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EXHIBIT 10.29
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PARTICIPATION AGREEMENT
Dated as of February 1, 1999
among
STERILE RECOVERIES, INC.,
as the Construction Agent and as the Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner Trustee
under the SRI Realty Trust 1998-1,
and
FIRST UNION NATIONAL BANK,
as the Lender and the Holder
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TABLE OF CONTENTS
PAGE
SECTION 1. THE LOANS...........................................................................................1
SECTION 2. HOLDER ADVANCES.....................................................................................1
SECTION 3. SUMMARY OF TRANSACTIONS.............................................................................2
3.1. Operative Agreements..............................................................................2
3.2. Property Purchase.................................................................................2
3.3. Construction of Improvements; Commencement of Basic Rent..........................................2
SECTION 4. THE CLOSINGS........................................................................................3
4.1. Initial Closing Date..............................................................................3
4.2. Initial Closing Date; Property Closing Dates; Acquisition Advances; Construction Advances.........3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION DATE;
THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS.............................................3
5.1. General...........................................................................................3
5.2. Procedures for Funding............................................................................4
5.3. Conditions Precedent for the Lessor and the Bank Relating to the Initial Closing Date,
the Issuance of Letters of Credit and the Advance of Funds for the Acquisition of a Property......6
5.4. Conditions Precedent for the Lessor and the Bank Relating to the Advance of Funds
after the Acquisition Advance....................................................................10
5.5. Additional Reporting and Delivery Requirements on Completion Date and on
Construction Period Termination Date.............................................................12
5.6. The Construction Agent Delivery of Construction Budget Modifications.............................12
5.7. Restrictions on Liens............................................................................12
5.8. Payments.........................................................................................13
5.9. Non-Ratable Holder Advances, Obligations to Issue Letters of Credit and Loans....................13
5.10. Consent of the Bank to Requests for Funding in Connection with Transactions
Evidenced by Bond Documents......................................................................13
5.11. Filing Copies....................................................................................13
SECTION 6. REPRESENTATIONS AND WARRANTIES.....................................................................14
6.1. Representations and Warranties of the Borrower...................................................14
6.2. Representations and Warranties of the Lessee.....................................................14
SECTION 7. PAYMENT OF CERTAIN EXPENSES........................................................................17
7.1. Transaction Expenses.............................................................................17
7.2. Brokers' Fees....................................................................................18
7.3. Certain Fees and Expenses........................................................................18
7.4. Commitment Fee...................................................................................18
SECTION 8. OTHER COVENANTS AND AGREEMENTS.....................................................................19
8.1. Cooperation with the Construction Agent or the Lessee............................................19
8.2. Covenants of the Owner Trustee and the Bank......................................................19
8.3. Lessee Covenants, Consent and Acknowledgment.....................................................20
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8.4. Allocation of Certain Payments...................................................................22
8.5. Grant of Easements, etc..........................................................................22
8.6. Appointment by the Bank and the Owner Trustee....................................................23
8.7. Collection and Allocation of Payments and Other Amounts..........................................23
8.8. Release of Properties, etc.......................................................................24
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT...............................................................24
9.1. The Construction Agent's and the Lessee's Credit Agreement Rights................................24
9.2. The Construction Agent's and the Lessee's Trust Agreement Rights.................................25
SECTION 10. TRANSFER OF INTEREST...............................................................................26
10.1. Restrictions on Transfer.........................................................................26
10.2. Effect of Transfer...............................................................................26
SECTION 11. INDEMNIFICATION....................................................................................26
11.1. General Indemnity................................................................................26
11.2. General Tax Indemnity............................................................................27
11.3. Increased Costs, Illegality, etc.................................................................30
11.4. Funding/Contribution Indemnity...................................................................32
SECTION 12. MISCELLANEOUS......................................................................................33
12.1. Survival of Agreements; Third Party Beneficiaries................................................33
12.2. Notices..........................................................................................33
12.3. Counterparts.....................................................................................34
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters..................................34
12.5. Headings, etc....................................................................................35
12.6. Parties in Interest..............................................................................35
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE; ARBITRATION..............35
12.8. Severability.....................................................................................37
12.9. Liability Limited................................................................................37
12.10. Rights of the Lessee.............................................................................38
12.11. Further Assurances...............................................................................38
12.12. Calculations under Operative Agreements..........................................................39
12.13. [Intentionally Left Blank];......................................................................39
12.14. Financial Reporting/Tax Characterization.........................................................39
12.15. Set-off..........................................................................................39
EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Officer's Certificate - Section 5.3(w)
D - Form of Secretary's Certificate - Section 5.3(x)
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E - Form of Officer's Certificate - Section 5.3(z)
F - Form of Secretary's Certificate - Section 5.3(aa)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(bb)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(cc)
I - Form of Officer's Certificate - Section 5.5
J - Description of Material Litigation - Section 6.2(d)
Appendix A - Rules of Usage and Definitions
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of February 1, 1999 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Agreement") is by and among STERILE RECOVERIES, INC., a Florida
corporation (the "Lessee" or the "Construction Agent"); FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not individually (in its
individual capacity, the "Trust Company"), except as expressly stated herein,
but solely as the Owner Trustee under the SRI Realty Trust 1998-1 (the "Owner
Trustee", the "Borrower" or the "Lessor"); and FIRST UNION NATIONAL BANK, a
national banking association, as lender and holder (together with its
successors and assigns, "Bank"). Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings set forth in Appendix A
hereto.
In consideration of the mutual agreements herein contained and other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, the Bank
has agreed to make Loans to the Lessor or issue Letters of Credit for the
account of the Lessor from time to time in an aggregate principal amount of up
to the aggregate amount of the Commitments in order for the Lessor to acquire
the Properties (or a leasehold interest in such Properties pursuant to one or
more Head Leases) and certain Improvements, to develop and construct certain
Improvements in accordance with the Agency Agreement and the terms and
provisions hereof and for the other purposes described herein, and in
consideration of the receipt of proceeds of the Loans or the issuance of the
Letters of Credit, as the case may be, the Lessor will issue the Notes.
Pursuant to Section 5 of this Agreement and Section 2 of the Credit Agreement,
the Loans shall be made from time to time to the Lessor and the Letters of
Credit shall be issued from time to time for the account of the Lessor at the
request of the Construction Agent in consideration for the Construction Agent
agreeing for the benefit of the Lessor, pursuant to the Agency Agreement, to
acquire the Properties (or a leasehold interest in such Properties pursuant to
one or more Head Leases), to acquire the Equipment, to construct certain
Improvements and to cause the Lessee to lease the Properties, each in
accordance with the Agency Agreement and the other Operative Agreements. The
Loans and Letters of Credit and the obligations of the Lessor under the Credit
Agreement shall be secured by the Collateral.
SECTION 2. HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement (including without
limitation Section 5.9) and the other Operative Agreements and in reliance on
the representations and warranties of each of the parties hereto contained
herein or made pursuant hereto, on each date
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Advances are requested to be made in accordance with Section 5 hereof, the Bank
shall make a Holder Advance to the Lessor with respect to the SRI Realty Trust
1998-1 in an amount in immediately available funds such that the aggregate of
all Holder Advances on such date shall be three percent (3%) of the amount of
the Requested Funds on such date; provided, that the Bank shall not be
obligated for any Holder Advance in excess of the Available Holder Commitment.
Subject to Section 5.9, no prepayment or any other payment with respect to any
Advance shall be permitted such that the Holder Advance with respect to such
Advance is less than three percent (3%) of the outstanding amount of such
Advance, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS.
On the date hereof, each of the respective parties hereto and thereto
shall execute and deliver this Agreement, the Lease, each applicable Ground
Lease, the Agency Agreement, the Credit Agreement, the Notes, the Trust
Agreement, the Certificates, the Security Agreement, each applicable Mortgage
Instrument, each applicable Bond Document, each applicable LOC Document and
such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.
3.2. PROPERTY PURCHASE.
On each Property Closing Date and subject to the terms and conditions of
this Agreement (a) the Bank will make a Holder Advance in accordance with
Sections 2 and 5 of this Agreement and the terms and provisions of the Trust
Agreement, (b) the Bank will make Loans or issue one or more Letters of Credit
in accordance with Sections 1 and 5 of this Agreement and the terms and
provisions of the Credit Agreement, (c) the Lessor will purchase and acquire
good and marketable title to, lease pursuant to a Head Lease or ground lease
pursuant to a Ground Lease, the applicable Property, each to be within an
Approved State, identified by the Construction Agent, in each case pursuant to
a Deed, Xxxx of Sale, Ground Lease or Head Lease, as the case may be, and grant
the Bank a lien on such Property by execution of the required Security
Documents, (d) the Bank, the Lessee and the Lessor shall execute and deliver a
Lease Supplement relating to such Property and (e) the Term shall commence with
respect to such Property.
3.3. CONSTRUCTION OF IMPROVEMENTS; COMMENCEMENT OF BASIC RENT.
Construction Advances will be made with respect to particular Improvements
to be constructed and with respect to ongoing Work regarding the Equipment and
construction of particular Improvements, in each case, pursuant to the terms
and conditions of this Agreement, the Agency Agreement and the other Operative
Agreements. The Construction Agent will act as a construction agent on behalf
of the applicable Development Authority (if any) and the Lessor respecting the
Work regarding the Equipment, the construction of such Improvements and the
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expenditures of the Construction Advances related to the foregoing. The
Construction Agent shall promptly notify the Lessor upon Completion of the
Improvements and the Lessee shall commence to pay Basic Rent as of the Rent
Commencement Date.
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE.
All documents and instruments required to be delivered on the Initial
Closing Date shall be delivered at the offices of Xxxxx & Xxx Xxxxx, PLLC,
Charlotte, North Carolina, or at such other location as may be determined by
the Lessor, the Bank and the Lessee.
4.2. INITIAL CLOSING DATE; PROPERTY CLOSING DATES; ACQUISITION
ADVANCES; CONSTRUCTION ADVANCES.
The Construction Agent shall deliver to the Bank a requisition (together
with invoices for, or other reasonably satisfactory evidence of, any
Transaction Expenses and other fees, expenses and disbursements referred to in
Section 7.1 that are to be paid with the applicable Advance, a "Requisition"),
in the form attached hereto as EXHIBIT A or in such other form as is reasonably
satisfactory to the Bank in connection with (a) the Transaction Expenses and
other fees, expenses and disbursements payable, pursuant to Section 7.1, by the
Lessor and (b) each Acquisition Advance pursuant to Section 5.3 and (c) each
Construction Advance pursuant to Section 5.4.
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT;
REPORTING REQUIREMENTS ON COMPLETION DATE;
THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS.
5.1. GENERAL.
(a) To the extent funds have been advanced by the Bank to the Lessor
as Loans and as Holder Advances or any Letter of Credit has been issued in
favor of any Bond Trustee in connection with the financing of any Property
contemplated by the Operative Agreements, the Lessor will use such funds
or the issuance of any such Letter of Credit from time to time in
accordance with the terms and conditions of this Agreement and the other
Operative Agreements (i) at the direction of the Construction Agent to
acquire (or to cause the applicable Development Authority to acquire for
lease pursuant to one or more Head Leases) the Properties in accordance
with the terms of this Agreement, the Agency Agreement and the other
Operative Agreements, (ii) to make Advances to the Construction Agent to
permit the acquisition, testing, engineering, installation, development,
construction, modification, design, and renovation, as applicable, of the
Properties (or components thereof) in accordance with the terms of the
Agency Agreement and the other Operative Agreements, and (iii) to pay
Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Section 7.1.
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(b) In lieu of the payment of interest on the Loans and Holder Yield
on the Holder Advances on any Scheduled Interest Payment Date with respect
to any Property during the period prior to the Rent Commencement Date with
respect to such Property, (i) each Loan shall automatically be increased
by the amount of interest accrued and unpaid on such Loan for such period
(except to the extent that at any time such increase would cause such Loan
to exceed the Available Commitment, in which case the Lessee shall pay
such excess amount to the Bank in immediately available funds on the date
the Available Commitment was exceeded), and (ii) each Holder Advance shall
automatically be increased by the amount of Holder Yield accrued and
unpaid on such Holder Advance for such period (except to the extent that
at any time such increase would cause the Holder Advance to exceed the
Available Holder Commitment, in which case the Lessee shall pay such
excess amount to the Bank in immediately available funds on the date the
Available Holder Commitment of such Holder was exceeded). Such increases
in a Loan and a Holder Advance shall occur without any disbursement of
funds by any Person. If not otherwise paid with Loan proceeds, the LOC
Reimbursement Amounts (x) prior to the Completion Date for each Property,
as applicable, shall accrue in accordance with Section 2.3(a) of the
Credit Agreement and (y) after the Completion Date for each Property, as
applicable, shall be payable in accordance with Sections 2.3(a) and 2.12
of the Credit Agreement.
5.2. PROCEDURES FOR FUNDING.
(a) The Construction Agent shall designate the date for Advances and
the date for issuance of Letters of Credit hereunder in accordance with
the terms and provisions hereof and of the other Operative Agreements;
provided, however, it is understood and agreed that no more than two (2)
Advances (excluding any conversion and/or continuation of any Loans or
Holder Advances and excluding Loans made to reimburse the Bank for draws
on Letters of Credit) may be requested during any calendar month. Not less
than (i) three (3) Business Days prior to the Initial Closing Date and
(ii) three (3) Business Days prior to the date on which any Acquisition
Advance or Construction Advance is to be made or any Letter of Credit is
to be issued, the Construction Agent shall deliver to the Bank (A) with
respect to the Initial Closing Date, each Acquisition Advance and the
issuance of each Letter of Credit, a Requisition as described in Section
4.2 hereof (including without limitation a legal description of the Land,
if any, a schedule of the Improvements, if any, and a schedule of the
Equipment, if any, acquired or to be acquired on such date or with respect
to which any such Letter of Credit is issued, each of the foregoing in a
form reasonably acceptable to the Bank) and (B) with respect to each
Construction Advance but not regarding Property for which Letters of
Credit have been issued, a Requisition identifying (among other things)
the Property to which such Construction Advance relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request funds in
an amount that is not in excess of the total aggregate of the Available
Commitments plus the Available Holder Commitments at such time or
otherwise request a Letter of Credit, and
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(iii) except with regard to any Requisition submitted in connection with a
Property for which a Letter of Credit is requested, request that the Bank
make Holder Advances and Loans to the Lessor for the payment of
Transaction Expenses, Property Acquisition Costs (in the case of an
Acquisition Advance) or other Property Costs (in the case of a
Construction Advance) that have previously been incurred or are to be
incurred on the date of such Advance to the extent such were not subject
to a prior Requisition, in each case as specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent set forth
in Sections 5.3 or 5.4, as applicable, and subject to Section 5.9, on each
Property Closing Date or (in connection with Advances which do not relate
to Letters of Credit) the date on which the Construction Advance is to be
made, as applicable, (i) the Bank shall at Lessee's request, either (A)
make Loans to the Lessor in an aggregate amount equal to ninety-seven
percent (97%) of the Requested Funds up to an aggregate principal amount
equal to the aggregate of the Available Commitments or (B) issue Letters
of Credit in favor of the applicable Bond Trustee specified in any
Requisition up to an aggregate principal amount equal to the aggregate of
the Available Commitments, (ii) except in connection with Advances to
reimburse the Bank for draws on Letters of Credit, the Bank shall make a
Holder Advance based on its Holder Commitment in an amount such that the
aggregate of all Holder Advances at such time shall be three percent (3%)
of the balance of the Requested Funds specified in such Requisition, up to
the aggregate advanced amount equal to the Available Holder Commitments;
and (iii) the total amount of such Loans and Holder Advances made on such
date shall (x) be used by the Lessor to pay Property Costs including
Transaction Expenses within three (3) Business Days of the receipt by the
Lessor of such Advance or (y) be advanced by the Lessor on the date of
such Advance to the Construction Agent or the Lessee to pay Property
Costs, as applicable. Notwithstanding that the Operative Agreements state
that Advances shall be directed to the Lessor, each Advance shall in fact
be directed to the Construction Agent (for the benefit of the Lessor) and
applied by the Construction Agent (for the benefit of the Lessor) pursuant
to the requirements imposed on the Lessor under the Operative Agreements;
provided, Letters of Credit shall be issued and Loans made to reimburse
the Bank for draws on Letters of Credit in accordance with the applicable
provisions of the Credit Agreement and such amounts shall not be directed
to the Construction Agent.
(d) With respect to an Advance obtained by the Lessor to pay for
Property Costs and/or Transaction Expenses or other costs payable under
Section 7.1 hereof and not expended by the Lessor for such purpose on the
date of such Advance, such amounts shall be held by the Lessor (or the
Bank on behalf of the Lessor) until the applicable closing date or, if
such closing date does not occur within three (3) Business Days of the
date of the Lessor's receipt of such Advance, shall be applied regarding
the applicable Advance to repay the Loans for (or LOC Reimbursement
Amounts, if any) and the Holder Advances and, subject to the terms hereof,
and of the Credit Agreement and the Trust Agreement, shall remain
available for future Advances. Any such amounts held by the Lessor (or the
Bank on behalf of the Lessor) shall be subject to the lien of the Security
Agreement.
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(e) All Operative Agreements which are to be delivered to the Lessor
shall be delivered to the Bank, on behalf of the Lessor, and such items
(except for Notes, Certificates, Bills of Sale, the Ground Leases, the
Head Leases and chattel paper originals, with respect to which in each
case there shall be only one original) shall be delivered with originals
sufficient for the Lessor and the Bank. All other items which are to be
delivered to the Lessor shall be delivered to the Bank, on behalf of the
Lessor, and such other items shall be held by the Bank. To the extent any
such other items are requested in writing from time to time by the Lessor,
the Bank shall provide a copy of such item. In addition, all items
described in Sections 5.3, 5.4 or 5.5 shall be delivered by the Bank or
other appropriate party to the applicable Development Authority and/or
Bond Trustee, to the extent expressly required by any Bond Document.
(f) Notwithstanding the completion of any closing under this
Agreement pursuant to Sections 5.3 or 5.4, each condition precedent in
connection with any such closing may be subsequently enforced by the Bank
(unless such has been expressly waived in writing by the Bank).
5.3. CONDITIONS PRECEDENT FOR THE LESSOR AND THE BANK RELATING TO THE
INITIAL CLOSING DATE, THE ISSUANCE OF LETTERS OF CREDIT AND THE
ADVANCE OF FUNDS FOR THE ACQUISITION OF A PROPERTY.
The obligations (i) on the Initial Closing Date of the Lessor and the Bank
to enter into the transactions contemplated by this Agreement, including
without limitation the obligation to execute and deliver the applicable
Operative Agreements to which each is a party on the Initial Closing Date, (ii)
on the Initial Closing Date of the Bank to make Holder Advances and Loans in
order to pay Transaction Expenses, fees, expenses and other disbursements
payable by the Lessor under Section 7.1 of this Agreement, (iii) on each date
requested by the Lessee of the Bank to issue Letters of Credit under Section
2.12 of the Credit Agreement and (iv) on a Property Closing Date for the
purpose of providing funds to the Lessor necessary to pay the Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1 of this Agreement and to acquire (or lease pursuant to one or more
Head Leases) or ground lease a Property (an "Acquisition Advance"), in each
case (with regard to the foregoing Sections 5.3(i), (ii), (iii) and (iv)) are
subject to the satisfaction or waiver of the following conditions precedent on
or prior to the Initial Closing Date or the applicable Property Closing Date,
as the case may be (to the extent such conditions precedent require the
delivery of any agreement, certificate, instrument, memorandum, legal or other
opinion, appraisal, commitment, title insurance commitment, lien report or any
other document of any kind or type, such shall be in form and substance
reasonably satisfactory to the Bank and, to the extent required by the
applicable Bond Documents, the applicable Bond Trustee; notwithstanding the
foregoing, the obligations of each party shall not be subject to any conditions
contained in this Section 5.3 which are required to be performed by such
party):
(a) the correctness of the representations and warranties of the
parties to the Operative Agreements contained herein, in each of the other
Operative Agreements and
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each certificate delivered pursuant to any Operative Agreement (including
without limitation the Incorporated Representations and Warranties) on
each such date;
(b) the performance by the parties to the Operative Agreements of
their respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) The Bank shall have received a fully executed counterpart copy of
the Requisition, appropriately completed;
(d) [Reserved];
(e) the Construction Agent shall have delivered to the Bank a good
standing certificate for the Construction Agent in the state where each
such Property is located, the Deed with respect to the Land and existing
Improvements (if any), a copy of the Ground Lease (if any), a copy of the
Head Lease and each of the other Bond Documents respecting such Property
(if any), and a copy of the Xxxx of Sale with respect to the Equipment (if
any), respecting such of the foregoing as are being acquired (or leased
pursuant to any Head Lease) or ground leased on each such date with the
proceeds of the Loans and Holder Advances or which have been previously
acquired (or leased pursuant to any Head Lease) or ground leased with the
proceeds of the Loans and Holder Advances;
(f) there shall not have occurred and be continuing any Default or
Event of Default under any of the Operative Agreements and no Default or
Event of Default under any of the Operative Agreements will have occurred
after giving effect to the Advance requested by each such Requisition;
(g) the Construction Agent shall have delivered to the Bank title
insurance commitments to issue policies respecting each such Property,
with such endorsements as the Bank deems necessary, in favor of the Lessor
and the Bank from a title insurance company acceptable to the Bank, but
only with such title exceptions thereto as are acceptable to the Bank;
(h) the Construction Agent shall have delivered to the Bank an
environmental site assessment respecting each such Property prepared by an
independent recognized professional acceptable to the Bank and evidencing
no pre-existing environmental condition with respect to which there is
more than a remote risk of loss;
(i) the Construction Agent shall have delivered to the Bank a survey
(with a flood hazard certification) respecting each such Property prepared
by (i) an independent recognized professional acceptable to the Bank and
(ii) in a manner and including such information as is required by the
Bank;
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(j) unless such an opinion has previously been delivered with respect
to a particular state, the Construction Agent shall have caused to be
delivered to the Bank a legal opinion in the form attached hereto as
EXHIBIT B or in such other form as is reasonably acceptable to the Bank,
prepared by counsel acceptable to the Bank;
(k) the Construction Agent shall have caused to be delivered to the
Bank a Mortgage Instrument (in such form as is acceptable to the Bank),
Lessor Financing Statements and Lender Financing Statements respecting
each such Property, all fully executed and in recordable form;
(l) the Lessee shall have delivered to the Bank with respect to each
such Property a Lease Supplement and a memorandum (or short form lease)
regarding the Lease and such Lease Supplement in the form attached to the
Lease as EXHIBIT B or in such other form as is acceptable to the Bank and
suitable for recording;
(m) with respect to each Acquisition Advance, the sum of the
Available Commitment plus the Available Holder Commitment (after deducting
the Unfunded Amount, if any, and after giving effect to the Acquisition
Advance) will be sufficient to pay all amounts payable therefrom;
(n) if any such Property is subject to a Ground Lease, the
Construction Agent shall have caused a lease memorandum (or short form
lease) to be delivered to the Bank for such Ground Lease and, if requested
by the Bank, a landlord waiver and a mortgagee waiver (in each case, in
such form as is acceptable to the Bank);
(o) counsel (acceptable to the Bank) for the ground lessor of each
such Property subject to a Ground Lease shall have issued to the Lessor
and the Bank its opinion;
(p) the Construction Agent shall have delivered to the Bank a
preliminary Construction Budget for each such Property, if applicable;
(q) the Construction Agent shall have provided evidence to the Bank
of insurance with respect to each such Property as provided in the Lease;
(r) the Construction Agent shall have caused an Appraisal regarding
each such Property to be provided to the Bank from an appraiser
satisfactory to the Bank;
(s) the Construction Agent shall cause (i) Uniform Commercial Code
lien searches, tax lien searches and judgment lien searches regarding the
Lessee and each applicable Development Authority, if any, to be conducted
(and copies thereof to be delivered to the Bank) in such jurisdictions as
determined by the Bank by a nationally recognized search company
acceptable to the Bank and (ii) the liens referenced in such lien searches
which are objectionable to the Bank to be either removed or otherwise
handled in a manner satisfactory to the Bank;
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(t) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the Operative
Agreements and/or documents related thereto shall have been paid or
provisions for such payment shall have been made to the satisfaction of
the Bank;
(u) each of the Operative Agreements to be entered into on such date
shall have been duly authorized, executed and delivered by the parties
thereto, and shall be in full force and effect, and the Bank shall have
received a fully executed copy of each of the Operative Agreements (except
for the Bonds, as to which a specimen copy may be furnished);
(v) since the date of the most recent audited financial statements
(as delivered pursuant to the requirements of the Lessee Credit Agreement)
of the Lessee, there shall not have occurred any event, condition or state
of facts which shall have or could reasonably be expected to have a
Material Adverse Effect, other than as specifically contemplated by the
Operative Agreements;
(w) as of the Initial Closing Date only, the Bank shall have received
an Officer's Certificate, dated as of the Initial Closing Date, of the
Lessee in the form attached hereto as EXHIBIT C or in such other form as
is acceptable to the Bank
(x) as of the Initial Closing Date only, the Bank shall have received
(i) a certificate of the Secretary or an Assistant Secretary of the
Lessee, dated as of the Initial Closing Date, in the form attached hereto
as EXHIBIT D or in such other form as is acceptable to the Bank and (ii) a
good standing certificate (or local equivalent) from the respective states
where the Lessee is incorporated and where the principal place of business
of the Lessee is located;
(y) as of the Initial Closing Date only, there shall not have
occurred any material adverse change in the consolidated assets,
liabilities, operations, business or condition (financial or otherwise) of
the Lessee from that set forth in the most recent audited consolidated
financial statements of the Lessee which have been provided to the Bank;
(z) as of the Initial Closing Date only, the Bank shall have received
an Officer's Certificate of the Lessor dated as of the Initial Closing
Date in the form attached hereto as EXHIBIT E or in such other form as is
acceptable to the Bank;
(aa) as of the Initial Closing Date only, the Bank shall have
received (i) a certificate of the Secretary, an Assistant Secretary, Trust
Officer or Vice President of the Trust Company in the form attached hereto
as EXHIBIT F or in such other form as is acceptable to the Bank and (ii) a
good standing certificate from the Office of the Comptroller of the
Currency;
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(bb) as of the Initial Closing Date only, counsel for the Lessor
acceptable to the Bank shall have issued to the Lessee and the Bank its
opinion in the form attached hereto as EXHIBIT G or in such other form as
is reasonably acceptable to the Bank;
(cc) as of the Initial Closing Date only, the Construction Agent
shall have caused to be delivered to the Bank a legal opinion in the form
attached hereto as EXHIBIT H or in such other form as is acceptable to the
Bank from counsel acceptable to the Bank;
(dd) respecting any Property subject to a Head Lease, the Bank shall
have received a memorandum regarding such Head Lease in form acceptable to
the Bank and otherwise suitable for recording;
(ee) respecting any Property subject to Bond Documents, counsel for
each of the applicable Bond Trustee (if represented by counsel) and the
applicable Development Authority shall have issued to the Lessee, the
Lessor and the Bank its opinion in form and substance reasonably
acceptable to the Bank;
(ff) respecting any Property subject to a Head Lease, the
Construction Agent shall have delivered from the applicable Development
Authority an Agency Agreement Joinder in the form attached as Exhibit A to
the Agency Agreement, appointing the Construction Agent as construction
agent for such Development Authority to be named as Lessor under such Head
Lease;
(gg) respecting any Property subject to Bond Documents, the
conditions to closing the transactions contemplated by the Bond Documents
respecting such Property shall have been satisfied; and
(hh) evidence of payment to the applicable Financing Parties of the
fees payable on such date, including without limitation the annual letter
of credit commission pursuant to Section 2.12(f) of the Credit Agreement.
5.4. CONDITIONS PRECEDENT FOR THE LESSOR AND THE BANK RELATING TO THE
ADVANCE OF FUNDS AFTER THE ACQUISITION ADVANCE.
The obligations of the Bank to make Holder Advances and Loans in
connection with all requests for Advances subsequent to the acquisition of a
Property (and to pay the Transaction Expenses, fees, expenses and other
disbursements payable by the Lessor under Section 7.1 of this Agreement in
connection therewith) are subject to the satisfaction or waiver of the
following conditions precedent (to the extent such conditions precedent require
the delivery of any agreement, certificate, instrument, memorandum, legal or
other opinion, appraisal, commitment, title insurance commitment, lien report
or any other document of any kind or type, such shall be in form and substance
satisfactory to the Bank, in its reasonable discretion; notwithstanding the
foregoing, the obligations of each party shall not be subject to any conditions
contained in this Section 5.4 which are required to be performed by such
party):
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(a) the correctness on such date of the representations and
warranties of the parties to any Operative Agreement contained herein, in
each of the other Operative Agreements and in each certificate delivered
pursuant to any Operative Agreement (including without limitation the
Incorporated Representations and Warranties);
(b) the performance by the parties to any Operative Agreement of
their respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Bank shall have received a fully executed counterpart of the
Requisition, appropriately completed;
(d) based upon the applicable Construction Budget which shall satisfy
the requirements of this Agreement, the Available Commitments and the
Available Holder Commitment (after deducting the Unfunded Amount) will be
sufficient to complete the Improvements;
(e) there shall not have occurred and be continuing any Default or
Event of Default under any of the Operative Agreements and no Default or
Event of Default under any of the Operative Agreements will have occurred
after giving effect to the Construction Advance requested by the
applicable Requisition;
(f) the title insurance policy delivered in connection with the
requirements of Section 5.3(g) shall provide for (or shall be endorsed to
provide for) insurance in an amount at least equal to the maximum total
Property Cost indicated by the Construction Budget referred to in
subparagraph (d) above and there shall be no title change or exception
objectionable to the Bank;
(g) the Construction Agent shall have delivered to the Bank copies of
the Plans and Specifications for the applicable Improvements;
(h) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the Operative
Agreements shall have been paid or provisions for such payment shall have
been made to the satisfaction of the Bank;
(i) since the date of the most recent audited Financial Statements
(as such term is defined in the Lessee Credit Agreement) of the Lessee,
there shall not have occurred any event, condition or state of facts which
shall have or could reasonably be expected to have a Material Adverse
Effect, other than as specifically contemplated by the Operative
Agreements; and
(j) in the opinion of the Bank and its counsel, the transactions
contemplated by the Operative Agreements do not and will not subject the
Lessor or the Bank to any adverse regulatory prohibitions, constraints,
penalties or fines.
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5.5. ADDITIONAL REPORTING AND DELIVERY REQUIREMENTS ON COMPLETION DATE AND
ON CONSTRUCTION PERIOD TERMINATION DATE.
On or prior to the Completion Date for each Property, the Construction
Agent shall deliver to the Bank an Officer's Certificate in the form attached
hereto as EXHIBIT I or in such other form as is acceptable to the Bank.
Furthermore, on or prior to the Completion Date for each Property, the
Construction Agent shall deliver or cause to be delivered to the Bank (unless
previously delivered to the Bank) originals of the following, each of which
shall be in form and substance acceptable to the Bank, in its reasonable
discretion: (v) a title insurance endorsement regarding the title insurance
policy delivered in connection with the requirements of Section 5.3(g), but
only to the extent such endorsement is necessary to provide for insurance in an
amount at least equal to the maximum total Property Cost and, if endorsed, the
endorsement shall not include a title change or exception objectionable to the
Bank; (w) an as-built survey for such Property, (x) insurance certificates
respecting such Property as required hereunder and under the Lease Agreement,
and (y) if requested by the Bank, amendments to the Lessor Financing Statements
executed by the appropriate parties. In addition, on the Completion Date for
such Property the Construction Agent covenants and agrees that the recording
fees, documentary stamp taxes or similar amounts required to be paid in
connection with the related Mortgage Instrument shall have been paid in an
amount required by applicable law, subject, however, to the obligations of the
Bank to fund such costs to the extent required pursuant to Section 7.1.
5.6. THE CONSTRUCTION AGENT DELIVERY OF CONSTRUCTION BUDGET MODIFICATIONS.
The Construction Agent covenants and agrees to deliver to the Bank each
month notification of any modification to any Construction Budget regarding any
Property if such modification increases the cost to construct such Property;
provided no Construction Budget may be increased unless (a) the title insurance
policies referenced in Section 5.3(g) are also modified or endorsed, if
necessary, to provide for insurance in an amount that satisfies the
requirements of Section 5.4(f) of this Agreement and (b) after giving effect to
any such amendment, the Construction Budget remains in compliance with the
requirements of Section 5.4(d) of this Agreement.
5.7. RESTRICTIONS ON LIENS.
On each Property Closing Date, the Construction Agent shall cause each
Property acquired by the Lessor or any applicable Development Authority on such
date to be free and clear of all Liens except those referenced in Sections
6.2(c)(ii) and 6.2(c)(iii). On each date a Property is either sold to a third
party in accordance with the terms of the Operative Agreements or, pursuant to
Section 22.1(a) of the Lease Agreement, retained by the Lessor, the Lessee
shall cause such Property to be free and clear of all Liens (other than Lessor
Liens and such other Liens that are expressly set forth as title exceptions on
the title commitment issued under Section 5.3(g) with respect to such Property,
to the extent such title commitment has been approved by the Bank).
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5.8. PAYMENTS.
All payments of principal, interest, Holder Advances, Holder Yield, LOC
Reimbursement Amounts and other amounts to be made by the Construction Agent or
the Lessee under this Agreement or any other Operative Agreements (excluding
Excepted Payments which shall be paid directly to the party to whom such
payments are owed) shall be made to the Bank at the office designated by the
Bank from time to time in Dollars and in immediately available funds, without
setoff, deduction, or counterclaim. Subject to the definition of "Interest
Period" in Appendix A attached hereto, whenever any payment under this
Agreement or any other Operative Agreements shall be stated to be due on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time in such case shall be included in the
computation of interest, Holder Yield and fees payable pursuant to the
Operative Agreements, as applicable and as the case may be.
5.9. NON-RATABLE HOLDER ADVANCES, OBLIGATIONS TO ISSUE LETTERS OF
CREDIT AND LOANS.
Upon the request of the Lessee but only with the prior consent of the Bank
not to be unreasonably withheld, (a) Holder Advances may be more or less than
three percent (3%) of the amount of the Requested Funds on any date and (b) the
Bank (as the Lender) may issue Letters of Credit and extend Loans such that the
Bank (as the Lender) may be responsible for more or less than ninety-seven
percent (97%) of the Letters of Credit or the Requested Funds on any date;
provided, however, in no event shall the aggregate amount of outstanding Holder
Advances constitute less than three percent (3%) of the sum of (x) the
aggregate amount of Holder Advances then outstanding, (y) the aggregate amount
of Loans then outstanding and (z) the aggregate amount of Letters of Credit
then outstanding.
5.10. CONSENT OF THE BANK TO REQUESTS FOR FUNDING IN CONNECTION WITH
TRANSACTIONS EVIDENCED BY BOND DOCUMENTS.
The Lessee shall not request or accept any funding in connection with any
Property pursuant to any Bond Documents unless the Bank has given its prior
written consent to any such funding, such consent not to be unreasonably
withheld or delayed.
5.11 FILING COPIES.
The Bank agrees, within fifteen (15) days after the Initial Closing Date,
to provide or cause its counsel to provide a diskette containing copies of the
Participation Agreement, the Lease, the Credit Agreement, the Security
Agreement, the Agency Agreement, the Trust Agreement, each Note and each Holder
Certificate executed and delivered on the Initial Closing Date in order to
facilitate the Lessee's obligations to comply with its filing requirements
under applicable securities laws.
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SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
Effective as of the Initial Closing Date, and the date of each Advance and
the date of issuance of each Letter of Credit, the Trust Company in its
individual capacity and as the Borrower, as indicated, represents and warrants
(in addition to any representations or warranties made in any Officer's or
Secretary's Certificate delivered pursuant hereto, which representations and
warranties are incorporated herein by reference) to each of the other parties
hereto that the execution, delivery and performance of each Operative Agreement
to which it is or will be a party, either in its individual capacity or
(assuming due authorization, execution and delivery of the Trust Agreement by
the Bank) as the Owner Trustee, as the case may be, has been duly authorized by
all necessary action on its part and neither the execution and delivery
thereof, nor the consummation of the transactions contemplated thereby, nor
compliance by it with any of the terms and provisions thereof (i) does or will
require any approval or consent of any trustee or holders of any of its
indebtedness or obligations, (ii) does or will contravene any Legal Requirement
relating to its banking or trust powers, (iii) does or will contravene or
result in any breach of or constitute any default under, or result in the
creation of any Lien upon any of its property under, (A) its charter or
by-laws, or (B) any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement or other agreement or
instrument to which it is a party or by which it or its properties may be bound
or affected, which contravention, breach, default or Lien under clause (B)
would materially and adversely affect its ability, in its individual capacity
or as the Owner Trustee, to perform its obligations under the Operative
Agreements to which it is a party or (iv) does or will require any Governmental
Action by any Governmental Authority regulating its banking or trust powers.
The Owner Trustee further reaffirms its representations and warranties under
each Bond Document and agrees that each and every representation and warranty
made therein and in any certificate or other document executed and delivered in
connection therewith is true and accurate as of the date hereof.
6.2. REPRESENTATIONS AND WARRANTIES OF THE LESSEE.
Effective as of the Initial Closing Date, the date of each Advance, the
date of issuance of each Letter of Credit and the Rent Commencement Date, the
Lessee represents and warrants to each of the other parties hereto that:
(a) The Lessee has delivered to the Bank the financial statements and
other reports referred to in Article VII of the Lessee Credit Agreement;
(b) The execution and delivery by the Lessee of this Agreement and
the other applicable Operative Agreements as of such date and the
performance by the Lessee of its respective obligations under this
Agreement and the other applicable Operative Agreements are within the
corporate powers of the Lessee, have been duly authorized by all necessary
corporate action on the part of the Lessee (including without limitation
any necessary shareholder action), have been duly executed and delivered,
have received all necessary governmental approval, and do not and will not
(i) violate any Legal
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Requirement which is binding on the Lessee or any of its Subsidiaries,
(ii) contravene or conflict with, or result in a breach of, any provision
of the Articles of Incorporation, By-Laws or other organizational
documents of the Lessee or any of its Subsidiaries or of any agreement,
indenture, instrument or other document which is binding on the Lessee or
any of its Subsidiaries or (iii) result in, or require, the creation or
imposition of any Lien (other than pursuant to the terms of the Operative
Agreements) on any asset of the Lessee or any of its Subsidiaries;
(c) (i) This Agreement and the other applicable Operative Agreements,
executed prior to and as of such date by the Lessee, constitute the legal,
valid and binding obligation of the Lessee, as applicable, enforceable
against the Lessee, in accordance with their terms. The Lessee has
executed the various Operative Agreements required to be executed by the
Lessee as of such date;
(ii) The Security Documents create, as security for the Obligations
(as such term is defined in the Security Agreement), valid and enforceable
security interests in, and Liens on, all of the Collateral, in favor of
the Bank, and such security interests and Liens are subject to no other
Liens other than Liens that are expressly set forth as title exceptions on
the title commitment issued under Section 5.3(g) with respect to the
applicable Property, to the extent such title commitment has been approved
by the Bank. Upon recordation of the Mortgage Instrument in the real
estate recording office identified by the Construction Agent or the
Lessee, the Lien created by the Mortgage Instrument in the real property
described therein shall be a perfected first priority mortgage Lien on
such real property (or, in the case of a Ground Lease or a Head Lease, the
leasehold estate under such Ground Lease or Head Lease) in favor of the
Bank. To the extent that the security interests in the portion of the
Collateral comprised of personal property can be perfected by filing in
the filing offices identified by the Construction Agent or the Lessee,
upon filing of the Lender Financing Statements in such filing offices, the
security interests created by the Security Agreement shall be perfected
first priority security interests in such personal property in favor of
the Bank; and
(iii) The Lease Agreement creates, as security for the obligations of
the Lessee under the Lease Agreement, valid and enforceable security
interests in, and Liens on, each Property leased thereunder, in favor of
the Lessor, and such security interests and Liens are subject to no other
Liens other than Liens that are expressly set forth as title exceptions on
the title commitment issued under Section 5.3(g) with respect to the
applicable Property, to the extent such title commitment has been approved
by the Bank. Upon recordation of the memorandum of the Lease Agreement and
the memorandum of a Ground Lease or Head Lease (or, in either case, a
short form lease) in the real estate recording office identified by the
Construction Agent or the Lessee, the Lien created by the Lease Agreement
in the real property described therein shall be a perfected first priority
mortgage Lien on such real property (or, in the case of a Ground Lease or
Head Lease, the leasehold estate under such Ground Lease or Head Lease) in
favor of the Bank. To the extent that the security interests in the
portion of any Property comprised of personal property can be perfected by
the filing in the filing offices identified by the
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Construction Agent or the Lessee upon filing of the Lessor Financing
Statements in such filing offices, a security interest created by the
Lease Agreement shall be perfected first priority security interests in
such personal property in favor of the Lessor, which rights pursuant to
the Lessor Financing Statements are assigned to the Bank;
(iv) each Head Lease creates a valid and good and marketable
leasehold interest in each Property to be acquired with the proceeds of
Bonds by the applicable Development Authority;
(d) There are no material actions, suits or proceedings pending or,
to our knowledge, threatened against the Lessee in any court or before any
Governmental Authority (nor shall any order, judgment or decree have been
issued or proposed to be issued by any Governmental Authority to set
aside, restrain, enjoin or prevent the full performance of any Operative
Agreement or any transaction contemplated thereby) that (i) concern any
Property or the Lessee's interest therein, (ii) question the validity or
enforceability of any Operative Agreement to which the Lessee is a party
or the overall transaction described in the Operative Agreements to which
the Lessee is a party or (iii) have or could reasonably be expected to
have a Material Adverse Effect; provided, for purposes of disclosure, the
Lessee has described the litigation set forth on EXHIBIT J;
(e) No Governmental Action by any Governmental Authority or other
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person pursuant to any Legal Requirement,
contract, indenture, instrument or agreement or for any other reason is
required to authorize or is required in connection with (i) the execution,
delivery or performance of any Operative Agreement, (ii) the legality,
validity, binding effect or enforceability of any Operative Agreement,
(iii) the acquisition, ownership, construction, completion, occupancy,
operation, leasing or subleasing of any Property or (iv) any Advance, in
each case, except those which have been obtained and are in full force and
effect;
(f) Upon the execution and delivery of each Lease Supplement to the
Lease, (i) the Lessee will have unconditionally accepted the Property
subject to the Lease Supplement and will have a valid and subsisting
leasehold or subleasehold interest in such Property, subject only to the
Permitted Liens, and (ii) no offset will exist with respect to any Rent or
other sums payable under the Lease;
(g) Except as otherwise contemplated by the Operative Agreements, the
Construction Agent shall not use the proceeds of any Holder Advance or
Loan for any purpose other than the purchase and/or lease of the
Properties, the acquisition, installation and testing of the Equipment,
the construction of Improvements and the payment of Transaction Expenses
and the fees, expenses and other disbursements referenced in Section 7.1
of this Agreement, in each case which accrue prior to the Rent
Commencement Date with respect to a particular Property;
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(h) All information heretofore or contemporaneously herewith
furnished by the Lessee or its Subsidiaries to the Bank or the Owner
Trustee for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all information hereafter
furnished by or on behalf of the Lessee or its Subsidiaries to the Bank or
the Owner Trustee pursuant hereto or in connection herewith will be, true
and accurate in every material respect on the date as of which such
information is dated or certified, and such information, taken as a whole,
does not and will not omit to state any material fact necessary to make
such information, taken as a whole, not misleading;
(i) The principal place of business, chief executive office and
office of the Construction Agent and the Lessee where the documents,
accounts and records relating to the transactions contemplated by this
Agreement and each other Operative Agreement are kept are located at 00000
XX Xxxxxxx 00X, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000;
(j) The representations and warranties of the Lessee set forth in any
of the Operative Agreements (including the Incorporated Representations
and Warranties) are true and correct in all material respects on and as of
each such date as if made on and as of such date. The Lessee is in all
material respects in compliance with its obligations under the Operative
Agreements and there exists no Default or Event of Default under any of
the Operative Agreements which is continuing and which has not been cured
within any cure period expressly granted under the terms of the applicable
Operative Agreement or otherwise waived in accordance with the applicable
Operative Agreement. No Default or Event of Default will occur under any
of the Operative Agreements as a result of, or after giving effect to, the
Advance requested by the Requisition on the date of each Advance; and
(k) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, no portion of any Property is
located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency, or if any
such 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 Section 14.2(b) of the Lease and in accordance with the
National Flood Insurance Act of 1968, as amended
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. TRANSACTION EXPENSES.
(a) Assuming no Default or Event of Default shall have occurred and
be continuing, the Lessor agrees to pay, or cause to be paid, all
Transaction Expenses and all commissions and fees referenced in Section
2.12(f) of the Credit Agreement; provided, however, the Lessor shall pay
such amounts described in this Section 7.1(a) only if (i) such amounts are
properly described in a Requisition delivered in accordance with the
Operative Agreements, and (ii) funds are made available by the Bank in
connection with
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such Requisition in an amount sufficient to allow such payment. The Lessee
agrees to timely pay all amounts referred to in this Section 7.1(a) to the
extent not paid by the Lessor.
(b) [INTENTIONALLY LEFT BLANK];
(c) All fees payable pursuant to the Operative Agreements shall be
calculated on the basis of a year of three hundred sixty (360) days for
the actual days elapsed.
7.2. BROKERS' FEES.
The Lessee agrees to pay or cause to be paid any and all brokers' fees, if
any, including without limitation any interest and penalties thereon, which are
payable in connection with the transactions contemplated by this Agreement and
the other Operative Agreements.
7.3. CERTAIN FEES AND EXPENSES.
The Lessee agrees to pay or cause to be paid (a) the initial and annual
Owner Trustee's fee and any Bond Trustee's initial or annual fee and all
reasonable expenses of the Owner Trustee, any Bond Trustee and any co-trustees
(including without limitation reasonable counsel fees and expenses) or any
successor owner trustee, bond trustee and/or co-trustee, for acting as the
owner trustee, bond trustee or co-trustee under the Trust Agreement or any
other Operative Agreement, (b) all reasonable costs and expenses incurred by
the Lessee, the Bank, any Development Authority, any Bond Trustee or the Lessor
in entering into any Lease Supplement and any future amendments, modifications,
supplements, restatements and/or replacements with respect to any of the
Operative Agreements, whether or not such Lease Supplement, amendments,
modifications, supplements, restatements and/or replacements are ultimately
entered into, or giving or withholding of waivers of consents hereto or
thereto, which have been requested by the Lessee, the Bank, any Development
Authority, any Bond Trustee or the Lessor, (c) all reasonable costs and
expenses incurred by the Lessee, the Bank, any Development Authority, any Bond
Trustee or the Lessor in connection with any exercise of remedies under any
Operative Agreement or any purchase of any Property by the Construction Agent,
the Lessee or any third party and (d) all reasonable costs and expenses
incurred by the Lessee, the Bank, any Development Authority, any Bond Trustee
or the Lessor in connection with any transfer or conveyance of any Property or
leasehold interest therein, whether or not such transfer or conveyance is
ultimately accomplished.
7.4. COMMITMENT FEE.
During the Commitment Period, the Lessee agrees to pay or to cause to be
paid to the Bank, an annual commitment fee (the "Commitment Fee") equal to the
product of (a) the sum of the average daily Available Commitment during the
Commitment Period plus the average daily Available Holder Commitment during the
Commitment Period multiplied by (b) a rate per annum equal to twenty-five one
hundredths of one percent (0.25%). Such Commitment Fee shall be payable
quarterly in arrears on each Commitment Fee Payment Date. If all
or a portion of any
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such Commitment Fee shall not be paid when due, such overdue amount shall bear
interest, payable by the Lessee on demand, at a rate per annum equal to the ABR
plus two percent (2%) from the date of such non-payment until such amount is
paid in full (as well as before judgment).
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. COOPERATION WITH THE CONSTRUCTION AGENT OR THE LESSEE.
The Bank and the Lessor (at the direction of the Bank) shall, at the
expense of and to the extent reasonably requested by the Construction Agent or
the Lessee (but without assuming additional liabilities on account thereof and
only to the extent such is acceptable to the Bank and the Lessor (at the
direction of the Bank) in its reasonable discretion, cooperate with the
Construction Agent or the Lessee in connection with the Construction Agent or
the Lessee satisfying its covenant obligations contained in the Operative
Agreements including without limitation at any time and from time to time,
promptly and duly executing and delivering any and all such further
instruments, documents and financing statements (and continuation statements
related thereto).
8.2. COVENANTS OF THE OWNER TRUSTEE AND THE BANK.
Each of the Owner Trustee and the Bank hereby agrees that so long as this
Agreement is in effect:
(a) Neither the Owner Trustee (in its trust capacity or in its
individual capacity) nor the Bank will create or permit to exist at any
time, and each of them will, at its own cost and expense, promptly take
such action as may be necessary duly to discharge, or to cause to be
discharged, all Lessor Liens on the Properties attributable to it;
provided, however, that the Owner Trustee and the Bank shall not be
required to so discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently prosecuted
so long as such proceedings shall not materially and adversely affect the
rights of the Lessee under the Lease and the other Operative Agreements or
involve any material danger of impairment of the Liens of the Security
Documents or of the sale, forfeiture or loss of, and shall not interfere
with the use or disposition of, any Property or title thereto or any
interest therein or the payment of Rent;
(b) Without prejudice to any right under the Trust Agreement of the
Owner Trustee to resign (subject to requirement set forth in the Trust
Agreement that such resignation shall not be effective until a successor
shall have agreed to accept such appointment), or the Bank's rights under
the Trust Agreement to remove the institution acting as the Owner Trustee,
each of the Owner Trustee and the Bank hereby agrees with the Lessee (i)
not to terminate or revoke the trust created by the Trust Agreement except
as permitted by Article VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of the
Trust Agreement in such a manner as to adversely affect the rights of any
such party without the prior written
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consent of such party and (iii) to comply with all of the terms of the
Trust Agreement, the nonperformance of which would adversely affect such
party;
(c) The Owner Trustee or any successor may resign or be removed by
the Bank as the Owner Trustee, a successor Owner Trustee may be appointed
and a corporation may become the Owner Trustee under the Trust Agreement,
only in accordance with the provisions of Article IX of the Trust
Agreement and, with respect to such appointment, with the consent of the
Lessee (so long as there shall be no Lease Event of Default that shall
have occurred and be continuing), which consent shall not be unreasonably
withheld or delayed;
(d) The Owner Trustee, in its capacity as the Owner Trustee under the
Trust Agreement, and not in its individual capacity, shall not contract
for, create, incur or assume any Indebtedness, or enter into any business
or other activity or enter into any contracts or agreements, other than
pursuant to or under the Operative Agreements;
(e) The Bank will not instruct the Owner Trustee to take any action
in violation of the terms of any Operative Agreement;
(f) Neither the Bank nor the Owner Trustee shall (i) commence any
case, proceeding or other action with respect to the Owner Trustee under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, arrangement,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (ii) seek appointment of a receiver,
trustee, custodian or other similar official with respect to the Owner
Trustee or for all or any substantial benefit of the creditors of the
Owner Trustee; and neither the Bank nor the Owner Trustee shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee and the
Bank if the Owner Trustee's principal place of business or chief executive
office, or the office where the records concerning the accounts or
contract rights relating to any Property are kept, shall cease to be
located at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, or if it
shall change its name; and
(h) The Owner Trustee shall take or refrain from taking such actions
and grant or refrain from granting such approvals with respect to the
Operative Agreements and/or relating to any Property in each case as
directed in writing by the Bank.
8.3. LESSEE COVENANTS, CONSENT AND ACKNOWLEDGMENT.
(a) The Lessee acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Agreement and the
Mortgage Instruments, shall create Liens respecting the various personal
property, fixtures and real property described therein in favor of the
Bank. The Lessee hereby irrevocably consents to the creation,
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perfection and maintenance of such Liens. The Lessee shall, to the extent
reasonably requested by any of the other parties hereto, cooperate with
the other parties in connection with their covenants herein or in the
other Operative Agreements and shall from time to time duly execute and
deliver any and all such future instruments, documents and financing
statements (and continuation statements related thereto) as any other
party hereto may reasonably request.
(b) The Lessor hereby instructs the Lessee, and the Lessee hereby
acknowledges and agrees, that until such time as the Loans and the Holder
Advances are paid in full and the Liens evidenced by the Security
Agreement and the Mortgage Instruments have been released (i) any and all
Rent (excluding Excepted Payments which shall be payable to any other
Person as appropriate) and any and all other amounts of any kind or type
under any of the Operative Agreements due and owing or payable to any
Person shall instead be paid directly to the Bank (excluding Excepted
Payments which shall be payable to any other Person as appropriate) or as
the Bank may direct from time to time for allocation in accordance with
Section 8.7 hereof, (ii) all rights of the Lessor under the Lease shall be
exercised by the Bank and (iii) the Lessee shall cause all notices,
certificates, financial statements, communications and other information
which are delivered, or are required to be delivered, to the Lessor, to
also be delivered at the same time to the Bank.
(c) The Lessee shall not consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement except in accordance with Section 12.4 of this
Agreement.
(d) The Lessee hereby covenants and agrees that, except for amounts
payable as Basic Rent, any and all payment obligations (including without
limitation LOC Reimbursement Amounts but subject to the provisions of
Section 2.3(a) of the Credit Agreement regarding accrual of such amounts
until the Completion Date for each Property, as applicable) owing from
time to time under the Operative Agreements by any Person to the Bank or
any other Person shall (without further action) be deemed to be
Supplemental Rent obligations payable by the Lessee. Without limitation,
such obligations of the Lessee shall include without limitation
arrangement fees, administrative fees, unused fees, breakage costs,
indemnities, trustee fees and transaction expenses incurred by the parties
hereto in connection with the transactions contemplated by the Operative
Agreements.
(e) At any time the Lessor or the Bank is entitled under the
Operative Agreements to possession of a Property or any component thereof,
each of the Construction Agent and the Lessee hereby covenants and agrees,
at its own cost and expense, to assemble and make the same available to
the Bank (on behalf of the Lessor).
(f) The Lessee hereby covenants and agrees that Advances for items
other than Land and Improvements respecting any individual parcel of
Property shall at no time
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constitute in excess of fifty percent (50%) of the aggregate Advances
respecting such parcel of Property funded at such time under the Operative
Agreements.
(g) The Lessee hereby covenants and agrees that it shall give prompt
notice to the Bank if the Lessee's principal place of business or chief
executive office, or the office where the records concerning the accounts
or contract rights relating to any Property are kept, shall cease to be
located at 00000 XX Xxxxxxx 00X, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 or
if it shall change its name.
(h) The Lessee shall promptly notify the Bank, or cause the Bank to
be promptly notified, upon the Lessee gaining knowledge of the occurrence
of any Default or Event of Default which is continuing at such time. In
any event, such notice shall be provided to the Bank within ten (10) days
of when the Lessee gains such knowledge.
(i) Lessee shall take all action necessary to assure that Lessee's
computer based systems are able to operate and effectively process data
including dates on and after January 1, 2000. At the request of the Bank,
Lessee shall provide the Bank assurance acceptable to the Bank of Lessee's
Year 2000 compatibility.
(j) Lessee shall perform any and all obligations of Lessor under, and
cause Lessor to otherwise remain in full compliance with, the terms and
provisions of each Ground Lease, if any.
(k) The Lessee shall, on or before the first day of each fiscal
quarter of the Lessee, furnish to the Bank a written notice setting forth
the Lessee's calculation, in reasonable detail, of the Consolidated
Leverage Ratio for the immediately preceding fiscal quarter of the Lessee.
8.4. ALLOCATION OF CERTAIN PAYMENTS.
Except for Excepted Payments, the parties hereto acknowledge and agree
that all payments due and owing by the Lessee to the Lessor under the Lease or
any of the other Operative Agreements shall be made by the Lessee directly to
the Bank as more particularly provided in Section 8.3 hereof. The Lessor, the
Bank and the Lessee acknowledge the terms of Section 8.7 of this Agreement
regarding the allocation of payments and other amounts made or received from
time to time under the Operative Agreements and agree, that all such payments
and amounts are to be allocated as provided in Section 8.7 of this Agreement.
8.5. GRANT OF EASEMENTS, ETC.
The Bank hereby agrees that, so long as no Event of Default shall have
occurred and be continuing, the Owner Trustee shall, from time to time at the
request of the Lessee (and with the prior consent of the Bank), in connection
with the transactions contemplated by the Agency Agreement, the Lease or the
other Operative Agreements, (i) grant easements and other rights in
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the nature of easements with respect to any Property, (ii) release existing
easements or other rights in the nature of easements which are for the benefit
of any Property, (iii) execute and deliver to any Person any instrument
appropriate to confirm or effect such grants or releases, and (iv) execute and
deliver to any Person such other documents or materials in connection with the
acquisition, development, construction, testing or operation of any Property,
including without limitation reciprocal easement agreements, construction
contracts, operating agreements, development agreements, plats, replats or
subdivision documents; provided, that each of the agreements referred to in
this Section 8.5 shall be of the type normally executed by the Lessee in the
ordinary course of the Lessee's business and shall be on commercially
reasonable terms so as not to diminish the value of any Property in any
material respect.
8.6. APPOINTMENT BY THE BANK AND THE OWNER TRUSTEE.
The Bank is appointed to provide notices under the Operative Agreements on
behalf of the Owner Trustee (as determined by the Bank, in its reasonable
discretion), to receive notices under the Operative Agreements on behalf of the
Owner Trustee and (subject to Sections 8.5 and 9.2) to take such other action
under the Operative Agreements on behalf of the Owner Trustee as the Bank shall
determine in its reasonable discretion from time to time. The Bank hereby
accepts such appointments. Further, the Bank shall be entitled to take such
action on behalf of the Owner Trustee as is delegated to the Bank under any
Operative Agreement (whether express or implied) as may be reasonably
incidental thereto. The parties hereto hereby agree to the provisions contained
in this Section 8.6.
8.7. COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
(a) The Lessee has agreed pursuant to Section 5.8 and otherwise in
accordance with the terms of this Agreement to pay to (i) the Bank any and
all Rent (excluding Excepted Payments) and any and all other amounts of
any kind or type under any of the Operative Agreements due and owing or
payable to any Person and (ii) each Person as appropriate the Excepted
Payments.
(b) Payments and other amounts received by the Bank from time to time
in accordance with the terms of subparagraph (a) shall be applied and
allocated by the Bank first, to the payment of interest on the Loans and
thereafter the principal of the Loans which is due and payable on such
date; second, to the payment of accrued Holder Yield with respect to the
Holder Advances and thereafter the portion of the Holder Advances which is
due on such date; and third, if no Default or Event of Default is in
effect, any excess shall be paid to such Person or Persons as the Lessee
may designate.
(c) Upon the termination of the Commitments and the payment in full
of the Loans and all other amounts owing by the Owner Trustee hereunder or
under any Credit Document and the payment in full of all amounts owing to
the Holder and the Owner Trustee under the Trust Agreement, any moneys
remaining with the Bank shall be returned to the Lessee or such other
Person or Persons as the Lessee may designate. In the event of an
Acceleration it is agreed that, prior to the application and allocation of
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amounts received by the Bank in the order described in Section 8.7(b)
above, any such amounts shall first be applied and allocated to the
payment of (i) any and all sums advanced by the Bank in order to preserve
the Collateral or to preserve its Lien thereon, (ii) the expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any exercise by the Bank
of its rights under the Security Documents, together with reasonable
attorneys' fees and expenses and court costs and (iii) any and all other
amounts reasonably owed to the Bank under or in connection with the
transactions contemplated by the Operative Agreements (including without
limitation any accrued and unpaid administration fees).
8.8. RELEASE OF PROPERTIES, ETC.
If the Lessee shall at any time purchase any Property (or Lessor's
leasehold interest in such Property under any Head Lease) pursuant to the
Lease, or the Construction Agent shall purchase any Property (or Lessor's
leasehold interest in such Property under any Head Lease) pursuant to the
Agency Agreement, or if any Property (or Lessor's leasehold interest in such
Property under any Head Lease) shall be sold in accordance with Article XXII of
the Lease, then, upon satisfaction by the Owner Trustee of its obligation to
prepay the Loans, Holder Advances and all other amounts owing to the Bank under
the Operative Agreements, the Bank shall release such Properties (or Lessor's
leasehold interests in such Properties under any Head Leases) from the Liens
created by the Security Documents to the extent of its interest therein. In
addition, upon the termination of the Commitments and the Holder Commitments
and the payment in full of the Loans, the Holder Advances and all other amounts
owing by the Owner Trustee and the Lessee hereunder or under any other
Operative Agreement, the Bank shall release all of the Properties (or Lessor's
leasehold interests in such Properties under any Head Leases) from the Liens
created by the Security Documents to the extent of its interest therein. Upon
request of the Owner Trustee following any such release, the Bank shall, at the
sole cost and expense of the Lessee, execute and deliver to the Owner Trustee
and the Lessee such documents as the Owner Trustee or the Lessee shall
reasonably request to evidence such release.
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
9.1. THE CONSTRUCTION AGENT'S AND THE LESSEE'S CREDIT AGREEMENT
RIGHTS.
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Bank, the Lessee and the Owner Trustee hereby agree that, prior
to the occurrence and continuation of any Default or Event of Default, the
Construction Agent or the Lessee, as the case may be, shall have the following
rights:
(a) the right to designate an account to which amounts funded under
the Operative Agreements shall be credited pursuant to Section 2.3(a) of
the Credit Agreement;
(b) the right to terminate or reduce the Commitments pursuant to
Section 2.5(a) of the Credit Agreement;
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(c) the right to exercise the conversion and continuation options
pursuant to Section 2.7 of the Credit Agreement;
(d) the right to receive any notice and any certificate, in each case
issued pursuant to Section 2.11(a) of the Credit Agreement;
(e) the right to cause Letters of Credit to be issued pursuant to
Section 2.12 of the Credit Agreement;
(f) the right to consent to any assignment by the Bank to which the
Lessor has the right to consent pursuant to Section 9.8 of the Credit
Agreement; and
(g) the right to act on behalf of the Owner Trustee, in its capacity
as the lessee under any Head Lessee, in connection with the acquisition,
construction, development and equipping of any Property pursuant to and in
accordance with the Operative Agreements and, in addition thereto, the
right to exercise other rights of the Owner Trustee under any Head Lease
upon not less than thirty (30) days prior written notice from the Lessee
to the Bank unless the Bank in its sole discretion objects to such
exercise of rights.
9.2. THE CONSTRUCTION AGENT'S AND THE LESSEE'S TRUST AGREEMENT
RIGHTS.
Notwithstanding anything to the contrary contained in the Trust Agreement,
the Lessee, the Owner Trustee and the Bank hereby agree that, prior to the
occurrence and continuation of any Default or Event of Default, the
Construction Agent or the Lessee, as the case may be, shall have the following
rights:
(a) the right to exercise the conversion and continuation options
pursuant to Section 3.8 of the Trust Agreement;
(b) the right to receive any notice and any certificate, in each case
issued pursuant to Section 3.9(a) of the Trust Agreement;
(c) the right to exercise the removal options contained in Section
9.1 of the Trust Agreement; provided, however, that no removal of the
Owner Trustee and appointment of a successor Owner Trustee by the Holder
pursuant to Section 9.1 of the Trust Agreement shall be made without the
prior written consent (not to be unreasonably withheld or delayed) of the
Lessee.
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SECTION 10. TRANSFER OF INTEREST.
10.1. RESTRICTIONS ON TRANSFER.
The Bank may assign or transfer all of its interest hereunder and under
the other Operative Agreements in accordance with Section 9.8 of the Credit
Agreement. The Bank may, directly or indirectly, assign, convey or otherwise
transfer all of its right, title or interest in or to the Trust Estate or the
Trust Agreement with the prior written consent of the Lessee (which consent
shall not be unreasonably withheld or delayed) and in accordance with the terms
of Section 11.8(b) of the Trust Agreement. The Owner Trustee may, subject to
the rights of the Lessee under the Lease and the other Operative Agreements and
to the Lien of the applicable Security Documents but only with the prior
written consent of the Bank (which consent may be withheld by the Bank in its
sole discretion) and (provided, no Default or Event of Default has occurred and
is continuing) with the consent of the Lessee, directly or indirectly, assign,
convey, appoint an agent with respect to enforcement of, or otherwise transfer
any of its right, title or interest in or to any Property, the Lease, the Trust
Agreement and the other Operative Agreements (including without limitation any
right to indemnification thereunder), or any other document relating to a
Property or any interest in a Property as provided in the Trust Agreement and
the Lease. The provisions of the immediately preceding sentence shall not apply
to the obligations of the Owner Trustee to transfer Property to the Lessee or a
third party purchaser pursuant to Article XXII of the Lease upon payment for
such Property in accordance with the terms and conditions of the Lease. The
Lessee may not assign any of the Operative Agreements or any of their
respective rights or obligations thereunder or with respect to any Property in
whole or in part to any Person without the prior written consent of the Bank
and the Lessor.
10.2. EFFECT OF TRANSFER.
From and after any transfer effected in accordance with this Section 10,
the transferor shall be released, to the extent of such transfer, from its
liability hereunder and under the other documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer;
provided, however, that any transferor shall remain liable hereunder and under
such other documents to the extent that the transferee shall not have assumed
the obligations of the transferor thereunder. Upon any transfer by the Owner
Trustee or the Bank as above provided, any such transferee shall assume the
obligations of the Owner Trustee or the Bank, as the case may be.
Notwithstanding any transfer of all or a portion of the transferor's interest
as provided in this Section 10, the transferor shall be entitled to all
benefits accrued and all rights vested prior to such transfer including without
limitation rights to indemnification under any such document.
SECTION 11. INDEMNIFICATION.
11.1. GENERAL INDEMNITY.
Whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold
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harmless each Indemnified Person on an After Tax Basis from and against any
Claims, which may be imposed on, incurred by or asserted against an Indemnified
Person by any third party, including without limitation Claims arising from the
negligence of an Indemnified Person (but not to the extent such Claims arise
from the gross negligence or willful misconduct of such Indemnified Person
itself, as determined by a court of competent jurisdiction, as opposed to gross
negligence or willful misconduct imputed to such Indemnified Person) in any way
relating to or arising or alleged to arise out of the execution, delivery,
performance or enforcement of this Agreement, the Lease or any other Operative
Agreement or on or with respect to any Property or any component thereof,
including without limitation Claims in any way relating to or arising or
alleged to arise out of (a) the financing, refinancing, purchase, acceptance,
rejection, ownership, design, construction, refurbishment, development,
delivery, acceptance, nondelivery, leasing, subleasing, possession, use,
occupancy, operation, maintenance repair, modification, transportation,
condition, sale, return, repossession (whether by summary proceedings or
otherwise), or any other disposition of any Property or any part thereof,
including without limitation the acquisition, holding or disposition of any
interest in the Property, lease or agreement comprising a portion of any
thereof; (b) any latent or other defects in any Property or any portion thereof
whether or not discoverable by an Indemnified Person or the Indemnity Provider;
(c) a violation of Environmental Laws, Environmental Claims or other loss of or
damage to any property or the environment relating to the Property, the Lease,
the Agency Agreement or the Indemnity Provider; (d) the Operative Agreements,
or any transaction contemplated thereby; (e) any breach by the Indemnity
Provider of any of its representations or warranties under the Operative
Agreements to which the Indemnity Provider is a party or failure by the
Indemnity Provider to perform or observe any covenant or agreement to be
performed by it under any of the Operative Agreements; (f) the transactions
contemplated hereby or by any other Operative Agreement, in respect of the
application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) personal
injury, death or property damage, including without limitation Claims based on
strict or absolute liability in tort; and (h) any fees, expenses and/or other
assessments by any business park or any other applicable entity with oversight
responsibility for the applicable Property. The Indemnity Provider shall be
permitted to contest or respond to any Claim subject to this Section 11.1 with
the prior written consent of the Indemnified Person, which consent shall not be
unreasonably withheld or delayed.
The Indemnity Provider agrees to pay as Supplemental Rent any and all
indemnification amounts with respect to which the Borrower is otherwise
obligated pursuant to Section 2.12 of the Credit Agreement.
The Construction Agent and the Lessee waive and agree not to assert any
defense alleging that the Owner Trustee or any Development Authority is the
owner of any Property or portion thereof.
11.2. GENERAL TAX INDEMNITY.
(a) The Indemnity Provider shall pay and assume liability for, and
does hereby agree to indemnify, protect and defend each Property and all
Indemnified Persons, and hold them harmless against, all Impositions
(including without limitation Impositions
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for which the Owner Trustee becomes liable under any Bond Document whether
by way of indemnity or otherwise) on an After Tax Basis, and all payments
pursuant to the Operative Agreements shall be made free and clear of and
without deduction for any and all present and future Impositions.
(b) Notwithstanding anything to the contrary in Section 11.2(a)
hereof, the following shall be excluded from the indemnity required by
Section 11.2(a):
(i) Taxes (other than Taxes that are, or are in the nature of,
sales, use, rental, value added, transfer or property taxes) that are
imposed on a Indemnified Person (other than the Lessor, the Owner
Trustee and the Trust) by the United States federal government that
are based on or measured by the net income (including without
limitation taxes based on capital gains and minimum taxes) of such
Person; provided, that this clause (i) shall not be interpreted to
prevent a payment from being made on an After Tax Basis if such
payment is otherwise required to be so made;
(ii) Taxes (other than Taxes that are, or are in the nature of,
sales, use, rental, value added, transfer or property taxes) that are
imposed on any Indemnified Person (other than the Lessor, the Owner
Trustee and the Trust) by any state or local jurisdiction or taxing
authority within any state or local jurisdiction and that are based
upon or measured by the net income (including without limitation
taxes based on capital gains and minimum taxes) of such Person;
provided that such Taxes shall not be excluded under this
subparagraph (ii) to the extent such Taxes would have been imposed
had the location, possession or use of any Property in, the location
or the operation of the Lessee in, or the Lessee's making payments
under the Operative Agreements from, the jurisdiction imposing such
Taxes been the sole connection between such Indemnified Person and
the jurisdiction imposing such Taxes; provided, further, that this
clause (ii) shall not be interpreted to prevent a payment from being
made on an After Tax Basis if such payment is otherwise required to
be so made;
(iii) any Tax to the extent it relates to any act, event or
omission that occurs after the termination of the Lease and
redelivery or sale of the Property (or any interest therein under any
Head Lease) in accordance with the terms of the Lease (but not any
Tax that relates to such termination, redelivery or sale and/or to
any period prior to such termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified Person as a
result of the gross negligence or willful misconduct of such
Indemnified Person itself, as determined by a court of competent
jurisdiction (as opposed to gross negligence or willful misconduct
imputed to such Indemnified Person), but not Taxes imposed as a
result of ordinary negligence of such Indemnified Person;
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(c) Subject to the terms of Section 11.2(f), the Indemnity
Provider shall pay or cause to be paid all Impositions directly to
the taxing authorities where feasible and otherwise to the
Indemnified Person, as appropriate, and the Indemnity Provider shall
at its own expense, upon such Indemnified Person's reasonable
request, furnish to such Indemnified Person copies of official
receipts or other satisfactory proof evidencing such payment.
(d) The Indemnity Provider shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns
in respect of each Property and any other tax returns required for
the Owner Trustee respecting the transactions described in the
Operative Agreements. In case any other report or tax return shall be
required to be made with respect to any obligations of the Indemnity
Provider under or arising out of subsection (a) and of which the
Indemnity Provider has knowledge or should have knowledge, the
Indemnity Provider, at its sole cost and expense, shall notify the
relevant Indemnified Person of such requirement and (except if such
Indemnified Person notifies the Indemnity Provider that such
Indemnified Person intends to prepare and file such report or return)
(A) to the extent required or permitted by and consistent with Legal
Requirements, make and file in the Indemnity Provider's name such
return, statement or report; and (B) in the case of any other such
return, statement or report required to be made in the name of such
Indemnified Person, advise such Indemnified Person of such fact and
prepare such return, statement or report for filing by such
Indemnified Person or, where such return, statement or report shall
be required to reflect items in addition to any obligations of the
Indemnity Provider under or arising out of subsection (a), provide
such Indemnified Person at the Indemnity Provider's expense with
information sufficient to permit such return, statement or report to
be properly made with respect to any obligations of the Indemnity
Provider under or arising out of subsection (a). Such Indemnified
Person shall, upon the Indemnity Provider's request and at the
Indemnity Provider's expense, provide any data maintained by such
Indemnified Person (and not otherwise available to or within the
control of the Indemnity Provider) with respect to each Property
which the Indemnity Provider may reasonably require to prepare any
required tax returns or reports.
(e) As between the Indemnity Provider on one hand, and the Bank
on the other hand, the Indemnity Provider shall be responsible for,
and the Indemnity Provider shall indemnify and hold harmless the Bank
(without duplication of any indemnification required by subsection
(a)) on an After Tax Basis against, any obligation for United States
or foreign withholding taxes or similar levies, imposts, charges,
fees, deductions or withholdings (collectively, "Withholdings")
imposed in respect of the interest payable on the Notes, Holder Yield
payable on the Certificates or with respect to any other payments
under the Operative Agreement (all such payments being referred to
herein as "Exempt Payments" to be made without deduction, withholding
or set off) (and, if the Bank receives a demand for such payment from
any taxing authority or a Withholding is otherwise required with
respect to any Exempt Payment, the Indemnity Provider shall discharge
such demand on behalf of the Bank.
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If the Bank or any of its Affiliates files a consolidated tax
return (or equivalent) and subsequently receives the benefit in any
country of a tax credit or an allowance resulting from U.S. Taxes
with respect to which it has received a payment of an additional
amount under this Section 11.2(e), the Bank will pay to the Indemnity
Provider such part of that benefit as in the opinion of the Bank will
leave it (after such payment) in a position no more and no less
favorable than it would have been in if no additional payment had
been required to be paid, provided always that (i) the Bank will be
the sole judge of the amount of any such benefit and of the date on
which it is received, (ii) the Bank will have the absolute discretion
as to the order and manner in which it employs or claims tax credits
and allowances available to it and (iii) the Bank will not be obliged
to disclose to the Borrower any information regarding its tax affairs
or tax computations. For the purposes of this Section 11.2(e), "U.S.
Taxes" shall mean any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of
America or any taxing authority thereof or therein.
(f) If a written Claim is made against any Indemnified Person or
if any proceeding shall be commenced against such Indemnified Person
(including without limitation a written notice of such proceeding),
for any Impositions, the Indemnity Provider shall be permitted to
contest such Claim with the written consent of the Indemnified
Person, which consent shall not be unreasonably withheld or delayed;
provided, however, that the Indemnity Provider shall have the right
to conduct and control such contest only if such contest involves a
Tax other than a Tax on net income of the Indemnified Person and can
be pursued independently from any other proceeding involving a Tax
liability of such Indemnified Person.
11.3. INCREASED COSTS, ILLEGALITY, ETC.
(a) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request hereafter adopted,
promulgated or made by any central bank or other governmental
authority (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making,
funding or maintaining Advances or issuing Letters of Credit, then
the Lessee shall from time to time, upon demand by the Bank, pay to
the Bank additional amounts sufficient to compensate the Bank for
such increased cost. A certificate as to the amount of such increased
cost, submitted to the Lessee by the Bank, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If the Bank determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law, but
in each case promulgated or made after the date hereof) affects or
would affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank and
that the amount of such capital is increased by or based upon the
existence of the Bank's commitment to make Advances or to issue
Letters of Credit and other commitments of this type or upon the
Advances, then, upon demand by the Bank, the Lessee shall pay to the
Bank, from time to time as
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specified by the Bank, additional amounts sufficient to compensate
the Bank or such corporation in the light of such circumstances, to
the extent that the Bank reasonably determines such increase in
capital to be allocable to the existence of the Bank's commitment to
make such Advances or to issue such Letters of Credit. A certificate
as to such amounts submitted to the Lessee by the Bank shall be
conclusive and binding for all purposes, absent manifest error.
(c) Without limiting the effect of the foregoing, the Lessee
shall pay to the Bank on the last day of the Interest Period therefor
so long as the Bank is maintaining reserves against "Eurocurrency
liabilities" under Regulation D an additional amount (determined by
the Bank) equal to the product of the following for each Eurodollar
Loan or Eurodollar Holder Advance, as the case may be, for each day
during such Interest Period:
(i) the principal amount of such Eurodollar Loan or
Eurodollar Holder Advance, as the case may be, outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of which
is the rate (expressed as a decimal) at which interest accrues
on such Eurodollar Loan or Eurodollar Holder Advance, as the
case may be, for such Interest Period as provided in the Credit
Agreement or the Trust Agreement, as the case may be (less the
Applicable Percentage), and the denominator of which is one (1)
minus the effective rate (expressed as a decimal) at which such
reserve requirements are imposed on such Financing Party on such
day minus (y) such numerator; and
(iii) 1/360.
(d) Without affecting its rights under Sections 11.3(a), 11.3(b)
or 11.3(c) or any other provision of any Operative Agreement, the
Bank agrees that if there is any increase in any cost to or reduction
in any amount receivable by the Bank with respect to which the Lessee
would be obligated to compensate the Bank pursuant to Sections
11.3(a) or 11.3(b), the Bank shall use reasonable efforts to select
an alternative office for Advances or issuance of Letters of Credit
which would not result in any such increase in any cost to or
reduction in any amount receivable by the Bank; provided, however,
that the Bank shall not be obligated to select an alternative office
for Advances or issuance of Letters of Credit if the Bank determines
that (i) as a result of such selection such the Bank would be in
violation of any applicable law, regulation, treaty, or guideline, or
would incur additional costs or expenses or (ii) such selection would
be inadvisable for regulatory reasons or materially inconsistent with
the interests of the Bank.
(e) With reference to the obligations of the Lessee set forth in
Sections 11.3(a) through 11.3(d), the Lessee shall not have any
obligation to pay to the Bank amounts owing under such Sections for
any period which is more than one (1) year prior to the date upon
which the request for payment therefor is delivered to the Lessee.
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36
(f) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for the Bank to
perform its obligations hereunder to make or maintain Eurodollar
Loans or Eurodollar Holder Advances, as the case may be, then (i)
each Eurodollar Loan or Eurodollar Holder Advance, as the case may
be, will automatically, at the earlier of the end of the Interest
Period for such Eurodollar Loan or Eurodollar Holder Advance, as the
case may be, or the date required by law, convert into an ABR Loan or
an ABR Holder Advance, as the case may be, and (iii) the obligation
of the Bank to make, convert or continue Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, shall be suspended
until the Agent shall notify the Lessee that the Bank has determined
that the circumstances causing such suspension no longer exist.
11.4. FUNDING/CONTRIBUTION INDEMNITY.
Subject to the provisions of Section 2.11(a) of the Credit Agreement and
3.9(a) of the Trust Agreement, as the case may be, the Lessee agrees to
indemnify the Bank and to hold the Bank harmless from any loss or reasonable
expense which such Financing Party may sustain or incur as a consequence of (a)
any default in connection with the drawing of funds for any Advance, (b) any
default in making any prepayment after a notice thereof has been given in
accordance with the provisions of the Operative Agreements or (c) the making of
a voluntary or involuntary payment of Eurodollar Loans or Eurodollar Holder
Advances, as the case may be, on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification shall be in an amount equal
to the excess, if any, of (x) the amount of interest or Holder Yield, as the
case may be, which would have accrued on the amount so paid, or not so
borrowed, accepted, converted or continued for the period from the date of such
payment or of such failure to borrow, accept, convert or continue to the last
day of such Interest Period (or, in the case of a failure to borrow, accept,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable Eurodollar Rate plus the
Applicable Percentage for such Loan or Holder Advance, as the case may be, for
such Interest Period over (y) the amount of interest (as determined by the Bank
in its reasonable discretion) which would have accrued to the Bank on such
amount by (i) (in the case of Loans) reemploying such funds in loans of the
same type and amount during the period from the date of payment or failure to
borrow to the last day of the then applicable Interest Period (or, in the case
of a failure to borrow, the Interest Period that would have commenced on the
date of such failure) and (ii) (in the case of Holder Advances) placing such
amount on deposit for a comparable period with leading banks in the relevant
interest rate market. This covenant shall survive the termination of the
Operative Agreements and the payment of all other amounts payable hereunder.
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SECTION 12. MISCELLANEOUS.
12.1. SURVIVAL OF AGREEMENTS; THIRD PARTY BENEFICIARIES.
The representations, warranties, covenants, indemnities and agreements of
the parties provided for in the Operative Agreements, and the parties'
obligations under any and all thereof, shall survive the execution and delivery
of this Agreement, the transfer of any Property to the Owner Trustee or any
Development Authority, the acquisition or lease of any Property (or any of its
components), the construction of any Improvements, the Completion of any
Property, any disposition of any interest of the Owner Trustee or any
Development Authority in any Property or any interest of the Bank in the Trust
Estate, 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 Agreements. Except as
otherwise expressly set forth herein or in other Operative Agreements, the
indemnities of the parties provided for in the Operative Agreements shall
survive the expiration or termination of any thereof. Each Development
Authority and Bond Trustee shall be deemed to be a third party beneficiary of
this Agreement and each other Operative Agreement (other than the Bond
Documents) to the extent named herein or therein.
12.2. NOTICES.
All notices required or permitted to be given under any Operative
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage paid with return receipt requested; by private courier, prepaid;
by telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or acknowledged by the
addressee or its office. Personal delivery shall be effective when
accomplished. Unless a party changes its address by giving notice to the other
party as provided herein, notices shall be delivered to the parties at the
following addresses:
If to the Construction Agent or the Lessee, to such entity at the
following address:
Sterile Recoveries, Inc.
00000 XX Xxxxxxx 00X, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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38
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxx X. Xxxxx,
Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Bank, to it at the following address:
First Union National Bank
c/o First Union Capital Markets Group
DC 6
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxx Xxxxxx,
Capital Markets Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Any party initiating the sending of a notice hereunder with respect
to any Property subject to a Head Lease shall simultaneously provide a
copy of such notice to the applicable Development Authority and the
applicable Bond Trustee at the respective addresses for such Persons set
forth in the applicable Bond Documents.
From time to time any party may designate additional parties and/or
another address for notice purposes by notice to each of the other parties
hereto. Each notice hereunder shall be effective upon receipt or refusal
thereof.
12.3. COUNTERPARTS.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one (1) and
the same instrument.
12.4. TERMINATIONS, AMENDMENTS, WAIVERS, ETC.; UNANIMOUS VOTE
MATTERS.
Each Basic Document may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by, subject to Article VIII of
the Trust Agreement regarding termination of the Trust Agreement, the Bank, the
Owner Trustee and the Lessee (to the extent the Lessee is a party to such Basic
Document); provided, to the extent no Default or Event of Default shall have
occurred and be continuing, the Bank shall not amend, supplement, waive or
modify any provision of any Basic Document in such a manner as to adversely
affect
34
39
the rights of the Lessee without the prior written consent (not to be
unreasonably withheld or delayed) of the Lessee. Each Operative Agreement which
is not a Basic Document may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by the parties thereto and the
Bank.
12.5. HEADINGS, ETC.
The Table of Contents and headings of the various Articles and Sections of
this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof.
12.6. PARTIES IN INTEREST.
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; VENUE; ARBITRATION.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action
or proceeding with respect to this Agreement or any other Operative
Agreement may be brought in the courts of the State of North Carolina
located in Mecklenburg County or of the United States for the Western
District of North Carolina, and, by execution and delivery of this
Agreement, each of the parties to this Agreement hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. Each of the
parties to this Agreement further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices pursuant
to Section 12.2, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by Law or to commence legal
proceedings or to otherwise proceed against any party in any other
jurisdiction.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO ANY DISPUTE OR THIS AGREEMENT, ANY
OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or
35
40
any other Operative Agreement brought in the courts referred to in
subsection (a) above and hereby further irrevocably waives and agrees not
to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
(d) Notwithstanding the provisions of Section 12.7(a) or of any other
Operative Agreement to the contrary, upon demand of any party to this
Agreement and/or any other Operative Agreement, upon demand of any party
hereto, whether made before or after institution of any judicial
proceeding, any claim or controversy arising out of, or relating to the
Operative Agreements between or among the parties hereto (a "Dispute")
shall be resolved by binding arbitration conducted under and governed by
the Commercial Financial Disputes Arbitration Rules (the "Arbitration
Rules") of the American Arbitration Association (the "AAA") and the
Federal Arbitration Act. Disputes may include without limitation tort
claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, or claims arising from
documents executed in the future. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to swap
agreements.
All arbitration hearings shall be conducted in the city in which the
office of the Agent (referenced pursuant to Section 12.2 of this Agreement) is
located. A hearing shall begin within ninety (90) days of demand for
arbitration and all hearings shall be concluded within one hundred and twenty
(120) days of demand for arbitration. These time limitations may not be
extended unless a party shows cause for extension and then for no more than a
total of sixty (60) days. The expedited procedures set forth in Rule 51 et seq.
of the Arbitration Rules shall be applicable to claims of less than $1,000,000.
Arbitrators shall be licensed attorneys selected from the Commercial Financial
Dispute Arbitration Panel of the AAA. The parties do not waive applicable
federal or state substantive law except as provided herein.
Notwithstanding the preceding binding arbitration provisions, the parties
agree to preserve, without diminution, certain remedies that any party may
exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any real or personal property or other security
by exercising a power of sale or under applicable law by judicial foreclosure
including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceedings; and (iv) when applicable, a judgment by confession of judgment.
Any claim or controversy with regard to any party's entitlement to such
remedies is a Dispute.
Each party to this Agreement agrees that it shall not have a remedy of
punitive or exemplary damages against any other party in any Dispute and hereby
waives any right or claim
36
41
to punitive or exemplary damages they have now or which may arise in the future
in connection with any Dispute, whether the Dispute is resolved by arbitration
or judicially.
12.8. SEVERABILITY.
Any provision of this 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.
12.9. LIABILITY LIMITED.
(a) The Bank, the Lessee and the Owner Trustee each acknowledge
and agree that the Owner Trustee is (except as otherwise expressly
provided herein or therein) entering into this Agreement and the
other Operative Agreements to which it is a party (other than the
Trust Agreement and to the extent otherwise provided in Section 6.1
of this Agreement), solely in its capacity as trustee under the Trust
Agreement and not in its individual capacity and that the Trust
Company shall not be liable or accountable under any circumstances
whatsoever in its individual capacity for or on account of any
statements, representations, warranties, covenants or obligations
stated to be those of the Owner Trustee, except for its own gross
negligence or willful misconduct and as otherwise expressly provided
herein or in the other Operative Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, no Exculpated Person shall be personally liable in
any respect for any liability or obligation arising hereunder or in
any other Operative Agreement including without limitation the
payment of the principal of, or interest on, the Notes, or for
monetary damages for the breach of performance of any of the
covenants contained in the Credit Agreement, the Notes, this
Agreement, the Security Agreement or any of the other Operative
Agreements. The Bank agrees that, in the event any remedies under any
Operative Agreement are pursued, the Bank shall have no recourse
against any Exculpated Person, for any deficiency, loss or Claim for
monetary damages or otherwise resulting therefrom and recourse shall
be had solely and exclusively against the Trust Estate (excluding
Excepted Payments) and the Lessee (with respect to the Lessee's
obligations under the Operative Agreements); but nothing contained
herein shall be taken to prevent recourse against or the enforcement
of remedies against the Trust Estate (excluding Excepted Payments) in
respect of any and all liabilities, obligations and undertakings
contained herein and/or in any other Operative Agreement.
Notwithstanding the provisions of this Section, nothing in any
Operative Agreement shall: (i) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Notes
and/or the Certificates arising under any Operative Agreement or
secured by any Operative Agreement, but the same shall continue until
paid or discharged; (ii) relieve any
37
42
Exculpated Person from liability and responsibility for (but only to
the extent of the damages arising by reason of): active waste
knowingly committed by any Exculpated Person with respect to any
Property, any fraud, gross negligence or willful misconduct on the
part of any Exculpated Person; (iii) relieve any Exculpated Person
from liability and responsibility for (but only to the extent of the
moneys misappropriated, misapplied or not turned over) (A) except for
Excepted Payments, misappropriation or misapplication by the Lessor
(i.e., application in a manner contrary to any of the Operative
Agreements) of any insurance proceeds or condemnation award paid or
delivered to the Lessor by any Person other than the Bank, (B) except
for Excepted Payments, any deposits or any escrows or amounts owed by
the Construction Agent under the Agency Agreement held by the Lessor
or (C) except for Excepted Payments, any rent or other income
received by the Lessor from the Lessee that is not turned over to the
Bank; or (iv) affect or in any way limit the Bank's rights and
remedies under any Operative Agreement with respect to the Rents and
rights and powers of the Bank under the Operative Agreements or to
obtain a judgment against the Lessee's interest in the Properties or
the Bank's rights and powers to obtain a judgment against the Lessor
or the Lessee (provided, that no deficiency judgment or other money
judgment shall be enforced against any Exculpated Person except to
the extent of the Lessor's interest in the Trust Estate (excluding
Excepted Payments) or to the extent the Lessor may be liable as
otherwise contemplated in clauses (ii) and (iii) of this Section
12.9(b)).
12.10. RIGHTS OF THE LESSEE.
If at any time all obligations (i) of the Owner Trustee under the Credit
Agreement, the Security Documents and the other Operative Agreements and (ii)
of the Lessee under the Operative Agreements have in each case been satisfied
or discharged in full, then the Lessee shall be entitled to (a) terminate the
Lease and (b) receive all amounts then held under the Operative Agreements and
all proceeds with respect to any of the Properties. Upon the termination of the
Lease pursuant to the foregoing clause (a), the Lessor shall transfer to the
Lessee all of its right, title and interest free and clear of the Lien of the
Lease, the Lien of the Security Documents and all Lessor Liens in and to any
Properties then subject to the Lease and any amounts or proceeds referred to in
the foregoing clause (b) shall be paid over to the Lessee.
12.11. 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 effectuate the intent and
purposes of this Participation Agreement, the other Operative Agreements and
the transactions contemplated hereby and thereby (including without limitation
the preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of Mortgage Instruments and other filings or
registrations which the parties hereto may from time to time request to be
filed or effected). The Lessee, at its own expense and without need of any
prior request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or (if the Owner Trustee shall so
38
43
request) as so requested, in order to maintain and protect all security
interests provided for hereunder or under any other Operative Agreement. In
addition, in connection with the sale or other disposition of any Property or
any portion thereof, the Lessee agrees to execute such instruments of
conveyance as reasonably required in connection therewith.
12.12. CALCULATIONS UNDER OPERATIVE AGREEMENTS.
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Owner Trustee
shall be made by the Bank and that such calculations and determinations shall
be conclusive and binding on the parties hereto in the absence of manifest
error.
12.13. [INTENTIONALLY LEFT BLANK];
12.14. FINANCIAL REPORTING/TAX CHARACTERIZATION.
Lessee agrees to obtain advice from its own accountants and tax counsel
regarding the financial reporting treatment and the tax characterization of the
transactions described in the Operative Agreements. Lessee further agrees that
Lessee shall not rely upon any statement of any Financing Party or any of their
respective Affiliates and/or Subsidiaries regarding any such financial
reporting treatment and/or tax characterization.
12.15. SET-OFF.
In addition to any rights now or hereafter granted under applicable Law
and not by way of limitation of any such rights, upon and after the occurrence
of any Event of Default and during the continuance thereof, the Bank and its
Affiliates and any assignee of the Bank in accordance with the applicable
provisions of the Operative Agreements are hereby authorized by the Lessee at
any time or from time to time, without notice to the Lessee or to any other
Person, any such notice being hereby expressly waived, to set-off and to
appropriate and to apply any and all deposits (general or special, time or
demand, including without limitation indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Bank and its Affiliates or any assignee or participant of
the Bank in accordance with the applicable provisions of the Operative
Agreements to or for the credit or the account of the Lessee against and on
account of the obligations of the Lessee under the Operative Agreements
irrespective of whether or not (a) the Bank shall have made any demand under
any Operative Agreement or (b) the Bank shall have declared any or all of the
obligations of the Lessee under the Operative Agreements to be due and payable
and although such obligations shall be contingent or unmatured.
[signature pages follow]
39
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
CONSTRUCTION AGENT
AND LESSEE:
STERILE RECOVERIES, INC., a Florida corporation
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------------------------
Title: EVP
-----------------------------------------
OWNER TRUSTEE AND
LESSOR:
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, except as expressly stated herein,
but solely as the Owner Trustee under the SRI
Realty Trust 1998-1
By: /s/ Authorized officer
-------------------------------------------
Name: Authorized officer
------------------------------------------
Title:
-----------------------------------------
BANK:
FIRST UNION NATIONAL BANK, a national banking
association, as Lender and Holder
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
45
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2, 5.2, 5.3 and 5.4 of the Participation Agreement)
STERILE RECOVERIES, INC., a Florida corporation (the "Company") hereby
certifies as true and correct and delivers the following Requisition to FIRST
UNION NATIONAL BANK, as lender and holder ("Bank"):
Reference is made herein to that certain Participation Agreement dated
as of February 1, 1999 (as amended, modified, extended, supplemented, restated
and/or replaced from time to time, the "Participation Agreement") among the
Company, in its capacity as the Lessee and as the Construction Agent, First
Security Bank, National Association, as the Owner Trustee and the Bank.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings set forth therefor in the Participation Agreement.
Check one:
____ INITIAL CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance)
____ PROPERTY CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance)
____ CONSTRUCTION ADVANCE DATE: _____________
(three (3) Business Days prior notice required for Advance)
1. Transaction Expenses and other fees, expenses and disbursements under
Section 7 of the Participation Agreement and any and all other amounts
contemplated to be financed under the participation Agreement including without
limitation any Work, broker's fees, taxes, recording fees and the like (with
supporting invoices or closing statement attached):
Party to Whom Amount Owed
Amount is Owed (in U.S. Dollars)
--------------- ----------------
--------------- ----------------
--------------- ----------------
--------------- ----------------
--------------- ----------------
A-1
46
[FOR TRANSACTIONS INVOLVING THE ISSUANCE OF LETTERS OF CREDIT]
The Company hereby requests the Bank to issue a Letter of Credit for the
account of the Owner Trustee in favor of _______________ in an amount not to
exceed $ ___________________.
2. Description of Land (which shall be a legal description of the Land in
connection with an Advance to pay Property Acquisition Costs): See attached
Schedule 1
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
5. Description of Work: See attached Schedule 4
6. Aggregate Loans and Holder Advances requested since the Initial Closing Date
with respect to each Property for which Advances are requested under this
Requisition (listed on a Property by Property basis), including without
limitation all amounts requested under this Requisition: [IDENTIFY ON A
PROPERTY BY PROPERTY BASIS]
$ [Property]
--------------
In connection with this Requisition, the Company hereby requests that
the Bank make Loans to the Lessor in the amount of $______________ and that the
Bank make Holder Advances to the Lessor in the amount of $________________. The
Company hereby certifies (i) that the foregoing amounts requested do not exceed
the total aggregate of the Available Commitments plus the Available Holder
Commitments and (ii) each of the provisions of the Participation Agreement
applicable to the Loans and Holder Advances requested hereunder have been
complied with as of the date of this Requisition.
The Company requests the Loans be allocated as follows:
$ ABR Loans
--------------
$ Eurodollar Loans
--------------
The Company requests the Holder Advances be allocated as follows:
$ ABR Holder Advances
--------------
$ Eurodollar Holder Advances
--------------
A-2
47
The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of __________, ______.
STERILE RECOVERIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
A-3
48
Schedule 1
Description of Land
(Legal Description and Street Address)
A-4
49
Schedule 2
Description of Improvements
A-5
50
Schedule 3
Description of Equipment
General Description Make Model Serial Number
A-6
51
Schedule 4
Work
Work Performed for which the Advance is requested:
A-7
52
EXHIBIT B
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(j) of the
Participation Agreement)
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of Sterile
Recoveries, Inc.
Dear Sirs:
We have acted as special counsel to Sterile Recoveries, Inc., a Florida
corporation (the "Lessee") in connection with certain transactions contemplated
by the Participation Agreement dated as of February 1, 1999 (the "Participation
Agreement"), among the Lessee, First Security Bank, National Association, as
the Owner Trustee (the "Owner Trustee"), and First Union National Bank, as
lender and holder ("First Union"). This opinion is delivered pursuant to
Section 5.3(j) of the Participation Agreement. All capitalized terms used
herein, and not otherwise defined herein, shall have the meanings assigned
thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of [IDENTIFY THE APPLICABLE OPERATIVE
AGREEMENTS, INCLUDING EACH MORTGAGE INSTRUMENT, RELATED UCC FIXTURE FILINGS,
ADDITIONAL UCCS (HEREINAFTER DEFINED), DEEDS AND MEMORANDA OF LEASE] and such
other corporate documents and records of the Lessee, certificates of public
officials and representatives of the Lessee as to certain factual matters, and
such other instruments and documents which we have deemed necessary or
advisable to examine for the purpose of this opinion. With respect to such
examination, we have assumed (i) the statements of fact made in all such
certificates, documents and instruments are true, accurate and complete; (ii)
the due authorization, execution and delivery of the Operative Agreements by
the parties thereto; (iii) the genuineness of all signatures, the authenticity
and completeness of all documents, certificates, instruments, records and
corporate records submitted to us as originals and the conformity to the
original instruments of all documents submitted to us as copies, and the
authenticity and completeness of the originals of such copies; (iv) that all
parties have all requisite corporate power and authority to execute, deliver
and perform the Operative Agreements; and (v) except as to the Lessee, the
enforceability of the Mortgage Instrument, the Memorandum of Lease and the UCC
financing statements against all parties thereto.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Mortgage Instrument and Memorandum of Lease are enforceable in
accordance with their respective terms, except as limited by laws generally
affecting the
B-1
53
enforcement of creditors' rights, which laws will not materially prevent the
realization of the benefits intended by such documents.
(b) Each form of Mortgage Instrument and UCC fixture filing relating
thereto, attached hereto as Schedules 1 and 2, respectively, is in proper form
for filing and recording with the offices of [IDENTIFY THE RECORDING OFFICES OF
THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of each Mortgage Instrument and UCC fixture filing in [IDENTIFY THE
RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO
BE LOCATED], First Union will have a valid, perfected lien and security
interest in that portion of the Collateral described in such Mortgage
Instrument or UCC fixture filing to the extent such Collateral is comprised of
real property and/or fixtures.
(c) The forms of UCC financing statements relating to the Security
Documents, attached hereto as Schedule 3 (the "Additional UCCs"), are in proper
form for filing and recording with the offices of [IDENTIFY (I) THE RECORDING
OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED
AND (II) THE SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of the Additional UCCs in [IDENTIFY (I) THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED AND (II) THE
SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED], First Union will
have a valid, perfected lien and security interest in that portion of the
Collateral which can be perfected by filing UCC-1 financing statements under
Article 9 of the UCC.
(d) Each form of Deed and Memorandum of Lease is in appropriate form
for filing and recording with the [IDENTIFY THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS FOR THE COUNTIES WHERE THE PROPERTIES ARE TO BE
LOCATED].
(e) Each Memorandum of Lease, when filed and recorded with the
[IDENTIFY THE RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS FOR THE
COUNTIES WHERE THE PROPERTIES ARE TO BE LOCATED], will have been filed and
recorded in all public offices in the State of [__________] in which filing or
recording is necessary to provide constructive notice of the Lease to third
Persons and to establish of record the interest of the Lessor thereunder as to
the Properties described in each such Memorandum of Lease.
(f) Title to the Properties located in the State of [___________] may
be held in the name of the Owner Trustee as follows: First Security Bank,
National Association, not individually, but solely as the Owner Trustee under
the SRI Realty Trust 1998-1.
(g) The execution and delivery by First Security Bank, National
Association, individually or as the Owner Trustee, as the case may be, of the
Operative Agreements to which it is a party and compliance by First Security
Bank, National Association, individually or as the Owner Trustee, with all of
the provisions thereof do not and will not contravene any law, rule or
regulation of [IDENTIFY THE STATE].
B-2
54
(h) By reason of their participation in the transaction contemplated
under the Operative Agreements, neither First Union nor the Owner Trustee has
to (a) qualify as a foreign corporation in [IDENTIFY THE STATE], (b) file any
application or any designation for service of process in [IDENTIFY THE STATE]
or (c) pay any franchise, income, sales, excise, stamp or other taxes of any
kind to [IDENTIFY THE STATE].
(i) The provisions in the Operative Agreements concerning Rent,
interest, fees, prepayment premiums and other similar charges do not violate
the usury laws or other similar laws regulating the use or forbearance of money
of [IDENTIFY THE STATE].
(j) If the transactions contemplated by the Operative Agreements are
characterized as a lease transaction by a court of competent jurisdiction, the
Lease and the applicable Lease Supplement shall demise to the Lessee a valid
leasehold interest in the Properties described in such Lease Supplement.
(k) If the transactions contemplated by the Operative Agreements are
characterized as a loan transaction by a court of competent jurisdiction, the
combination of the Mortgage Instruments, the Deeds, the Lease and the
applicable Lease Supplements (and the other Operative Agreements incorporated
therein by reference) are sufficient to create a valid, perfected lien or
security interest in the Properties therein described, enforceable as a
mortgage in [IDENTIFY THE STATE].
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the State of [___________] and the federal laws
of the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Owner Trustee, First Union and their respective successors and assigns and may
not be relied upon by any other person other than such parties and their
respective successors and assigns without the express written consent of the
undersigned. The opinions expressed herein are as of the date hereof and we
make no undertaking to amend or supplement such opinions if facts come to our
attention or changes in the current law of the jurisdictions mentioned herein
occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
B-3
55
Distribution List
First Union National Bank as Lender and Holder
Sterile Recoveries, Inc., as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the SRI Realty Trust 1998-1
B-4
56
Schedule 1
Form of Mortgage Instrument
B-5
57
Schedule 2
Forms of UCC Fixture Filings
B-6
58
Schedule 3
Forms of UCC Financing Statements
B-7
59
EXHIBIT C
STERILE RECOVERIES, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(w) of the Participation Agreement)
STERILE RECOVERIES, INC., a Florida corporation (the "Company"), DOES
HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Company
contained in the Operative Agreements to which it is a party is
true and correct on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing
under any Operative Agreement.
3. Each Operative Agreement to which the Company is a party is in
full force and effect with respect to it.
4. The Company has duly performed and complied with all covenants,
agreements and conditions contained in the Participation Agreement
(hereinafter defined) or in any Operative Agreement required to be
performed or complied with by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise
defined herein have the respective meanings ascribed thereto in the
Participation Agreement dated as of February 1, 1999 among the Company, as the
Lessee and as the Construction Agent, First Security Bank, National
Association, as the Owner Trustee and First Union National Bank, as lender and
holder ("Bank").
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate
to be duly executed and delivered as of this _____ day of __________, ______.
STERILE RECOVERIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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60
EXHIBIT D
STERILE RECOVERIES, INC.
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(x) of the Participation Agreement)
STERILE RECOVERIES, INC., a Florida corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. Attached hereto as Schedule 1 is a true, correct and complete copy
of the resolutions of the Board of Directors of the Company duly
adopted by the Board of Directors of the Company on __________.
Such resolutions have not been amended, modified or rescinded
since their date of adoption and remain in full force and effect
as of the date hereof.
2. Attached hereto as Schedule 2 is a true, correct and complete copy
of the Articles of Incorporation of the Company on file in the
Office of the Secretary of State of Florida. Such Articles of
Incorporation have not been amended, modified or rescinded since
their date of adoption and remain in full force and effect as of
the date hereof.
3. Attached hereto as Schedule 3 is a true, correct and complete copy
of the Bylaws of the Company. Such Bylaws have not been amended,
modified or rescinded since their date of adoption and remain in
full force and effect as of the date hereof.
4. The persons named below now hold the offices set forth opposite
their names, and the signatures opposite their names and titles
are their true and correct signatures.
Name Office Signature
---- ------ ---------
------------------- ----------------------- -------------------------
------------------- ----------------------- -------------------------
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this _____ day of ___________, ______.
STERILE RECOVERIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
D-1
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Schedule 1
Board Resolutions
D-2
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Schedule 2
Articles of Incorporation
X-0
00
Xxxxxxxx 0
Xxxxxx
X-0
64
EXHIBIT E
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (except with respect to paragraph 1 below, to the
extent any such representations and warranties are made in its individual
capacity) but solely as the owner trustee under the SRI Realty Trust 1998-1
(the "Owner Trustee"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Owner Trustee
contained in the Operative Agreements to which it is a party is
true and correct on and as of the date hereof.
2. Each Operative Agreement to which the Owner Trustee is a party is
in full force and effect with respect to it.
3. The Owner Trustee has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any Operative
Agreement required to be performed or complied with by it on or
prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of February 1, 1999 among Sterile Recoveries, Inc., as the
Lessee and as the Construction Agent, the Owner Trustee, and First Union
National Bank, as lender and holder ("Bank").
IN WITNESS WHEREOF, the Owner Trustee has caused this Officer's Certificate to
be duly executed and delivered as of this _____ day of __________, ______.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually,
except as expressly stated herein,
but solely as the Owner Trustee
under the SRI Realty Trust 1998-1
STERILE RECOVERIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
X-0
00
XXXXXXX X
FIRST SECURITY BANK, NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(aa) of the Participation Agreement)
CERTIFICATE OF ASSISTANT SECRETARY
I, ______________________, duly elected and qualified Assistant
Secretary of the Board of Directors of First Security Bank, National
Association (the "Association"), hereby certify as follows:
1. The Association is a National Banking Association duly organized,
validly existing and in good standing under the laws of the United States. With
respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C.
1, et seq., the Comptroller of the Currency charters and exercises
regulatory and supervisory authority over all National Banking
Associations;
B. On December 9, 1881, the First National Bank of Ogden, Utah was
chartered as a National Banking Association under the laws of the
United States and under Charter No. 2597;
C. On October 2, 1922, in connection with a consolidation of The
First National Bank of Ogden, Ogden, Utah, and The Utah National
Bank of Ogden, Ogden, Utah, the title was changed to "The First &
Utah National Bank of Ogden"; on January 18, 1923, The First &
Utah National Bank of Ogden changed its title to "First Utah
National Bank of Ogden"; on January 19, 1926, the title was
changed to "First National Bank of Ogden"; on February 24, 1934,
the title was changed to "First Security Bank of Utah, National
Association"; on June 21, 1996, the title was changed to "First
Security Bank, National Association"; and
D. First Security Bank, National Association, Ogden, Utah, continues
to hold a valid certificate to do business as a National Banking
Association.
2. The Association's Articles of Association, as amended, are in full
force and effect, and a true, correct and complete copy is attached hereto as
Schedule A and incorporated herein by reference. Said Articles were last
amended October 20, 1975, as required by law on notice at a duly called special
meeting of the shareholders of the Association.
F-1
66
3. The Association's By-Laws, as amended, are in full force and
effect; and a true, correct and complete copy is attached hereto as Schedule B
and incorporated herein by reference. Said By-Laws, still in full force and
effect, were adopted September 17, 1942, by resolution, after proper notice of
consideration and adoption of By-Laws was given to each and every shareholder,
at a regularly called meeting of the Board of Directors with a quorum present.
4. Pursuant to the authority vested in it by an Act of Congress
approved December 23, 1913 and known as the Federal Reserve Act, as amended,
the Federal Reserve Board (now the Board of Governors of the Federal Reserve
System) has granted to the Association now known as "First Security Bank,
National Association" of Ogden, Utah, the right to act, when not in
contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any other fiduciary capacity in which
State banks, trust companies or other corporations which come into competition
with National Banks are permitted to act under the laws of the State of Utah;
and under the provisions of applicable law, the authority so granted remains in
full force and effect.
5. Pursuant to authority vested by Act of Congress (12 X.X.X. 00x xxx
00 X.X.X. 000, as amended) the Comptroller of the Currency has issued
Regulation 9, as amended, dealing, in part, with the Fiduciary Powers of
National Banks, said regulation providing in subparagraph 9.7 (a) (1-2):
(1) The board of directors is responsible for the proper exercise of
fiduciary powers by the Bank. All matters pertinent thereto,
including the determination of policies, the investment and
disposition of property held in fiduciary capacity, and the
direction and review of the actions of all officers, employees,
and committees utilized by the Bank in the exercise of its
fiduciary powers, are the responsibility of the board. In
discharging this responsibility, the board of directors may
assign, by action duly entered in the minutes, the administration
of such of the Bank's fiduciary powers as it may consider proper
to assign to such director(s), officer(s), employee(s) or
committee(s) as it may designate.
(2) No fiduciary account shall be accepted without the prior approval
of the board, or of the director(s), officer(s), or committee(s)
to whom the board may have designated the performance of that
responsibility.
6. A Resolution relating to Exercise of Fiduciary Powers was adopted
by the Board of Directors at a meeting held July 26, 1994 at which time there
was a quorum present; said resolution is still in full force and effect and has
not been rescinded. Said resolution is attached hereto as Schedule C and
incorporated herein by reference.
F-2
67
7. A Resolution relating to the Designation of Officers and Employees
to Exercise Fiduciary Powers was adopted by the Trust Policy Committee at a
meeting held February 7, 1996 at which time a quorum was present; said
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Schedule D and is incorporated herein by
reference.
8. Attached hereto as Schedule E and incorporated herein by
reference, is a listing of facsimile signatures of persons authorized (herein
"Authorized Signatory or Signatories") on behalf of the Association and its
Trust Group to act in exercise of its fiduciary powers subject to the
resolutions in Paragraphs 6 and 7, above.
9. The principal office of the First Security Bank, National
Association, Trust Group and of its departments, except for the St. Xxxxxx,
Utah, Ogden, Utah, and Provo, Utah, branch offices, is located at 00 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 and all records relating to fiduciary
accounts are located at such principal office of the Trust Group or in storage
facilities within Salt Lake County, Utah, except for those of the Ogden, Utah,
St. Xxxxxx, Utah, and Provo, Utah, branch offices, which are located at said
office.
10. Each Authorized Signatory (i) is a duly elected or appointed, duly
qualified officer or employee of the Association; (ii) holds the office or job
title set forth below his or her name on the date hereof; (iii) and the
facsimile signature appearing opposite the name of each such officer or
employee is a true replica of his or her signature.
F-3
68
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Association this __________ day of _________________, ______.
(SEAL)
--------------------------------------
R. Xxxxx Xxxxxxxxx
Senior Vice President
Assistant Secretary
F-4
69
Schedule A
Articles of Association
F-5
70
Schedule B
Bylaws
F-6
71
Schedule C
Resolution Relating to
Exercise of Fiduciary Powers
F-7
72
Schedule D
Resolution Relating to the
Designation of Officers and Employees
to Exercise Fiduciary Powers
F-8
73
Schedule E
Authorized Signatory or Signatories
F-9
74
EXHIBIT G
[Outside Counsel Opinion for the Owner Trustee]
(Pursuant to Section 5.3(bb) of the
Participation Agreement)
-----------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Amended, Restated and Replacement Trust Agreement dated as of
February 1, 1999
Dear Sirs:
We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity ("FSB")
and in its capacity as trustee (the "Owner Trustee") under the Amended,
Restated and Replacement Trust Agreement dated as of February 1, 1999 (the
"Trust Agreement") by and among it and First Union National Bank, as holder
(the "Holder"), in connection with the execution and delivery by the Owner
Trustee of the Operative Agreements to which it is a party. Except as otherwise
defined herein, the terms used herein shall have the meanings set forth in
Appendix A to the Participation Agreement dated as of February 1, 1999 (the
"Participation Agreement") by and among Sterile Recoveries, Inc. (the
"Lessee"), First Security Bank, National Association, as the Owner Trustee and
First Union National Bank, as lender and holder (in such capacity, "Bank").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary or advisable for the purpose of
rendering this opinion.
Based upon the foregoing, we are of the opinion that:
1. FSB is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America
and each of FSB and the Owner Trustee has under the laws of the State of Utah
and federal banking law the power and authority to enter into and perform its
obligations under the Trust Agreement and each other Operative Agreement to
which it is a party.
2. The Owner Trustee is the duly appointed trustee under the Trust
Agreement.
3. The Trust Agreement has been duly authorized, executed and
delivered by one (1) of the officers of FSB and, assuming due authorization,
execution and delivery by the Holder, is a legal, valid and binding obligation
of the Owner Trustee (and to the extent set forth therein,
G-1
75
against FSB), enforceable against the Owner Trustee (and to the extent set
forth therein, against FSB) in accordance with its terms, and the Trust
Agreement creates under the laws of the State of Utah for the Holder the
beneficial interest in the Trust Estate it purports to create and is a valid
trust under the laws of the State of Utah.
4. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by FSB, and, assuming due authorization,
execution and delivery by the other parties thereto, are legal, valid and
binding obligations of FSB, enforceable against FSB in accordance with their
respective terms.
5. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by the Owner Trustee, and, assuming due
authorization, execution and delivery by the other parties thereto, are legal,
valid and binding obligations of the Owner Trustee, enforceable against the
Owner Trustee in accordance with their respective terms. The Notes and
Certificates have been duly issued, executed and delivered by the Owner
Trustee, pursuant to authorization contained in the Trust Agreement, and the
Certificates are entitled to the benefits and security afforded by the Trust
Agreement in accordance with its terms and the terms of the Trust Agreement.
6. The execution and delivery by each of FSB and the Owner Trustee of
the Trust Agreement and the Operative Agreements to which it is a party, and
compliance by FSB or the Owner Trustee, as the case may be, with all of the
provisions thereof do not and will not contravene any Laws applicable to or
binding on FSB, or as the Owner Trustee, or contravene the provisions of, or
constitute a default under, its charter documents or by-laws or, to our
knowledge after due inquiry, any indenture, mortgage contract or other
agreement or instrument to which FSB or Owner Trustee is a party or by which it
or any of its property may be bound or affected.
7. The execution and delivery of the Operative Agreements by each of
FSB and the Owner Trustee and the performance by each of FSB and the Owner
Trustee of their respective obligations thereunder does not require on or prior
to the date hereof the consent or approval of, the giving of notice to, the
registration or filing with, or the taking of any action in respect of any
Governmental Authority or any court.
8. Assuming that the trust created by the Trust Agreement is treated
as a grantor trust for federal income tax purposes within the contemplation of
Section 671 through 678 of the Internal Revenue Code of 1986, there are no
fees, taxes, or other charges (except taxes imposed on fees payable to the
Owner Trustee) payable to the State of Utah or any political subdivision
thereof in connection with the execution, delivery or performance by the Owner
Trustee or the Bank, as the case may be, of the Operative Agreements or in
connection with the acquisition of any Property by the Owner Trustee or in
connection with the making by the Holder of its investment in the Trust or its
acquisition of the beneficial interest in the Trust Estate or in connection
with the issuance and acquisition of the Certificates, or the Notes, and
neither the Owner Trustee, the Trust Estate nor the trust created by the Trust
Agreement will be subject to any fee, tax or other governmental charge (except
taxes on fees payable to the Owner Trustee)
G-2
76
under the laws of the State of Utah or any political subdivision thereof on,
based on or measured by, directly or indirectly, the gross receipts, net income
or value of the Trust Estate by reason of the creation or continued existence
of the trust under the terms of the Trust Agreement pursuant to the laws of the
State of Utah or the Owner Trustee's performance of its duties under the Trust
Agreement.
9. There is no fee, tax or other governmental charge under the laws
of the State of Utah or any political subdivision thereof in existence on the
date hereof on, based on or measured by any payments under the Certificates,
Notes or the beneficial interest in the Trust Estate, by reason of the creation
of the trust under the Trust Agreement pursuant to the laws of the State of
Utah or the Owner Trustee's performance of its duties under the Trust Agreement
within the State of Utah.
10. Upon the filing of the financing statement on form UCC-1 in the
form attached hereto as Schedule 1 with the Utah Division of Corporation and
Commercial Code, the Bank's security interest in the Trust Estate will be
perfected, to the extent that such perfection is governed by Article 9 of the
Uniform Commercial Code as in effect in the State of Utah (the "Utah UCC").
Your attention is directed to the Utah UCC, which provides, in part,
that a filed financing statement which does not state a maturity date or which
states a maturity date of more than five (5) years is effective only for a
period of five (5) years from the date of filing, unless within six (6) months
prior to the expiration of said period a continuation statement is filed in the
same office or offices in which the original statement was filed. The
continuation statement must be signed by the secured party, identify the
original statement by file number and state that the original statement is
still effective. Upon the timely filing of a continuation statement, the
effectiveness of the original financing statement is continued for five (5)
years after the last date to which the original statement was effective.
Succeeding continuation statements may be filed in the same manner to continue
the effectiveness of the original statement.
The foregoing opinions are subject to the following assumptions, exceptions and
qualifications:
A. We are attorneys admitted to practice in the State of Utah and in
rendering the foregoing opinions we have not passed upon, or purported to pass
upon, the laws of any jurisdictions other than the State of Utah and the
federal banking law governing the banking and trust powers of FSB. In addition,
without limiting the foregoing we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended, (iii) the
Federal Communications Act of 1934, as amended, or (iv) state securities or
blue sky laws. Insofar as the foregoing opinions relate to the legality,
validity, binding effect and enforceability of the documents involved in these
transactions, which by their terms are governed by the laws of a state other
than Utah, we have assumed that the laws of such state (as to which we express
no opinion), are in all material aspects identical to the laws of the State of
Utah.
G-3
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B. The opinions set forth in paragraphs 3, 4, and 5 above are subject
to the qualification that enforceability of the Trust Agreement and the other
Operative Agreements to which FSB and the Owner Trustee are parties, in
accordance with their respective terms, may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws affecting
enforcement of creditors' rights generally, and (ii) general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
C. As to the documents involved in these transactions, we have assumed
that each is a legal, valid and binding obligation of each party thereto, other
than FSB or the Owner Trustee, and is enforceable against each such party in
accordance with their respective terms.
D. We have assumed that all signatures, other than those of the Owner
Trustee or FSB, on documents and instruments involved in these transactions are
genuine, that all documents and instruments submitted to us as originals are
authentic, and that all documents and instruments submitted to us as copies
conform with the originals, which facts we have not independently verified.
E. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment or property involved in these transactions.
F. We have made no investigation of, and we express no opinion
concerning, the nature of the title to any part of the equipment or property
involved in these transactions or the priority of any mortgage or security
interest.
G. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.
H. In addition to any other limitation by operation of law upon the
scope, meaning, or purpose of this opinion, the opinions expressed herein speak
only as of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) and make no undertaking to amend or
supplement such opinions if facts come to our attention or changes in the
current law of the jurisdictions mentioned herein occur which could affect such
opinions the legal analysis, a legal conclusion or any information confirmation
herein.
I. This opinion is for the sole benefit of the Lessee, the
Construction Agent, the Owner Trustee, the Bank and their respective successors
and assigns in matters directly related to the Participation Agreement or the
transaction contemplated thereunder and may not be relied upon by any other
person other than such parties and their respective successors and assigns
without the express written consent of the undersigned. The opinions expressed
in this letter are limited to the matter set forth in this letter, and no other
opinions should be inferred beyond the matters expressly stated.
G-4
78
Very truly yours,
RAY, XXXXXXX & XXXXXXX
M. Xxxx Xxxxxx
G-5
79
Distribution List
First Union National Bank, as lender and holder
Sterile Recoveries, Inc., as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the SRI Realty Trust 1998-1
G-6
80
EXHIBIT H
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(cc) of the Participation Agreement)
---------------,------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of Sterile
Recoveries, Inc.
Dear Sirs:
We have acted as special counsel to Sterile Recoveries, Inc., a Florida
corporation (the "Lessee") in connection with certain transactions contemplated
by the Participation Agreement dated as of February 1, 1999 (the "Participation
Agreement"), among the Lessee, First Security Bank, National Association, as
the Owner Trustee (the "Owner Trustee"), and First Union National Bank, as
lender and holder ("First Union"). This opinion is delivered pursuant to
Section 5.3(ee) of the Participation Agreement. All capitalized terms used
herein, and not otherwise defined herein, shall have the meanings assigned
thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of the Operative Agreements, and such other
corporate, partnership or limited liability company documents and records of
the Lessee, certificates of public officials and representatives of the Lessee
as to certain factual matters, and such other instruments and documents which
we have deemed necessary or advisable to examine for the purpose of this
opinion. With respect to such examination, we have assumed (i) the statements
of fact made in all such certificates, documents and instruments are true,
accurate and complete; (ii) the due authorization, execution and delivery of
the Operative Agreements by the parties thereto other than the Lessee; (iii)
the genuineness of all signatures (other than the signatures of persons signing
on behalf of the Lessee), the authenticity and completeness of all documents,
certificates, instruments, records and corporate records submitted to us as
originals and the conformity to the original instruments of all documents
submitted to us as copies, and the authenticity and completeness of the
originals of such copies; (iv) that all parties other than the Lessee have all
requisite corporate power and authority to execute, deliver and perform the
Operative Agreements; and (v) the enforceability of the Operative Agreements
against all parties thereto other than the Lessee and respecting the opinion
set forth below in section (i), First Security Bank, National Association,
individually or as the Owner Trustee, as the case may be. We have further
assumed that the laws of the States of [STATE OF LAWYER'S ADMISSION] and
[GOVERNING LAW OF PARTICIPATION AGREEMENT] are substantively identical.
H-1
81
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Lessee is a [CORPORATION] duly [INCORPORATED], validly
existing and in good standing under the laws of the state of its
[INCORPORATION] and has the power and authority to conduct its business as
presently conducted and to execute, deliver and perform its obligations under
the Operative Agreements to which it is a party. The Lessee is duly qualified
to do business in all jurisdictions in which its failure to so qualify would
materially impair its ability to perform its obligations under the Operative
Agreements to which it is a party or its financial position or its business as
now and now proposed to be conducted.
(b) The execution, delivery and performance by the Lessee of the
Operative Agreements to which it is a party have been duly authorized by all
necessary [CORPORATE] action on the part of the Lessee and the Operative
Agreements to which the Lessee is a party have been duly executed and delivered
by the Lessee.
(c) The Operative Agreements to which the Lessee is a party constitute
valid and binding obligations of the Lessee enforceable against the Lessee in
accordance with the terms thereof, subject to bankruptcy, insolvency,
liquidation, reorganization, fraudulent conveyance, and similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
(d) The execution and delivery by the Lessee of the Operative
Agreements to which it is a party and compliance by the Lessee with all of the
provisions thereof do not and will not (i) contravene the provisions of, or
result in any breach of or constitute any default under, or result in the
creation of any Lien (other than Permitted Liens and Lessor Liens) upon any of
its property under, its [ARTICLES OF INCORPORATION, BY-LAWS, OPERATING
AGREEMENT, PARTNERSHIP AGREEMENT OR OTHER SIMILAR DOCUMENT OF FORMATION] or any
indenture, mortgage, chattel mortgage, deed of trust, lease, conditional sales
contract, bank loan or credit agreement or other agreement or instrument to
which the Lessee is a party or by which the Lessee or any property of the
Lessee may be bound or affected, or (ii) contravene any Laws or any order of
any Governmental Authority applicable to or binding on the Lessee.
(e) No Governmental Action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery or
performance by the Lessee of any of the Operative Agreements to which the
Lessee is a party or for the acquisition, ownership, construction and
completion of the Properties, except for those which have been obtained.
(f) Except as set forth on Schedule 1 hereto, there are no actions,
suits or proceedings pending or to our knowledge, threatened against the Lessee
in any court or before any Governmental Authority, that concern the Properties
or the interest of the Lessee therein or that question the validity or
enforceability of any Operative Agreement to which the Lessee is a party or the
overall transaction described in the Operative Agreements to which the Lessee
is a party.
H-2
82
(g) Neither the nature of the Properties, nor any relationship between
the Lessee and any other Person, nor any circumstance in connection with the
execution, delivery and performance of the Operative Agreements to which the
Lessee is a party is such as to require any approval of stockholders of, or
approval or consent of any trustee or holders of indebtedness of, the Lessee,
except for such approvals and consents which have been duly obtained and are in
full force and effect.
(h) The Security Documents which have been executed and delivered as
of the date of this opinion create, for the benefit of First Union, the
security interests in the Collateral described therein which by their terms
such Security Documents purport to create. Upon filing of the UCC-1 financing
statements (attached hereto as Schedule 2) relating to the Security Documents
in the recording offices of (A) the respective county clerk where the principal
place of business of the Lessee is located and (B) the Secretary of State where
the principal place of business of the Lessee is located, First Union will have
a valid, perfected lien and security interest in that portion of the Collateral
which can be perfected by the filing of UCC-1 financing statements under
Article 9 of the UCC in [IDENTIFY THE STATE].
(i) The Operative Agreements to which First Security Bank, National
Association, individually or as the Owner Trustee, is a party constitute valid
and binding obligations of such party and are enforceable against First
Security Bank, National Association, individually or as the Owner Trustee, as
the case may be, in accordance with the terms thereof, subject to bankruptcy,
insolvency, liquidation, reorganization, fraudulent conveyance, and similar
laws affecting creditors, rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
(j) The issuance, sale and delivery of the Notes and the issuance and
delivery of the Certificates under the circumstances contemplated by the
Participation Agreement do not, under existing law, require registration of the
Notes or the Certificates being issued on the date hereof under the Securities
Act of 1933, as amended, or the qualification of the Loan Agreement under the
Trust Indenture Act of 1939, as amended.
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the States of [FLORIDA], and the federal laws of
the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Guarantors, the Owner Trustee, First Union and their respective successors and
assigns and may not be relied upon by any other person other than such parties
and their respective successors and assigns without the express written consent
of the undersigned. The opinions expressed herein are as of the date hereof and
we make no undertaking to amend or supplement such opinions if facts come to
our attention or changes in the current law of the jurisdictions mentioned
herein occur which could affect such opinions.
H-3
83
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
H-4
84
Distribution List
First Union National Bank, as lender and holder
Sterile Recoveries, Inc., as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the SRI Realty Trust 1998-1
H-5
85
Schedule 1
(Litigation)
H-6
86
Schedule 2
(UCC 1 Financing Statements)
H-7
87
EXHIBIT I
STERILE RECOVERIES, INC.
OFFICER'S CERTIFICATE
---------------------
(Pursuant to Section 5.5 of the Participation Agreement)
STERILE RECOVERIES, INC., a Florida corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. The address for the subject Property is ___________________________________
_____________________________________.
2. The Completion Date for the construction of Improvements at the Property
occurred on ______________.
3. The aggregate Property Cost for the Property was $___________.
4. Attached hereto as Schedule 1 is the detailed, itemized documentation
supporting the asserted Property Cost figures.
5. All representations and warranties of the Company in each Operative
Agreement and in each certificate delivered pursuant thereto (including
without limitation the Incorporated Representations and Warranties) are
true and correct as of the Completion Date.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of February 1, 1999 among the Company, as the Lessee and as the
Construction Agent, First Security Bank, National Association, as the Owner
Trustee and First Union National Bank, as lender and holder.
[The remainder of this page has been intentionally left blank.]
I-1
88
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate
to be duly executed and delivered as of this ____ day of _____________, ______.
STERILE RECOVERIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
I-2
89
Schedule I
(Itemized Documentation in Support of Asserted Property Cost)
I-3
90
EXHIBIT J
[Description of Material Litigation]
(Pursuant to Section 6.2(d) of the Participation Agreement)
None.
J-1
91
-------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
-------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any document
to articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits are references to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any
document are solely for convenience of reference and shall not constitute a
part of any such document nor shall they affect the meaning, construction or
effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors, permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented, restated
and/or replaced from time to time in accordance with the applicable provisions
thereof.
(f) Except as otherwise expressly provided, references to any law
includes any amendment or modification to such law and any rules or regulations
issued thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable
document and not to any particular article, section, subsection, paragraph or
clause thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be
Appendix A-1
92
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those specifically
mentioned.
(i) References herein to "attorney's fees", "legal fees", "costs of
counsel" or other such references shall be deemed to include the allocated cost
of in-house counsel.
(j) Each of the parties to the Operative Agreements and their counsel
have reviewed and revised, or requested revisions to, the Operative Agreements,
and the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction and
interpretation of the Operative Agreements and any amendments or exhibits
thereto.
(k) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
have the meaning so ascribed to such term in the applicable Operative
Agreement.
II. Definitions
"AAA" shall have the meaning given to such term in Section 12.7(d) of
the Participation Agreement.
"ABR" shall mean, for any day, a rate per annum equal to the greater
of (a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.5%). For
purposes hereof: "Prime Lending Rate" shall mean the rate announced by the Bank
from time to time as its prime lending rate as in effect from time to time. The
Prime Lending Rate is a reference rate and is one of several interest rate
bases used by the Bank and does not necessarily represent the lowest or most
favorable rate offered by the Bank actually charged to any customer. The Bank
may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate. The Prime Lending Rate shall change automatically
and without notice from time to time as and when the prime lending rate of the
Bank changes. "Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds transactions with
members or the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the Agent from
three (3) Federal funds brokers of recognized standing selected by it. Any
change in the ABR due to a change in the Prime Lending Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Lending Rate or the Federal Funds
Effective Rate, respectively.
"ABR Holder Advance" shall mean a Holder Advance bearing a Holder
Yield based on the ABR.
Appendix A-2
93
"ABR Loans" shall mean Loans the rate of interest applicable to which
is based upon the ABR.
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
"Accounts" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Acquisition Advance" shall have the meaning given to such term in
Section 5.3 of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with an
Acquisition Advance.
"Additional Incorporated Terms" shall have the meaning given to such
term in Section 28.1 of the Lease.
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any Person, any Person or
group acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the then
maximum marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated on or about
the Initial Closing Date between the Construction Agent and the Lessor.
"Agency Agreement Joinder" shall mean each joinder agreement
substantially in the form of Exhibit A to the Agency Agreement, or such other
form as is acceptable to the Lessee, the Lessor and the Bank.
"Agency Agreement Event of Default" shall mean an "Event of Default"
as defined in Section 5.1 of the Agency Agreement.
"Applicable Percentage" shall mean for Eurodollar Loans, Eurodollar
Holder Advances, ABR Loans and ABR Holder Advances, the appropriate applicable
percentages corresponding to the Consolidated Leverage Ratio in effect as of
the most recent Calculation Date as shown below:
Appendix A-3
94
APPLICABLE APPLICABLE APPLICABLE APPLICABLE
PERCENTAGE PERCENTAGE FOR PERCENTAGE FOR PERCENTAGE FOR
PRICING CONSOLIDATED FOR EURODOLLAR ABR ABR
LEVEL LEVERAGE RATIO EURODOLLAR LOANS HOLDER ADVANCES LOANS HOLDER ADVANCES
--------- ---------------- ---------------- --------------- ------------- ----------------
LEVEL I <1.0:1.0 1.00% 1.75% 0.00% 0.75%
LEVEL II >1.0:1.0<2.0:1.0 1.25% 2.00% 0.25% 1.00%
LEVEL III >2.0:1.0 1.50% 2.25% 0.50% 1.25%
The Applicable Percentage for Eurodollar Loans, Eurodollar Holder
Advances, ABR Loans and ABR Holder Advances shall, in each case, be determined
and adjusted quarterly on the date five (5) Business Days after the date on
which the Bank receives the quarterly officer's certificate provided by the
Lessee in accordance with the provisions of Section 8.3(k) of the Participation
Agreement (each a "Calculation Date"); provided, however, that (i) the initial
Applicable Percentage, in each case, shall be based on Pricing Level I (as
shown above) and shall remain at Pricing Level I until the delivery of the
Lessee's audited financial statements for December 31, 1998 and, thereafter,
the Pricing Level shall be determined by the then current Consolidated Leverage
Ratio, and (ii) if the Lessee fails to provide the written notice required by
Section 8.3(k) of the Participation Agreement to the Agent on or before the
most recent Calculation Date, the Applicable Percentage, in each case, from the
date of such failure shall be based on Pricing Level III until five (5)
Business Days after such time that such written notice is provided whereupon
the Pricing Level shall be determined by the then current Consolidated Leverage
Ratio. Except as set forth above, each Applicable Percentage shall be effective
from one Calculation Date until the next Calculation Date. Any adjustment in
the Applicable Percentage shall be applicable to all existing Eurodollar Loans,
Eurodollar Holder Advances, ABR Loans and ABR Holder Advances as well as any
new Eurodollar Loans, Eurodollar Holder Advances, ABR Loans and ABR Holder
Advances made or issued.
"Appraisal" shall mean, with respect to any Property, an appraisal to
be delivered in connection with the Participation Agreement or in accordance
with the terms of the Lease, in each case prepared by a reputable appraiser
reasonably acceptable to the Agent, which in the judgment of counsel to the
Agent, complies with all of the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, the rules and
regulations adopted pursuant thereto, and all other applicable Legal
Requirements and otherwise satisfactory to the Bank.
"Appraisal Procedure" shall have the meaning given such term in
Section 22.4 of the Lease.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying the Improvements or the Improvements,
including without limitation the use of any streets, ways, alleys, vaults or
strips of
Appendix A-4
95
land adjoining, abutting, adjacent or contiguous to the Land and (b) all
permits, licenses and rights, whether or not of record, appurtenant to such
Land or the Improvements.
"Arbitration Rules" shall have the meaning given to such term in
Section 12.7(d) of the Participation Agreement.
"Assignment and Acceptance" shall mean the Assignment and Acceptance
in the form attached to the Credit Agreement as EXHIBIT B.
"Available Commitment" shall mean an amount equal to the excess, if
any, of (a) the amount of the Commitment over (b) the aggregate principal
amount of all Loans made as of such date after giving effect to Section 5.2(d)
of the Participation Agreement (but without giving effect to any other
repayments or prepayments of any Loans hereunder).
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (a) the aggregate amount of the Holder Commitments over (b)
the aggregate amount of the Holder Advances made since the Initial Closing Date
after giving effect to Section 5.2(d) of the Participation Agreement (but
without giving effect to any other repayments or prepayments of any Holder
Advances).
"Bank" shall mean First Union National Bank, a national banking
association, and its permitted successors and assigns.
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Basic Documents" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease and the Security Agreement.
"Basic Rent" shall mean, the sum of (a) the Loan Basic Rent and (b)
the Lessor Basic Rent, calculated as of the applicable date on which Basic Rent
is due.
"Xxxx of Sale" shall mean a Xxxx of Sale regarding Equipment in form
and substance satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Bond Documents" shall mean any and all agreements, documents and
instruments executed and delivered by any Development Authority, any Bond
Trustee, the Owner Trustee and any other Person in connection with the issuance
of Bonds, including without limitation any Bonds, Indentures, tender agency
agreements, Head Leases, placement agency agreements, remarketing agreements,
private placement memoranda and other documents or agreements relating to any
of the foregoing.
Appendix A-5
96
"Bond Trustee" shall mean any bond or indenture trustee under any Bond
Documents, and any of such trustee's successors and assigns.
"Bonds" shall mean any bonds or other securities issued by any
Development Authority for the purpose of financing the acquisition,
development, construction and equipping of one or more Properties.
"Borrower" shall mean the Owner Trustee, not in its individual
capacity but as Borrower under the Credit Agreement.
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Credit Agreement as a date on which
the Lessor requests the Bank to make Loans hereunder.
"Budgeted Total Property Cost" shall mean, at any date of
determination with respect to any Construction Period Property, an amount equal
to the aggregate amount which the Construction Agent in good faith expects to
be expended in order to achieve Completion with respect to such Property.
"Business Day" shall mean a day on which (a) banks located in each of
the cities in which the principal of the Bank, any Bond Trustee, any other
institution that issues a letter of credit in accordance with any Bond
Document, and the Remarketing Agent are not authorized or required by law to
close, and (b) The New York Stock Exchange is not closed; provided, however,
that when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Lease" means, with respect to the Lessee and its
Subsidiaries, any lease of any property that should, in accordance with GAAP,
be classified and accounted for as a capital lease on a consolidated balance
sheet of the Lessee and its Subsidiaries.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers
on a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
Appendix A-6
97
"Casualty" shall mean any damage or destruction of all or any portion
of the Property as a result of a fire or other casualty.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended
by the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of the Bank regarding
the Holder Commitment issued pursuant to the terms and conditions of the Trust
Agreement.
"Chattel Paper" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986 together with
rules and regulations promulgated thereunder, as amended from time to time, or
any successor statute thereto.
"Collateral" shall mean all assets of the Lessor, the Construction
Agent and the Lessee, now owned or hereafter acquired, upon which a Lien is
purported to be created by one or more of the Security Documents.
"Commencement Date" shall have the meaning specified in Section 2.2 of
the Lease.
"Commitment" shall mean the obligation of the Bank to make Loans to
the Lessor in an aggregate principal amount at any time outstanding not to
exceed the Lender Commitment.
"Commitment Fee" shall have the meaning given to such term in Section
7.4 of the Participation Agreement.
"Commitment Fee Payment Date" shall mean the last Business Day of each
March, June, September and December and the last Business Day of the Commitment
Period, or such earlier date as the Commitments shall terminate as provided in
the Credit Agreement or the Holder Commitment shall terminate as provided in
the Trust Agreement.
"Commitment Period" shall mean the period from and including the
Initial Closing Date to and including the Construction Period Termination Date
(or, with respect to the issuance of Letters of Credit, to and including the
date five (5) days prior to the Maturity Date) or such earlier date as the
Commitments shall terminate as provided in the Credit Agreement or the Holder
Commitment shall terminate as provided in the Trust Agreement.
Appendix A-7
98
"Completion" shall mean, with respect to a Property, such time as the
acquisition, installation, testing and final completion of the Improvements on
such Property has been achieved in accordance with the Plans and
Specifications, the Agency Agreement and/or the Lease, and in compliance with
all Legal Requirements and Insurance Requirements and a certificate of
occupancy has been issued with respect to such Property by the appropriate
governmental entity (except if non-compliance, individually or in the
aggregate, shall not have and could not reasonably be expected to have a
Material Adverse Effect). If the Lessor purchases a Property that includes
existing Improvements that are to be immediately occupied by the Lessee without
any improvements financed pursuant to the Operative Agreements, the date of
Completion for such Property shall be the Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the earlier
of (a) the date on which Completion for such Property has occurred or (b) the
Construction Period Termination Date.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent
to, any Property or alter the pedestrian or vehicular traffic flow to any
Property so as to result in a change in access to such Property, or by or on
account of an eviction by paramount title or any transfer made in lieu of any
such proceeding or action.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Lessee and its Subsidiaries or any other
Person, such statements or items on a consolidated basis in accordance with
applicable principles of consolidation under GAAP.
"Consolidated EBITDA" means, with respect to the Lessee and its
Subsidiaries, for any period of determination, (a) Consolidated Net Income for
such period, plus (b) the sum of the following to the extent deducted in the
determination of Consolidated Net Income: (i) Consolidated Interest Expense,
(ii) income and franchise taxes and (iii) depreciation and amortization
expense, in each case determined in accordance with GAAP for such period.
"Consolidated Interest Expense" means, for any period of
determination, the gross interest expense of the Lessee and its Subsidiaries
(including any amount attributable to interest in respect of payments under
Capital Leases and any net amount payable under any Hedging Agreement), all
determined for such period on a Consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio" means, as of the last day of each fiscal
quarter of the Lessee, the ratio of Funded Debt of the Lessee and its
Subsidiaries (computed as of the last day of such fiscal quarter) to
Consolidated EBITDA (computed for the four fiscal quarterly period then
ending).
Appendix A-8
99
"Consolidated Subsidiary" shall mean, as to any Person, any Subsidiary
of such Person which under the rules of GAAP consistently applied should have
its financial results consolidated with those of such Person for purposes of
financial accounting statements.
"Construction Advance" shall mean an advance of funds to pay Property
Costs pursuant to Section 5.4 of the Participation Agreement.
"Construction Agent" shall mean Sterile Recoveries, Inc., a Florida
corporation, as the construction agent under the Agency Agreement.
"Construction Budget" shall mean the cost of acquisition,
installation, testing, constructing and developing any Property as determined
by the Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Contract" shall mean any contract entered into between
the Construction Agent or the Lessee with a Contractor for the construction of
Improvements or any portion thereof on the Property.
"Construction Loan" shall mean any Loan made in connection with a
Construction Advance.
"Construction Loan Property Cost" shall mean with respect to each
Construction Period Property at the date of determination, an amount equal to
(a) the aggregate principal amount of Construction Loans made on or prior to
such date with respect to the Property minus (b) the aggregate principal amount
of prepayments or repayments of the Loans allocated to reduce the Construction
Loan Property Cost of such Property pursuant to Section 2.6(c) of the Credit
Agreement.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement Date for such Property and
ending on the Completion Date for such Property.
"Construction Period Property" means, at any date of determination,
any Property as to which the Rent Commencement Date has not occurred on or
prior to such date.
"Construction Period Termination Date" shall mean (a) the earlier of
(i) the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement, or (ii)
the second anniversary of the Initial Closing Date or (b) such later date as
shall be agreed to by the Bank.
"Contingent Obligation" means, at any date of determination, any
obligation, contingent or otherwise, of the Lessee or any of its Subsidiaries
pursuant to which such Person has directly
Appendix A-9
100
or indirectly guaranteed any Debt or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of any such Person (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement condition or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, that the term
Contingent Obligation shall not include endorsements for collection or deposit
in the ordinary course of business.
"Contractor" shall mean each entity with whom the Construction Agent
or the Lessee contracts to construct any Improvements or any portion thereof on
the Property.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Lessee, are treated as a single
employer under Section 414 of the Code.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated on or about
the Initial Closing Date, among the Lessor and the Bank.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Participation Agreement, the Credit
Agreement, the Notes, the Letters of Credit and the Security Documents.
"Debt" means, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Debt of others secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any Lien
on, or payable out of the
Appendix A-10
101
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all Contingent
Obligations of any such Person (excluding, for purposes hereof, the Contingent
Obligations identified on Schedule 1.1B to the Lessee Credit Agreement), (h)
the principal portion of all obligations of such Person under Capital Leases,
(i) all obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and required by the terms thereof to be redeemed,
or for which mandatory sinking fund payments are due, prior to the Maturity
Date, (l) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product to which such Person is a party, where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP, and (m) the Debt of any partnership or
unincorporated joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto (excluding, for
purposes hereof, the Debt of any such partnership or unincorporated joint
venture which is not majority-owned by such Person as of the Initial Closing
Date until such time, if ever, that such entity becomes majority-owned by such
person).
"Deed" shall mean a warranty deed regarding the Land and/or
Improvements in form and substance satisfactory to the Bank.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Deficiency Balance" shall have the meaning given in Section 22.1(b)
of the Lease Agreement.
"Development Authority" shall mean any industrial development
authority or similar governmental or other entity identified as the issuer of
Bonds and owner and lessor under any Head Lease with respect to one or more
Properties, together with any such entity's successors and assigns.
"Disputes" shall have the meaning given to such term in Section
12.7(d) of the Participation Agreement.
"Documents" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Election Date" shall have the meaning given to such term in Section
20.1 of the Lease.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
Appendix A-11
102
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan
(within the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue Service and the Department of Labor
in rules, regulations, releases or bulletins in effect on any Closing Date.
"Environmental Claims" shall mean any investigation, notice,
violation, demand, allegation, action, suit, injunction, judgment, order,
consent decree, penalty, fine, lien, proceeding, or claim (whether
administrative, judicial, or private in nature) arising (a) pursuant to, or in
connection with, an actual or alleged violation of, any Environmental Law, (b)
in connection with any Hazardous Substance, (c) from any abatement, removal,
remedial, corrective, or other response action in connection with a Hazardous
Substance, Environmental Law, or other order of a Tribunal or (d) from any
actual or alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"Environmental Laws" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Tribunal relating
to emissions, discharges, releases, threatened releases of any Hazardous
Substance into ambient air, surface water, ground water, publicly owned
treatment works, septic system, or land, or otherwise relating to the handling,
storage, treatment, generation, use, or disposal of Hazardous Substances,
pollution or to the protection of health or the environment, including without
limitation CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., and state statutes analogous thereto.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens (if the threat requires remediation under
any Environmental Law and is not remediated during any grace period allowed
under such Environmental Law) to violate or results in or threatens (if the
threat requires remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
"Equipment" shall mean personal property of every kind and nature
whatsoever purchased, leased or otherwise acquired using the proceeds of the
Bonds, the Loans or the Holder Advances by the Construction Agent, the Lessee,
any Development Authority or the Lessor and all improvements and modifications
thereto and replacements thereof, whether or not now owned or hereafter
acquired or now or subsequently attached to, contained in or used or usable in
any way in connection with any operation of any Improvements.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached
to the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Head Lease and/or Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
Appendix A-12
103
"ERISA Affiliate" shall mean each entity required to be aggregated
with the Lessee pursuant to the requirements of Section 414(b) or (c) of the
Code.
"Eurocurrency Reserve Requirements" shall mean for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed on eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank of the Federal
Reserve System.
"Eurodollar Holder Advance" shall mean a Holder Advance bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan or Eurodollar Holder
Advance for any Interest Period therefor, the rate per annum appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one (1) rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
"Event of Default" shall mean a Lease Event of Default, an Agency
Agreement Event of Default, a Credit Agreement Event of Default or a default
under any Bond Document after required notices, if any, and the expiration of
applicable cure periods.
"Excepted Payments" shall mean:
(a) all indemnity payments (including without limitation
indemnity payments made pursuant to Section 11 of the Participation
Agreement), whether made by adjustment to Basic Rent or otherwise, to
which the Owner Trustee, or any of its respective Affiliates, agents,
officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value)
payable under any Operative Agreement to reimburse the Owner Trustee,
or any of its Affiliates (including without limitation the reasonable
expenses of the Owner Trustee or the Trust Company and incurred in
connection with any such payment) for performing or
Appendix A-13
104
complying with any of the obligations of the Lessee under and as
permitted by any Operative Agreement;
(c) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other
than such proceeds or payments payable to the Bank;
(d) any insurance proceeds under policies maintained by the
Owner Trustee or the Bank;
(e) Transaction Expenses or other amounts, fees, disbursements
or expenses paid or payable to or for the benefit of the Owner
Trustee;
(f) all right, title and interest of the Owner Trustee to any
Property or any portion thereof or any other property to the extent
any of the foregoing has been released from the Liens of the Security
Documents and the Lease pursuant to the terms thereof;
(g) upon termination of the Credit Agreement pursuant to the
terms thereof, all remaining property covered by the Lease or Security
Documents;
(h) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (g) above;
and
(i) any rights of either the Owner Trustee or the Trust
Company to demand, collect, xxx for or otherwise receive and enforce
payment of any of the foregoing amounts, provided that such rights
shall not include the right to terminate the Lease.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Exculpated Persons" shall mean the Trust Company (except with respect
to the representations and warranties and the other obligations of the Trust
Company pursuant to the Operative Agreements expressly undertaken in its
individual capacity, including without limitation the representations and
warranties of the Trust Company pursuant to Section 6.1 of the Participation
Agreement, the obligations of the Trust Company pursuant to Section 8.2 of the
Participation Agreement and the obligations of the Trust Company pursuant to
the Trust Agreement) and the Bank (except with respect to the obligations of
the Bank expressly undertaken pursuant to the Participation Agreement and the
Trust Agreement), their officers, directors, shareholders and partners.
"Exempt Payments" shall have the meaning specified in Section 11.2(e)
of the Participation Agreement.
Appendix A-14
105
"Expiration Date" shall mean the last day of the Term; provided, in no
event shall the Expiration Date be later than fifteen (15) days after the third
annual anniversary of the Initial Closing Date, unless such later date has been
expressly agreed to in writing by each of the Lessor, the Lessee and the Bank.
"Fair Market Sales Value" shall mean, with respect to any Property
(or, as applicable, Lessor's leasehold interest in such Property pursuant to
any Head Lease), the amount, which in any event, shall not be less than zero
(0), that would be paid in cash in an arms-length transaction between an
informed and willing purchaser and an informed and willing seller, neither of
whom is under any compulsion to purchase or sell, respectively, such Property
(or, as applicable, Lessor's leasehold interest in such Property pursuant to
any Head Lease). Fair Market Sales Value of any Property (or, as applicable,
Lessor's leasehold interest in such Property pursuant to any Head Lease) shall
be determined based on the assumption that, except for purposes of Section 17
of the Lease, such Property (or, as applicable, Lessor's leasehold interest in
such Property pursuant to any Head Lease) is in the condition and state of
repair required under Section 10.1 of the Lease and the Lessee is in compliance
with the other requirements of the Operative Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such
term in the definition of ABR.
"Financing Parties" shall mean the Lessor, the Owner Trustee, in its
trust capacity, the Bank, as Holder and Lender, and their respective successors
and assigns.
"First Union" shall mean First Union National Bank, a national banking
association, and its permitted successors and assigns.
"Fixtures" shall mean all fixtures relating to the Improvements,
including without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including without
limitation strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, governmental
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition.
"Funded Debt" means, with respect to any Person, without duplication,
(i) all Debt of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all purchase money
Indebtedness (including for purposes hereof, indebtedness and obligations
described in clauses (c) and (d) of the definition of "Debt") of such Person,
including without limitation the principal portion of all obligations of such
Person under Capital Leases, (iv) all Contingent Obligations of such Person
with respect to Funded Debt of another Person, (v) the
Appendix A-15
106
maximum available amount of all standby letters of credit or acceptances issued
or created for the account of such Person, (vi) all Funded Debt of another
Person secured by a Lien on any Property of such Person, whether or not such
Funded Debt has been assumed, provided that for purposes hereof the amount of
such Funded Debt shall be limited to the greater of (A) the amount of such
Funded Debt as to which there is recourse to such Person and (B) the fair
market value of the property which is subject to the Lien, (vii) the
outstanding attributed principal amount under any securitization transaction,
and (viii) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product to which such Person is a party, where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP. The Funded Debt of any Person shall
include the Funded Debt of any partnership or joint venture in which such
Person is a general partner or joint venturer, but only to the extent to which
there is recourse to such Person for the payment of such Funded Debt.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the accounting principles board of the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"Government Acts" shall have the meaning specified in Section
2.12(k)(i) of the Participation Agreement.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions,
publications, filings, notices to and declarations of or with, or required by,
any Governmental Authority, or required by any Legal Requirement, and shall
include, without limitation, all environmental and operating permits and
licenses that are required for the full use, occupancy, zoning and operating of
the Property.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Ground Lease" shall mean a ground lease (in form and substance
satisfactory to the Agent) respecting any Property (a) owned by the Lessee (or
a parent corporation or any Subsidiary of the Lessee) and leased to the Lessor
where such lease has at least a ninety-nine (99) year term and payments set at
no more than $1.00 per year, or (b) where such lease is subject to such other
terms and conditions as are satisfactory to the Bank.
"Hard Costs" shall mean all costs and expenses payable for supplies,
materials, labor and profit with respect to the Improvements under any
Construction Contract.
Appendix A-16
107
"Hazardous Substance" shall mean any of the following: (a) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (b) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety as determined in accordance with
any Environmental Law; or (c) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
"Head Lease" shall mean any lease relating to any Property between any
Development Authority, as lessor, and the Owner Trustee, as lessee, as such may
be amended, modified, supplemented, restated and/or replaced from time to time.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection
with hedging the interest rate exposure of the Lessee or any of its
Subsidiaries under any agreement executed in connection with any Debt, and any
confirming letter executed pursuant to such hedging agreement, all as amended
or supplemented from time to time.
"Holder" shall mean the Bank as the holder of one or more Certificates
in connection with the SRI Realty Trust 1998-1.
"Holder Advance" shall mean any advance made by the Bank to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Advances made by the Bank to the Trust Estate pursuant to Section 2 of
the Participation Agreement and Section 3.1 of the Trust Agreement less any
payments of any Holder Advances received by the Bank pursuant to Section 3.4 of
the Trust Agreement.
"Holder Commitments" shall mean $300,000, as such amount may be
increased or reduced from time to time in accordance with the provisions of the
Operative Agreements.
"Holder Construction Property Cost" shall mean, with respect to each
Construction Period Property, at any date of determination, an amount equal to
the outstanding Holder Advances made with respect thereto under the Trust
Agreement.
"Holder Overdue Rate" shall mean the lesser of (a) the then current
rate of Holder Yield respecting the particular amount in question plus two
percent (2%) and (b) the highest rate permitted by applicable law.
Appendix A-17
108
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Advances with respect thereto.
"Holder Yield" shall mean with respect to Holder Advances from time to
time either the Eurodollar Rate plus the Applicable Percentage for Eurodollar
Holder Advances or the ABR as elected by the Owner Trustee from time to time
with respect to such Holder Advances in accordance with the terms of the Trust
Agreement; provided, however, (a) the outstanding Holder Advances shall bear a
yield at the ABR applicable from time to time from and after the dates and
during the periods specified in Section 3.7(c) of the Trust Agreement, and (b)
the Holder Advances shall bear a yield at the ABR applicable from time to time
after the dates and during the periods specified in Section 11.3(f) of the
Participation Agreement.
"Impositions" shall mean any and all liabilities, losses, expenses,
costs, charges and Liens of any kind whatsoever for fees, taxes, levies,
imposts, duties, charges, assessments or withholdings ("Taxes") including but
not limited to (i) real and personal property taxes, including without
limitation personal property taxes on any property covered by the Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes
and other similar taxes (including rent taxes and intangibles taxes); (iii)
excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes
and documentary recording taxes and fees; (v) taxes that are or are in the
nature of franchise, income, value added, privilege and doing business taxes,
license and registration fees; (vi) assessments on any Property, including
without limitation all assessments for public Improvements or benefits, whether
or not such improvements are commenced or completed within the Term; and (vii)
taxes, Liens, assessments or charges asserted, imposed or assessed by the PBGC
or any governmental authority succeeding to or performing functions similar to,
the PBGC; and in each case all interest, additions to tax and penalties
thereon, which at any time prior to, during or with respect to the Term or in
respect of any period for which the Lessee shall be obligated to pay
Supplemental Rent, may be levied, assessed or imposed by any Governmental
Authority upon or with respect to (a) any Property or any part thereof or
interest therein; (b) the leasing, financing, refinancing, demolition,
construction, substitution, subleasing, assignment, control, condition,
occupancy, servicing, maintenance, repair, ownership, possession, activity
conducted on, delivery, insuring, use, operation, improvement, sale, transfer
of title, return or other disposition of such Property or any part thereof or
interest therein; (c) the Notes, other indebtedness with respect to any
Property, or the Certificates, or any part thereof or interest therein; (d) the
rentals, receipts or earnings arising from any Property or any part thereof or
interest therein; (e) the Operative Agreements, the performance thereof, or any
payment made or accrued pursuant thereto; (f) the income or other proceeds
received with respect to any Property or any part thereof or interest therein
upon the sale or disposition thereof; (g) any contract (including the Agency
Agreement) relating to the construction, acquisition or delivery of the
Improvements or any part thereof or interest therein; (h) the issuance of the
Notes or the Certificates; (i) the Owner Trustee, the Trust or the Trust
Estate; or (j) otherwise in connection with the transactions contemplated by
the Operative Agreements.
"Improvements" shall mean, with respect to the construction,
renovations and/or Modifications on any Land, all buildings, structures,
Fixtures, and other improvements of every
Appendix A-18
109
kind existing at any time and from time to time on or under the Land purchased
or otherwise acquired using the proceeds of the Bonds, the Loans or the Holder
Advances or which is subject to a Ground Lease, together with any and all
appurtenances to such buildings, structures or improvements, including without
limitation sidewalks, utility pipes, conduits and lines, parking areas and
roadways, and including without limitation all Modifications and other
additions to or changes in the Improvements at any time, including without
limitation (a) any Improvements existing as of the Property Closing Date as
such Improvements may be referenced on the applicable Requisition and (b) any
Improvements made subsequent to such Property Closing Date.
"Incorporated Covenants" shall have the meaning given to such term in
Section 28.1 of the Lease.
"Incorporated Representations and Warranties" shall have the meaning
given to such term in Section 28.1 of the Lease.
"Indebtedness" of a Person shall mean, without duplication, such
Person's:
(a) obligations for borrowed money;
(b) obligations representing the deferred purchase price of
Property (whether real, personal, tangible, intangible or mixed) or
services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade);
(c) obligations, whether or not assumed, secured by liens or
payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person;
(d) obligations which are evidenced by notes, acceptances or
other instruments;
(e) Capitalized Lease obligations;
(f) net liabilities under interest rate swap, exchange or cap
agreements; and
(g) contingent obligations.
"Indemnified Person" shall mean the Lessor, the Owner Trustee, in its
individual and its trust capacity, the Trust, the Trust Company, the Bank and
their respective successors, assigns, directors, shareholders, partners,
officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the Lessee.
Appendix A-19
110
"Indenture" shall mean each trust indenture between the applicable
Development Authority and the applicable Bond Trustee relating to the
applicable Bonds.
"Initial Closing Date" shall mean February 24, 1999.
"Initial Construction Advance" shall mean any initial Advance to pay
for: (a) Property Costs for construction of any Improvements; and (b) the
Property Costs of restoring or repairing any Property which is required to be
restored or repaired in accordance with Section 15.1(e) of the Lease.
"Instruments" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent,
and all requirements of the issuer of any such policy and, regarding self
insurance, any other requirements of the Lessee.
"Interest Period" shall mean (a) during the Commitment Period and
thereafter as to any Eurodollar Loan or Eurodollar Holder Advance (i) with
respect to the initial Interest Period, the period beginning on the date of the
first Eurodollar Loan and Eurodollar Holder Advance and ending one (1) month,
two (2) months or three (3) months thereafter, as selected by the Lessor (in
the case of a Eurodollar Loan) or the Owner Trustee (in the case of a
Eurodollar Holder Advance) in its applicable notice given with respect thereto
and (ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan or Eurodollar
Holder Advance and ending one (1) month, two (2) months or three (3) months
thereafter, as selected by the Lessor by irrevocable notice to the Bank (in the
case of a Eurodollar Loan) or by the Owner Trustee (in the case of a Eurodollar
Holder Advance) in each case not less than three (3) Business Days prior to the
last day of the then current Interest Period with respect thereto; provided,
however, that all of the foregoing provisions relating to Interest Periods are
subject to the following: (A) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding
Business Day), (B) no Interest Period shall extend beyond the Maturity Date or
the Expiration Date, as the case may be, (C) where an Interest Period begins on
a day for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall end on the
last Business Day of such calendar month, (D) there shall not be more than four
(4) Interest Periods outstanding at any one (1) time.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, together with the rules and regulations promulgated
thereunder.
"Land" shall mean a parcel of real property described on (a) the
Requisition issued by the Construction Agent on the Property Closing Date
relating to such parcel and (b) the schedules to
Appendix A-20
111
each applicable Lease Supplement executed and delivered in accordance with the
requirements of Section 2.4 of the Lease.
"Land Cost" shall have the meaning specified in Section 5.4 of the
Agency Agreement.
"Law" shall mean any statute, law, ordinance, regulation, rule,
directive, order, writ, injunction or decree of any Tribunal.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated on
or about the Initial Closing Date, between the Lessor and the Lessee, together
with any Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the
lapse of time or the giving of notice, or both, would constitute a Lease Event
of Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of EXHIBIT A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all foreign, federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, the
Lessor, any applicable Development Authority or Bond Trustee with respect to a
particular Property, the Lessee, the Bank or any Property, Land, Improvement,
Equipment or the taxation, demolition, construction, use or alteration of such
Improvements, whether now or hereafter enacted and in force, including without
limitation any that require repairs, modifications or alterations in or to any
Property or in any way limit the use and enjoyment thereof (including without
limitation all building, zoning and fire codes and the Americans with
Disabilities Act of 1990, 42 U.S.C. ss. 12101 et. seq., and any other similar
federal, state or local laws or ordinances and the regulations promulgated
thereunder) and any that may relate to environmental requirements (including
without limitation all Environmental Laws), and all permits, certificates of
occupancy, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments which are either of record or known to the Lessee affecting any
Property or the Appurtenant Rights.
"Lender" shall mean the Bank as lender under the Participation
Agreement and the Credit Agreement.
"Lender Commitment" shall mean $9,700,000, as such amount may be
increased or reduced from time to time in accordance with the provisions of the
Operative Agreements.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to procure a security interest in favor of the
Bank in the Collateral subject to the Security Documents.
Appendix A-21
112
"Lessee" shall have the meaning set forth in the Lease.
"Lessee Credit Agreement" shall mean that certain Credit Agreement
dated as of February 24, 1999 among the Lessee, certain subsidiaries of the
Lessee which are parties thereto from time to time, as guarantors, the lenders
from time to time parties thereto and First Union National Bank, as agent, as
such may hereafter be amended, modified, supplemented, restated and/or replaced
from time to time.
"Lessee Credit Agreement Event of Default" shall mean an Event of
Default as defined in Section 11.1 of the Lessee Credit Agreement.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as the Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (a) any such scheduled Holder Yield
due on the Holder Advances prior to the Rent Commencement Date with respect to
the Property to which such Holder Advances relate or (b) overdue amounts under
the Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor or
the Trust Company, in its individual capacity, not resulting from the
transactions contemplated by the Operative Agreements, (b) any act or omission
of the Lessor or the Trust Company, in its individual capacity, which is not
required by the Operative Agreements or is in violation of any of the terms of
the Operative Agreements, (c) any claim against the Lessor or the Trust
Company, in its individual capacity, with respect to Taxes or Transaction
Expenses against which the Lessee is not required to indemnify the Lessor or
the Trust Company, in its individual capacity, pursuant to Section 11 of the
Participation Agreement or (d) any claim against the Lessor arising out of any
transfer by the Lessor of all or any portion of the interest of the Lessor in
the Properties, the Trust Estate or the Operative Agreements other than the
transfer of title to or possession of any Properties by the Lessor pursuant to
and in accordance with the Lease, the Credit Agreement, the Security Agreement
or the Participation Agreement or pursuant to the exercise of the remedies set
forth in Article XVII of the Lease.
"Letter of Credit" shall mean any direct-pay letter of credit issued
by the Bank for the account of the Borrower in accordance with the terms of
Section 2.12 of the Credit Agreement.
Appendix A-22
113
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, option or charge of any kind.
"Limited Recourse Amount" shall mean with respect to all the
Properties (or, as applicable, Lessor's leasehold interests in such Properties
subject to one or more Head Leases) on an aggregate basis, an amount equal to
the sum of the Termination Values with respect to all the Properties (and all
Bonds relating to any such Properties) on an aggregate basis on each Payment
Date, less the Maximum Residual Guarantee Amount as of such date with respect
to all the Properties on an aggregate basis.
"Loan Basic Rent" shall mean the scheduled interest due on the Loans
on any Scheduled Interest Payment Date pursuant to the Credit Agreement (but
not including interest on (a) any such Loan due prior to the Rent Commencement
Date with respect to the Property to which such Loan relates or (b) any overdue
amounts under Section 2.8(b) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) (i) the aggregate principal
amount all Loans (including without limitation all Acquisition Loans and
Construction Loans) made on or prior to such date with respect to such Property
plus (ii) the aggregate LOC Reimbursement Amounts minus (b) the aggregate
amount of prepayments or repayments as the case may be of the Loans allocated
to reduce the Loan Property Cost of such Property pursuant to Section 2.6(c) of
the Credit Agreement.
"Loans" shall mean the loans extended pursuant to the Credit
Agreement.
"LOC Documents" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any Pledge Agreement, any documents
delivered in connection therewith, any application therefor, and any
agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing
for (i) the rights and obligations of the parties concerned or at risk or (ii)
any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Bank
but not theretofore reimbursed by the Borrower with amounts provided by the
Lessee as Supplemental Rent.
"LOC Reimbursement Amount" shall mean the aggregate amount of all
drawings under Letters of Credit honored by the Bank (but not previously
reimbursed by the Borrower with amounts provided by the Lessee as Supplemental
Rent) plus all other interests, charges, fees, commissions and other amounts
owing from time to time with respect to the Letters of Credit
Appendix A-23
114
(but not previously reimbursed by the Borrower with amounts provided by the
Lessee as Supplemental Rent).
"Marketing Period" shall mean, if the Lessee has given a Sale Notice
in accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the Expiration Date.
"Material Adverse Effect" shall, mean a material adverse effect on (a)
the business, condition (financial or otherwise), assets, liabilities or
operations of the Lessee, (b) the ability of the Lessee to perform its
respective obligations under any Operative Agreement to which it is a party,
(c) the validity or enforceability of any Operative Agreement or the rights and
remedies of the Bank or the Lessor thereunder, (d) the validity, priority or
enforceability of any Lien on any Property created by any of the Operative
Agreements, or (e) the value, utility or useful life of any Property or the
use, or ability of the Lessee to use, any Property for the purpose for which it
was intended.
"Maturity Date" shall mean the Expiration Date.
"Maximum Residual Guarantee Amount" shall mean an amount equal to the
product of the aggregate Property Cost for all of Properties times eighty-five
percent (85%).
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee and the Lessee (or regarding any
Property subject to a Ground Lease, the applicable Affiliate of the Lessee) in
favor of the Bank) and evidencing a Lien on the Property (or, as applicable,
Lessor's leasehold interest in such Property under any Head Lease), in form and
substance reasonably acceptable to the Bank.
"Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or required by
the Lessee or any of its Subsidiaries or ERISA Affiliates.
"Multiple Employer Plan" shall mean a plan to which the Lessee or any
ERISA Affiliate and at least one (1) other employer other than an ERISA
Affiliate is making or accruing an obligation to make, or has made or accrued
an obligation to make, contributions.
"New Facility" shall have the meaning given to such term in Section
28.1 of the Lease.
"Notes" shall mean those notes issued to the Bank pursuant to the
Credit Agreement.
"Obligations" shall have the meaning given to such term in Section 1
of the Security Agreement.
Appendix A-24
115
"Officer's Certificate" with respect to any person shall mean a
certificate executed on behalf of such person by a Responsible Officer who has
made or caused to be made such examination or investigation as is necessary to
enable such Responsible Officer to express an informed opinion with respect to
the subject matter of such Officer's Certificate.
"Operative Agreements" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease, the Lease Supplements (and memoranda of
the Lease and each Lease Supplement in a form reasonably acceptable to the
Agent), the Security Agreement, the Mortgage Instruments, the other Security
Documents, the Ground Leases, the Deeds, the Bills of Sale, the Bond Documents,
the LOC Documents and any and all other agreements, documents and instruments
executed in connection with any of the foregoing.
"Original Executed Counterpart" shall have the meaning given to such
term in Section 5 of EXHIBIT A to the Lease.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Credit Agreement.
"Overdue Rate" shall mean (a) with respect to the Loan Basic Rent, and
any other amount owed under or with respect to the Credit Agreement or the
Security Documents, the rate specified in Section 2.8(b) of the Credit
Agreement, (b) with respect to the Lessor Basic Rent, the Holder Yield and any
other amount owed under or with respect to the Trust Agreement, the Holder
Overdue Rate, and (c) with respect to any other amount, the amount referred to
in clause (y) of Section 2.8(b) of the Credit Agreement.
"Owner Trustee," "Borrower" or "Lessor" shall mean First Security
Bank, National Association, not individually, except as expressly stated in the
various Operative Agreements, but solely as the Owner Trustee under the SRI
Realty Trust 1998-1, and any successor, replacement and/or additional Owner
Trustee expressly permitted under the Operative Agreements.
"Participation Agreement" shall mean the Participation Agreement dated
on or about the Initial Closing Date, among the Lessee, the Owner Trustee, not
in its individual capacity except as expressly stated therein, and the Bank.
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Advances is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Pension Plan" shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
Multiemployer Plan), and to which
Appendix A-25
116
the Lessee or any ERISA Affiliate may have any liability, including without
limitation any liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the preceding five (5)
years, or by reason of being deemed to be a contributing sponsor under section
4069 of ERISA.
"Permitted Facility" shall mean a Property approved by the Bank.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
(b) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease for no
longer than the duration of the Lease;
(c) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 13.1 of the
Lease;
(d) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of
the Improvements or in connection with any Modifications or arising in
the ordinary course of business for amounts that either are not more
than thirty (30) days past due or are being diligently contested in
good faith by appropriate proceedings, so long as such proceedings
satisfy the conditions for the continuation of proceedings to contest
Taxes set forth in Section 13.1 of the Lease;
(e) Liens of any of the types referred to in clause (d) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor and
the Bank have been made), which bonding (or arrangements) shall comply
with applicable Legal Requirements, and shall have effectively stayed
any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
13.1 of the Lease; and
(g) Liens in favor of municipalities to the extent agreed to
by the Lessor.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
Appendix A-26
117
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Operative
Agreements.
"Pledge Agreement" shall mean each pledge agreement from the Owner
Trustee to the Bank relating to the applicable Bonds.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Property" shall mean, with respect to each Permitted Facility that is
(or is to be) acquired, constructed and/or renovated pursuant to the terms of
the Operative Agreements, the Land and each item of Equipment and the various
Improvements, in each case located on such Land, including without limitation
each Construction Period Property, each Property subject to a Ground Lease,
each Property subject to a Head Lease and each Property for which the Term has
commenced.
"Property Acquisition Cost" shall mean the cost to the Lessor (or, as
applicable, any Development Authority) to purchase a Property on a Property
Closing Date.
"Property Closing Date" shall mean the date on which the Lessor (or,
as applicable, any Development Authority) purchases a Property or, with respect
to the first Advance, the date on which the Lessor seeks reimbursement for
Property previously purchased by the Lessor (or, as applicable, any Development
Authority).
"Property Cost" shall mean with respect to a Property the aggregate
amount (and/or the various items and occurrences giving rise to such amounts)
of the Loan Property Cost plus the Holder Property Cost for such Property (as
such amounts shall be increased equally among all Properties respecting the
Holder Advances and the Loans extended from time to time to pay for the
Transaction Expenses, fees, expenses and other disbursements referenced in
Section 7.1 of the Participation Agreement).
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"Redemption Date" shall have the meaning specified in Section 2.12(e)
of the Participation Agreement.
Appendix A-27
118
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Remarketing Agent" shall mean any Person appointed to serve as
remarketing agent or in a similar capacity with respect to any Bonds under the
applicable Indenture or other Bond Documents.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Rent Commencement Date" shall mean, regarding each Property, the
Completion Date.
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chairman or Vice Chairman of the Executive Committee of
the Board of Directors, the President, any Senior Vice President or Executive
Vice President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer, except that when used with respect to
the Trust Company or the Owner Trustee, "Responsible Officer" shall also
include the Cashier, any Assistant Cashier, any Trust Officer or Assistant
Trust Officer, the Controller and any Assistant Controller or any other officer
of the Trust Company or the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.
"Sale Date" shall have the meaning given to such term in Section
20.3(a) of the Lease.
"Sale Notice" shall mean a notice given to the Lessor in connection
with the election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section
20.1 of the Lease.
Appendix A-28
119
"Sale Proceeds Shortfall" shall mean the amount by which the proceeds
of a sale described in Section 22.1 of the Lease are less than the Limited
Recourse Amount with respect to the Properties if it has been determined that
the Fair Market Sales Value of the Properties at the expiration of the term of
the Lease has been impaired by greater than ordinary wear and tear during the
Term of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan or Eurodollar Holder Advance, the last day of the Interest Period
applicable to such Eurodollar Loan or Eurodollar Holder Advance, (b) as to any
ABR Loan or any ABR Holder Advance, the fifteenth day of each month, unless
such day is not a Business Day and in such case on the next occurring Business
Day and (c) as to all Loans and Holder Advances, the date of any voluntary or
involuntary payment, prepayment, return or redemption, and the Maturity Date or
the Expiration Date, as the case may be.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement dated on or
about the Initial Closing Date between the Lessor and the Bank.
"Security Documents" shall mean the collective reference to the
Security Agreement, the Mortgage Instruments, (to the extent the Lease is
construed as a security instrument) the Lease, the UCC Financing Statements and
all other security documents hereafter delivered to the Bank granting a lien on
any asset or assets of any Person to secure the obligations and liabilities of
the Lessor under the Credit Agreement and/or under any of the other Credit
Documents or to secure any guarantee of any such obligations and liabilities.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition, development, installation,
construction, improvement and testing of the Properties other than Hard Costs,
including without limitation structuring fees, administrative fees, legal fees,
upfront fees, fees and expenses related to appraisals, title examinations,
title insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, the Commitment Fee, fees and
expenses of the Owner Trustee payable or reimbursable under the Operative
Agreements and costs and expenses incurred pursuant to Section 7 of the
Participation Agreement.
"SRI Realty Trust 1998-1" shall mean the grantor trust created
pursuant to the terms and conditions of the Trust Agreement.
"Sterile Recoveries" shall mean Sterile Recoveries, Inc., a Florida
corporation, and its successors and permitted assignees.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the
Appendix A-29
120
board of directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time owned by such Person, or by one (1) or more Subsidiaries, or by such
Person and one (1) or more Subsidiaries.
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Credit Agreement.
"Supplemental Rent" shall mean all amounts, liabilities and
obligations (other than Basic Rent) which the Lessee assumes or agrees to pay
to any Development Authority, any Bond Trustee, the Lessor, the Trust Company,
the Bank or any other Person under the Lease or under any of the other
Operative Agreements including without limitation payments of the Termination
Value and the Maximum Residual Guarantee Amount and all indemnification
amounts, liabilities and obligations.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Tender Advance" shall have the meaning specified in Section
2.12(d)(i) of the Participation Agreement.
"Tender Agent" shall mean any Person appointed to serve as tender
agent or in any similar capacity with respect to any Bonds under the applicable
Indenture or other Bond Documents.
"Tender Draft" shall have the meaning specified in each Letter of
Credit, as applicable.
"Term" shall have the meaning specified in Section 2.2 of the Lease.
"Termination Date" shall have the meaning specified in Section 16.2(a)
of the Lease.
"Termination Event" shall mean (a) with respect to any Pension Plan,
the occurrence of a Reportable Event or an event described in Section 4062(e)
of ERISA, (b) the withdrawal of the Lessee or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan, (c) the distribution of a notice of
intent to terminate a Plan or Multiemployer Plan pursuant to Section 4041(a)(2)
or 4041A of ERISA, (d) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC under Section 4042 of ERISA, (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (f) the complete or partial withdrawal of the Lessee or
any ERISA Affiliate from a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
Appendix A-30
121
"Termination Value" shall mean the sum of (a) either (i) with respect
to all Properties, an amount equal to the aggregate outstanding Property Cost
for all the Properties, in each case as of the last occurring Payment Date, or
(ii) with respect to a particular Property, an amount equal to the Property
Cost allocable to such Property, plus (b) respecting the amounts described in
each of the foregoing subclause (i) or (ii), as applicable, any and all accrued
but unpaid interest on the Loans and any and all Holder Yield on the Holder
Advances related to the applicable Property Cost, plus (c) to the extent the
same is not duplicative of the amounts payable under clause (b) above, all
other Rent and other amounts then due and payable or accrued under the Agency
Agreement, Lease and/or under any other Operative Agreement (including without
limitation amounts under Sections 11.1 and 11.2 of the Participation Agreement
and all costs and expenses referred to in clause FIRST of Section 22.2 of the
Lease).
"Transaction Expenses" shall mean all Soft Costs and all other costs
and expenses incurred in connection with the preparation, execution and
delivery of the Operative Agreements and the transactions contemplated by the
Operative Agreements including without limitation all of the following:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of accountants for the Lessee in connection with the
transaction contemplated by the Operative Agreements;
(c) any and all other reasonable fees, charges or other
amounts payable to the Bank, the Owner Trustee or any broker which
arises under any of the Operative Agreements;
(d) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any
of the other transaction documents; and
(e) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreement.
"Tribunal" shall mean any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision agency, department,
commission, board, bureau or instrumentality of a governmental body.
"Trust" shall mean the SRI Realty Trust 1998-1.
Appendix A-31
122
"Trust Agreement" shall mean the Amended, Restated and Replacement
Trust Agreement dated on or about the Initial Closing Date between the Bank and
the Owner Trustee.
"Trust Company" shall mean First Security Bank, National Association,
in its individual capacity, and any successor owner trustee under the Trust
Agreement in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the
Trust Agreement.
"Type" shall mean, as to any Loan, whether it is an ABR Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender
Financing Statements and the Lessor Financing Statements.
"UCP" shall have the meaning specified in Section 2.12(j) of the
Participation Agreement.
"Unfunded Amount" shall have the meaning specified in Section 3.2 of
the Agency Agreement.
"Unfunded Liability" shall mean, with respect to any Plan, at any
time, the amount (if any) by which (a) the present value of all benefits under
such Plan exceeds (b) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of the Company or any member of the Controlled Group to the PBGC or
such Plan under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Withholdings" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods and/or services with respect to
any Property.
"Year 2000" shall mean the calendar year beginning January 1, 2000 and
ending December 31, 2000.
Appendix A-32
