Exhibit 10.3
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PARTICIPATION AGREEMENT
Dated as of June 27, 2003
among
CYPRESS SEMICONDUCTOR CORPORATION, as the Lessee,
WACHOVIA DEVELOPMENT CORPORATION,
as the Lessor,
THE VARIOUS FINANCIAL INSTITUTIONS AND OTHER INSTITUTIONAL INVESTORS WHICH
ARE PARTIES HERETO FROM TIME TO TIME, as the Credit Lenders,
THE VARIOUS FINANCIAL INSTITUTIONS AND OTHER INSTITUTIONAL INVESTORS WHICH
ARE PARTIES HERETO FROM TIME TO TIME, as the Mortgage Lenders,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Agent for the Primary Financing Parties
and, respecting the Security Documents,
as the Agent for the Secured Parties
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TABLE OF CONTENTS
Page
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SECTION 1. THE FINANCING .................................................... 1
SECTION 2. [RESERVED] ....................................................... 2
SECTION 3. SUMMARY OF TRANSACTIONS .......................................... 2
3.1. Operative Agreements ............................................. 2
3.2. Property Purchase ................................................ 2
3.3. Commencement of Basic Rent ....................................... 2
SECTION 4. THE CLOSING ...................................................... 3
4.1. Closing Date ..................................................... 3
4.2. Requisitions ..................................................... 3
SECTION 5. FUNDING OF THE ADVANCE; CONDITIONS PRECEDENT; THE LESSEE'S
DELIVERY OF NOTICES; RESTRICTIONS ON LIENS ....................... 3
5.1. General .......................................................... 3
5.2. Procedures for Funding ........................................... 3
5.3. Conditions Precedent for the Lessee, the Agent and the
Primary Financing Parties Relating to each Property Closing
Date and the Advance of Funds for the Acquisition of the
Properties ....................................................... 4
5.4. Cash Collateral Account .......................................... 10
5.5. Restrictions on Liens ............................................ 12
5.6. [Reserved] ....................................................... 12
5.7. Special Provision Regarding Replacement of Nonextending
Lenders .......................................................... 12
5.8. Payments ......................................................... 13
SECTION 5A. [RESERVED.] ..................................................... 13
SECTION 5B. LESSOR ADVANCE .................................................. 13
5B.1. Procedure for Lessor Advance .................................... 13
5B.2. Lessor Yield .................................................... 13
5B.3. Scheduled Return of Lessor Advance .............................. 14
5B.4. Early Return of Lessor Advance .................................. 14
5B.5. Conversion and Continuation Options ............................. 14
5B.6. Computation of Lessor Yield ..................................... 15
SECTION 6. REPRESENTATIONS AND WARRANTIES .................................. 16
6.1. Representations and Warranties of the Lessor .................... 16
6.2. Representations and Warranties of the Lessee .................... 18
6.3. Representations and Warranties of the Lenders ................... 24
SECTION 7. PAYMENT OF CERTAIN EXPENSES ...................................... 25
7.1. Transaction Expenses ............................................. 25
7.2. Brokers' Fees .................................................... 26
7.3. Certain Fees and Expenses ........................................ 26
7.4. [Reserved] ....................................................... 27
7.5. Administrative Fee ............................................... 27
SECTION 8. OTHER COVENANTS AND AGREEMENTS ................................... 27
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8.1. Cooperation with the Lessee ..................................... 27
8.2. Covenants of the Lessor ......................................... 27
8.3. Lessee Covenants, Consent and Acknowledgment .................... 29
8.4. Sharing of Certain Payments ..................................... 35
8.5. Grant of Easements, etc ......................................... 35
8.6. Appointment of the Agent by the Primary Financing Parties ....... 36
8.7. Collection and Allocation of Payments and Other Amounts ......... 40
8.8. Release of Properties, etc ...................................... 45
8.9. Limitation of Lessor's Obligations .............................. 45
8.10. No Representations or Warranties as to the Property or the
Operative Agreements ............................................ 46
8.11. Reliance; Advice of Counsel ..................................... 46
8.12. Non Disturbance ................................................. 47
8.13. Payment of Appraiser Expenses ................................... 47
SECTION 8A. AFFIRMATIVE COVENANTS OF THE LESSEE ............................. 47
8A.1. Financial Statements ............................................ 47
8A.2. Certificates; Other Information ................................. 48
8A.3. [Reserved] ...................................................... 49
8A.4. [Reserved] ...................................................... 49
8A.5. Maintenance of Property Insurance ............................... 49
8A.6. Inspection of Property; Books and Records; Discussions .......... 50
8A.7. [Reserved] ...................................................... 50
8A.8. [Reserved] ...................................................... 50
8A.9. Financial Covenant .............................................. 50
SECTION 9. CREDIT NOTE LOAN AGREEMENT, MORTGAGE NOTE LOAN AGREEMENT AND
LESSOR ADVANCES .................................................. 50
SECTION 10. TRANSFER OF INTEREST ............................................ 52
10.1. Restrictions on Transfer ........................................ 52
10.2. Effect of Transfer .............................................. 53
SECTION 11. INDEMNIFICATION ................................................. 54
11.1. General Indemnity ............................................... 54
11.2. General Tax Indemnity ........................................... 57
11.3. Increased Costs, Illegality, etc ................................ 62
11.4. Funding/Contribution Indemnity .................................. 65
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT
LIABILITY, ETC .................................................. 65
SECTION 12. MISCELLANEOUS ................................................... 66
12.1. Survival of Agreements .......................................... 66
12.2. Notices ......................................................... 66
12.3. Counterparts .................................................... 67
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote
Matters ......................................................... 67
12.5. Headings, etc ................................................... 69
12.6. Parties in Interest ............................................. 69
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12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; VENUE ................................................... 69
12.8. Severability ................................................... 70
12.9. Liability Limited .............................................. 71
12.10. [Reserved] ..................................................... 72
12.11. Further Assurances ............................................. 72
12.12. Calculations under Operative Agreements ........................ 72
12.13. Confidentiality ................................................ 72
12.14. Financial Reporting/Tax Characterization ....................... 74
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EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, and 5.3
B - Form of Outside Local Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Lessee's Secretary's Certificate - Section 5.3(w)
D- Form of Lessee's Officer's Certificate - Section 5.3(y)
E - Form of Lessor's Secretary's Certificate - Section 5.3(z)
F - Form of Lessor's Officer's Certificate - Section 5.3(aa)
G - Form of Officer's Cash Collateral Compliance Certificate - Section
H - Form of Officer's Financial Compliance Certificate - Section
I - Form of Lessee's Counsel's Legal Opinion Section 5.3(cc)
Appendix A - Rules of Usage and Definitions
SCHEDULES
1. Schedule of Credit Lender Commitments
2. Schedule of Mortgage Lender Commitments
3. Schedule of Excluded Equipment
4. Schedule of Maximum Residual Guarantee Amount for Each Property
6.2(d). Schedule of Litigation
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of June 27, 2003 (as amended,
modified, extended, supplemented and/or restated from time to time, this
"Agreement") is by and among CYPRESS SEMICONDUCTOR CORPORATION, a Delaware
corporation (the "Lessee"); WACHOVIA DEVELOPMENT CORPORATION, a North Carolina
corporation (the "Lessor"); the various financial institutions and other
institutional investors which are parties hereto from time to time as holders of
the Credit Notes (subject to the definition of Credit Lenders in Appendix A
hereto, individually, a "Credit Lender" and collectively, the "Credit Lenders");
the various financial institutions and other institutional investors, which are
parties hereto from time to time as Mortgage Lenders (subject to the definition
of Mortgage Lenders in Appendix A hereto, individually, a "Mortgage Lender" and
collectively, the "Mortgage Lenders") (the Lessor, each Credit Lender and each
Mortgage Lender may be referred to individually as a "Primary Financing Party"
and collectively as the "Primary Financing Parties"); and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as the agent for the
Primary Financing Parties and respecting the Security Documents, as the agent
for the Secured Parties (in such capacity, the "Agent"). 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 FINANCING.
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 Primary
Financing Parties have agreed to make the Lessor Advances (in the case of the
Lessor) or make loans pursuant to the Credit Notes and the Mortgage Notes (in
the case of the Credit Lenders and the Mortgage Lenders, respectively) issued by
the Lessor on each Closing Date, with such Lessor Advance, the Credit Notes and
Mortgage Notes to be in an aggregate principal amount of up to the aggregate
amount of the Primary Financing Parties' Commitments in order for (i) the Lessor
to acquire the Properties in accordance with the terms and provisions hereof and
for the other purposes described herein and (ii) to enter into the Operative
Agreements with the Lessee. The Credit Lenders will make loans to the Lessor
pursuant to the Credit Note Loan Agreement and the Credit Notes. The Mortgage
Lenders will make loans to the Lessor pursuant to the Mortgage Note Loan
Agreement and the Mortgage Notes. The Lessor will make Lessor Advances pursuant
to the terms and conditions herein. The obligations of the Lessor to the Primary
Financing Parties and the Lessee Secured Obligations shall be secured by the
Collateral provided by the Lessee in the Security Documents (including without
limitation
the Properties and the Cash Collateral), as more particularly set forth herein
and in the other Operative Agreements and the obligations of the Lessor to the
Lenders shall be secured by the Collateral provided by the Lessor (including
without limitation the Lessor's right, title and interest in the Lease and the
other Operative Agreements and the Properties), as more particularly set forth
herein and in the other Operative Agreements.
SECTION 2. [RESERVED].
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. Operative Agreements.
On the Initial Closing Date, each of the respective parties hereto and
thereto shall execute and deliver each of the following agreements to which it
is a party this Agreement, the Lease, each applicable Ground Lease (or
restatement thereof), the Credit Note Loan Agreement, the Mortgage Note Loan
Agreement, the Credit Notes, the Mortgage Notes, the Security Agreement, each
applicable Mortgage Instrument, each applicable Security Document and such other
documents, instruments, certificates and opinions of counsel as agreed to by the
parties hereto or reasonably required for the closing of the transactions as
contemplated in the Operative Agreements.
3.2. Property Purchase.
On each Property Closing Date and subject to the terms and conditions of
this Agreement (a) the Credit Lenders will make loans to the Lessor in
accordance with Section 5 of this Agreement and the terms and provisions of the
Credit Note Loan Agreement, (b) the Mortgage Lenders will make loans to the
Lessor in accordance with Section 5 of this Agreement and the terms and
provisions of the Mortgage Note Loan Agreement, (c) the Lessor will make Lessor
Advances in accordance with Sections 5 and 5B of this Agreement, (d) the Lessor
will acquire title to or a Ground Lease interest in the Properties for the
benefit of Lessee and subject to the Operative Agreements and (e) the Lessee and
the Lessor shall each grant to the Agent and the Lessee shall grant to the
Lessor (in accordance with the Lease), as applicable, Liens on its right, title
and interest in the Properties and the other Collateral for the benefit of the
Primary Financing Parties (provided,- only the Lessee shall grant an interest in
the Cash Collateral and such grant shall be for the benefit of the Credit
Lenders, the Wachovia Mortgage Lender and the Lessor) by execution of the
required Security Documents.
3.3. Commencement of Basic Rent.
The Lessee shall commence to pay Basic Rent for each Property as of the
Property Closing Date for such Property.
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SECTION 4. THE CLOSING.
4.1. Closing Date.
All documents and instruments required to be delivered on any 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
Agent and the Lessee, provided the Agent, in its discretion may deliver
documents to the appropriate title companies prior to the relevant Property
Closing Date.
4.2. Requisitions.
Prior to each Closing Date, the Lessee shall deliver to the Agent a
requisition (a "Requisition"), in the form attached hereto as Exhibit A or in
such other form as is satisfactory to the Agent, in its reasonable discretion,
in connection with (a) the Transaction Expenses and other fees, expenses and
disbursements payable, pursuant to Section 7.1, by the Lessor, and (b) the
Advances pursuant to Section 5.3.
SECTION 5. FUNDING OF THE ADVANCE; CONDITIONS PRECEDENT; THE LESSEE'S
DELIVERY OF NOTICES; RESTRICTIONS ON LIENS.
5.1. General.
To the extent funds have been made available to the Lessor pursuant to
this Section 5, the Lessor will use such funds on the applicable Property
Closing Date in accordance with the terms and conditions of this Agreement and
the other Operative Agreements for the following purposes (i) at the direction
of the Lessee to acquire the Properties in accordance with and subject to the
terms of this Agreement and the other Operative Agreements, and (ii) to pay
Transaction Expenses, and reasonable fees, expenses and other disbursements
payable by the Lessor under Section 7.
5.2. Procedures for Funding.
(a) The Lessee shall deliver to the Agent, not less than three (3)
Business Days prior to each Property Closing Date a Requisition as
described in Section 4.2.
(b) [Reserved].
(c) Subject to the satisfaction of the conditions precedent set
forth in Section 5.3, on the applicable Property Closing Date and provided
the applicable Property Closing Date is during the Commitment Period, (i)
the Credit Lenders shall make Loans to the Lessor under the Credit Note
Loan Agreement based on their respective Credit Note Commitments, (ii) the
Mortgage Lenders shall make Loans to the Lessor under the Mortgage Note
Loan Agreement based on their respective Mortgage Note Commitments, and
(iii) the Lessor shall make an advance based on its Lessor
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Commitment (each advance by the Lessor, a "Lessor Advance"). The Requested
Funds shall be funded by the Credit Lenders, the Mortgage Lenders and the
Lessor such that (I) the Credit Loans made by the Credit Lenders under the
Credit Notes shall equal the product of the Requested Funds set forth in
such Requisition times sixty-nine percent (69%), (II) the Mortgage Loans
made by the Mortgage Lenders under the Mortgage Notes shall equal the
product of the Requested Funds set forth in such Requisition times
twenty-five percent (25%), and (III) the Lessor Advance shall equal the
product of the Requested Funds set forth in such Requisition times six
percent (6%). Notwithstanding that the Operative Agreements state that the
Advance shall be directed to the Lessor, the Advance shall in fact be paid
to such Persons as directed by the Lessee (for the benefit of the Lessor)
pursuant to the requirements imposed on the Lessor and the Lessee under
the Operative Agreements.
(d) [Reserved].
(e) All Operative Agreements which are to be delivered to the Agent
or the Primary Financing Parties shall be delivered to the Agent, on
behalf of the Agent or the Primary Financing Parties, and such items
(except for Notes, Bills of Sale, Deeds and chattel paper originals, with
respect to which in each case there shall be only one original) shall be
delivered with a number of originals sufficient for the Lessor, the Agent
and each Credit Lender and Mortgage Lender. The Agent shall then deliver
such Operative Agreements to the Lessor and each Credit Lender and
Mortgage Lender. All other items which are to be delivered to the Agent or
the Primary Financing Parties shall be delivered to the Agent, on behalf
of the Agent or the Primary Financing Parties, or directly to such party
as required by the Operative Agreements. Except as otherwise noted, copies
shall be sufficient for any other deliveries to parties other than the
Agent required under Section 5.3. To the extent any such other items
delivered to the Agent are requested in writing from time to time by the
Lessor or any other Primary Financing Party or are required to be
delivered by the Agent pursuant to Section 8.6(g), the Agent shall provide
a copy of such item to the party requesting it or to the parties entitled
thereto, as applicable.
(f) [Reserved].
(g) Notwithstanding the completion of the closing under this
Agreement, any condition precedent (other than Sections 5.3(u), (x), (z),
(aa), (bb), (dd) and (ff) and Sections 5.3(a), (b), (k), (m), (v) and (z)
solely with respect to deliveries from any Financing Party) not satisfied
prior to the Closing Date may be subsequently enforced by the Agent as a
covenant obligation of the Lessee, if the applicable Closing Date was
permitted to occur even though such condition precedent was not satisfied
on such Closing Date, unless expressly waived in writing by the Agent.
5.3. Conditions Precedent for the Lessee, the Agent and the Primary
Financing Parties Relating to each Property Closing Date and the
Advance of Funds for the Acquisition of the Properties.
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The obligations (i) on the Initial Closing Date of the Lessee and
the Financing Parties 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 and, in the case of the Credit Lenders and the
Mortgage Lenders, to make Loans to the Lessor, and in the case of the
Lessor, to make the Lessor Advance, (ii) on the Initial Closing Date of
the Lessor (or the Agent on behalf of the Lessor) to use the proceeds from
the sale of the Credit Notes and the Mortgage Notes and the Lessor Advance
to pay Transaction Expenses, fees, expenses and other disbursements
payable by the Lessor under Section 7.1(a) of this Agreement and (iii) on
each Property Closing Date of the Lessor to make Lessor Advances and the
Credit Lenders and the Mortgage Lenders to make Loans for the purpose of
providing funds to the Lessor necessary to pay Transaction Expenses, fees,
expenses and other disbursements payable by the Lessor under Section
7.1(a) of this Agreement and to acquire the Properties (each of the
foregoing (ii) and (iii), an "Advance"), in each case (with regard to the
foregoing Sections 5.3(i), (ii) and (iii) are subject to the satisfaction
or waiver of each 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 satisfactory to the Agent and the Primary Financing Parties, in
their reasonable discretion; 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 this Agreement contained herein, in each of the other Operative
Agreements and each certificate delivered by such party pursuant to any
Operative Agreement;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to such date;
(c) the Agent shall have received a fully executed counterpart copy
of the Requisition, appropriately completed;
(d) with respect to a Property Closing Date only, title to each such
Property shall conform to the representations and warranties set forth in
Section 6.2(l) hereof;
(e) with respect to a Property Closing Date only, the Lessee shall
have delivered to the Agent a good standing certificate for the Lessee in
the state where the Property is located, the Deed with respect to the Land
and Improvements (if any), a copy of the Ground Lease (if any) and a copy
of the Xxxx of Sale with respect to the Equipment, respecting such of the
foregoing as are being acquired or ground leased on such date;
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(f) there shall not have occurred and be continuing any Default or
Event of Default and no Default or Event of Default will have occurred
after giving effect to the Advance;
(g) with respect to a Property Closing Date only, the Lessee shall
have delivered or caused to be delivered to the Agent title insurance
commitments to issue policies insuring the Lien of the Mortgage
Instruments up to the amount of the Notes and the Lessor Advance
respecting each Property being acquired or ground leased on such Property
Closing Date, with such endorsements as the Agent deems reasonably
necessary, in favor of the Lessor and the Agent from a title insurance
company reasonably acceptable to the Agent, but only with such title
exceptions thereto as are reasonably acceptable to the Agent;
(h) with respect to a Property Closing Date only, the Lessee shall
have delivered to the Agent an environmental site assessment respecting
each Property being acquired on such Property Closing Date, prepared by an
independent recognized professional reasonably acceptable to the Agent and
evidencing no pre-existing environmental condition with respect to which
there is more than a remote risk of loss;
(i) with respect to a Property Closing Date only, the Lessee shall
have delivered to the Agent an ALTA survey (with a flood hazard
certification) respecting each Property being acquired on such Property
Closing Date prepared by (i) an independent recognized professional
reasonably acceptable to the Agent and (ii) in a manner and including such
information as is reasonably required by the Agent;
(j) with respect to a Property Closing Date only, the Lessee shall
have caused to be delivered to the Agent a legal opinion in the form
attached hereto as Exhibit B or in such other form as is reasonably
acceptable to the Agent with respect to local law real property issues
respecting the state in which each Property being acquired on such
Property Closing Date is located addressed to the Agent, from counsel
located in the state where each such Property is located, prepared by
counsel reasonably acceptable to the Agent;
(k) [Reserved];
(l) the Lessee shall have delivered to the Agent invoices for, or
other reasonably satisfactory evidence of, the various Transaction
Expenses and other fees, expenses and disbursements referenced in Section
7 of this Agreement, as appropriate;
(m) with respect to a Property Closing Date only, the Lessee shall
have caused to be delivered to the Agent Mortgage Instruments (in such
form as is reasonably acceptable to the Agent, with revisions as necessary
to conform to applicable state law), Lessor Financing Statements and
Lender Financing Statements respecting each Property being acquired on
such Property Closing Date, all fully executed and in recordable form;
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(n) with respect to a Property Closing Date only, the Lessee shall
have delivered to the Agent with respect to each Property being acquired
on such Property Closing Date a Lease Supplement and a memorandum (or
short form lease) regarding the Lease and such Lease Supplement (such
memorandum or short form lease to be in the form attached to the Lease as
Exhibit B or in such other form as is reasonably acceptable to the Agent
and Lessee, with modifications as necessary to conform to applicable state
law, and in form suitable for recording);
(o) with respect to each Advance, the sum of the Available Credit
Note Commitments, plus the Available Mortgage Note Commitments, plus the
Available Lessor Commitment will be sufficient to pay all amounts payable
therefrom;
(p) with respect to a Property Closing Date only, if any such
Property is subject to a Ground Lease, the Lessee shall have caused a
lease memorandum (or short form lease) to be delivered to the Agent for
such Ground Lease and, if requested by the Agent, a landlord waiver and a
mortgagee waiver (in each case, in such form as is reasonably acceptable
to the Agent);
(q) with respect to a Property Closing Date only (other than the
Initial Closing Date), counsel (reasonably acceptable to the Agent) for
the ground lessor (to the extent the ground lessor is the Lessee or an
Affiliate of the Lessee) of each such Property subject to a Ground Lease
shall have issued to the Agent, its opinion (in form and substance
reasonably satisfactory to the Agent);
(r) with the respect to a Property Closing Date only, the Lessee
shall have provided evidence of insurance to the Agent with respect to
each Property being acquired on such Property Closing Date as provided in
the Lease;
(s) with respect to a Property Closing Date only, the Lessee shall
have caused an Appraisal regarding each Property being acquired on such
Property Closing Date to be provided to the Agent from an appraiser
reasonably satisfactory to the Agent;
(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 Agent;
(u) in the opinion of the Agent and its counsel, the transactions
contemplated by the Operative Agreements do not and will not subject the
Primary Financing Parties or the Agent to any materially adverse
regulatory prohibitions, constraints, penalties or fines;
(v) 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 Agent shall have
received a fully executed copy of each of the Operative Agreements;
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(w) as of the Initial Closing Date only, the Agent 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 reasonably acceptable to the Agent stating that (i) each and
every representation and warranty of the Lessee contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Initial Closing Date; (ii) no Lease Default or Lease Event of Default has
occurred and is continuing under any Operative Agreement and Lessee is not
aware or any other Default or Event of Default; (iii) each Operative
Agreement to which the Lessee is a party is in full force and effect with
respect to it except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent transfer or conveyance, reorganization, moratorium
or other similar laws relating to or affecting creditors' or lessors'
rights generally and general principles of equity; and (iv) the Lessee has
duly performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Agreement required to be performed or
complied with by it on or prior to the Initial Closing Date;
(x) since the date of the most recent audited financial statements
of the Lessee (which have been previously delivered to the Agent), 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 (i) an increase of approximately $150,000,000 in the
convertible debt outstanding and (ii) as specifically contemplated by the
Operative Agreements;
(y) as of the Initial Closing Date only, the Agent 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 reasonably acceptable to
the Agent attaching and certifying as to (1) the resolutions of the Board
of Directors of the Lessee duly authorizing the execution, delivery and
performance by the Lessee of each of the Operative Agreements to which it
is or will be a party, (2) the certificate of incorporation of the Lessee
certified as of a recent date by the Secretary of State of its state of
incorporation and its by-laws and (3) the incumbency and signature of
persons authorized to execute and deliver on behalf of the Lessee the
Operative Agreements to which it is or will be a party and (ii) a good
standing certificate (or local equivalent) from the appropriate office of
the respective states where the Lessee is incorporated and where the
principal place of business of the Lessee is located as to its good
standing in each such state;
(z) as of the Initial Closing Date only, the Agent and Lessee, 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 reasonably acceptable to the Agent, stating that (i) each
and every representation and warranty of the Lessor contained in the
Operative Agreements to which it is a party is true and correct on and as
of the Initial Closing Date, (ii) each Operative Agreement to which the
Lessor is a party is in full force and effect with respect to it except as
the same may be limited by applicable bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' or lessors' rights
8
generally and general principles of equity; (iii) the Lessor has duly
performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Agreement required to be performed or
complied with by it on or prior to the Initial Closing Date and (iv) no
Credit Agreement Default or Credit Agreement Event of Default attributable
solely to Lessor has occurred and is continuing under any Operative
Agreement;
(aa) as of the Initial Closing Date only, the Agent and Lessee shall
have received (i) a certificate of the Secretary or an Assistant Secretary
of the Lessor, dated as of the Initial Closing Date in the form attached
hereto as Exhibit F or in such other form as is reasonably acceptable to
the Agent attaching and certifying as to (A) the signing resolutions duly
authorizing the execution, delivery and performance by the Lessor of each
of the Operative Agreements to which it is or will be a party, (B) its
articles of incorporation or other equivalent charter documents as
certified by the Secretary of State of its state of incorporation and its
by-laws, as the case may be, certified as of a recent date by an
appropriate officer of the Lessor and (C) the incumbency and signature of
persons authorized to execute and deliver on its behalf the Operative
Agreements to which it is a party and (ii) a good standing certificate
from the appropriate governmental authority in the jurisdiction of the
Lessor's organization and the jurisdiction of the Lessor's principal place
of business;
(bb) as of the Initial Closing Date only, counsel for the Lessor
reasonably acceptable to the Agent shall have issued to the Primary
Financing Parties (other than the Lessor), the Lessee and the Agent its
opinion dated as of the Initial Closing Date in such form as is reasonably
acceptable to the Agent;
(cc) as of the Initial Closing Date only, counsel for the Lessee
reasonably acceptable to the Agent shall have issued to the Primary
Financing Parties and the Agent its opinion dated as of the Initial
Closing Date in such form as is reasonably acceptable to the Agent;
provided, however, that if the Initial Closing Date and the Property
Closing Date occur simultaneously, the opinion required by this Section
5.3(cc) and the opinion required by Section 5.3(j) may be combined into a
single legal opinion, provided such legal opinion satisfies both Sections
5.3(j) and 5.3(cc);
(dd) as of each Property Closing Date only, no Casualty and no
Condemnation respecting any Property to be acquired or ground leased on
such Property Closing Date shall have occurred and no action shall be
pending or threatened by a Governmental Authority to initiate a
Condemnation with respect to any such Property;
(ee) the Lessee shall cause (i) Uniform Commercial Code lien
searches, tax lien searches and judgment lien searches regarding the
Lessee and the Lessor to be conducted (and copies thereof to be delivered
to the Agent) in such jurisdictions as determined by the Agent by a
nationally recognized search company reasonably acceptable to the Agent
and (ii) the liens referenced in such lien searches which are
objectionable to the Agent to be either removed or otherwise handled in a
manner reasonably satisfactory to the Agent;
9
(ff) with respect to a Property Closing Date only, the Lessor shall
have caused to be delivered to the Agent, Mortgage Instruments to which it
is a party (in such form as is reasonably acceptable to the Agent, with
revisions as necessary to conform to applicable state law), respecting
each Property being acquired on such Property Closing Date, all fully
executed and in recordable form;
(gg) [Reserved];
(hh) [Reserved]; and
(ii) the Lessee shall have deposited good and immediately available
funds, in Dollars, into the Cash Collateral Account in a sufficient amount
so that after giving effect to the requested Advance on the applicable
Closing Date the Lessee is in compliance with Section 5.4 hereof.
5.4. Cash Collateral Account.
(a) On the Initial Closing Date, each Property Closing Date and
pursuant to the Cash Collateral Security Documents, the Lessee shall
pledge to the Agent, for the benefit of the Lenders, as security for the
Cash Collateral Obligations, by delivery to the Intermediary or by
otherwise depositing into the Cash Collateral Account, Cash Collateral
(which may be in the form of cash or Cash Equivalents or a combination
thereof) in an amount such that the Total Coverage Amount after such
pledge or deposit on such date is equal to or greater than the Required
Cash Collateral Balance as of such date;
(b) On each February 15th May 15th, August 15th, November 15th
(unless such day is not a Business Day, then on the previously occurring
Business Day) (each such date, a "Cash Collateral Compliance Date"), the
Lessee shall furnish to the Agent an Officer's Certificate in the form of
Exhibit G setting forth the Lessee's calculation, in reasonable detail,
demonstrating compliance by the Lessee with the provisions of this Section
5.4 as of such date;
(c) (i) If on any Cash Collateral Compliance Date or on any other
date that the Agent provides notice to the Lessee that the Total Coverage
Amount shall be less than the Required Cash Collateral Balance, as of such
date, then the Lessee shall pledge to the Agent, by delivery to the
Intermediary or by otherwise depositing into the Cash Collateral Account,
additional Cash Collateral in an amount such that the Total Coverage
Amount after such pledge or deposit on such Cash Collateral Compliance
Date or within two (2) Business Days of such notice is equal to or greater
than the Required Cash Collateral Balance as of such date.
(ii) If on any Cash Collateral Compliance Date or the date one
(1) Business Day after the completion of an assignment to a Mortgage
Lender other than the Wachovia Mortgage Lender the Total Coverage
Amount shall be greater
10
than the Required Cash Collateral Balance as of such date, and
provided no Default or Event of Default has occurred and is
continuing, upon the written request of the Lessee, the Agent shall
cause the Intermediary to convey to the Lessee and otherwise release
from the Lien of the Cash Collateral Security Documents, a portion
of the Cash Collateral (as requested by the Lessee); provided, in no
event shall the Lessee request the conveyance and release of, and in
no event shall the Agent be required to cause the Intermediary to
convey and release, any Cash Collateral if as a result of such
conveyance and release the Total Coverage Amount will be less than
the Required Cash Collateral Balance after taking into account
unfunded Requisitions as of such date.
(d) The Lessor and the Lessee hereby acknowledge and agree that the
Cash Collateral Account (and the Cash Collateral on deposit therein from
time to time) constitutes additional Collateral to secure any and all Cash
Collateral Obligations and the Lessor and the Lessee agree to execute and
deliver any agreements, financing statements, instruments or other
documents reasonably requested by the Agent to perfect the security
interest of the Credit Lenders the Wachovia Mortgage Lender or the Lessor
in the Cash Collateral Account (including without limitation the Cash
Collateral Security Documents).
(e) Notwithstanding any provision contained herein or in any other
Operative Agreement to the contrary:
(i) upon delivery to the Agent of the Termination Value for
all Properties less an amount actually in the Cash Collateral as of
such date, the Agent may, apply the Cash Collateral Account to the
remaining balance of the Termination Value,
(ii) provided no Lease Default or Lease Event of Default has
occurred and is continuing, upon (A) payment in full of the
principal of and interest on the Credit Notes, the Mortgage Notes
held by the Wachovia Mortgage Lender, the Lessor Advances and Lessor
Yield, all other Cash Collateral Obligations and all other amounts
owing by Lessee pursuant to the Operative Agreements and (B)
termination of the Commitments of the Credit Lenders, the Wachovia
Mortgage Lender and the Lessor, the Agent shall, upon the written
request of the Lessee, cause all amounts being held on deposit in
the Cash Collateral Account to be returned to the Lessee or
(iii) provided, the Lessee has properly elected either the
Immediate Purchase Option or the Purchase Option and complies with
the provisions of the Operative Agreements applicable thereto, the
Agent is not prohibited by any Governmental Authority or Law from
distributing the Cash Collateral to the Cash Secured Parties or any
other Financing Party, no Lease Event of Default has occurred and is
continuing and Lessee has delivered to the Agent in good and
immediately available Dollars an amount equal to the Termination
Value for all Properties less the amount of Cash Collateral which is
not so prohibited to be
11
applied to the Termination Value for all Properties, then the Agent
shall distribute the Cash Collateral in accordance with Section
8.7(b)(vi) of the Participation Agreement (for the avoidance of
doubt, such distribution of the Termination Value may include Cash
Collateral being distributed to Financing Parties other than the
Cash Secured Parties). After all such payments have been made, the
Properties will be transferred in accordance with the Immediate
Purchase Option or the Purchase Option, as applicable.
5.5. Restrictions on Liens.
On each Property Closing Date, the Lessee shall cause each Property
acquired by the Lessor on such date to be free and clear of all Liens except
those referenced in Sections 6.2(q)(i) and 6.2(q)(ii), such other Liens that are
expressly set forth as title exceptions on the title commitment or policy issued
under Section 5.3(g) with respect to such Property, Liens for Taxes that are not
yet due and payable and such other Liens that have been expressly approved or
agreed to by the Agent. On the date any Property is either sold to a third party
(other than the Lessee or any Affiliate or designee of the Lessee) 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, such other
Liens that are expressly set forth as title exceptions on the title commitment
or policy issued under Section 5.3(g) with respect to such Property, to the
extent such title commitment has been approved by the Agent, Liens for Taxes
that are not yet due and payable and such other Liens that have been expressly
approved or agreed to by the Agent).
5.6. [Reserved].
5.7. Special Provision Regarding Replacement of Nonextending Lenders.
In the event a Lender does not consent to (or is deemed to have rejected)
a Renewal Term proposed by Lessee in accordance with Section 2.2 of the Lease,
the Lessee shall have the right to replace such a Lender as a party to this
Agreement and the other relevant Operative Agreements, the Lessee may, upon
notice to such Lender and the Agent, replace such Lender by causing such Lender
to assign its Credit Note Commitment or Mortgage Note Commitment, as applicable,
if any, and its Credit Note or Mortgage Note, as applicable, (with the
assignment fee to be paid by the Lessee in such instance) pursuant to Section 10
hereof and Sections 9.7 and 9.8 of the Credit Note Loan Agreement or the
Mortgage Note Loan Agreement, as applicable, and the other applicable terms and
conditions in the Operative Agreements to one or more other Lenders or eligible
assignees designated by the Lessee. To the extent not paid by the replacement
Lender, the Lessee shall (a) pay or cause to be paid in full all principal,
interest, fees and other amounts payable under the Operative Agreements to such
Lender through the date of replacement, (b) provide or cause to be provided by
the eligible assignee approved by the Agent, Lessee and reasonably acceptable to
the replaced Lender, appropriate assurances and indemnities as each replaced
Lender may reasonably require with respect to the Operative Agreements, and (c)
release such Lender from its obligations under the Operative Agreements. Any
Lender being replaced and the replacement Lenders shall execute and deliver an
Assignment and Acceptance in the form of Exhibit B to the Credit Note Loan
12
Agreement or the Mortgage Note Loan Agreement, as applicable, and take actions
to comply with Section 10 hereof and Sections 9.7 and 9.8 of the Credit Note
Loan Agreement or the Mortgage Note Loan Agreement, as applicable, and the other
applicable terms and conditions in the Operative Agreements.
5.8. Payments.
All payments of Rent, and other amounts payable to any Financing Party to
be made by 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 Agent at the office designated by
the Agent from time to time by written notice as provided herein 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, Lessor Yield and fees
payable pursuant to the Operative Agreements, as applicable and as the case may
be.
SECTION 5A. [RESERVED.]
SECTION 5B. LESSOR ADVANCE.
5B.1. Procedure for Lessor Advance.
Upon receipt from Lessee by the Agent of a Requisition pursuant to
Section 4.2, and subject to the terms and conditions of this Agreement,
the Lessor shall make an Advance under the Lessor Commitment equal to six
percent (6%) of the amount requested in such Requisition on the applicable
Property Closing Date. The Lessor Advance shall be based on the Eurodollar
Rate or the ABR, as designated by the Lessee in the applicable
Requisition.
5B.2. Lessor Yield.
(a) The Lessor Advance shall bear yield calculated at the rate of
Lessor Yield applicable from time to time. The Lessee shall pay as Basic
Rent to the Agent for distribution to the Lessor the Lessor Yield in
arrears on each Interest Payment Date or as otherwise provided herein or
in Section 8.7 of this Agreement.
(b) If all or a portion of Lessor Yield shall not be received by the
Lessor when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall, without limiting the rights of the
Lessor hereunder or under any other Operative Agreement, bear interest at
the Lessor Overdue Rate, in each case from the date of nonpayment until
paid (whether after or before judgment) and shall be paid upon demand.
13
5B.3. Scheduled Return of Lessor Advance.
The outstanding amount of the Lessor Advance shall be due in full on the
Expiration Date. On the Expiration Date, subject to the terms of this Agreement,
the Lessor (or the Agent on behalf of the Lessor) shall receive from the Lessee
as Basic Rent under the Lease the outstanding amount of the Lessor Advance then
due, together with all accrued but unpaid Lessor Yield and all other amounts due
to Lessor under the Operative Agreements provided; nothing in this Section 5B.3
shall limit the rights, or increase the obligations, of the Lessee with respect
to a Limited Recourse Event of Default or Lessee's exercise of the Sale Option
pursuant to the Lease.
5B.4. Early Return of Lessor Advance.
(a) Subject to Sections 11.2(e), 11.3 and 11.4 of this Agreement,
the Lessor Advance may at any time and from time to time be prepaid by the
Lessee with its funds (or in Agent's discretion and at times permitted
pursuant to this Agreement and the Cash Collateral Security Documents by
application of the Cash Collateral) as a payment of Supplemental Rent, in
whole or in part, without premium or penalty, upon at least one (1)
Business Day's prior irrevocable notice to the Agent, on behalf of the
Lessor, specifying the date and amount of prepayment of the Lessor
Advance. Upon receipt of such notice, the Agent shall promptly notify the
Lessor thereof. If such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein. Amounts
prepaid shall not be re-advanced and such prepayments shall be distributed
in accordance with Section 8.7(b) of this Agreement.
(b) If on any date the Agent or the Lessor shall receive any payment
in respect of (i) any Casualty, or Condemnation or Environmental Violation
pursuant to Sections 15.1(a) or 15.1(g) or Article XVI of the Lease
(excluding any payments in respect thereof which are payable to Lessee in
accordance with the Lease), or (ii) the Termination Value of any Property
in connection with the delivery of a Termination Notice pursuant to
Article XVI of the Lease, or (iii) the Termination Value of any Property
or such other applicable amount in connection with the exercise of the
Purchase Option under Article XX of the Lease or the exercise of the
option of the Lessor to transfer the Properties to the Lessee pursuant to
Section 20.3 of the Lease, then in each case, the Agent or the Lessor
shall receive such payment to be distributed in accordance with Section
8.7(b) of this Agreement.
(c) Each prepayment of the Lessor Advances pursuant to Section 5B.4
shall (i) be credited to reduce the Property Cost of the Properties
ratably unless such prepayment is associated with a specific Property in
which case it shall be allocated to reduce the Property Cost of such
Property and (ii) be distributed pursuant to Section 8.7.
5B.5. Conversion and Continuation Options.
(a) The Lessee may elect from time to time to convert Lessor
Advances based on the Eurodollar Rate to Lessor Advances based on the ABR
by giving the Lessor at
14
least three (3) Business Days' prior irrevocable notice of such election,
provided, that any such conversion may only be made on the last day of an
Interest Period with respect thereto, and provided, further, to the extent
a Lease Event of Default has occurred and is continuing on the last day of
any such Interest Period, the applicable Lessor Advances based on the
Eurodollar Rate shall automatically be converted to Lessor Advances based
on the ABR. The Lessee may elect from time to time to convert Lessor
Advances based on the ABR to Lessor Advances based on the Eurodollar Rate
by giving the Lessor at least three (3) Business Days' prior irrevocable
notice of such election. All or any part of outstanding Lessor Advance may
be converted as provided herein, provided, that (i) no Lessor Advance
based on the ABR may be converted into a Lessor Advance based on the
Eurodollar Rate after the date that is one (1) month prior to the
Expiration Date and (ii) such notice of conversion regarding any Lessor
Advance based on the Eurodollar Rate shall contain an election by the
Lessee of an Interest Period for such Lessor Advance based on the
Eurodollar Rate to be created by such conversion and such Interest Period
shall be in accordance with the terms of the definition of the term
"Interest Period" including without limitation subparagraphs (A) through
(D) thereof.
(b) Any Lessor Advance based on the Eurodollar Rate may be continued
as such upon the expiration of the then current Interest Period with
respect thereto by the Lessee giving irrevocable notice to the Lessor, in
accordance with the applicable notice provision for the conversion of
Lessor Advances based on the ABR to Lessor Advances based on the
Eurodollar Rate set forth herein, provided, that no Lessor Advance based
on the Eurodollar Rate may be continued as such after the date that is one
(1) month prior to the Expiration Date, provided, further, no Lessor
Advance based on the Eurodollar Rate may be continued as such if a Lease
Event of Default has occurred and is continuing as of the last day of the
Interest Period for such Lessor Advance based on the Eurodollar Rate, and
provided, further, that if the Lessee shall fail to give any required
notice as described above or otherwise herein or if such continuation is
not permitted pursuant to the preceding proviso, such Lessor Advance shall
automatically be converted to an ABR Lessor Advance on the last day of
such then expiring Interest Period.
5B.6. Computation of Lessor Yield.
(a) Lessor Yield shall be calculated on the basis of (i) a year of
three hundred sixty (360) days for the actual days elapsed with respect to
Eurodollar Loans and Eurodollar Lessor Advances and (ii) a year of three
hundred sixty-five (365) or three hundred sixty-six (366) days, as
applicable, for the actual days elapsed with respect to Loans and ABR
Lessor Advances. Any change in the Lessor Yield resulting from a change in
the Eurocurrency Reserve Requirements applicable to Lessor after the
Initial Closing Date shall become effective as of the opening of business
on the day on which such change becomes effective with respect to each
Interest Period commencing at least three (3) Business Days after the
Lessor notifies Lessee of such change in the Eurocurrency Reserve
Requirements.
15
(b) Pursuant to Section 12.12 of this Agreement, the calculation of
Lessor Yield under this Section 5B.6 shall be made by the Agent. Each
determination of Lessor Yield by the Agent shall be conclusive and binding
in the absence of manifest error.
(c) If the Eurodollar Rate cannot be determined by the Agent in the
manner specified in the definition of the term "Eurodollar Rate", then
commencing on the Interest Payment Date next occurring and continuing
until such time as the Eurodollar Rate can be determined by the Agent in
the manner specified in the definition of such term, the outstanding
Lessor Advance shall bear a yield at the ABR.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. Representations and Warranties of the Lessor.
The Lessor represents and warrants to each of the other parties hereto
that as of each Closing Date (except to the extent any such representation or
warranty relates to an earlier date):
(a) It is a corporation duly organized and validly existing and in
good standing under the laws of the State of North Carolina, is qualified
to do business in each jurisdiction necessary to permit the Lessor to own
and lease the Properties and perform its obligations under the Operative
Agreements and has the power and authority to enter into and perform its
obligations under each of the Operative Agreements to which it is or will
be a party and each other agreement, instrument and document to be
executed and delivered by it on or before such Closing Date in connection
with or as contemplated by each such Operative Agreement to which the
Lessor is or will be a party, and is a multi-purpose, Wholly-Owned Entity
of Wachovia Corporation;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party are within the corporate
powers of the Lessor, has been duly authorized by all necessary action on
its part, have been duly executed and delivered, 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 or any other
consent or approval that has not previously been obtained, (ii) does or
will contravene any Legal Requirement applicable to Lessor, (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 the Properties (except
as described in the Operative Agreements) or any of its other 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) could reasonably be expected to
materially and adversely affect its ability to perform its obligations
under the Operative Agreements to
16
which it is a party or would question the validity or enforceability of
any of the Operative Agreements to which it is or will become a party or
(iv) does or will require any Governmental Action by any Governmental
Authority;
(c) Each Operative Agreement to which the Lessor is or will be a
party has been, or on or before such Closing Date will be, duly executed
and delivered by the Lessor, and each Operative Agreement to which the
Lessor is a party constitutes, or upon execution and delivery will
constitute, a legal, valid and binding obligation enforceable against the
Lessor in accordance with the terms thereof;
(d) There is no action or proceeding pending or, to its knowledge,
threatened to which it is or will be a party before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability to perform its obligations under the Operative
Agreements to which it is a party or would question the validity or
enforceability of any of the Operative Agreements to which it is or will
become a party;
(e) The Lessor has not assigned or transferred any of its right,
title or interest in or under the Lease or its interest in any Property or
any portion thereof, except in accordance with the Operative Agreements;
(f) No Default or Event of Default under the Operative Agreements
attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative Agreements,
the proceeds of the Advance shall not be applied by the Lessor for any
purpose other than the purchase and/or lease of the Properties or to pay
Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Section 7.1(a) of this Agreement;
(h) Neither the Lessor nor any Person authorized by the Lessor to
act on its behalf has offered or sold any interest in the Lessor's
Interest or the Notes, or in any similar security relating to the
Properties, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as the
offering of the aforementioned securities to, or solicited any offer to
acquire any of the same from, any Person other than, in the case of the
Notes, the Agent and the Lenders and neither the Lessor nor any Person
authorized by the Lessor to act on its behalf will take any action which
would subject, as a direct result of such action alone, the issuance or
sale of any interest in the Lessor's Interest or the Notes to the
provisions of Section 5 of the Securities Act or require the qualification
of any Operative Agreement under the Trust Indenture Act of 1939, as
amended;
(i) The location of the Lessor for purposes of the UCC is North
Carolina. The Lessor's principal place of business, chief executive office
and office where the documents, accounts and records relating to the
transactions contemplated by this Agreement and each other Operative
Agreement are kept are located at One Wachovia Center, 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000;
17
(j) The Lessor is not engaged principally in, and does not have as
one (1) of its important activities, the business of extending credit for
the purpose of purchasing or carrying any margin stock (within the meaning
of Regulation U), and no part of the proceeds of the Loans or the Lessor
Advance will be used by it to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulations T, U, or X;
(k) The Lessor is not an "investment company" or a company
controlled by an "investment company" within the meaning of the Investment
Company Act;
(l) Each Property and the Collateral in which Lessor has any right,
title or interest is free and clear of all Lessor Liens attributable to
the Lessor;
(m) [Reserved].
(n) The Lessor's true legal name as registered in the jurisdiction
of its organization is "Wachovia Development Corporation" and its Federal
Employer Identification Number is 00-0000000. During the five (5) year
period immediately prior to the Initial Closing Date, the true legal name
of the Lessor has not been other than "Wachovia Development Corporation"
or "First Union Development Corporation". The Lessor does not use, or
transact and has not used, or transacted within the five (5) years
immediately prior to the Initial Closing Date any business under, any
trade name other than its current or prior legal name referenced in the
preceding sentence; and
(o) The Lessor has filed all tax returns and all other material
reports that are required under applicable Law to be filed by it and has
paid all taxes or other charges of any Governmental Authority due pursuant
to such returns or other reports, except for any taxes or other charges
that are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been set aside on the
books and records of the Lessor.
6.2. Representations and Warranties of the Lessee.
Lessee represents and warrants to each of the other parties hereto that as
of each Closing Date (except to the extent that any such representation or
warranty relates to an earlier date):
(a) The Lessee is duly organized or formed and validly existing in
good standing under the laws of the jurisdiction of its incorporation or
formation, is qualified to do business and is in good standing in each
jurisdiction in which the nature of its business makes such qualification
necessary, and has all requisite power and authority to own its properties
and to carry on its business as now conducted;
(b) (i) The Lessee has the power and authority to enter into and
perform its obligations under the Operative Agreements to which it is a
party or will be a party and has the corporate power and authority to act
as the Lessee;
18
(ii) The execution and delivery by the Lessee of this
Agreement and the other applicable Operative Agreements to which the
Lessee is a party as of such date and the performance by the Lessee of its
obligations under this Agreement and the other applicable Operative
Agreements to which the Lessee is a party 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 (A) violate
any Legal Requirement which is binding on the Lessee, (B) contravene or
conflict with, or result in a breach of, any provision of the Certificate
of Incorporation, By-Laws or other organizational documents of the Lessee
or of any agreement, indenture, instrument or other document which is
binding on the Lessee or (C) 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;
(c) This Agreement and the other applicable Operative Agreements to
which the Lessee is a party, executed prior to or as of such date by the
Lessee, constitute the legal, valid and binding obligation of the Lessee,
enforceable against the Lessee, in accordance with their terms except as
the same may be limited by applicable bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' or lessors' rights generally and by
general principles of equity;
(d) Except as set forth in Schedule 6.2(d), there are no actions,
suits or proceedings pending or, to Lessee's knowledge, threatened against
the Lessee in any court or before any Governmental Authority (nor has any
order, judgment or decree been issued or, to the knowledge of the Lessee,
is proposed to be issued by any Governmental Authority against the Lessee
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 Lessee's interest therein, (ii) that question the
validity or enforceability of any obligation of Lessee pursuant to the
Operative Agreements or the overall transaction, as it applies to Lessee,
described in the Operative Agreements or to Lessee's knowledge, that
question the validity or enforceability of any obligation of any other
party pursuant to the Operative Agreements or the overall transaction
described in the Operative Agreements or (iii) have or could reasonably be
expected to have a Material Adverse Effect;
(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 or
any 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 by Lessee of any Operative Agreement to
which the Lessee is a party, (ii) the legality, validity, binding effect
or enforceability against Lessee of any Operative Agreement to which the
Lessee is a party, (iii) the acquisition, ownership, occupancy, operation,
leasing or subleasing by Lessee of
19
any Property or (iv) the Lessee's request for the Advance, in each case,
except those which have been obtained or performed and are in full force
and effect;
(f) Upon the execution and delivery of a Lease Supplement to the
Lease respecting any Property, (i) the Lessee will have unconditionally
accepted such Property subject to the Lease Supplement, 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 Lessee shall cause the proceeds of any Lessor Advance or Loan not to
be used for any purpose other than the purchase and/or lease of the
Properties and the payment of Transaction Expenses referenced in Section
7.1(a) of this Agreement with respect to a particular Property;
(h) All information with respect to Lessee or any of its Affiliates
heretofore or contemporaneously herewith furnished in writing by Lessee
(or any of its Affiliates) to the Agent, the Lessor or any other Primary
Financing Party for purposes of or in connection with this Agreement and
the transactions contemplated hereby is, taken as a whole, 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 omit to state any material fact necessary to make such
information, taken as a whole, not misleading;
(i) The location of the Lessee for purposes of the UCC is Delaware.
The principal place of business, chief executive office and office of 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 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000-0000;
(j) The representations and warranties of Lessee set forth in any of
the Operative Agreements are true and correct. There exists no Lease
Default or Lease 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 and
Lessee has no actual knowledge of any other 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;
(k) Each Property being financed consists of Land (either owned or
ground leased by Lessor) and existing Improvements thereon which
Improvements are suitable for their intended use at the time of the
Property Closing Date;
(l) 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
20
agency, or if any Property (or any portion thereof) 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;
(m) Each Property complies with all Insurance Requirements and all
standards of Lessee with respect to similar properties owned by Lessee;
(n) Each Property complies with all Legal Requirements as of such
date (including without limitation all zoning and land use laws and
Environmental Laws), except to the extent that failure to comply
therewith, individually or in the aggregate, shall not have and could not
reasonably be expected to have a Material Adverse Effect;
(o) All utility services and facilities necessary for the operation
of the Improvements and the Equipment for the Lessee's intended use of
each Property (including without limitation gas, electrical, water and
sewage services and facilities) are available at the applicable Property;
(p) Acquisition, installation and testing of the Equipment and
construction of the Improvements have been performed in a good and
workmanlike manner;
(q) (i) The Security Documents create, as security for the
Obligations (as such term is defined in the Security Agreement), valid and
enforceable mortgage and security interests in, and Liens on, all of the
Collateral, in favor of the Agent, for the benefit of the Secured Parties
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 or policy issued under Section 5.3(g) with respect to any
Property. Upon execution of the Control Agreement by the parties thereto,
the Lien created by the Cash Collateral Security Documents shall be a
perfected first priority Lien on the Cash Collateral;
(ii) The Lease Agreement creates, as security for the
obligations of the Lessee under the Lease Agreement, valid and enforceable
mortgage and 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 or policy issued under
Section 5.3(g) with respect to such Property;
(r) (i) Neither Lessee nor any Subsidiary of Lessee is engaged
principally, or as one of its more important activities, in the business
of extending credit for the purposes of buying or carrying Margin Stock
(as defined in Regulation U); and
(ii) No part of the proceeds of the Advance will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any
21
purpose that entails a violation of, or that is inconsistent with, the
provisions of the Regulations of the Board including Regulation T, U or X;
(s) Except as such could not reasonably be expected to have a
Material Adverse Effect:
(i) No Property (including soils, surface waters, groundwaters
on, at or under any Property) contains or is otherwise affected by, nor to
Lessee's knowledge has any Property previously contained or been affected
by, any Hazardous Substance in amounts or concentrations which (A)
constitute a violation of applicable Environmental Laws or (B) could give
rise to liability or obligation under applicable Environmental Laws;
(ii) Each Property and all operations conducted by Lessee or
its Subsidiaries on any Property in connection therewith are in compliance
with all applicable Environmental Laws, and there are no Hazardous
Substances at, under or about any Property or such operations which could
reasonably be expected to interfere with the continued operation of such
Property;
(iii) Lessee or its Subsidiaries have obtained, are in
compliance with, and have made all appropriate filings for issuance or
renewal of, all environmental permits with respect to each Property, and
all such environmental permits are in full force and effect;
(iv) Neither Lessee nor any Subsidiary thereof has received
any notice of violation, alleged violation, noncompliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws, in each case, with respect to any Property, nor does
Lessee have knowledge or reason to believe that any such notice will be
received or is being threatened;
(v) Hazardous Substances have not been transported or disposed
of from any Property in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability under,
applicable Environmental Laws, nor have any Hazardous Substances been
generated, treated, stored or disposed of at, on or under any Property in
violation of, or in a manner which could reasonably be expected to give
rise to liability under, any applicable Environmental Laws;
(vi) No judicial proceedings or governmental or administrative
action is pending, or threatened, under any applicable Environmental Law
with respect to any Property to which Lessee or any Subsidiary in
occupancy thereof has been or will be named as a party, nor are there any
consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding
under any applicable Environmental Law with respect to any Property;
(vii) There has been no release, or imminent threat of
release, of Hazardous Substances at or from any Property, in violation of
or in amounts or in a
22
manner that could reasonably be expected to give rise to liability under
applicable Environmental Laws; and
(viii) Neither Lessee nor any Subsidiary of Lessee (A) is
failing to comply with any applicable Environmental Law or to obtain,
maintain or comply with any applicable permit, license or other approval
required under any applicable Environmental Law or (B) has become subject
to any Environmental Claim;
(t) No notices, complaints or orders of violation or non-compliance
or liability have been issued to the Lessee or, to the best of its
knowledge, threatened by any Person with respect to any Property or the
present or intended future use thereof, except for such violations and
instances of non-compliance as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and Lessee is
not aware of any circumstances which could give rise to the issuance of
any such notices, complaints or orders;
(u) The fair market value for each Property is within 10% of the
Property Cost allocated to such Property;
(v) The audited consolidated balance sheet and income statement of
the Lessee and its Consolidated Subsidiaries as of December 31, 2002,
together with related audited consolidated statements of operations,
retained earnings and cash flows as of December 31, 2002 and the unaudited
consolidated balance sheet and income statement of the Lessee and its
Consolidated Subsidiaries as of March 31, 2003, together with related
unaudited consolidated statements of operations, retained earnings and
cash flows as of March 31, 2002, fairly present in all material respects
the consolidated financial condition of the Lessee and its Consolidated
Subsidiaries as at such dates and the consolidated results of the
operations of the Lessee and its Consolidated Subsidiaries for the period
ended on such dates, all in accordance with GAAP, subject with respect to
the March 31, 2003 financial statements, to changes resulting from audit
and normal year end audit adjustments;
(w) Neither the Lessee nor any of its Subsidiaries is in default
with respect to any judgment, order, writ, injunction, decree or decision
of any Governmental Authority which default could reasonably be expected
to have a Material Adverse Effect. Each of the Lessee and its Subsidiaries
is complying in all material respects with all statutes, regulations,
rules and orders applicable to it of all Governmental Authorities, a
violation of which could reasonably be expected to have a Material Adverse
Effect;
(x) Each of the Lessee and its Subsidiaries has filed or caused to
be filed all tax returns required to be filed and has paid, or has made
adequate provision for the payment of, all taxes shown to be due and
payable on said returns or in any assessments made against it, except any
Taxes that are being contested in good faith by appropriate proceedings
and for which the Lessee or such Subsidiary, as applicable, has set aside
on its books adequate reserves; except to the extent failure to reserve
could not be expected to have Material Adverse Effect;
23
(y) The Lessee is not subject to regulation under the Public Utility
Holding Company Act of 1935, as amended, the Federal Power Act or the
Investment Company Act of 1940, as amended, nor is the Lessee subject to
any statute or regulation which prohibits the incurrence of indebtedness
under this Agreement or the other Operative Agreements, including, without
limitation, statutes or regulations relative to common or contract
carriers or to the sale of electricity, gas, steam, water, telephone,
telegraph or other public utility services;
(z) There has been no material adverse change in the consolidated
assets, liabilities, operations, business or conditions (financial or
otherwise) of the Lessee and its Consolidated Subsidiaries taken as a
whole from that set forth in the financial statements referenced in
Section 6.2(x);
(aa) The execution and delivery of the Operative Agreements by
Lessee will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax
could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The
representation by the Lessee in the first sentence of this Section 6.2(aa)
is made in reliance upon and subject to (i) the accuracy of the
representations of the Credit Lenders and the Mortgage Lenders in Section
6.3 of the Participation Agreement;
(bb) The true legal name of the Lessee as registered in the
jurisdiction of its organization is and has been for at least five (5)
years "Cypress Semiconductor Corporation" and its Federal Employer
Identification number is 00-000-0000. The Lesser does not use or transact,
and has not used or transacted within the five (5) years immediately prior
to the Initial Closing Date, any business under any trade name other than
its legal name; and
(cc) None of the Advances have been used to purchase Non-Integral
Equipment.
(dd) No Advances have been used to acquire any of the items set
forth in Schedule 3 to the Participation Agreement.
6.3. Representations and Warranties of the Lenders.
Each Lender, severally, represents and warrants to each of the other
parties hereto that as of each Closing Date (except to the extent any such
representation or warranty expressly is made to relate to an earlier date):
(a) It is a corporation duly organized and validly existing and in
good standing under the laws of its jurisdiction of organization and has
the power and authority to enter into and perform its obligations under
each of the Operative Agreements to which it is or will be a party and
each other agreement, instrument and document to be executed and delivered
by it on or before such Closing Date in connection with or as
24
contemplated by each such Operative Agreement to which such Lender is or
will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which such Lender is or will be a party are within the
corporate powers of such Lender, has been duly authorized by all necessary
action on such Lender's part, has been duly executed and delivered, 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 or any other consent or approval that has not previously been
obtained, (ii) does or will contravene any Legal Requirement applicable to
such Lender, (iii) does or will contravene or result in any breach of or
constitute any default under or any of its other 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) could reasonably be expected to materially and
adversely affect its ability to perform its obligations under the
Operative Agreements to which it is a party or would question the validity
or enforceability of any of the Operative Agreements to which it is or
will become a party or (iv) does or will require any Government Action by
any Governmental Authority;
(c) Each Operative Agreement to which such Lender is or will be a
party has been, or on or before such Closing Date will be, duly executed
and delivered by such Lender, and each Financing Agreement to which such
lender is a party constitutes, or upon execution and delivery will
constitute, a legal, valid and binding obligation enforceable against such
Lender in accordance with the terms thereof; and
(d) There is no action or proceeding pending or, to its knowledge,
threatened to which it is or will be a party before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability to perform its obligations under the Operative
Agreements to which it is a party or would question the validity or
enforceability of any of the Operative Agreements to which it is or will
become a party.
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. Transaction Expenses.
(a) The Lessor agrees on each Closing Date, to pay, or cause to be
paid, all Transaction Expenses arising with respect to such Closing Date
and the transactions contemplated by the Operative Agreements, including
without limitation all reasonable fees, expenses and disbursements of
Xxxxx & Xxx Xxxxx PLLC (as counsel for the Agent and the Lessor), the
Lessor and the Agent in connection with the transactions contemplated by
the Operative Agreements and incurred in connection with such Closing
Date, and the reasonable out-of-pocket expenses of the Lessor due and
payable on such Closing Date, all fees, taxes and expenses for the
recording, registration and filing of
25
documents, all fees, taxes and expenses related to or arising out of the
Lessor's qualifying to do business in any Approved State and all other
reasonable fees, expenses and disbursements incurred in connection with
such Closing Date; provided, however, the Lessor shall be required to pay
such amounts described in this Section 7.1(a) only if (i) such amounts are
properly described in a Requisition delivered on or before such Closing
Date, and (ii) funds are made available by the Lessor, the Credit Lenders
and the Mortgage Lenders in connection with such Requisition in an amount
sufficient to allow such payment on such Closing Date. On each such
Closing Date after delivery and receipt of the Requisition referenced in
Section 4.2 hereof and satisfaction of the other conditions precedent for
such date, the Lessor shall make a Lessor Advance, the Credit Lenders
shall make Loans pursuant to the Credit Note Loan Agreement and the
Mortgage Lenders shall make Loans pursuant to the Mortgage Note Loan
Agreement, in order to enable the Lessor to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in this
Section 7.1(a). The Lessee agrees to timely pay all amounts referred to in
this Section 7.1(a) to the extent the Lessor is not required to pay such
amounts.
(b) [Reserved].
(c) [Reserved].
7.2. Brokers' Fees.
The Lessee agrees to pay or cause to be paid any and all brokers' fees, if
any, payable in accordance with the engagement letter dated June 16, 2003 or
otherwise agreed to in writing by the Lessee, 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,
excluding the fees of any brokers retained by the Agent, any Primary Financing
Party, or any Affiliate of any of the foregoing.
7.3. Certain Fees and Expenses.
To the extent not duplicative of amounts funded by the Advance on the
Closing Date, the Lessee agrees to pay or cause to be paid (a) all reasonable
out-of-pocket expenses of the Lessor (including without limitation reasonable
counsel fees and expenses) incurred in connection with the transactions
contemplated hereby and by the other Operative Agreements (b) all reasonable
out-of-pocket costs and expenses incurred by the Lessee, the Agent or the
Primary Financing Parties in entering into any future amendments, modifications,
supplements and/or restatements with respect to any of the Operative Agreements
which have been requested by the Lessee, whether or not such amendments,
modifications, supplements and/or restatements are ultimately entered into, or
giving or withholding of waivers or consents hereto or thereto, (c) all
reasonable out-of-pocket costs and expenses incurred by the Lessor, the Agent or
the Primary Financing Parties in connection with any exercise of remedies
arising out of a Lease Event of Default under any Operative Agreement or any
purchase of the Properties pursuant to the terms of the Operative Agreements by
the Lessee or its designee and (d) all reasonable out-of-pocket costs and
expenses incurred by the Lessee, the Agent or any Primary Financing Party in
connection
26
with any transfer or conveyance of any Property to the Lessee or its
designee or any third party pursuant to the terms of the Operative Agreements,
whether or not such transfer or conveyance is ultimately accomplished.
7.4. [Reserved].
7.5. Administrative Fee.
The Lessee shall pay or cause to be paid an administrative fee to the
Agent (for its individual account) in the amount equal to the product of (a)
0.06% and (b) the sum of the Property Cost of all Properties (or such other
amount as may be agreed upon by the Lessee and the Agent from time to time)
which shall be paid on the Initial Closing Date and each annual anniversary
thereof while the Lease is in effect and such amount shall be deemed to be
earned in full by the Agent as of the Initial Closing Date or annual anniversary
thereof, as applicable.
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. Cooperation with the Lessee.
The Primary Financing Parties and the Agent shall, at the expense of and
to the extent reasonably requested by the Lessee (but without assuming
additional liabilities on account thereof and only to the extent such is
required to carry out the intent of the Operative Agreements, to document the
status of the parties' rights and obligations under the Operative Agreements, or
is otherwise acceptable to the Primary Financing Parties and/or the Agent, as
applicable, in their reasonable discretion), cooperate with the Lessee in
connection with 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) executing estoppel statements in reasonable form, executing
collateral, mortgage and deed of trust releases as and when appropriate in
accordance with the terms and conditions of the Operative Agreements.
8.2. Covenants of the Lessor.
The Lessor hereby agrees that so long as this Agreement is in effect:
(a) The Lessor will not create or permit to exist at any time, and
it 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;
(b) [Reserved];
(c) The Lessor shall not (i) commence any case, proceeding or other
action under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, arrangement,
winding-up, liquidation,
27
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 for all or any substantial benefit of the creditors of
the Lessor; and the Lessor shall not 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;
(d) The Lessor shall give prompt written notice to the Lessee, the
Primary Financing Parties (other than the Lessor) and the Agent if the
Lessor's location for purposes of the UCC shall cease to be North
Carolina, or if the Lessor's principal place of business or chief
executive office, or the office where the records concerning the accounts
or contract rights relating to the Properties are kept, shall cease to be
located at One Wachovia Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000; and
(e) The Lessor 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 the Properties in each case as
directed in writing by the Agent or, in connection with Section 8.5
hereof, the Lessee; provided, however, that notwithstanding the foregoing
provisions of this subparagraph (e) the Lessee, the Agent and the Primary
Financing Parties each acknowledge, covenant and agree that neither the
Lessor not the Agent shall act or refrain from acting except in accordance
with the provisions of the Intercreditor Agreement; provided, further,
that each of the Agent, the Primary Financing Parties (other than the
Lessor) and the Lessee acknowledges, covenants and agrees that it will not
instruct the Lessor to take any action in violation of the terms of any
Operative Agreement.
(f) The Lessor shall give the Lessee prompt written notice (a
"Lessor Notice") following the Lessor's knowledge, but in any event
promptly upon receipt by it of (x) notice from an acquiring Person as
provided in the related underlying transaction documents that a
disposition of property will occur or (y) an appraisal or other form of
written valuation study, in either case that, in the exercise of the
Lessor's reasonable judgment, would (regarding the Fair Market Sales Value
of the Property as set forth in the Appraisal delivered pursuant to
Section 5.3(s)), in the case of clause (x) above, cause such Fair Market
Sales Value of the Property to exceed fifty percent (50%) of (or, in the
case of clause (y) above, provide the Lessor with adequate information to
determine that, such Fair Market Sales Value of the Property exceeds fifty
percent (50%) of) the fair market value (based on appraisals or other
information in the Lessor's possession and delivered in connection with
the consummation of such underlying transactions relating to various
properties of the Lessor or received by the Lessor as described in clause
(y) above) of all of the property owned (as determined in accordance with
Lessor's financial reporting under GAAP) by the Lessor (the "Fifty Percent
FMV Event"). In the event that a Lessor Notice is given, the Lessor, upon
receipt of a written request from the Lessee, may, at its option, elect to
either (i) obtain additional assets such that the gross asset value of the
Property does not ever constitute more than fifty percent (50%) of the
total assets of the Lessor, (ii) transfer its interests in all of the
Property to another Affiliate of the Lessor such that the representations
set forth in the Lessor Confirmation Letter remain correct, (iii) obtain,
at the Lessee's sole cost and expense, additional appraisals on assets
28
owned by the Lessor, or (iv) obtain, at the Lessee's sole cost and
expense, a SAS 97-type letter reasonably acceptable to the Lessee from the
Lessor's auditor to certify that the Lessor is a voting interest entity as
defined by FASB Interpretation No. 46 (to be renewed as required). Nothing
relating to the circumstances surrounding or the physical delivery of the
Lessor Notice will in any way inhibit or prohibit the Lessee's right to
replace the Lessor pursuant to Section 10.1(d). Notwithstanding the
foregoing, in no event will the Lessor be required to disclose or provide
access to any information to the extent that such disclosure or access
would violate any law applicable to the Lessor or its Affiliates,
including without limitation banking regulations applicable to national
banks, or result in a breach of the Lessor's or any Affiliate's
confidentiality policies or agreements. The parties hereto agree that the
Lessee is the sole beneficiary of the matters addressed in this Section
8.2(f).
(g) Upon the Lessee's prior written request, the Lessor shall
provide to the Lessee at least fifteen (15) days prior to the end of each
calendar quarter and at least forty-five (45) days prior to the end of
each calendar year, a confirmed copy of the Lessor Confirmation Letter.
The parties hereto agree that the Lessee is the sole beneficiary of the
matters addressed in this Section 8.2(g).
(h) Lessor shall not obtain nonrecourse financing with respect to
the Properties in excess of ninety-four percent (94%) of the aggregate
Termination Value for all Properties.
8.3. Lessee Covenants, Consent and Acknowledgment.
(a) The Lessee acknowledges and agrees that the Lessor, pursuant to
the terms and conditions of the Security Agreement and the Mortgage
Instruments, shall create Liens respecting the Properties (including
without limitation the Land, Improvements and Equipment constituting such
Properties) described therein in favor of the Agent for the benefit of the
Secured Parties Lenders. The Lessee hereby irrevocably consents to the
creation, perfection and maintenance of such Liens in accordance with the
Operative Agreements. 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 to carry out the intent of such agreements.
(b) The Lessor hereby instructs the Lessee, and the Lessee hereby
acknowledges and agrees, that until such time as all of the Lessee Secured
Obligations have been paid in full and all Commitments have been
terminated (i) 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 shall instead be paid
directly to the Agent (excluding Excepted Payments) or as the Agent may
direct from time to time for allocation and distribution in accordance
with the procedures set
29
forth in Section 8.7 hereof, (ii) all rights of the Lessor under the Lease
shall be exercised by the Agent 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 be delivered to the Agent, as Lessor's agent.
(c) The Lessee shall not consent to any amendment, supplement or
other modification of the terms or provisions of any Operative Agreement
to which it is a party 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 owing from time to
time under the Operative Agreements by any Person to the Agent, the
Lessor, any Primary Financing Party or any other Person shall (without
further action) be deemed to be Supplemental Rent obligations payable by
the Lessee. Without limitation, such Supplemental Rent obligations of the
Lessee shall include the Supplemental Rent obligations pursuant to this
Section 8.3(d), Section 3.3 of the Lease, arrangement fees any
administrative fees, breakage costs, participation fees, upfront fees,
prepayment penalties, Make-Whole Amounts, indemnities, filing fees,
assessments, impositions, penalties and other costs associated with
Lessor's qualification to do business in any Approved State, other
reasonable fees and transaction expenses incurred by the parties hereto in
connection with the transactions contemplated by the Operative Agreements.
(e) The Lessee hereby covenants and agrees to cause an Appraisal or
reappraisal (in form and substance reasonably satisfactory to the Agent
and from an appraiser selected by the Agent) at Lessee's sole cost and
expense, to be issued respecting each Property as requested by the Agent
from time to time (i) at each and every time as such shall be required to
satisfy any regulatory requirements or Legal Requirements imposed on the
Agent and/or any Primary Financing Party and (ii) after the occurrence of
a Lease Event of Default.
(f) The Lessee hereby covenants and agrees that, except for amounts
payable as Basic Rent, any and all payment obligations owing from time to
time under the Operative Agreements by any Person to the Agent, any
Primary Financing Party 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 the
Supplemental Rent obligations pursuant to this Section 8.3(f), Section 3.3
of the Lease, arrangement fees, administrative fees, participation fees,
upfront fees, unused fees, prepayment penalties, breakage costs,
indemnities and transaction expenses incurred by the parties hereto in
connection with the transactions contemplated by the Operative Agreements.
(g) At any time the Lessor or the Agent is entitled under the
Operative Agreements to possession of any Property, the Lessee hereby
covenants and agrees, at its own cost and expense, to make such Property
available to the Agent (on behalf of the Lessor).
30
(h) The Lessee hereby covenants and agrees that none of the Advances
have been used to purchase Non-Integral Equipment.
(i) [Reserved].
(j) The Lessee hereby covenants and agrees that it shall give prompt
notice to the Agent if the Lessee's location or jurisdiction of
organization for purposes of the UCC, its principal place of business or
chief executive office, or the office where the records concerning the
accounts or contract rights relating to the Properties are kept, shall
cease to be located at the locations set forth in Section 6.2(i) or if it
shall change its name.
(k) [Reserved].
(l) Until all of the obligations under the Operative Agreements have
been finally and indefeasibly paid and satisfied in full and the
Commitments terminated, unless consent has been obtained from the Majority
Secured Parties, the Lessee will:
(i) continue to engage in the same general type of business as
conducted by it on the Initial Closing Date, preserve and maintain
its corporate existence and qualify and remain qualified as a
foreign corporation (or partnership, limited liability company or
other such similar entity, as the case may be) and, unless failure
to so perform would not have a Material Adverse Effect, preserve and
maintain all rights, franchises, licenses and privileges necessary
to the conduct of its business, remain authorized to do business in
each applicable jurisdiction and shall maintain all licenses,
permits and registrations necessary for the conduct of its
operations;
(ii) pay and perform all obligations of the Lessee under the
Operative Agreements and pay and perform (A) all taxes, assessments
and other governmental charges that may be levied or assessed upon
any Property, which if not paid or performed would have a Material
Adverse Effect, (B) all taxes, assessments and other governmental
charges that may be levied or assessed upon it or any of its
property, which if not paid or performed would have a Material
Adverse Effect, and (C) all other indebtedness, obligations and
liabilities in accordance with customary trade practices, which if
not paid would have a Material Adverse Effect; provided that the
Lessee may contest any item described in this Section 8.3(l)(ii) in
good faith so long as adequate reserves are maintained with respect
thereto in accordance with GAAP;
(iii) to the extent failure to do so would have a Material
Adverse Effect, observe and remain in compliance with all applicable
Laws and maintain in full force and effect all Governmental Actions,
in each case applicable to the conduct of its business; keep in full
force and effect all licenses, certifications or accreditations
necessary for any Property to carry on its business; and not permit
the termination of any insurance reimbursement program required by
the Operative Agreements to be made available to any Property;
31
(iv) and will cause each of its Subsidiaries to, provided that
the Agent and the Primary Financing Parties use reasonable efforts
to minimize disruption to the business of the Lessee and its
Subsidiaries and subject to the provisions of Section 12.13, permit
representatives of the Agent or any Primary Financing Party
(including without limitation, independent accountants, agents,
attorneys, employees and appraisers), from time to time, to visit
and inspect their properties (including without limitation the
Properties); inspect, audit and make extracts photocopies or
photographs or record any information obtained from their books,
records, accounts receivable and files, including without limitation
management letters prepared by independent accountants; discuss with
its principal officers, and its independent accountants, its
business, assets, liabilities, financial condition, results of
operations and business prospects and investigate or verify the
accuracy of any information provided or obtained for the purpose of
determining whether a Lease Default or Lease Event of Default has
occurred; and
(v) not enter into any agreement, any term or condition of
which would, if complied with by the Lessee, result in a Default or
Event of Default either immediately or upon the elapsing of time.
(m) 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.
(n) With respect to any Modification or any other alteration to any
Improvement and at any time during the Term, promptly after obtaining any
required architectural approvals by any business park or any other
applicable entity with oversight responsibility for the applicable
Improvements, the Lessee shall deliver to the Agent copies of the same.
(o) [Reserved].
(p) Lessee shall promptly, but in any event within five (5) days of
when any Responsible Officer of the Lessee gains such knowledge, notify
the Agent and each Primary Financing Party, or cause the Agent and each
Primary Financing Party to be promptly notified, of the occurrence of any
Default or Event of Default which is continuing at such time and
describing the same in reasonable detail with a description of the action
the Lessee or any Affiliate has taken or proposes to take with respect
thereto.
(q) The Lessee authorizes the Agent at the expense of the Lessee to
file fixture filings and/or financing statements, including without
limitation amendments, with respect to any collateral under or pursuant to
any Operative Agreement without the signature of the Lessee in such form
and in such filing offices as the Agent reasonably determines appropriate
to perfect the security interests of the Agent under the applicable
Operative Agreements.
32
(r) [Reserved].
(s) Lessee shall not, nor shall it permit anyone authorized to act
on its behalf to, take any action which would subject the issuance or sale
of the Notes, the Property or the Operative Agreements, or any security or
lease, the offering of which, for purposes of the Securities Act or any
state securities laws, would be deemed to be part of the same offering as
the offering of the aforementioned items, to the registration requirements
of Section 5 of the Securities Act or any state securities laws.
(t) With respect to each determination of interest and Lessor Yield
pursuant to this Participation Agreement, the Credit Note Loan Agreement
and the Mortgage Note Loan Agreement and of Basic Rent under the Lease,
Lessee agrees to be bound by Sections 2.2, 2.8, 2.9 and 9.19 of the Credit
Note Loan Agreement and the Mortgage Note Loan Agreement, respectively,
Sections 5B, 9 and 11.3 and the applicable definitions in Appendix A.
(u) [Reserved].
(v) [Reserved].
(w) Lessee will, and will cause each of its Consolidated
Subsidiaries to, promptly notify the Lessor, the Agent and each Lender in
writing of any change made (i) by Lessee or any of its Consolidated
Subsidiaries to its fiscal year, or (ii) by Lessee to its Certificate of
Incorporation (or other similar organizational documents) or bylaws (or
other similar document). Lessee also agrees that it will provide the
Lessor, the Agent and each Lender with copies of any amendments to the
Certificate of Incorporation, bylaws or other organizational documents
referred to above.
(x) The Lessee shall deliver (or cause to be delivered) to the Agent
an annual certificate evidencing the insurance required to be maintained
by the Lessee under Article XIV of the Lease on the date such certificate
is due thereunder.
(y) Each Property shall comply with all Insurance Requirements
(unless the failure to comply with such Insurance Requirements will not
result in a denial of coverage under any insurance policy required to be
maintained hereunder or under any other Operative Agreement) and all
standards of Lessee with respect to similar properties owned by Lessee.
(z) Each Property shall comply with all Legal Requirements
(including without limitation all zoning and land use laws and
Environmental Laws), except to the extent that failure to comply
therewith, individually or in the aggregate, shall not have and could not
reasonably be expected to have a Material Adverse Effect.
(aa) [Reserved].
33
(bb) The Lessee shall cause each Ground Lease to include a provision
that grants the Agent (on behalf of the Secured Parties) at least thirty
(30) days, after the Agent's receipt of notice of an event of default
pursuant to the applicable Ground Lease, to cure such event of default
under such Ground lease.
(cc) Upon recordation of the Mortgage Instruments in the applicable
real estate recording office in the applicable Approved State identified
by the Lessee, where the Property is located, the Lien created by each
Mortgage Instrument in the real property described therein shall create a
deed of trust or be a perfected mortgage Lien on the applicable Property
in favor of the Agent, for the benefit of the Mortgage Lenders, the Lessor
and the Credit Lenders. 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 in the state where such Property is
located or in the state of the Lessee's "location", as such term is used
in the UCC, upon filing of the Secured Party Financing Statements in such
filing offices, the security interests created by the Security Agreement
shall be perfected security interests in such personal property in favor
of the Agent, for the ratable benefit of the Secured Parties.
(dd) Upon recordation of the memorandum of the Lease Agreement (or,
a short form lease) in the applicable real estate recording office in the
state where the Property is located, the Lien created by the Lease
Agreement in the real property described therein shall create a deed of
trust or be a perfected mortgage Lien on the Properties in favor of the
Lessor. 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 in the state where such Property is located or in the
state of the Lessee's "location", as such term is used in the UCC, upon
filing of the Lessor Financing Statements in such filing offices, the
security interests created by the Lease Agreement shall be perfected
security interests in such personal property in favor of the Lessor, which
rights pursuant to the Lessor Financing Statements are assigned to the
Agent, for the benefit of the Secured Parties.
(ee) Lessee shall not incur or suffer to exist any Lien on any
Property or other Collateral other than the Liens created and/or evidenced
by the Security Documents, Permitted Liens, Lessor Liens, or Liens that
are expressly set forth as title exceptions on the title commitments
issued in connection with Section 5.3(g) with respect to each Property and
as otherwise permitted under Section 8.5.
(ff) Lessee shall deliver a written notice to Agent and the Lessor
promptly upon a Responsible Person of the Lessee receiving notice or
having actual knowledge of the taking by a Governmental Authority of an
action which would constitute a Condemnation or receiving notice of a
violation of any Legal Requirement (including without limitation
Environmental Laws) on or at any Property that could be reasonably likely
to have a Material Adverse Effect or impose any civil or criminal
liability upon Lessor, Agent, any Primary Financing Party, Lessee or any
other Indemnified Person.
(gg) [Reserved].
34
(hh) [Reserved].
(ii) Without providing at least sixty (60) days' prior written
notice to the Agent, Lessee will not change its legal name.
(jj) The Lessee shall not finance and grant any Lien in favor of any
third party with respect to any addition, improvement, replacement,
substitution or any other construction on any Property other than
Non-Integral Equipment.
(kk) The Lessee shall deliver within fifteen (15) Business Days of
the Initial Closing Date a survey regarding the Property located in San
Jose, California that, except for time of delivery, complies with the
Operative Agreements.
(ll) Lessee shall not remove, destroy any Property or any portion
thereof or make any Modification which would impair the value of any
Property or any portion thereof unless Lessee either (i) receives the
prior written consent of Lessor to take such action and provides all
reasonably requested information regarding such action or (ii) such action
would only affect Improvements and Equipment which are promptly replaced,
in compliance with the Operative Agreements, with Improvements and
Equipment titled in Lessor's name which are of equal or greater value,
utility and useful life than the affected Improvements and Equipment.
8.4. Sharing 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 Agent as more particularly provided in Section 8.3 hereof. The Lessor, the
Agent, the Credit Lenders, the Mortgage Lenders 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 Agent, the Credit Lenders, the Mortgage Lenders and the Lessor hereby
agree that, so long as no Lease Event of Default shall have occurred and be
continuing, and until such time as the Agent gives instructions to the contrary
to the Lessor after the occurrence and continuance of such Lease Event of
Default, the Lessor shall from time to time at the request of the Lessee, in
connection with the transactions contemplated by the Lease or the other
Operative Agreements, (i) grant easements and other rights with respect to any
Property, (ii) release existing easements or other rights 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, testing or operation of any Property, including without limitation
reciprocal easement
35
agreements, operating 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 with respect to the Lessee's other
properties and shall be on commercially reasonable terms so as not to diminish
the value of the Property in any material respect or otherwise have a Material
Adverse Effect.
8.6. Appointment of the Agent by the Primary Financing Parties.
(a) The Secured Parties acknowledge and agree and direct that the
rights and remedies of the beneficiaries of the Liens created by the
Security Documents shall be exercised by the Agent on behalf of the
Secured Parties in accordance with the provisions of the Operative
Agreements; provided, in all cases, the Agent shall allocate payments and
other amounts received in accordance with Section 8.7. The Agent is
further appointed to provide notices under the Operative Agreements on
behalf of the Lessor and each other Primary Financing Party (as determined
by the Agent, in its reasonable discretion), to receive notices under the
Operative Agreements on behalf of the Lessor and each other Primary
Financing Party. The Agent hereby accepts such appointments.
(b) Each Primary Financing Party hereby designates and appoints the
Agent as the agent of such Primary Financing Party under this Agreement
and the other Operative Agreements, and each such Primary Financing Party
authorizes the Agent, in such capacity, to execute the Operative
Agreements as agent for and on behalf of such Primary Financing Party, to
take such action on behalf of such Primary Financing Party under the
provisions of this Agreement and the other Operative Agreements and to
exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and other Operative Agreements,
together with such other powers as are reasonably incidental thereto.
Subject to the terms of the Operative Agreements, each of the Primary
Financing Parties directs the Agent to exercise such powers, make such
decisions and otherwise perform such duties as are delegated to the Agent
hereunder or thereunder. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Primary Financing Party, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Operative Agreement or
otherwise exist against the Agent.
(c) The Agent may execute any of its duties under this Agreement and
the other Operative Agreements by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
(d) Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Operative Agreement (except
for its or such Person's own gross negligence, willful
36
misconduct or its or such Person's failure to use ordinary care in the
handling of funds) or (b) responsible in any manner to any of the Primary
Financing Parties for any recitals, statements, representations or
warranties made by the Lessor or the Lessee or any officer thereof
contained in this Agreement or any other Operative Agreement or in any
certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this
Agreement or any other Operative Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Operative Agreement or for any failure of the
Lessor or the Lessee to perform its obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Primary Financing Party
to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other
Operative Agreement, or to inspect the properties, books or records of the
Lessor or the Lessee.
(e) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel
(including without limitation counsel to the Lessor or the Lessee),
independent accountants and other experts selected by the Agent. The Agent
may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement
or any other Operative Agreement unless it shall first receive such advice
or concurrence of the Majority Secured Parties, the Majority Credit
Lenders, the Majority Mortgage Lenders or all the Primary Financing
Parties, as the case may be, as set forth in this Agreement or any other
Operative Agreement or it shall first be indemnified to its satisfaction
by the Primary Financing Parties against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Operative
Agreements in accordance therewith, and such and any action taken or
failure to act pursuant thereto shall be binding upon all the Primary
Financing Parties and all future holders of the Notes.
(f) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent
has received written notice from a Primary Financing Party, the Lessee or
the Lessor referring to this Agreement or such other Operative Agreement,
describing such Default or Event of Default and stating that such notice
is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Primary Financing
Parties and the Lessee. The Agent shall take such action with respect to
such Default or Event of Default as shall be directed by the Majority
Secured Parties or otherwise as determined pursuant to intercreditor
provisions in any other agreement among the Primary Financing Parties;
provided, that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such
action, or refrain
37
from taking such action, with respect to such Default or Event of Default
as it shall deem advisable in the best interests of the Primary Financing
Parties; provided, further, the foregoing shall not limit the rights of
the Lessor, the Majority Credit Lenders, the Majority Mortgage Lenders or
all the Primary Financing Parties, as the case may be, as described in
this Agreement or any other Operative Agreement.
(g) Each Primary Financing Party expressly acknowledges that neither
the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties
to it and that no act by the Agent hereinafter taken, including without
limitation any review of the affairs of the Lessor or the Lessee, shall be
deemed to constitute any representation or warranty by the Agent to any
Primary Financing Party. Each Primary Financing Party represents to the
Agent that it has, independently and without reliance upon the Agent or
any other Primary Financing Party, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Lessor and the Lessee and made its
own decision to make Loans pursuant to its Credit Notes or its Mortgage
Notes or make its Lessor Advance hereunder and enter into this Agreement.
Each Primary Financing Party also represents that it will, independently
and without reliance upon the Agent or any other Primary Financing Party,
and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the
other Operative Agreements, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Lessor and the
Lessee. The Agent agrees to provide to the Primary Financing Parties
notices, reports and other documents that are customarily provided by the
Agent in its capacity as Agent in transactions similar to the transactions
contemplated hereby and by the other Operative Agreements. Except for
notices, reports and other documents expressly required to be furnished to
the Primary Financing Parties by the Agent hereunder, the Agent shall not
have any duty or responsibility to provide any Primary Financing Party
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or
creditworthiness of the Lessor or the Lessee which may come into the
possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
(h) The Primary Financing Parties agree to indemnify the Agent, in
its capacity as such (to the extent not reimbursed by the Lessor or the
Lessee and without limiting any obligation of the Lessor or the Lessee
under and in accordance with the terms of the Operative Agreements to do
so), ratably according to their respective Commitment Percentages in
effect on the date on which indemnification is sought under this Section
(or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Notes and the Lessor Advance
shall have been paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may
at any time (including without limitation at any time following the
payment of the
38
Notes) be imposed on, incurred by or asserted against any of them in any
way relating to or arising out of, the Commitments, this Agreement, any of
the other Operative Agreements or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any of them under or in
connection with any of the foregoing; provided, that no Primary Financing
Party shall be liable for the payment of any portion of such liabilities,
obligations, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Agent, or its failure to use ordinary care in
the handling of funds. The agreements in this Section shall survive the
payment of the Notes and all other amounts payable hereunder.
(i) The Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Lessor or the
Lessee as though the Agent were not the Agent hereunder and under the
other Operative Agreements.
(j) (i) The Agent may resign at any time as the Agent upon sixty
(60) days' notice to the Primary Financing Parties, the Lessor and the
Lessee, provided if a Lease Event of Default shall have occurred and be
continuing then such notice period may be waived by the Majority Secured
Parties without consent of the Lessee. If the Agent shall resign as the
Agent under this Agreement, a successor Agent shall be appointed by the
Majority Secured Parties which successor Agent shall be subject to the
approval of, so long as no Event of Default shall have occurred and be
continuing, the Lessee, such approval not to be unreasonably withheld or
delayed. If no successor Agent is appointed prior to the effective date of
the resignation of the resigning Agent, the Agent may appoint, after
consulting with the Primary Financing Parties and subject to the approval
of, so long as no Event of Default shall have occurred and be continuing,
the Lessee, such approval not to be unreasonably withheld or delayed, a
successor Agent. Any successor Agent, however appointed, shall be a bank
or trust company incorporated and doing business within the United States
of America and having a combined capital and surplus of at least
$500,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Agent hereunder upon reasonable or
customary terms. If no successor Agent has accepted appointment as the
Agent by the date which is sixty (60) days following a retiring Agent's
notice of resignation, the retiring Agent's notice of resignation shall
nevertheless thereupon become effective and the Primary Financing Parties
shall perform all of the duties of the Agent until such time, if any, as
the Majority Secured Parties appoint and, if required, the Lessee
approves, a successor Agent, as provided for above. Upon the effective
date of such resignation, only such successor Agent shall succeed to all
the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the retiring Agent's rights, powers
and duties in such capacity shall be terminated. After any retiring Agent
resigns hereunder as the Agent, the provisions of this Section 8.6 shall
inure to their respective benefit as to any actions taken or omitted to be
taken by it while it was the Agent under this Agreement.
39
(ii) The Agent may be removed (x) by either the Majority
Credit Lenders, the Majority Mortgage Lenders or the Lessee in the
case of fraud, misappropriation of funds or the commission of
illegal acts by the Agent or where the Agent has failed to perform
its obligations hereunder or under any other Operative Agreement in
any material respect, or (y) any time at the request of any Primary
Financing Party, but only with the consent of the Majority Credit
Lenders and the Majority Mortgage Lenders and, so long as no Lease
Event of Default shall have occurred and be continuing, the Lessee.
Any such removal shall be effective upon the acceptance of
appointment of a successor Agent in accordance with the provisions
of paragraph (i) of this Section 8.6(j); provided, however, to the
extent the Agent being replaced pursuant to clause (x) of this
Section 8.6(j)(ii) is also a Credit Lender or a Mortgage Lender,
such Person shall not be permitted to vote in connection with the
appointment or approval of a successor Agent pursuant to paragraph
(i) of this Section 8.6(j).
(k) Other than the exercise of reasonable care to assure the safe
custody of the Collateral while being held by the Agent hereunder or under
any other Operative Agreement, the Agent shall have no duty or liability
to preserve rights pertaining thereto, it being understood and agreed that
the Lessee shall, to the extent possible, be responsible for preservation
of all rights in the Collateral, and the Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Lessee. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to
that which the Agent accords its own property, which shall be no less than
the treatment employed by a reasonable and prudent agent in the industry,
it being understood that the Agent shall not have responsibility for
taking any necessary steps to preserve rights against any parties with
respect to any of the Collateral.
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 Agent 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 by the Lessee to any party hereto and (ii) each Person as
appropriate the Excepted Payments. Promptly after receipt, the Agent shall
apply and allocate, in accordance with the terms of this Section 8.7, such
amounts received from the Lessee and all other payments, receipts and
other consideration of any kind whatsoever received by the Agent pursuant
to the Security Agreement or otherwise received by the Agent, the Lessor
or any of the Primary Financing Parties in connection with the Collateral,
the Security Documents or any of the other Operative Agreements. Ratable
distributions
40
among the Primary Financing Parties under this Section 8.7 shall be made
based on the ratio of the amounts outstanding under the Financing to the
aggregate Property Cost. Ratable distributions among the Credit Lenders
under this Section 8.7 shall be made based on the ratio of the amounts
outstanding under an individual Credit Lender's Credit Note to the
aggregate of all amounts outstanding under all of the Credit Lenders'
Credit Notes. Ratable distributions among the Mortgage Lenders under this
Section 8.7 shall be made based on the ratio of the amounts outstanding
under an individual Mortgage Lender's Mortgage Note to the aggregate of
all amounts outstanding under all of the Mortgage Lenders' Mortgage Notes.
(b) Payments and other amounts received by the Agent or Lessor from
time to time in accordance with the terms of subparagraph (a) shall be
applied and allocated as follows (subject in all cases to Section 8.7(c)):
(i) Any such payment or amount identified as or deemed to be
Basic Rent shall be applied and allocated by the Agent if no Default
or Event of Default is in effect, first, ratably to the Primary
Financing Parties for application and allocation to the payment of
interest on the Notes and Lessor Yield on the Lessor Advance;
second, to any and all other amounts then owing by the Lessee under
the Operative Agreements; and third, any excess shall be paid to the
Lessee or such Person or Persons as the Lessee may designate;
provided, that if a Default or Event of Default is in effect, such
amounts shall instead be held by the Agent until the earlier of (I)
the first date thereafter on which no Default or Event of Default
shall be in effect (in which case such amounts shall be applied
pursuant to this subparagraph (i)) and (II) the Expiration Date (or,
if earlier, the date of any Acceleration or payment by or for Lessee
of the Termination Value in accordance with the Operative
Agreements), in which case such amounts shall be applied and
allocated in the manner contemplated by Section 8.7(b)(iv) below.
(ii) Without regard to whether a Default or Event of Default
exists, if on any date the Agent or the Lessor shall receive any
amount in respect of any Casualty, Condemnation, Environmental
Violation or any other Property Proceeds pursuant to Sections
15.1(a) or 15.1(g) of the Lease (excluding any payments in respect
thereof which are payable to the Lessee in accordance with the
Lease) and such payment is in an amount less than the Termination
Value at such time, the Lessor or the Agent, as the case may be,
shall be required to pay such amount received in accordance with
Section 8.7(b)(iii) hereof; provided, distribution of such payment
may be delayed if such payment received and credited is permitted to
be used for Restoration in accordance with Article XV of the Lease.
(iii) Without regard to whether a Default or Event of Default
exists, an amount equal to any payment identified as proceeds of the
sale or other disposition (or lease upon the exercise of remedies)
of any Property or any portion thereof, to a third party, whether
pursuant to (A) the Lessee's election for the Sale Option pursuant
to Article XXII of the Lease, (B) a Limited Recourse Event of
Default, (C) the exercise of remedies under the Security Documents
or otherwise, or (D) the exercise of foreclosure remedies under the
Lease and any payment in respect of excess wear and tear pursuant to
Section 22.3 of the Lease, shall be applied and allocated by the
Agent (only in the case of Section 8.7(b)(iii)(A) or (B) above,
prior to the distribution below, to the Lessee to reimburse its
Remarketing Expenses incurred with respect to the applicable
Property) first,
41
ratably to the Mortgage Lenders for payment of the principal,
interest and Make-Whole Amounts, if any, of the Mortgage Notes then
outstanding, with respect to each such Property, second, to any and
all other amounts owing by the Lessee under the Operative Agreements
to the Mortgage Lenders, with respect to each such Property, third,
to the payment of the Lessor Advance and Lessor Yield and in
addition to the Lessor Advance and Lessor Yield, all other amounts
due and owing by the Lessee under the Operative Agreements to the
Lessor related to its capacity as the provider of the Lessor
Advances, with respect to each such Property, fourth, to the extent
such amount exceeds the maximum amount to be returned pursuant to
the foregoing provisions of this paragraph (iii), ratably to the
payment of the principal and interest on the Credit Notes then
outstanding, with respect to each such Property, fifth, to any and
all other amounts owing by the Lessee under the Operative Agreements
to the Credit Lenders, with respect to each such Property pursuant
to the Operative Agreements, sixth, to the extent moneys remain
after application and allocation pursuant to clauses first through
fifth above, to the Lessor for application and allocation to any and
all other amounts owing by the Lessee under the Operative Agreements
to any Financing Party, with respect to each such Property, as the
Lessor shall determine, absent manifest error and seventh, to the
extent moneys remain after application and allocation pursuant to
clauses first through sixth above, to the Lessee, provided, the
proceeds of the sale or other disposition of each Property shall be
distributed separately pursuant to this Section 8.7(b)(iii), such
that any deficiency upon a sale or other disposition of any Property
cannot be satisfied with the excess proceeds from any other
Property.
(iv) Without regard to whether a Default or Event of Default
exists, an amount equal to (A) any payment pursuant to Section
22.1(b) of the Lease (or otherwise) of the Maximum Residual
Guarantee Amount in respect of any Property and any payment or
proceeds which are derived from the Cash Collateral Account and (B)
any other amount payable after the occurrence of an Event of Default
not covered by Sections 8.7(b)(i) or 8.7(b)(iii) above (including
without limitation any amount received in connection with an action
for liquidated damages pursuant to Section 17.4 or Section 17.6 of
the Lease or by set off by the Agent) shall be applied and allocated
by the Agent first, ratably, to the payment of the principal and
interest on the Credit Notes then outstanding, second, to any and
all other amounts owing by the Lessee under the Operative Agreements
to the Credit Lenders, third, to the extent such amount exceeds the
maximum amount to be retained pursuant to the foregoing provisions
of this paragraph (iv), ratably to the Wachovia Mortgage Lender for
the payment of the principal and interest of the Mortgage Notes,
held by the Wachovia Mortgage Lender then outstanding, fourth, to
any and all other amounts owing by the Lessee under the Operative
Agreements to the Wachovia Mortgage Lender, fifth, to the payment of
the Lessor Advance and Lessor Yield and in addition to the Lessor
Advance and Lessor Yield, all other amounts due and owing by the
Lessee under the Operative Agreements to the Lessor (to the extent
payments or proceeds which are derived from the Cash Collateral
Account remain after distribution pursuant to first
42
through fifth above, such shall be distributed pursuant to eighth
and ninth as provided below), sixth, ratably to the payment of the
principal, interest and Make-Whole Amount, if any, of the Mortgage
Notes, held by Mortgage Lenders other than the Wachovia Mortgage
Lender, then outstanding, seventh, to any and all other amounts
owing by the Lessee under the Operative Agreements to the Mortgage
Lenders other than the Wachovia Mortgage Lender, eighth, to the
extent moneys remain after application and allocation pursuant to
clauses first through seventh above, to the Lessor for application
and allocation to any and all other amounts owing by the Lessee
under the Operative Agreements to any Financing Party as the Lessor
shall determine, absent manifest error and ninth, to the extent
moneys remain after application and allocation pursuant to clauses
first through eighth above, to the Lessee, provided, the Maximum
Residual Guarantee Amount shall be distributed separately pursuant
to this Section 8.7(b)(iv), such that any deficiency on any Property
cannot be satisfied with excess Maximum Residual Guarantee Amount
proceeds from any other Property.
(v) Without regard to whether a Default or Event of Default
exists, an amount equal to any such payment identified as
Supplemental Rent payable to the Agent or any Primary Financing
Party (not described in subparts (i) through (iv), above), shall be
applied and allocated by the Agent to the payment of any amounts
then owing to the Agent, the Primary Financing Parties and the other
parties to the Operative Agreements (or any of them) (other than any
such amounts payable pursuant to the preceding provisions of this
Section 8.7(b)) as shall be determined by the Agent in its
reasonable discretion; provided, however, that Supplemental Rent
received after the occurrence and continuance of an Event of Default
shall be applied and allocated as set forth in Section 8.7(b)(iv).
(vi) Except as set forth in subparagraph (ii) of this Section
8.7(b), any payment of Termination Value (including any application
of Cash Collateral to payment of the Termination Value for all
Properties pursuant to Section 5.4(e)(iii)) shall be applied and
allocated by the Agent if no Default or Event of Default is in
effect, first, ratably to the Primary Financing Parties for
application and allocation to the payment of the principal, interest
and Make-Whole Amount, if any, on the Notes, and the principal
amount of the Lessor Advance, Lessor Yield and breakage costs, in
each case, which is due and payable on such date; second, to any and
all other amounts owing under the Operative Agreements to the
Financing Parties; third, any excess shall be paid to the Lessee or
such Person or Persons as the Lessee may designate; provided, that
if a Default or Event of Default is in effect, such amount shall be
applied and allocated in the manner contemplated by Section
8.7(b)(iv).
(vii) The Agent in its reasonable judgment shall identify the
nature of each payment or amount received by the Agent and apply and
allocate each such amount in the manner specified above.
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(viii) To the extent that the value of the Land component of
any Property exceeds twenty-five percent (25%) of the Property Cost
for such Property, as of the Property Closing Date, based on the
Appraisal delivered to the Agent pursuant to Section 5.3(s) ("Split
Property"), the Land and the Improvements shall each be treated as a
separate "Property" solely for the allocation of the sales proceeds
from such Property pursuant to Section 8.7(b)(iii) and the
allocation of the Maximum Residual Guarantee Amount pursuant to
Section 8.7(b)(iv). Upon the sale of or receipt of the Maximum
Residual Guarantee Amount regarding any Split Property, an Appraisal
delivered in conjunction with the sale shall set forth the
proportionate value of the Land and Improvements at the time of such
sale, which shall be used to set the allocation of the proceeds
received with respect to such Split Property for distribution
pursuant to Section 8.7(b)(iii) or 8.7(b)(iv), as applicable.
(c) Notwithstanding any provision contained herein or in any other
Operative Agreement to the contrary, (i) except for Exempted Payments and
Excepted Payments, each Primary Financing Party shall promptly deliver to
the Agent for distribution pursuant to this Section 8.7 any sums received
from the Lessee or with respect to the Properties in excess of the amounts
owing to them pursuant to the applicable foregoing subparts of this
Section 8.7 of this Agreement and (ii) upon the payment in full of the
Notes and the Lessor Advance and all other amounts then due and owing by
or to the Lessor hereunder or under any Operative Agreement and the
payment in full of all other amounts then due and owing to the Primary
Financing Parties, the Agent and the other Financing Parties pursuant to
the Operative Agreements, any moneys remaining with or received thereafter
with respect to the Property by the Agent shall be returned to the Lessee
or its designee. Notwithstanding the foregoing, the obligations of the
Lessee to pay all amounts due to any Financing Party under the Notes or
any other Operative Agreement shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of the Lessee
is rescinded or must be otherwise restored by any Financing Party, whether
as a result of any proceedings in bankruptcy or reorganization or
otherwise, and the Lessee agrees that it will indemnify each Financing
Party on demand for all reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) incurred by any Financing Party in
connection with such rescission or restoration, including without
limitation any such costs and expenses incurred in defending against any
claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar
law. It is agreed that, prior to the application and allocation of amounts
received by the Agent in the order described in Section 8.7(b) above or
any distribution of money to the Lessee, any such amounts shall first be
applied and allocated to the payment of (i) any and all sums advanced by
the Agent in order to preserve the Collateral or any portion thereof or to
preserve its Liens thereon, (ii) the expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing or realizing
on the Collateral or any portion thereof, or of any exercise by the Agent
of its rights under the Security Documents, together with reasonable
attorneys' fees and expenses and court costs in connection therewith and
(iii) any and all other amounts owed to the Agent under or in connection
with the transactions
44
contemplated by the Operative Agreements (including without limitation any
accrued and unpaid administrative fees arising in connection with the
Operative Agreements).
8.8. Release of Properties, etc.
If the Lessee shall at any time purchase the Properties pursuant to the
Lease, or if the Properties shall be sold in accordance with Article XXII of the
Lease, then, upon satisfaction by the Lessor of its obligation to prepay the
Financing and all other amounts owing to the Financing Parties under the
Operative Agreements (using proceeds of payments from the Lessee or from the
disposition of the Properties), the Agent is hereby authorized and directed to
release such Properties from the Liens created by the Security Documents to the
extent of its interest therein. In addition, upon the payment in full of the
Financing and all other amounts owing by the Lessor and the Lessee hereunder and
under each other Operative Agreement, the Agent is hereby authorized and
directed to release the Properties from the Liens (including without limitation
the Liens granted by the Lessor) created by the Security Documents to the extent
of its interest therein. Upon request of the Lessor or the Lessee following any
such release, the Agent shall, at the sole cost and expense of the Lessee,
execute and deliver to the Lessor and the Lessee such documents as the Lessor or
the Lessee shall reasonably request to evidence such release.
8.9. Limitation of Lessor's Obligations.
(a) The Lessor shall not have any duty or obligation to manage,
control, use, make any payment in respect of, register, record, insure,
inspect, sell, dispose of or otherwise deal with the Properties or any
other part of the Lessor's Interest, or to otherwise take or refrain from
taking any action under or in connection with any Operative Agreement to
which the Lessor is a party, except as expressly provided by the terms of
the Operative Agreements or in written instructions from the Agent,
received pursuant to Section 8.6; and no implied duties or obligations
shall be read into the Operative Agreements against the Lessor. The Lessor
nevertheless agrees that it will, subject to Section 19.1 of the Lease,
promptly take all action as may be necessary to discharge any Lessor Liens
on any part of any Property or the Collateral.
(b) The Lessor agrees that it will not manage, control, use, sell,
dispose of or otherwise deal with any Property, the Collateral or any
other part of the Lessor's Interest except (a) as required by the terms of
the Operative Agreements, (b) in accordance with the powers granted to, or
the authority conferred upon, it pursuant to the Operative Agreements or
(c) in accordance with the express terms hereof and with written
instructions from the Agent pursuant to Section 8.6.
(c) Except in accordance with written instructions furnished
pursuant to an applicable provision of the Operative Agreements (expressly
cited in such instructions), and without limitation of the generality of
Section 8.9(a), the Lessor shall not have any duty to (i) file, record or
deposit any Operative Agreement or any other document, or to maintain any
such filing, recording or deposit or to refile, rerecord or redeposit any
such document; (ii) obtain insurance on any Property or effect or maintain
any such insurance, other than to receive and forward to each Primary
Financing Party and the Agent any
45
notices, policies, certificates or binders furnished to the Lessor
pursuant to the Lease; (iii) maintain any Property; (iv) pay or discharge
any Tax or any Lien owing with respect to or assessed or levied against
any part of the Lessor's Interest, except as provided in the last sentence
of Section 8.9(a), other than to forward notice of such Tax or Lien
received by the Lessor to each Primary Financing Party and the Agent; (v)
confirm, verify, investigate or inquire into the failure to receive any
reports or financial statements of Lessee or any other Person; (vi)
inspect the Property at any time or ascertain or inquire as to the
performance or observance of any of the covenants of Lessee or any other
Person under any Operative Agreement with respect to the Property; or
(vii) manage, control, use, sell, dispose of or otherwise deal with the
Property or any part thereof or any other part of the Lessor's Interest,
except as provided in Section 8.9(b).
(d) The Lessor, in the exercise or administration of its powers
pursuant to the Operative Agreements, may, at the expense and, so long as
no Lease Default or Lease Event of Default shall have occurred and be
continuing, with the consent of Lessee, employ agents, attorneys,
accountants, and auditors and enter into agreements with any of them and
the Lessor shall not be liable for the default or misconduct of any such
agents, attorneys, accountants or auditors if such agents, attorneys,
accountants or auditors shall have been selected by it with reasonable
care.
8.10. No Representations or Warranties as to the Property or the Operative
Agreements.
THE LESSOR MAKES (i) NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO THE TITLE, VALUE, USE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE
FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF ANY PROPERTY,
OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT except that the Lessor
hereby represents, warrants and covenants to each Primary Financing Party that
it will comply with the last sentence of Section 8.9(a), and (ii) no
representation or warranty as to the validity or enforceability of any Operative
Agreement as against any Person other than the Lessor or as to the correctness
of any statement made by a Person other than the Lessor contained in any
thereof.
8.11. Reliance; Advice of Counsel.
The Lessor shall not incur any liability to any Person in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper reasonably believed by it to be
genuine and believed by it in good faith to be signed by the proper party or
parties. The Lessor may accept and rely upon a certified copy of a resolution of
the board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body and
that the same is in full force and effect. As to any fact or matter the manner
of ascertainment of which is not
46
specifically prescribed herein, the Lessor may for all purposes of the Operative
Agreements rely on an Officer's Certificate of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Lessor for any action taken or omitted to be taken by it reasonably in good
faith in reliance thereon. In the administration of the Lessor's duties, the
Lessor may execute and perform its powers and duties directly or through agents
or attorneys and may consult with counsel, accountants and other skilled Persons
to be selected and employed by it, and the Lessor shall not be liable for
anything done, suffered or omitted reasonably in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
Persons and not contrary to the Operative Agreements.
8.12 Non Disturbance.
In the event of a foreclosure under any Security Document (other than the
Lease), so long as there shall then exist no Lease Event of Default, the Primary
Financing Parties agree, for themselves and their respective successors and
assigns, that no right, title or interest of the Lessee in nor the leasehold
interest of Lessee in, or the right of possession nor use and enjoyment of the
Properties by the Lessee under the Lease or the other Operative Agreements shall
be extinguished or terminated by reason of such foreclosure, but rather the
rights of the Lessee in the Collateral and under Lease shall continue in full
force and effect and the Lease shall automatically and unconditionally become a
direct lease between the Primary Financing Parties or any successor thereto, as
lessor as if such Primary Financing Parties or successor were the Lessor
originally named in the Lease, and Lessee.
8.13 Payment of Appraiser Expenses.
Notwithstanding any provision in any Operative Agreement to the contrary,
each of the Primary Financing Parties hereby agrees to pay its ratable share
(based on such Primary Financing Party's pro rata share of the aggregate amount
then outstanding under the Financing) of the fees or expenses of any appraiser
otherwise payable by the Lessor pursuant to Section 22.4 of the Lease.
SECTION 8A. AFFIRMATIVE COVENANTS OF THE LESSEE
The Lessee hereby covenants and agrees that on the Initial Closing Date,
and thereafter for so long as any Operative Agreement is in effect and until the
Commitments have terminated, all of the Lessee Secured Obligations have been
paid in full and all other amounts accrued or due and owing from the Lessee
pursuant to any Operative Agreement have been paid in full, the Lessee shall,
and shall cause each of its Subsidiaries to:
8A.1. Financial Statements.
Furnish to the Agent and each of the Primary Financing Parties:
(a) As soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Lessee, a copy of the
consolidated balance sheet of the Lessee and its consolidated subsidiaries
as at the end of such fiscal year and the related
47
consolidated and consolidating statements of income and retained earnings
and of consolidated cash flows of the Lessee and its consolidated
subsidiaries for such year which, other than in the case of the
consolidating statements, shall be audited by a firm of independent
certified public accountants of nationally recognized standing and, if
different from Lessee's accountants as of the Initial Closing Date,
reasonably acceptable to the Primary Financing Parties, setting forth in
each case in comparative form the figures for the previous year, reported
on without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification;
(b) As soon as available and in any event within forty-five (45)
days after the end of each of the first three fiscal quarters of the
Lessee, a copy of the unaudited consolidated balance sheet of the Lessee
and its consolidated subsidiaries as at the end of such period and related
consolidated and consolidating statements of income and retained earnings
and of consolidated cash flows for the Lessee and its consolidated
subsidiaries for such quarterly period and for the portion of the fiscal
year ending with such period, in each case setting forth in comparative
form consolidated figures for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit
adjustments);
(c) [Reserved];
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section (n) of the rules of usage in Appendix A hereto.
The Lessee shall deliver to the Agent and each Primary Financing Party at
the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 8A.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
8A.2. Certificates; Other Information.
Furnish to the Agent and each of the Primary Financing Parties:
(a) [Reserved];
48
(b) concurrently with the delivery of the financial statements
referred to in Sections 8A.1(a) and 8A.1(b) above, a certificate of a
Responsible Officer, in the form set forth in Exhibit H, stating that, to
the best of such Responsible Officer's knowledge, the Lessee during such
period observed or performed in all material respects all of its covenants
and other agreements or cured such non-performance within the time
permitted by the Operative Agreements, and satisfied in all material
respects every condition, contained in the Operative Agreements to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and such certificate shall include the
calculations in reasonable detail required to indicate compliance with
Section 8A.9 as of the last day of such period;
(c) within thirty (30) days after the same are provided, make
available by electronic mail or by posting on the Lessee's website copies
of all reports (other than those otherwise provided pursuant to Section
8A.1 and those which are of a promotional nature) and other financial
information which the Lessee sends to its stockholders, and within thirty
days after the same are filed, copies of all financial statements and
non-confidential reports which the Lessee may make to, or file with the
Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(d) [Reserved];
(e) promptly upon receipt thereof, a copy the portions of any other
report or "management letter" submitted by independent accountants to the
Lessee in connection with any annual, interim or special audit of the
books of such Person, to the extent such report or letter addresses any
qualification of the independent accountants' opinion on the Lessee's
financial statements;
(f) promptly, such other documents or other information as the
Agent, on behalf of any Primary Financing Party, may from time to time
reasonably request; and
(g) upon written request from the Agent and thereafter, as soon as
available, and in any event within ten (10) days of receipt of each
statement or any correspondence regarding the Cash Collateral Account,
Lessee shall deliver to the Agent a copy of such statement or
correspondence.
8A.3. [Reserved].
8A.4. [Reserved].
8A.5. Maintenance of Property Insurance.
(a) [Reserved]; and
49
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property in at least such amounts
and against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business; and
furnish to the Agent, upon written request, full information as to the
insurance carried; provided, however, that the Lessee and its Subsidiaries
may maintain self insurance plans (including wholly-owned captive
insurance company coverage) to the extent companies of similar size and in
similar businesses do so.
8A.6. Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in all material respects, taken as a whole, in conformity with GAAP and
all Requirements of Law shall be made of all dealings and transactions in
relation to its businesses and activities. Permit, upon at least five (5)
Business Days' notice from the Agent (or, if a Default or Event of Default shall
have occurred and be continuing, upon at least one (1) Business Day's notice
from the Agent), representatives of the Agent or any Primary Financing Party,
from time to time with respect to any Property or Lessee's performance or
compliance with any Operative Agreement, to visit and inspect, its properties
and to inspect, audit and make extracts from its books, records and files,
including without limitation management letters prepared by independent
accountants (with respect to any Property or Lessee's performance or compliance
with any Operative Agreement) and to discuss with its principal officers, and
its independent accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects (with respect to any
Property or Lessee's performance or compliance with any Operative Agreement).
All such inspected items shall be full, true and correct in all material
respects.
8A.7. [Reserved].
8A.8. [Reserved].
8A.9. Financial Covenant.
Commencing on the Initial Closing Date, the Lessee shall maintain and
shall cause its Consolidated Subsidiaries to maintain a Current Ratio of greater
than 0.75:1.00 as of the last day of each fiscal quarter of the Consolidated
Group.
SECTION 9. CREDIT NOTE LOAN AGREEMENT, MORTGAGE NOTE LOAN
AGREEMENT AND LESSOR ADVANCES.
Notwithstanding anything to the contrary contained in the Credit Note Loan
Agreement, the Mortgage Note Loan Agreement or any other Operative Agreement,
the Agent, the Lenders, the Lessee and the Lessor hereby agree that, unless a
Lease Default or Lease Event of Default has occurred and is continuing, the
Lessee, as the case may be, shall have the following rights:
(a) [Reserved];
50
(b) [Reserved];
(c) the right to exercise the conversion and continuation options
pursuant to Section 2.7 of the Credit Note Loan Agreement or pursuant to
Section 2.7 of the Mortgage Note Loan Agreement;
(d) the right to receive any notice and any certificate issued
pursuant to Section 2.11(a) of the Credit Note Loan Agreement or pursuant
to Section 2.11(a) of the Mortgage Note Loan Agreement;
(e) the right to replace any Credit Note Lender pursuant to Section
2.11(b) of the Credit Note Loan Agreement or any Mortgage Note Lender
pursuant to Section 2.11(b) of the Mortgage Note Loan Agreement;
(f) the right to consent to any assignment by a Credit Note Lender
or a Mortgage Note Lender pursuant to Section 9.8 of the Credit Note Loan
Agreement or Section 9.8 of the Mortgage Note Loan Agreement, as
applicable;
(g) the right to make determinations as to whether the Loans made
pursuant to the Credit Note Loan Agreement and pursuant to the Mortgage
Note Loan Agreement will be based on the Eurodollar Rate or the ABR
pursuant to Sections 2.1(b), 2.3 and 2.8(a) of the Credit Note Loan
Agreement and Sections 2.1(b), 2.3 and 2.8(a) of the Mortgage Note Loan
Agreement, respectively, and as to whether the Lessor Advances pursuant to
Section 5B will be based on the Eurodollar Rate or the ABR;
(h) the right to require Lessor to elect to convert Loans based on
the Eurodollar Rate to Loans based on the ABR pursuant to Section 2.7 of
the Credit Note Loan Agreement and Section 2.7 of the Mortgage Note Loan
Agreement, respectively;
(i) the right to elect to require any Credit Note Lender to transfer
or assign its interests, rights and obligations under the Credit Note Loan
Agreement to a replacement bank or institution, or to require the Lessor
to prepay all outstanding Loans made pursuant to the Credit Note Loan
Agreement in accordance with Section 2.11 of the Credit Note Loan
Agreement;
(j) the right to elect to require any Mortgage Note Lender to
transfer or assign its interests, rights and obligations under the
Mortgage Note Loan Agreement to a replacement bank or institution, or to
require the Lessor to prepay all outstanding Loans made pursuant to the
Mortgage Note Loan Agreement in accordance with Section 2.11 of the
Mortgage Note Loan Agreement;
(k) the right to approve any successor agent pursuant to Section 8.6
of the Participation Agreement; and
(l) the right of Lessee set forth in Section 5.4(e).
51
SECTION 10. TRANSFER OF INTEREST.
10.1. Restrictions on Transfer.
(a) Each Credit Lender and each Mortgage Lender may participate, assign or
transfer all or a portion of its interest hereunder and under the other
Operative Agreements in accordance with Sections 9.7 and 9.8 of the Credit Note
Loan Agreement or the Mortgage Note Loan Agreement, respectively, provided, that
each Credit Lender and each Mortgage Lender that participates, assigns or
transfers all or a portion of its interest hereunder and under the other
Operative Agreements shall deliver to the Agent a copy of each Assignment and
Acceptance (as referenced in Section 9.8 of the Credit Note Loan Agreement or
the Mortgage Note Loan Agreement, as applicable) for purposes of maintaining the
Register. The Lessor 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, 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, any Collateral, the Lease 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 Lease to any Eligible Lessor (i) if at any time the Lessor deems it
necessary or appropriate under applicable Law or pursuant to the direction or
recommendation of any Government Authority or (ii) for any other reason, but,
with respect to this clause (ii), only with the prior written consent of the
Agent (not to be unreasonably withheld or delayed) and (provided, no Lease
Default or Lease Event of Default has occurred and is continuing) with the
consent of the Lessee (not to be unreasonably withheld or delayed). Each
Eligible Lessor who receives any right, title or interest of the Lessor with
respect to the Operative Agreements shall provide the documentation required and
otherwise comply with Section 9.8(c) of the Credit Note Loan Agreement or the
Mortgage Note Loan Agreement, as applicable, mutatis mutandis, as if such
Eligible Lessor was a Purchasing Lender thereunder. The provisions of the
immediately preceding sentence shall not apply to the obligations of the Lessor
to transfer Property to the Lessee or a third party purchaser pursuant to
Article XX or XXII of the Lease or Section 8.8 hereof upon payment for such
Property in accordance with the terms and conditions of the Lease. Except as
provided in Article XXV of the Lease, Lessee may not assign any of the Operative
Agreements or any of its 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 Agent and the Primary Financing Parties. Except as otherwise expressly
permitted under the Operative Agreements (including pursuant to Article XXV of
the Lease), the Lessee may not assign any of the Operative Agreements or any of
its rights or obligations thereunder or with respect to the Properties or the
Collateral in whole or in part to any Person without the prior written consent
of the Agent and each Primary Financing Party, provided, if Article XXV of the
Lease expressly permits such assignment, and no Lease Default or Lease Event of
Default has occurred and is continuing, then such consents shall not be
unreasonably withheld or delayed.
(b) Notwithstanding anything to the contrary in Section 10.1(a), no
consent shall be required from the Agent, the Lessee or any Primary Financing
Party (but Lessor shall provide one hundred eighty (180) days (or such shorter
period as required by the Legal Requirement
52
giving rise to the assignment, conveyance, appointment or transfer contemplated
by this Section 10.1(b)) written notice to the Agent and the Lessee) in
connection with any assignment, conveyance, appointment or transfer by the
Lessor required by any Legal Requirement of all or any of its right, title or
interest in or to the Properties, the Lease and the other Operative Agreements
(including without limitation any right to indemnification thereunder), or any
other document relating to the Properties or any interest in the Properties as
provided in the to Lease an Eligible Lessor; provided, in such case, so long as
no Default or Event of Default shall have occurred and be continuing, Lessee
shall have the right to require the Lessor (unless such transfer or conveyance
has already occurred, in which case the Lessee shall have the right to require
such transferee) to transfer its interest to an Eligible Lessor selected by the
Lessee, in its reasonable discretion; provided, further, Lessee shall be
responsible for any cost or expense incurred by the Lessor, the transferor and
any transferee in connection with any assignment, conveyance, appointment or
transfer by the Lessor pursuant to this Section 10.1(b), unless the Legal
Requirement requiring such transfer is specific to Lessor (as opposed to a Legal
Requirement applicable generally to financial institutions or other corporations
engaged in activities similar to those of Lessor).
(c) [Reserved].
(d) Upon the occurrence and during the continuance of an Event of Default
by the Lessor, Lessee shall have the right to require the Lessor to transfer its
interest in the Properties and the Operative Agreements to an Eligible Lessor
selected by the Lessee, in its reasonable discretion.
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 Lessor or
any other Primary Financing Party as above provided, any such transferee shall
assume the obligations of the Lessor or such Primary Financing Party, as the
case may be, and shall be deemed the "Lessor" and/or a "Primary Financing
Party", as the case may be, for all purposes of such documents and each
reference herein to the transferor shall thereafter be deemed a reference to
such transferee for all purposes, except as provided in the preceding sentence.
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.
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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 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, as determined by a court of competent jurisdiction)
in any way relating to or arising or alleged to arise out of the negotiation,
execution, delivery, performance or enforcement of this Agreement, the Lease or
any other Operative Agreement or with respect to or on 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, nondelivery, leasing, subleasing, of the Property, (b)
the possession, use, occupancy, operation, maintenance, repair, modification, or
transportation of the Property by the Lessee, (c) the condition, sale, return,
repossession (whether by summary proceedings or otherwise), or any disposition
of any Property or any part thereof, including without limitation the
acquisition, holding or disposition of any interest in any Property, lease or
agreement comprising a portion of any thereof; (d) any latent or other defects
in any Property or any portion thereof whether or not discoverable by an
Indemnified Person or the Indemnity Provider; (e) a violation of, or penalties
arising from any violation of, Environmental Laws, Environmental Claims or other
loss of or damage to any property or the environment, including any claim
relating to any Property (except to the extent such violation is solely related
to and arose after foreclosure of Lessee's interest in such Property and after
Lessee's surrender of possession with respect to such Property in accordance
with the Operative Agreements and after Lessee has provided a Phase I
environmental site assessment recently prepared (no more than thirty (30) days
prior to the date when Lessee has delivered possession of such Property) by an
independent recognized professional reasonably acceptable to the Agent, and in
form, scope and content reasonably satisfactory to the Agent), the Lease or the
Indemnity Provider; (f) the Operative Agreements, or any transaction
contemplated thereby; (g) 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; (h) 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; (i) personal injury, death or property damage, including
without limitation Claims based on strict or absolute liability in tort; (j) any
claim for patent, trademark or copyright infringement relating to events or
circumstances at the Property; (k) any fees, expenses and/or other assessments
by any business park or any other applicable entity with oversight
responsibility for any Property, and (l) any condition of any Property which
violates any covenant, condition, representation or warranty by Lessee in the
Operative Agreements.
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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 Claim, such Indemnified
Person shall promptly notify the Indemnity Provider in writing and shall not
take action with respect to such Claim without the consent of the Indemnity
Provider for thirty (30) days after the receipt of such notice by the Indemnity
Provider; provided, however, that in the case of any such Claim, if action shall
be required by law or regulation to be taken prior to the end of such period of
thirty (30) days, such Indemnified Person shall endeavor to, in such notice to
the Indemnity Provider, inform the Indemnity Provider of such shorter period,
and no action shall be taken with respect to such Claim without the consent of
the Indemnity Provider before seven (7) days before the end of such shorter
period unless the Indemnified Person shall be required by such law or regulation
to take action prior to the end of such seven (7) day period; provided, further,
that the failure of such Indemnified Person to give the notices referred to in
this sentence shall not diminish the Indemnity Provider's obligation hereunder
except to the extent such failure precludes in all respects the Indemnity
Provider from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the Indemnified
Person (or such shorter period as the Indemnified Person has notified the
Indemnity Provider is required by law or regulation for the Indemnified Person
to respond to such Claim), the Indemnity Provider shall request in writing that
such Indemnified Person respond to such Claim, the Indemnified Person shall, at
the reasonable expense of the Indemnity Provider, in good faith conduct and
control such action (including without limitation by pursuit of appeals)
(provided, however, that (A) if such Claim, in the Indemnity Provider's
reasonable discretion, can be pursued by the Indemnity Provider on behalf of or
in the name of such Indemnified Person, the Indemnified Person, at the Indemnity
Provider's request, shall allow the Indemnity Provider to conduct and control
the response to such Claim and (B) in the case of any Claim (and notwithstanding
the provisions of the foregoing subsection (A)), the Indemnified Person may
request in writing that the Indemnity Provider conduct and control the response
to such Claim (with counsel to be selected by the Indemnity Provider and
consented to by such Indemnified Person, such consent not to be unreasonably
withheld or delayed; provided, however, that any Indemnified Person may retain
separate counsel at the expense of the Indemnity Provider in the event of a
potential conflict of interest between such Indemnified Person and the Indemnity
Provider)) by, in the sole discretion of the Person conducting and controlling
the response to such Claim (1) resisting payment thereof, (2) not paying the
same except under protest, if protest is necessary and proper, (3) if the
payment be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4) taking such other
action as is reasonably requested by the Indemnity Provider from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party. The parties agree that an Indemnified Person may at any time decline to
take further action with respect to the response to such Claim and may settle
such Claim if such Indemnified Person shall waive its rights to any indemnity
from the Indemnity Provider that otherwise would be payable in respect of such
Claim (and any future Claim, the pursuit of which is precluded by reason of such
resolution of such Claim) and shall pay to the
55
Indemnity Provider any amount previously paid or advanced by the Indemnity
Provider pursuant to this Section 11.1 by way of indemnification or advance for
the payment of an amount regarding such Claim, except reasonable expenses
therefrom incurred by such Indemnified Person in connection with the response to
such Claim.
Notwithstanding the foregoing provisions of this Section 11.1, an
Indemnified Person shall not be required to take any action and the Indemnity
Provider shall not be permitted to respond to any Claim in its own name or that
of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable and properly documented out-of-pocket costs, losses and expenses
that such Indemnified Person actually incurs in connection with such Claim,
including without limitation all reasonable legal, accounting and investigatory
fees and disbursements and the Indemnity Provider shall have agreed that the
Claim is an indemnifiable Claim hereunder, (B) in the case of a Claim that must
be pursued in the name of an Indemnified Person (or an Affiliate thereof), the
amount of the potential indemnity (taking into account all similar or logically
related Claims that have been or could be raised for which the Indemnity
Provider may be liable to pay an indemnity under this Section 11.1) exceeds
$25,000 (or such lesser amount as may be subsequently agreed between the
Indemnity Provider and the Indemnified Person), (C) the Indemnified Person shall
have reasonably determined that the action to be taken will not result in any
material danger of sale, forfeiture or loss of the Property, or any material
part thereof or material interest therein, will not interfere with the payment
of Rent, and will not result in risk of criminal liability, (D) if such Claim
shall involve the payment of any amount prior to the resolution of such Claim,
the Indemnity Provider shall provide to the Indemnified Person an interest-free
advance in an amount equal to the amount that the Indemnified Person is required
to pay (with no additional net after-tax cost to such Indemnified Person) prior
to the date such payment is due, (E) in the case of a Claim that must be pursued
in the name of an Indemnified Person (or an Affiliate thereof), the Indemnity
Provider shall have provided to such Indemnified Person an opinion of
independent reputable counsel selected by the Indemnity Provider and reasonably
satisfactory to the Indemnified Person stating that a reasonable basis exists to
contest such Claim (or, in the case of an appeal of an adverse determination, an
opinion of such counsel to the effect that the position asserted in such appeal
will more likely than not prevail) and (F) no Event of Default shall have
occurred and be continuing. In no event shall an Indemnified Person be required
to appeal an adverse judicial determination to the United States Supreme Court.
In addition, an Indemnified Person shall not be required to contest any Claim in
its name (or that of an Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely by a court of
competent jurisdiction pursuant to the contest provisions of this Section 11.1,
unless there shall have been a change in law (or interpretation thereof) and the
Indemnified Person shall have received, at the Indemnity Provider's expense, an
opinion of independent counsel selected by the Indemnity Provider and reasonably
acceptable to the Indemnified Person stating that as a result of such change in
law (or interpretation thereof), it is more likely than not that the Indemnified
Person will prevail in such contest. In no event shall the Indemnity Provider be
permitted to adjust or settle any Claim without the consent of the Indemnified
Person to the extent any such adjustment or settlement involves, or is
reasonably likely to involve, any performance by or adverse admission by or with
respect to the Indemnified Person.
56
11.2. General Tax Indemnity.
(a) Subject to Sections 11.2(b) and 11.2(e), the Indemnity Provider
shall pay and assume liability for, and does hereby agree to indemnify,
protect and defend the Property and all Indemnified Persons, and hold them
harmless against, all Impositions 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 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)
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 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 any Property 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);
(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; and
(v) Impositions imposed on a Tax Indemnitee which become
payable by reason of any transfer or disposition by such Tax
Indemnitee or an Affiliate of a Tax Indemnitee of any interest in
some or all of the Property or the Operative Agreements, other than
Impositions that result from transfers or dispositions which occur
(A) while an Event of Default has occurred and is continuing or (B)
57
in connection with (v) the Lessee's purchase of some or all of the
Property pursuant to the Operative Agreements; (w) the return of
some or all of the Property pursuant to the Operative Agreements;
(x) an Event of Loss, theft, destruction or damage to the Property
or any part thereof; (y) a substitution, replacement, improvement,
modification or addition of or to the Property or any part thereof
by any Lessee or Affiliate of any Lessee; or (z) a transfer required
by applicable law.
Notwithstanding the foregoing, the exclusions from the definition of
"Impositions" set forth in clauses (i), (ii), (iii) and (iv) shall not apply
(but the other exclusions shall apply) to any Taxes or increase in Taxes imposed
on an Indemnified Person net of any decrease in taxes realized by such
Indemnified Person, to the extent that such tax increase or decrease would not
have occurred if on the date of the Advance the Primary Financing Parties
advanced funds to the Lessee in the form of a loan secured by the Properties in
an amount equal to the Advance funded on such date, with debt service equal to
the Basic Rent payable on each Schedule Interest Payment Date and a principal
balance at the maturity of such loan in an amount equal to the then outstanding
amount of the Notes and the Lessor Advance at the end of the term of the Lease.
(c) (i) 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.
(ii) In the case of Impositions for which no contest is
conducted pursuant to Section 11.2(f) and which the Indemnity
Provider pays directly to the taxing authorities, the Indemnity
Provider shall pay such Impositions prior to the latest time
permitted by the relevant taxing authority for timely payment. In
the case of Impositions for which the Indemnity Provider reimburses
an Indemnified Person, the Indemnity Provider shall do so within
thirty (30) days after receipt by the Indemnity Provider of demand
by such Indemnified Person describing in reasonable detail the
nature of the Imposition and the basis for the demand (including
without limitation the computation of the amount payable),
accompanied by receipts or other reasonable evidence of such demand.
In the case of Impositions for which a contest is conducted pursuant
to Section 11.2(f), the Indemnity Provider shall pay such
Impositions or reimburse such Indemnified Person for such
Impositions, to the extent not previously paid or reimbursed
pursuant to subsection (a), prior to the latest time permitted by
the relevant taxing authority for timely payment after conclusion of
all contests under Section 11.2(f).
(iii) At the Indemnity Provider's request, the amount of any
indemnification payment by the Indemnity Provider pursuant to
subsection (a) shall be verified and certified by an independent
public accounting firm mutually acceptable to the Indemnity Provider
and the Indemnified Person. The fees and
58
expenses of such independent public accounting firm shall be paid by
the Indemnity Provider unless such verification shall result in an
adjustment in the Indemnity Provider's favor of fifteen percent
(15%) or more of the payment as computed by the Indemnified Person,
in which case such fee shall be paid by the Indemnified Person.
(d) The Indemnity Provider shall be responsible for preparing and
filing any real and personal property or ad valorem tax returns in respect
of the Properties. 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) no later than ten (10) days prior to the due date thereof.
Such Indemnified Person shall 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. At the expense of the Indemnity Provider, Indemnified
Persons shall make Tax information available to the Indemnity Provider as
reasonably requested in order to prepare such returns, statements or
reports. Indemnified Persons shall, upon receipt of any notice or
correspondence relating to Taxes for which the Indemnity Provider could be
liable, promptly forward such notice or correspondence to the Indemnity
Provider; provided that any delay of an Indemnified Person in forwarding
such notice or correspondence to the Indemnity Provider shall not result
in a loss of any indemnification hereunder unless such delay precludes the
ability of the Indemnity Provider to contest such Taxes.
(e) As between the Indemnity Provider on one hand, and each
Financing Party on the other hand, the Indemnity Provider shall be
responsible for, and the Indemnity Provider shall indemnify and hold
harmless each Financing Party (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, Lessor Yield
payable on the Lessor Advance or with respect to any other payments under
the Operative Agreements (all such payments being referred to herein as
"Exempt Payments" to be made without deduction,
59
withholding or set off) (and, if any Financing Party 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 such Financing Party); provided,
however, that the obligation of the Indemnity Provider under this Section
11.2(e) shall not apply to:
(i) Withholdings on any Exempt Payment to any Financing Party
which is a non-U.S. Person unless such Financing Party is, on the
date hereof (or on the date it becomes a Financing Party hereunder)
and on the date of any change in the principal place of business or
the lending office of such Financing Party (provided that this
Section 11.2(e)(i) shall not apply with respect to any change in a
Financing Party's principal place or Lending Office unless such
change subjects such Financing Party to additional U.S.
Withholdings), entitled to and does timely submit to the Agent two
(2) complete original signed copies of a Form W-8BEN or Form W-8ECI
or successor applicable form, certifying in each case that such
party is entitled under Section 1442 of the Code or any other
applicable provision thereof or under any applicable tax treaty or
convention to receive payments pursuant to the Operative Agreements
without deduction or withholding of United States federal income tax
and is a foreign Person thereby entitled to an exemption from United
States backup withholding taxes (except where the failure of the
exemption results from a change in the principal place of business
of the Lessee); provided, however, if a failure of the exemption is
due to a change in law after the date hereof or in the case of a
Financing Party that acquires its interest after the date hereof, a
change in law occurring after such date, then the Indemnity Provider
shall be liable for any withholding resulting therefrom; or
(ii) Any Withholdings of U.S. Taxes imposed solely by reason
of the failure by a non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connections with the United States of America of such non-U.S.
Person if such compliance is required by statute or regulation of
the United States of America as a precondition to relief or
exemption from such U.S. Taxes if the Indemnity Provider has
provided such certification, information, documentation or other
reporting requirements to the Financing Party and the Financing
Party is eligible for such relief or exemption.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean a
citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or under
any laws of the United States of America or any State thereof, or any
estate or trust that is subject to Federal income taxation regardless of
the source of its income, (B) "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,
(C) "Form W-8BEN" shall mean Form W-8BEN (Certificate of Foreign Status of
Beneficial Owner for United States Tax Withholding) of the Department of
the Treasury of the United States of America and (D) "Form W-8ECI"
60
shall mean Form W-8ECI (Certificate of Foreign Person's Claim for
Exemption from Withholding on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of
the Treasury of the United States of America. Each of the Forms referred
to in the foregoing clauses (C) and (D) shall include such successor and
related forms as may from time to time be adopted by the relevant taxing
authorities of the United States of America to document a claim to which
such Form relates.
If a Financing Party or an Affiliate with whom such Financing Party
files a consolidated tax return (or equivalent) 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), such Financing Party will pay to the
Indemnity Provider such part of that benefit as in the opinion of such
Financing Party 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) such Financing
Party will use commercially reasonable efforts to accurately judge the
amount of any such benefit and of the date on which it is received, (ii)
such Financing Party will have commercially reasonable discretion as to
the order and manner in which it employs or claims tax credits and
allowances available to it and (iii) such Financing Party will not be
obliged to disclose to the Lessor any information regarding its tax
affairs or tax computations, other than such information as is directly
relevant to the calculations provided in this paragraph or other
information permitted to be disclosed under other provisions of the
Operative Agreements. A subsequent loss of such tax credit or allowance
with respect to which a payment is made pursuant to this paragraph to an
Indemnity Provider shall be treated as an Imposition that is indemnifiable
under Section 11.2(a) hereof without regard to the exclusions of Section
11.2(b)(i), (ii), and (iii) hereof.
Each non-U.S. Person that shall become a Financing Party after the
date hereof shall, upon the effectiveness of the related transfer or
otherwise upon becoming a Financing Party hereunder, be required to
provide all of the forms and statements referenced above or other
evidences of exemption from Withholdings if the Indemnity Provider has
provided such certification, information, documentation or other reporting
requirements to the Financing Party and the Financing Party is eligible
for such relief or exemption.
(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 provisions in Section 11.1 relating to notification
and rights to contest shall apply; 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 that can be pursued independently from any other
proceeding involving a Tax liability of such Indemnified Person.
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11.3. Increased Costs, Illegality, etc.
(a) If, on or after the Initial Closing Date, the adoption of any
applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof (but excluding a
change in the internal policies of the applicable Primary Financing Party)
binding on any Primary Financing Party, or compliance by any Primary
Financing Party with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for any Primary Financing Party to
make, convert or continue its Eurodollar Loans or Lessor Advance based on
the Eurodollar Rate, as the case may be, and such Primary Financing Party
shall so notify the Agent, the Agent shall forthwith give notice thereof
to the other Primary Financing Parties and the Lessor, whereupon until
such Primary Financing Party notifies the Lessor and the Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Primary Financing Party to make, convert or continue
Eurodollar Loans or Lessor Advance based on the Eurodollar Rate, as the
case maybe, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Primary Financing Party shall designate a
different office from which to make, convert or continue such Loans or
Lessor Advance if such designation will avoid the need for giving such
notice and will not, in the judgment of such Primary Financing Party,
result in any economic or regulatory disadvantage to such Primary
Financing Party. If such Primary Financing Party shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Eurodollar Loans or Lessor Advance based on the Eurodollar Rate to
maturity and shall so specify in such notice, the Lessor shall (with funds
provided by the Lessee or its designee as Supplemental Rent for such
purpose) immediately prepay in full the then outstanding principal amount
of each such Eurodollar Loan or Lessor Advance based on the Eurodollar
Rate, as the case may be, together with accrued interest thereon.
Concurrently with prepaying each such Eurodollar Loan or Lessor Advance
based on the Eurodollar Rate, the Lessor shall borrow an ABR Loan or a
Lessor Advance based on the ABR in an equal principal amount from such
Primary Financing Party (on which interest and principal shall be payable
contemporaneously with the related Eurodollar Loans or Lessor Advance
based on the Eurodollar Rate of the other Primary Financing Parties), and
such Primary Financing Party shall make such an ABR Loan or Lessor Advance
based on the ABR, provided, compliance with this Section 11.3(a) shall not
constitute a "reborrowing" which is prohibited by Section 2.1(a) of the
Credit Note Loan Agreement or the Mortgage Note Loan Agreement, as
applicable.
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(b) If, on or after the date hereof, in the case of any Loan or the
Lessor Advance, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Primary Financing Party with
any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) shall subject any Primary Financing Party to any new tax
or any increased tax, duty or other charge with respect to its Loans
or its Lessor Advance, or shall change the basis of taxation of
payments to any Primary Financing Party of the principal of or
interest or yield on its Loans or Lessor Advance or any other
amounts due under this Agreement or any other Operative Agreement in
respect of its Loans or its Lessor Advance (except for (A) franchise
taxes, taxes or other charges related to the general authority of
such Primary Financing Party to do business or taxes on the overall
income of such Primary Financing Party, in each case imposed by the
jurisdiction where such Primary Financing Party is incorporated (or
any political subdivision thereof) or where it is managed or
controlled, or (B) withholding taxes imposed under the laws of any
jurisdiction other than the United States or any State thereof); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding with
respect to any Eurodollar Loan or Lessor Advance based on the
Eurodollar Rate any such requirement with respect to which such
Primary Financing Party is entitled to compensation during the
current Interest Period pursuant to a change in the Eurocurrency
Reserve Requirements), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Primary Financing Party or
shall impose on any Primary Financing Party or on the London inter
bank market any other condition affecting its Loans or its Lessor
Advance;
and the result of any of the foregoing is to increase the cost to such
Primary Financing Party of making or maintaining any Loan or Lessor
Advance, or to reduce the amount of any sum received or receivable by such
Primary Financing Party under this Agreement or any other Operative
Agreement, by an amount deemed by such Primary Financing Party to be
material, then, within 15 days after demand by such Primary Financing
Party (with a copy to the Agent), the Lessor shall pay (with funds
provided by the Lessee as Supplemental Rent for such purpose) to such
Primary Financing Party such additional amount or amounts as will
compensate such Primary Financing Party for such increased cost or
reduction; provided that no such amount shall be payable with respect to
any such increased costs or reductions incurred more than 180 days before
the date such Primary Financing Party first notifies the Lessor and the
Lessee of its intention to demand compensation under this Section 11.3(b);
provided further that if the adoption of or change in applicable law, rule
or regulation, or change in the interpretation or
63
administration thereof, that gives rise to such increased cost or
reduction is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.
(c) If any Primary Financing Party shall have determined in good
faith that any applicable law, rule, guideline or regulation regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "regulatory requirement"), has or
would have the effect of reducing the rate of return on capital of such
Primary Financing Party (or its Parent) as a consequence of such Primary
Financing Party's obligations hereunder to a level below that which such
Primary Financing Party (or its Parent) could have achieved but for such
regulatory requirement (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Primary Financing
Party to be material, then from time to time, within 15 days after demand
by such Primary Financing Party (with a copy to the Agent), the Lessor
shall pay (with funds provided by the Lessee as Supplemental Rent for such
purpose) to such Primary Financing Party such additional amount or amounts
as will compensate such Primary Financing Party (or its Parent) for the
portion of any such reduction which is reasonably allocable to the
transactions contemplated by this Agreement and the other Operative
Agreements; provided that no such amount shall be payable with respect to
any period commencing less than 30 days after the date such Primary
Financing Party first notifies the Lessor and the Lessee of its intention
to demand compensation under this Section 11.3(c).
(d) Each Primary Financing Party will promptly notify the Lessor,
the Lessee and the Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Primary Financing Party to
compensation pursuant to this Section and will designate a different
office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Primary
Financing Party, result in any economic or regulatory disadvantage to such
Primary Financing Party. A certificate of any Primary Financing Party
claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder, accompanied by a computation
in reasonable detail of such amount or amounts, shall be conclusive if
prepared in good faith and on a reasonable basis. In determining such
amount, such Primary Financing Party may use any reasonable averaging and
attribution methods; provided that such methods shall not be inconsistent
with the methods used by such Primary Financing Party in calculating the
reduction in return allocable to other similar loans or commitments to
other borrowers. Upon receipt of any such notice from a Primary Financing
Party, Lessee or Lessor may require that such Primary Financing Party
assign its Loan or Advance, as applicable, on a non-recourse basis to a
substitute Primary Financing Party in accordance with the terms of this
Participation Agreement, the Mortgage Loan Agreement, the Credit Loan
Agreement or any other Operative Agreement, as applicable.
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11.4. Funding/Contribution Indemnity.
If (a) the Lessor makes any payment of principal with respect to any Loan
or the Lessor Advance or converts any Eurodollar Loan or Lessor Advance based on
the Eurodollar Rate on any day other than the last day of the Interest Period
applicable thereto, (b) any default by the Lessee in the drawing of funds,
whereby the Advance is not made on the date specified in the Requisition
delivered in accordance with Section 4.2 or (c) the Lessor fails to prepay any
Loan or the Lessor Advance on the date fixed for prepayment pursuant to Section
2.6 of the Credit Note Loan Agreement, Section 2.6 of the Mortgage Note Loan
Agreement or Section 5B.4 hereof, as applicable, then the Lessor (with funds
provided by the Lessee as Supplemental Rent (to the extent such is not
duplicative) unless Lessee has otherwise fully performed its obligations under
the Lease and the other Operative Agreements as of the applicable date) shall
reimburse each Primary Financing Party within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
participant in the related Loan or Lessor Advance), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or failure to borrow or prepay, provided that such Primary Financing
Party shall have delivered to the Lessor and the Lessee a certificate as to the
amount of such loss or expense and describing in reasonable detail the
calculation thereof, which certificate shall be conclusive in the absence of
manifest error. This provision shall survive the termination of the Operative
Agreements and the payment of all other amounts payable hereunder or thereunder.
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY,
ETC.
WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF ANY
AND ALL OF THE OPERATIVE AGREEMENTS (BUT SUBJECT TO THE PROVISIONS OF SECTION
11.1 AND ANY OTHER EXPRESS LIMITATIONS OF THE OPERATIVE AGREEMENTS) AND TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH PERSON PROVIDING INDEMNIFICATION OF
ANOTHER PERSON UNDER ANY OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY RELEASES
EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE,
DESCRIBED IN ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON THE PART
OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES,
EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, LOSSES, COSTS,
LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE
ATTORNEY'S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH BENEFICIARY
(IRRESPECTIVE OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH
INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT)
ATTRIBUTABLE TO THE ORDINARY
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NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH
BENEFICIARY.
SECTION 12. MISCELLANEOUS.
12.1. Survival of Agreements.
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 the Properties to the Lessor or the Lessee,
the acquisition of the Properties (or any of its components), any disposition of
any interest of the Lessor in the Properties or the Collateral, the payment of
the Notes and the Lessor Advance 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 such agreements with respect to matters occurring prior to
such expiration or termination.
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 Lessee, to such entity at the following address:
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Treasurer, Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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If to the Lessor or the Lessor, to such entity at the following
address:
Wachovia Development Corporation
c/o Wachovia Securities
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent, to it at the following address:
Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to any Credit Lender, or any Mortgage Lender, to it at the address set
forth for such Primary Financing Party in Schedule 1 or Schedule 2 to the
Participation Agreement, as applicable.
From time to time, any party may designate 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 of the parties hereto agrees that:
(a) except as expressly provided in subsections (b) and (c) below
and except for the Unanimous Vote Matters, each Operative Agreement may
only be terminated, amended, modified, extended supplemented, restated,
replaced or waived upon the approval in writing by the Lessor, the Agent,
the Majority Secured Parties and the Lessee (to the extent the Lessee is a
party to such Operative Agreement); provided, each termination, amendment,
modification, extension, supplement, restatement, replacement or waiver
regarding any Operative Agreement, which affects the rights or obligations
of the Lessee shall also require the written consent of the Lessee,
provided, further, that
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each termination, amendment, modification, extension, supplement,
restatement, replacement or waiver regarding any Operative Agreement shall
also require the written consent of each Financing Party affected thereby
(the "Unanimous Vote Matters"), so as to
(i) extend the scheduled date of maturity of any Note;
(ii) extend the scheduled Expiration Date or extend any
payment date of any Note or Lessor Advance;
(iii) reduce the stated rate of interest payable on any Note
or reduce the stated Lessor Yield payable on any Lessor Advance
(other than as a result of waiving the applicability of any
post-default increase in interest rates or Lessor Yield);
(iv) modify the priority of any Lien in favor of the Agent
under any Security Document;
(v) subordinate any obligation owed to such Lender or the
Lessor;
(vi) terminate, amend, supplement, waive, discharge or modify
any provision of this Section 12.4 or reduce the percentages
specified in the definitions of Majority Credit Lenders, Majority
Mortgage Lenders or Majority Secured Parties;
(vii) release a material portion of the Collateral (except in
accordance with Section 8.8);
(viii) release the Lessor or the Lessee from its obligations
under any Operative Agreement or otherwise alter any payment
obligations of the Lessee, Lessor, or any Financing Party under the
Operative Agreements;
(ix) terminate, amend, supplement, waive, discharge or modify
any provision of Sections 8.6(h), (j) or (k) or 8.7 of this
Agreement;
(x) impose any additional affirmative obligation or
requirement on the applicable Financing Party, make any existing
obligations of the applicable Financing Party materially more
onerous, or further obligate, prohibit or restrict the applicable
Financing Party or its right, title or interest under the Operative
Agreements in any material manner; or
(xi) modify or amend any definition, referenced provision or
other term or condition so as to affect the matters described in the
foregoing (i)-(x).
(b) the Mortgage Instrument (and any UCC Financing Statement related
thereto) may only be terminated, amended, modified, extended supplemented,
restated,
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replaced or waived upon the approval in writing by the Lessor, the
Majority Mortgage Lenders and (to the extent the Lessee is a party thereto
or the same relates to the Lessee as opposed to relating to the Lessor)
the Lessee.
(c) each termination, amendment, modification, extension,
supplement, restatement, replacement or waiver regarding any Operative
Agreement affecting Sections 4.1, 8.2, 8.3, 9.1, 10.1, 10.2, 11.1, 12.1,
13.1, 13.2, 14.1, 14.2, 14.3, 15.1, 15.2, 15.3, 16.1, 16.2, 18.1, 19.1,
19.2, 20.2, 20.3 (excluding all provisions related to payments in Sections
20.2 or 20.3), 22.1, 22.4, 22.5, 23.1 or 24.1 of the Lease or affecting in
any way the Real Estate Collateral or any Property requires the consent of
the Lessor.
Any such termination, amendment, supplement, waiver, discharge or
modification approved, executed, adopted or consented to pursuant to this
Section 12.4 shall apply equally to each of the Lenders and the Lessor and shall
be binding upon all the parties to this Agreement. In the case of any waiver,
each party to this Agreement shall be restored to its former position and rights
under the Operative Agreements, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
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.
(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 INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED
ARE REQUIRED TO APPLY. 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 New York or of the United States for the Southern District of
New York, in each case located in the Borough of Manhattan (provided, if
no such courts are located in the Borough of Manhattan, such action or
proceeding may be brought in any of the courts of the State of New York or
of the United States for the Southern District of New York), and, by
execution and delivery of this Agreement, each of the parties to this
Agreement
69
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the parties tot his 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 five
(5) days after such mailing. Nothing herein shall affect the right of any
party to serve process in any manner permitted by Law or to commence legal
proceedings or to otherwise proceed against any party in any other
jurisdiction permitted by Law.
(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 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.
Subject to the other applicable provisions of the Operative Agreements,
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 under applicable law by judicial foreclosure; (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 to punitive or exemplary damages it has now or which
may arise in the future in connection with any Dispute.
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
70
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12.9. Liability Limited.
(a) [Reserved].
(b) Anything to the contrary contained in this Agreement, the Credit
Note Loan Agreement, the Mortgage Note Loan 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 Note Loan Agreement, the Mortgage Note Loan
Agreement, the Notes, this Agreement, the Security Agreement or any of the
other Operative Agreements. The Primary Financing Parties and the Agent
agree that, in the event any remedies under any Operative Agreement are
pursued, neither the Primary Financing Parties nor the Agent shall have
any 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 Lessor's Interest
(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 Lessor's Interest (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 arising under any Operative Agreement or secured by any
Operative Agreement, but the same shall continue until paid or discharged;
(ii) relieve any 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 Agent, (B) except for Excepted Payments, any
deposits or any escrows or amounts owed by the Lessee held by the Lessor
or (C) except for Excepted Payments, any rent or other income or funds
received by the Lessor from the Lessee that is not turned over to the
Agent; or (iv) affect or in any way limit the Agent's rights and remedies
under any Operative Agreement with respect to the Rents and rights and
powers of the Agent under the Operative Agreements to obtain a judgment
against the Lessee's interest in any Property pursuant to the terms of the
Operative Agreements or the Agent'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
71
interest in the Lessor's Interest (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. [Reserved].
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, to the extent possible, take such action as
may be necessary (including without limitation any action specified in the
preceding sentence), or (if the Lessor shall so request) as so requested, in
order to maintain and protect all security interests and the other interests of
the parties provided for hereunder or under any other Operative Agreement. In
addition, in connection with the sale or other disposition of any Property, any
Collateral, or any portion thereof, the parties hereto, at the sole expense of
the Lessee, agree to execute such instruments of conveyance, at the sole expense
of the Lessee, as reasonably required pursuant to the Operative Agreements 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 Lessor shall be
made by the Agent and that such calculations and determinations shall be
conclusive and binding on the parties hereto in the absence of manifest error.
12.13. Confidentiality.
Each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or any of its
Subsidiaries which is provided to it by the Lessee or any of its Subsidiaries
and which an employee of the Lessee or any of its Subsidiaries has requested in
writing be kept confidential, and shall not intentionally disclose such
information to any Person except:
(a) to the extent such information is public when received by such
Person or becomes public thereafter due to the act or omission of any
party other than such Person;
(b) to the extent such information is lawfully and independently
obtained from a source other than the Lessee or any of its Subsidiaries
and such information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if
72
such information is subject to an obligation of confidentiality, that
disclosure of such information is permitted;
(c) to counsel, auditors or accountants retained by any such Person
or any Affiliates of any such Person (if such Affiliates are permitted to
receive such information pursuant to clause (f) or (g) below), provided
they agree to keep such information confidential as if such Person or
Affiliate were party to this Agreement and to financial institution
regulators, including examiners of any Financing Party or any Affiliate
thereof in the course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of any Financing Party under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person (including, but not
limited to, the National Association of Insurance Commissioners);
provided, however, that such Person shall endeavor (if not otherwise
prohibited by Law) to notify the Lessee prior to any disclosure made
pursuant to this clause (e), except that no such Person shall be subject
to any liability whatsoever for any failure to so notify the Lessee;
(f) any Financing Party may disclose such information to another
Financing Party or to any Affiliate of a Financing Party that is a direct
or indirect owner of any Financing Party (provided, in each case that such
Affiliate has agreed to maintain confidentiality as if it were such
Financing Party);
(g) any Financing Party may disclose such information to an
Affiliate of any Financing Party to the extent required in connection with
the transactions contemplated hereby or to the extent such Affiliate is
involved in, or provides advice or assistance to such Person with respect
to, such transactions (provided, in each case that such Affiliate has
agreed to maintain confidentiality as if it were such Financing Party); or
(h) in connection with any proposed or actual assignment or grant of
a participation by any of the Credit Lenders or Mortgage Lenders of
interests in the Credit Note Loan Agreement, the Mortgage Note Loan
Agreement or any Note to such other financial institution who such Lenders
believes would be a permitted transferee of such Lender's rights under the
Operative Agreements (who shall in turn agree in writing to maintain
confidentiality as if it were a Credit Lender or Mortgage Lender
originally party to this Agreement);
(i) any Financing Party may disclose the Operative Agreements to any
rating Agency requesting the same.
Subject to the terms of Sections 12.13(a)-12.13(i), under the terms of any
one or more of which circumstances disclosure shall be permitted, each Financing
Party severally agrees to use
73
reasonable efforts to keep confidential all non-public information of the Lessee
obtained pursuant to or in connection with the Operative Agreements or
pertaining to the financing structure described in the unrecorded and
undisclosed Operative Agreements and severally agrees to use reasonable efforts
to notify the recipient of such confidential information that such information
is confidential.
Notwithstanding anything herein to the contrary, "Information" shall not
include, and the Financing Parties may disclose without limitation of any kind,
any information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and by the other Operative Agreements and all
materials of any kind (including opinions or other tax analyses) that are
provided to such Financing Party relating to such tax treatment and tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the transactions contemplated hereby and by the
other Operative Agreements.
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.
[signature pages follow]
74
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.
LESSEE: CYPRESS SEMICONDUCTOR CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
(signature pages continue)
BORROWER AND LESSOR: WACHOVIA DEVELOPMENT CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
(signature pages continue)
AGENT: WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Agent
By:
--------------------------------
Name:
------------------------------------
Title:
-----------------------------------
(signature pages continue)
CREDIT NOTE LENDER: WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Credit Note Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
(signature pages continue)
MORTGAGE NOTE LENDER: WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Mortgage Note Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
(signature pages end)
Schedule 1
Credit Note Commitment
----------------------
Name and Address of Credit Lenders Amount Percentage
------ ----------
Wachovia Bank, National Association $43,470,000.00 100.00%
c/o Wachovia Securities, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TOTAL $43,470,000.00 100.00%
Schedule 2
Mortgage Note Commitment
------------------------
Name and Address of Mortgage Lenders Amount Percentage
------ ----------
Wachovia Bank, National Association $15,750,000.00 100.00%
c/o Wachovia Securities, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TOTAL $15,750,000.00 100.00%
Schedule 3
Excluded Equipment
Schedule 4
Maximum Residual Guarantee Amount for Each Property
San Jose, CA Improvements 85.05%
------
San Jose, CA Land 95.00%
------
Bloomington, MN Property 84.20%
------
Schedule 6.2(d)
Schedule of Litigation
o On February 26, 1999, the Lemelson Partnership filed suit in the U.S. District
Court for the District of Arizona against Cypress, alleging the infringement of
multiple patents. Some of these patents are also at issue in a separate suit
filed in Nevada against the Lemelson Partnership by other parties. The court's
ruling in this matter is still pending.
o In January 2002, Cypress was contacted by Syndia Corporation, alleging that
Cypress infringed patents on which Xxxxxx Xxxxxxxx is named as the inventor.
These patents are related to those in the Lemelson Partnership suit discussed
above. No suit has been filed by Syndia.
o In February 2002, Cypress was contacted by an attorney for Xx. Xxxx Tan,
alleging that Cypress infringed a patent owned by Xx. Xxx. No suit has been
filed by Xx. Xxx.
o On October 17, 2002, Xx. Xxxxxx Xxxxx filed suit against Cypress in the Santa
Xxxxx County Superior Court, alleging conversion of not more than 85,000 shares
of Cypress' stock. Arbitration in this matter is scheduled for August 14, 2003.
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2, 5.2 and 5.3 of the Participation Agreement)
CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Company")
hereby certifies as true and correct and delivers the following Requisition to
WACHOVIA BANK, NATIONAL ASSOCIATION, as the agent for the Primary Financing
Parties (hereinafter defined) and respecting the Security Documents, as the
agent for the Secured Parties (the "Agent"):
Reference is made herein to that certain Participation Agreement dated as
of June 27, 2003 (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, Wachovia Development Corporation, as the lessor (the
"Lessor"), the various financial institutions and other institutional investors
which are parties thereto from time to time as lenders under the Credit Notes
(the "Credit Lenders"), the various financial institutions and other
institutional investors which are parties thereto from time to time as lenders
under the Mortgage Notes (the "Mortgage Lenders"), and the Agent. Capitalized
terms used herein but not otherwise defined herein shall have the meanings set
forth therefor in the Participation Agreement and the rules of usage set forth
therein shall apply herein.
____ INITIAL CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance, except to the
extent such Advance will be based solely on the ABR)
____ PROPERTY CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance, except to the
extent such Advance will be based solely on the ABR)
1. Transaction Expenses and other fees, expenses and disbursements under
Section 7.1(a) of the Participation Agreement and any and all other
amounts contemplated to be financed under the Participation Agreement
including without limitation any broker's fees, taxes, recording fees and
the like: See attached Schedule 1.
2. Description of Land (which shall be a legal description of the Land
subject to the Lease whether owned or ground lease by Lessor): See
attached Schedule 2.
3. Description of Equipment: See attached Schedule 3.
In connection with this Requisition, the Company hereby requests (a) that
the Mortgage Lenders make Loans to the Lessor pursuant to the Mortgage Notes in
the amount of $______________ (b) that the Credit Lenders make Loans to the
Lessor pursuant to the Credit Notes in the amount of $________________ and (c)
that the Lessor make a Lessor Advance in the amount of $_____________. The
Company hereby certifies that (i) each of the provisions of
A-1
the Participation Agreement applicable to the making of the Advance requested
hereunder have been complied with as of the date of this Requisition or will be
complied with by the Initial Closing Date or the applicable Property Closing
Date, (ii) prior to the delivery of this Requisition, the Lessee has deposited
in the Cash Collateral Balance amounts necessary to make the balance therein
equal or exceed the Required Cash Collateral Balance calculated to include the
Requested Funds, (iii) the balance of the Cash Collateral Account as of the date
of the Initial Closing Date or the applicable Property Closing Date is not less
than $____________, (iv) the Credit Lenders' portion of the Requested Funds,
calculated pursuant to Section 5 of the Participation Agreement, does not exceed
the Credit Note Commitments less all Loans (without giving effect to any
prepayments) pursuant to the Credit Note Loan Agreement, (v) the Mortgage
Lenders' portion of the Requested Funds, calculated pursuant to Section 5 of the
Participation Agreement, does not exceed the Mortgage Note Commitments less all
Loans (without giving effect to any prepayments) pursuant to the Mortgage Note
Loan Agreement and (vi) the Lessor's portion of the Requested Funds, calculated
pursuant to Section 5 of the Participation Agreement, does not exceed the Lessor
Commitment less all Lessor Advances (without giving effect to any prepayments).
The Company requests the Loans be allocated as follows:
$______________ ABR Loans
$______________ Eurodollar Loans
The Company requests the Lessor Advance be allocated as follows:
$______________ Amount of Lessor
Advance to be based on
the ABR
$______________ Amount of Lessor
Advance to be based on
the Eurodollar Rate
4. Each and every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct on and as
of the date hereof (except to the extent any such representation or
warranty relates to an earlier date, in which case such representation or
warranty shall have been true and correct as of such earlier date).
5. No Lease Default or Lease Event of Default has occurred and is continuing
under any Operative Agreement, and no Lease Default or Lease Event of
Default will occur under any of the Operative Agreements as a result of,
or after giving effect to, the Advance requested hereby on the date of
such Advance.
6. Each Operative Agreement to which the Lessee is a party is in full force
and effect with respect to it, except as the same may be limited by
applicable bankruptcy, insolvency, fraudulent transfer or conveyance,
reorganization, moratorium or other similar laws
A-2
relating to or affecting creditors' or lessors' rights generally and
general principles of equity.
7. The Lessee is in compliance with all covenants, agreements and conditions
contained in the Participation Agreement or in any Operative Agreement
required to be performed or complied with by it on the date hereof.
A-3
The Company has caused this Requisition to be executed by its duly
authorized officer as of this _____ day of __________, ______.
CYPRESS SEMICONDUCTOR CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
A-4
Schedule 1
[Schedule of Transaction Expenses and other Fees]
A-5
Schedule 2
Description of Land
(Legal Description and Street Address)
A-6
Schedule 3
Description of Equipment
A-7
EXHIBIT B
[Form of opinion to be revised.]
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(j) of the Participation Agreement)
June 27, 2003
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of Cypress Semiconductor
Corporation
Dear Ladies and Gentlemen:
We have acted as special counsel to Cypress Semiconductor Corporation, a
Delaware corporation (the "Lessee") in connection with certain transactions
contemplated by the Participation Agreement dated as of June 27, 2003 (the
"Participation Agreement"), among the Lessee, Wachovia Development Corporation,
a North Carolina corporation as the lessor (the "Lessor"), the various financial
institutions and other institutional investors which are parties thereto from
time to time as credit lenders (the "Credit Lenders"), the various financial
institutions and other institutional investors which are parties thereto from
time to time as mortgage lenders (the "Mortgage Lenders")and Wachovia Bank,
National Association, as agent for the Primary Financing Parties and respecting
the Security Documents, as Agent for the Secured Parties (the "Agent"). 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
B-1
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 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], the Agent 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 the Secretary of
State where the Lessee is located for purposes of the UCC]. Upon filing of the
Additional UCCs in [identify the Secretary of State where the Lessee is located
for purposes of the UCC], the Agent 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) The execution and delivery by the Lessor of the Operative Agreements
to which it is a party and compliance by the Lessor with all of the provisions
thereof do not and will not contravene any law, rule or regulation of [identify
the state].
(g) By reason of their participation in the transaction contemplated under
the Operative Agreements, none of the Agent or any Primary Financing Party has
to (a) qualify as a
B-2
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].
(h) 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].
(i) 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.
(j) 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 Primary Financing
Parties, the Agent 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
Distribution List
Wachovia Bank, National Association, as the Agent
The various financial institutions and other institutional investors which are
parties which are parties to the Participation Agreement from time to time, as
Credit Lenders
The various financial institutions and other institutional investors which are
parties which are parties to the Participation Agreement from time to time, as
Mortgage Lenders
Cypress Semiconductor Corporation, as the Lessee
Wachovia Development Corporation, as the Lessor
B-4
Schedule 1
Form of Mortgage Instrument
B-5
Schedule 2
Forms of UCC Fixture Filings
B-6
Schedule 3
Forms of UCC Financing Statements
B-7
EXHIBIT C
CYPRESS SEMICONDUCTOR CORPORATION
OFFICER'S CERTIFICATE
Pursuant to Section 5.3 (w) of the Participation Agreement, dated as of
June 27, 2003, among Cypress Semiconductor Corporation, a Delaware corporation,
as the Lessee (the "Company"), Wachovia Development Corporation, a North
Carolina corporation, as the Lessor, the various financial institutions and
other institutional investors which are parties thereto from time to time as
Credit Lenders, the various financial institutions and other institutional
investors which are parties thereto from time to time as Mortgage Lenders and
Wachovia Bank, National Association, as Agent for the Primary Financing Parties
and respecting the Security Documents, as Agent for the Secured Parties (the
"Agreement") the undersigned, _______________, the _____________ of the Company,
hereby certifies on behalf of the Company that, on and as of the date hereof:
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, except to the extent any such
representation or warranty relates to an earlier date, in which case
such representation or warranty shall have been true and correct as
of such earlier date.
2. No Lease Default or Lease Event of Default has occurred and is
continuing under any Operative Agreement and the Company is not
aware of any other Default or Event of Default.
3. Each Operative Agreement to which the Company is a party is in full
force and effect with respect to it, except as the same may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' or lessors' rights generally and
general principles of equity.
4. The Company is duly performing and in compliance with all covenants,
agreements and conditions contained in the Agreement or in any
Operative Agreement required to be performed or complied with by the
Company on the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise
defined herein have the respective meanings ascribed thereto in the Agreement.
C-1
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to
be duly executed and delivered as of this 27th day of June, 2003.
CYPRESS SEMICONDUCTOR CORPORATION
By:
---------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
C-2
EXHIBIT D
CYPRESS SEMICONDUCTOR CORPORATION
SECRETARY'S CERTIFICATE
The undersigned, Secretary of Cypress Semiconductor Corporation, a Delaware
corporation with offices at 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx (the
"Company"), hereby certifies 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 Certificate of Incorporation of the Company on file in the
Office of the Secretary of State of __________. Such Certificate of
Incorporation have not been amended, modified or rescinded since
their date of adoption and were in full force and effect on the date
of the resolutions referenced in paragraph 1 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
------------------- ----------------------- -------------------------
------------------- ----------------------- -------------------------
D-1
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed, the corporate seal to be affixed, and delivered as of this
____ day of _______, 2003.
CYPRESS SEMICONDUCTOR CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SEAL]
D-2
EXHIBIT E
WACHOVIA DEVELOPMENT CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
WACHOVIA DEVELOPMENT CORPORATION, a North Carolina corporation (the
"Lessor"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Lessor 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 Lessor is a party is in full
force and effect with respect to it.
3. The Lessor is duly performing and in compliance in all material
respects 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 the date hereof, other than those conditions which have been
expressly waived.
4. No Default or Event of Default attributable solely to the Lessor has
occurred and is continuing under any Operative Agreement.
5. The Lessor is not an entity which (a) is or holds itself out as
being engaged primarily, or proposes to engage primarily, in the
business of investing, reinvesting or trading in securities; (b) is
engaged or proposes to engage in the business of issuing face-amount
certificates of the installment type, or has been engaged in such
business and has any such certificate outstanding; or (c) is engaged
or proposes to engage in the business of investing, reinvesting,
owning, holding or trading in securities, and owns or proposes to
acquire "investment securities" having a value exceeding 40 per
centum of the value of its total assets (exclusive of government
securities and cash items) on an unconsolidated basis. As used in
this paragraph, "investment securities" includes all securities
except (i) government securities, (ii) securities issued by
employees' securities companies, and (iii) securities issued by
majority-owned subsidiaries of the owner which are not investment
companies. As used in this paragraph, "government securities" means
any security issued or guaranteed as to principal or interest by the
United States, or by a person controlled or supervised by and acting
as an instrumentality of the Government of the United States
pursuant to authority granted by the Congress of the United States;
or any certificate of deposit for any of the foregoing.
E-1
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 June 27, 2003 among Cypress Semiconductor Corporation, as
the Lessee, the Lessor, the various financial institutions and other
institutional investors which are parties thereto from time to time, as Credit
Lenders (the "Credit Lenders"), the various financial institutions and other
institutional investors which are parties thereto from time to time, as Mortgage
Lenders (the "Mortgage Lenders"), Wachovia Bank, National Association, as the
agent for the Primary Financing Parties and respecting the Security Documents,
as the agent for the Secured Parties (the "Agent").
IN WITNESS WHEREOF, the Lessor has caused this Officer's Certificate to be duly
executed and delivered as of this _____ day of __________________, ______.
WACHOVIA DEVELOPMENT CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
E-2
EXHIBIT F
WACHOVIA DEVELOPMENT CORPORATION
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 Wachovia Development Corporation (the "Company"), 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 North Carolina. Such Articles of
Incorporation have not been amended, modified or rescinded since
their date of adoption and were in full force and effect on the date
of the resolutions referenced in paragraph 1 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
------------------- ----------------------- -------------------------
------------------- ----------------------- -------------------------
F-1
IN WITNESS WHEREOF, the Company has caused this ________ Secretary's
Certificate to be duly executed and delivered as of this _____ day of
___________, _____.
WACHOVIA DEVELOPMENT CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
F-2
EXHIBIT G
[Form of Officer's Cash Collateral Compliance Certificate]
I, ______________________, _____________________ of a CYPRESS
SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Lessee") hereby certify
that, with respect to that certain Participation Agreement dated as of June 27,
2003 (as amended, modified, extended, restated or supplemented from time to
time, the "Participation Agreement") by and among the Lessee, Wachovia
Development Corporation, a North Carolina corporation, as the Lessor, the
various financial institutions and other institutional investors which are
parties thereto from time to time as Credit Lenders, the various financial
institutions and other institutional investors which are parties thereto from
time to time as Mortgage Lenders and Wachovia Bank, National Association, as
Agent for the Primary Financing Parties and respecting the Security Documents,
as Agent for the Secured Parties; all of the defined terms in the Participation
Agreement are incorporated herein by reference) among the Lessee, the Lessor,
the Lenders and the Agent; and capitalized terms used herein but not defined
herein shall have the meaning provided therefor in Appendix A to the
Participation Agreement and the rules of usage set forth therein shall apply
herein:
a. The copies of the investment account statements which accompany this
Officer's Certificate are true and correct copies of the investment
account statements relating to the Cash Collateral Account received
by the Lessee from the Intermediary covering the monthly period
beginning on _____________, 200__ and ending on __________, 200__;
b. Since ___________ (the date of the last similar certification, or,
if none, the Initial Closing Date) no Lease Default or Lease Event
of Default has occurred; and
Delivered herewith are detailed calculations demonstrating compliance by
the Lessee with the provisions of Section 5.4 of the Participation Agreement as
of the end of the period referred to above.
This ______ day of ___________, ______.
CYPRESS SEMICONDUCTOR CORPORATION
By:
------------------------
Name:
------------------------
Title:
------------------------
G-1
Attachment to Officer's Cash Collateral Compliance Certificate
Calculations Demonstrating Compliance with Section 5.4
of the Participation Agreement
(Attach copies of Cash Collateral Account Statements)
G-2
Exhibit H
Form of Officer's Financial Compliance Certificate
This Certificate is delivered in accordance with the provisions of Section 8A.9
of that certain Participation Agreement dated as of June 27, 2003 (as amended,
modified, extended, supplemented and/or restated from time to time, the
"Participation Agreement") among Cypress Semiconductor Corporation, a Delaware
corporation (the "Lessee"), Wachovia Development Corporation, a North Carolina
corporation, as the Lessor, the various financial institutions and other
institutional investors which are parties thereto from time to time as Credit
Lenders, the various financial institutions and other institutional investors
which are parties thereto from time to time as Mortgage Lenders and Wachovia
Bank, National Association, as Agent for the Primary Financing Parties and
respecting the Security Documents, as Agent for the Secured Parties; all of the
defined terms in the Participation Agreement are incorporated herein by
reference) among the Lessee, the Lessor, the Lenders and the Agent; and
capitalized terms used herein but not defined herein shall have the meaning
provided therefor in Appendix A to the Participation Agreement and the rules of
usage set forth therein shall apply herein.
The undersigned, being a Responsible Officer of Lessee hereby certifies,
in my official capacity and not in my individual capacity, that:
(a) the financial statements accompanying this Certificate fairly present
the financial condition of the parties covered by such financial statements in
all material respects;
(b) the Current Ratio for the fiscal quarter ending ___________, 200_ is
___ : 1.00 and delivered herewith are detailed calculations demonstrating
compliance by the Lessee with the provisions of Section 8A.9 of the
Participation Agreement as of the end of the period referred to above;
(c) except as set forth in Schedule 1 to this Certificate, during the
period covered by such financial statements, Lessee observed or performed all of
their covenants and other agreements in the Operative Agreements in all material
respects, and satisfied in all material respects every material condition,
contained in the Operative Agreements to be observed, performed or satisfied by
them; and
(d) except as set forth in Schedule 1 to this Certificate, since
___________, 200_ (the date of the last similar certification, or, if none, the
Initial Closing Date) no Lease Default or Lease Event of Default has occurred.
H-1
This the _______________ day of ________________________, 200_.
CYPRESS SEMICONDUCTOR CORPORATION
By:
------------------------
Name:
------------------------
Title:
------------------------
H-2
Schedule 1
[Noncompliance with (c) or (d)]
H-3
Attachment to Officer's Financial Compliance Certificate
Calculations Demonstrating Compliance with Section 8A.9
of the Participation Agreement
H-4
EXHIBIT I
FORM OF LEGAL OPINION FOR OUTSIDE LESSEE'S COUNSEL
June 27, 2003
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Lease Financing Provided in favor of Cypress Semiconductor
Corporation
Dear Ladies and Gentlemen:
We have acted as special counsel to Cypress Semiconductor Corporation, a
Delaware corporation (the "Lessee") in connection with certain transactions
contemplated by the Participation Agreement dated as of June 27, 2003 (the
"Participation Agreement"), among the Lessee, Wachovia Development Corporation,
a North Carolina corporation as the lessor (the "Lessor"), the various financial
institutions and other institutional investors which are parties thereto from
time to time as credit lenders (the "Credit Lenders"), the various financial
institutions and other institutional investors which are parties thereto from
time to time as mortgage lenders (the "Mortgage Lenders")and Wachovia Bank,
National Association, as agent for the Primary Financing Parties and respecting
the Security Documents, as Agent for the Secured Parties (the "Agent"). This
opinion is delivered pursuant to Section 5.3(cc) 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. All
terms which are defined herein are subject to the rules of usage of such terms
set forth 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 and the Ground Lessor, certificates of public officials and
representatives of the Lessee and the Ground Lessor 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.
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, we are of the opinion that:
[Expand opinions to include the Ground Lessor]
(a) The Lessee is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power and
I-1
authority to execute, deliver and perform its obligations under the
Operative Agreements and to conduct its business as presently 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) upon any of its
property under, its articles of incorporation or by-laws 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 it or any of its property 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 it
is a party or for the acquisition, ownership, construction and completion
of the Property, 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
Property or the Lessee's interest 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.
(g) Neither the nature of the Property, 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 the Agent, 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 statement (attached hereto as Schedule 2) relating to the
Security Documents in the recording offices of ______________, the Agent
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
statement under Article 9 of the UCC in the State of Delaware.
I-2
(i) The offer, issuance, sale and delivery of the Notes under the
circumstances contemplated by the Participation Agreement do not, under
existing law, require registration of the Notes being issued on the date
hereof under the Securities Act of 1933, as amended.
(j) The Cash Collateral Agreement and Control Agreement are in a
form sufficient to create in favor of the Agent for the benefit of the
Secured Parties a valid, perfected security interest in all right, title
and interest of the Lessee in the Cash Collateral delivered to the
Intermediary and held in the Cash Collateral Account.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
I-3
Distribution List
Wachovia Bank, National Association, as the Agent
The various financial institutions and other institutional investors which are
parties which are parties to the Participation Agreement from time to time, as
Credit Lenders
The various financial institutions and other institutional investors which are
parties which are parties to the Participation Agreement from time to time, as
Mortgage Lenders
Cypress Semiconductor Corporation, as the Lessee
Wachovia Development Corporation, as the Lessor
I-4
Schedule 1
(Litigation)
I-5
Schedule 2
(UCC-1 Financing Statement)
I-6
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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 except as otherwise stated, whenever
the term "Person" is used to refer to Lessee, "Person" in that context shall not
include the Lessor, its successors and assigns, the Financing Parties, and/or
their respective successors and assigns.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented and/or
restated 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 if necessary, other Operative Agreements) 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
A-1
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.
(l) In the case of a conflict caused by a term being defined more than
once, unless the context otherwise requires, such term shall have the meaning
specified in such agreement, or if not defined therein, in Appendix A to the
Participation Agreement.
(m) In computing any period of time for purposes of any Operative
Agreement, provided the applicable time of day deadline, if any, with respect to
such day has been met, than the first day of the applicable period shall be the
immediately following day (or if specified, Business Day) otherwise the first
day of the applicable period shall be the day of such deadline. In all cases,
unless a specific time of day deadline is specified and complied with, in which
case the date of such compliance shall not be counted, the day upon which the
required event occurs or is to occur shall be counted.
(n) Unless otherwise specified or permitted in the Operative Agreements,
all accounting terms used shall be interpreted, all accounting determinations
shall be made, and all financial statements required to be delivered shall be
prepared in accordance with GAAP applied on a basis consistent with the most
recent audited consolidated financial statements of the Lessee delivered to the
Agent and the Primary Financing Parties; provided that, if the Lessee shall
notify the Agent and the Primary Financing Parties that they wish to amend any
covenant in Section 8A.9 to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Lessee that the Primary
Financing Parties wish to amend Section 8A.9 for such purpose), then the
Lessee's compliance with such covenant shall be determined on the basis of GAAP
in effect immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Lessee and the Primary Financing Parties.
(o) Unless the context otherwise requires, references in the Operative
Agreements to the acquisition of a Property or Land or ownership of the Land by
the Lessor shall, unless the context otherwise requires, be deemed to refer to
the acquisition of title to such Property or Land or ownership of the Land by
the Lessor or the acquisition of a ground lease interest therein pursuant to a
Ground Lease, as indicated in the Lease Supplement applicable thereto.
A-2
II. Definitions
"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
use in the Operative Agreements: "Prime Lending Rate" shall mean the rate
announced by the Agent 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 Agent and does not necessarily represent
the lowest or most favorable rate offered by the Agent actually charged to any
customer. The Agent 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 Agent 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 Lessor Advances" shall mean Lessor Advances the rate of Yield
applicable to which is based upon the ABR.
"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 Mortgage Note Loan Agreement and/or Section 6 of the Credit Note Loan
Agreement.
"Accounts" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Accounts Receivable" shall mean calculated with respect to the Lessee and
its Consolidated Subsidiaries accounts receivables excluding (a) receivables
that have been sold, transferred, pledged or are subject to a Lien in
conjunction with any securitization or any similar transaction and (b)
receivables from employees under the Stock Purchase Assistance Plan.
"Advance" shall have the meaning given to such term in Section 5.3 of the
Participation Agreement.
A-3
"Affiliate" shall mean, with respect to any Person, any Person or group
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 U.S. federal and applicable state and local tax 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.
"Agent" shall mean Wachovia Bank, National Association, in its capacity as
agent for the Primary Financing Parties pursuant to each of the Participation
Agreement, the Mortgage Note Loan Agreement and the Credit Note Loan Agreement,
or any successor agent appointed to replace or succeed Wachovia Bank, National
Association in accordance with the terms of the Participation Agreement, the
Mortgage Note Loan Agreement and the Credit Note Loan Agreement and respecting
the Lease, such party in its capacity as agent for the Lessor and the Secured
Parties and respecting the other Security Documents, as agent for the Secured
Parties.
"Applicable Percentage" shall mean (i) for Eurodollar Loans from a Credit
Lender, one-half of a percent (0.50%), (ii) for Eurodollar Loans from the
Wachovia Mortgage Lender, one-half of a percent (0.50%), (iii) for Eurodollar
Loans from a Mortgage Lender other than the Wachovia Mortgage Lender, such
percentage provided in the applicable Operative Agreements and (iv) for
Eurodollar Lessor Advances, two and one-half percent (2.5%).
"Appraisal" shall mean an "as-built" 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 reasonable 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.
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
"Approved State" shall mean California, Minnesota and any other state
within the forty-eight contiguous states of the United States proposed by the
Lessee and consented to in writing by the Agent.
"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 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.
A-4
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached to the Credit Note Loan Agreement as Exhibit B or the
Assignment and Acceptance in the form attached to the Mortgage Note Loan
Agreement as Exhibit B, as applicable.
"Available Credit Note Commitments" shall mean the aggregate Credit Note
Commitments less the sum of (a) the aggregate amount of Credit Notes (without
giving effect to any prepayments) and (b) the portion of Requested Funds to be
funded by the Credit Lenders which is set forth in any pending Requisition.
"Available for Sale Securities" shall mean investments by the Lessee
classified as short term or long term in accordance with GAAP and in compliance
with the investment policy approved by the Lessee's Board of Directors, but in
all cases excluding all Cash Equivalents (as defined with respect to calculating
the Current Ratio).
"Available Lessor Commitment" shall mean the aggregate Lessor Commitments
less the sum of (a) the aggregate amount of Lessor Advances (without giving
effect to any prepayments) and (b) the portion of Requested Funds to be funded
by the Lessor which is set forth in any pending Requisition.
"Available Mortgage Note Commitment" shall mean the aggregate Mortgage
Note Commitments less the sum of (a) the aggregate amount of Mortgage Notes
(without giving effect to any prepayments) and (b) the portion of Requested
Funds to be funded by the Mortgage Lenders which is set forth in any pending
Requisition.
"Balances" shall mean, on any determination date, the sum of (i) the
aggregate of all Advances by Credit Lenders less the principal amounts repaid on
such Credit Note, (ii) the Mortgage Note Advances of each Mortgage Lender less
the principal amounts repaid on such Mortgage Note, and (iii) the Lessor Advance
of the Lessor as set forth in Section 5B of the Participation Agreement less the
principal amount of such Lessor Advance repaid.
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Bankruptcy Event" means with respect to Lessor or the Lessee, any
voluntary or involuntary dissolution, winding-up, total or partial liquidation
or reorganization, or bankruptcy, insolvency, receivership or other statutory or
common law proceedings or arrangements involving the Lessor or the Lessee or the
readjustment of its liabilities or any assignment for the benefit of creditors
or any marshalling of its assets or liabilities.
"Basic Documents" shall mean the following: the Participation Agreement,
the Mortgage Note Loan Agreement, the Credit Note Loan Agreement, the Notes, the
Lease, the Security Agreement, the Cash Collateral Agreement, the Control
Agreement, each Lease Supplement, the Mortgage Instruments, the other Security
Documents, the Intercreditor Agreement (if any), the Deeds, each Ground Lease,
the Bills of Sale and the Cash Collateral Security Documents.
A-5
"Basic Rent" shall mean an amount equal to the interest and Lessor Yield
due on any Interest Payment Date (but not including interest on any overdue
amounts under Section 2.8(b) of the Mortgage Note Loan Agreement, Section 2.8(b)
of the Credit Note Loan Agreement or otherwise, or any yield on overdue amounts
calculated at the Lessor Overdue Rate) payable in accordance with the Lease or
the Participation Agreement.
"Basic Term" shall have the meaning specified in Section 2.2 of the Lease.
"Basic Term Commencement Date" shall have the meaning specified in Section
2.2 of the Lease.
"Basic Term Expiration Date" shall have the meaning specified in Section
2.2 of the Lease.
"Benefitted Lender" shall have the meaning specified in Section 9.10(a) of
the Credit Note Loan Agreement or Section 9.10(a) of the Mortgage Note Loan
Agreement, as applicable.
"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).
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in North Carolina, California or New York are
authorized or required by law to close; provided, however, that when used in
connection with a Eurodollar Loan or a Eurodollar Lessor Advance, 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 Obligations" shall mean, for any Person, all obligations of
such Person to pay rent or other amounts under a Capitalized Lease.
"Capital Stock" shall mean any nonredeemable capital stock of the Lessee
or any of its Subsidiaries or of any other applicable Person, whether common or
preferred.
"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.
"Cash Collateral" shall mean the Cash and Cash Equivalents constituting
part of the Collateral pledged by the Lessee and maintained in the Cash
Collateral Account, all as referenced in the Cash Collateral Agreement and with
respect to the pledge of the Cash Collateral, shall have the meaning given to
such term in Section 1.1 of the Cash Collateral Agreement.
A-6
"Cash Collateral Account" shall mean the cash collateral account
(including without limitation the deposits and securities held in such account)
which is the subject of the Cash Collateral Agreement and held at Wachovia Bank,
National Association as account number 7572001153.
"Cash Collateral Agreement" shall mean the Assignment of Cash Collateral
Account dated as of the Initial Closing Date executed by the Lessee in favor of
the Agent, on behalf of the Credit Lenders.
"Cash Collateral Compliance Date" shall have the meaning given to such
term in Section 5.4(b) of the Participation Agreement.
"Cash Collateral Obligations" means the collective reference to all
obligations, now existing or hereafter arising, owing by the Lessor and/or the
Lessee and/or any of their affiliates to the Credit Lenders, the Wachovia
Mortgage Lender or the Lessor (or the Agent, on behalf of the Credit Lenders,
the Wachovia Mortgage Lender or the Lessor) under or pursuant to the Operative
Agreements whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter incurred, which may arise under, out of, or in
connection with the Participation Agreement, the Credit Note Loan Agreement, the
Mortgage Note Loan Agreement, the Lease Agreement, the Credit Notes, the
Mortgage Notes held by the Wachovia Mortgage Lender or any of the other
Operative Agreements, whether on account of principal, advanced amounts,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all reasonable fees and disbursements
of counsel to the Agent, to the Credit Lenders, the Wachovia Mortgage Lender or
the Lessor) that are required to be paid by the Lessor and/or the Lessee
pursuant to the terms of the Operative Agreements.
"Cash Collateral Security Documents" shall mean the Cash Collateral
Agreement, the Control Agreement, all other security documents hereafter
delivered to the Agent (for the benefit of the any of the Credit Lenders, the
Wachovia Mortgage Lender or the Lessor) granting a Lien on the Cash Collateral
or any other asset or assets of any Person to secure the Cash Collateral
Obligations and the other provisions of the Operative Agreements regarding the
Cash Collateral.
"Cash Equivalents", with respect to the Cash Collateral Account, shall
mean Lessee's (a) U.S. dollar denominated time and demand deposits and
certificates of deposit issued by the Agent, in each case with maturities of not
more than 364 days from the date of initial deposit or acquisition, (b)
securities issued or directly and fully guaranteed or insured by the United
States of America or issued by any agency or instrumentality thereof (provided
that the full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than five (5) years from the date
of initial deposit or acquisition and (c) mutual funds with investments limited
to the type of investments set forth in (b) of this definition. "Cash
Equivalents" for the purpose of calculating the Current Ratio shall mean
Lessee's investments with maturities of less than 91 days from the date of
acquisition or original issue date in accordance to GAAP and in compliance with
the investment policy approved by the Lessee's Board of Directors.
A-7
"Casualty" shall mean any damage or destruction of all or any portion of
any 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.
"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.
"Class A Cash Collateral" shall mean Cash Collateral consisting of any of
the following types:
(a) cash; and
(b) U.S. dollar denominated time and demand deposits and
certificates of deposit of the Agent, in each case with maturities of not
more than 364 days from the applicable date of determination.
"Class B Cash Collateral" shall mean Cash Collateral consisting of Cash
Equivalents other than the Class A Cash Collateral.
"Closing Date" shall mean the Initial Closing Date or any 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 and the Lessee, now owned
or hereafter acquired, upon which a Lien is created by one or more of the
Security Documents.
"Commencement Date" shall mean with respect to a Property, the applicable
Property Closing date for such Property.
"Commitments" shall mean the Credit Note Commitments of each Credit Lender
as set forth in Schedule 1 to the Participation Agreement, as such Schedule 1
may be amended or replaced from time to time, the Mortgage Note Commitments of
each Mortgage Lender as set forth in Schedule 2 to the Participation Agreement,
as such Schedule 2 may be amended and replaced from time to time, and the Lessor
Commitment of the Lessor as set forth in Section 5B of the Participation
Agreement.
"Commitment Percentage" shall mean, as to any Primary Financing Party at
any time, the percentage which such Primary Financing Party's Commitment then
constitutes of the aggregate
A-8
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Primary
Financing Party's Balance then outstanding constitutes of the aggregate
principal amount of all of the Balances then outstanding).
"Commitment Period" shall mean the Initial Closing 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,
such Property or alter the pedestrian or vehicular traffic flow to such 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 Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Lessee in its
consolidated financial statements prepared in accordance with GAAP if such
statements were prepared as of such date.
"Control Agreement" shall mean that certain Control Agreement dated as of
the Initial Closing Date among the Agent, the Lessor, the Lessee and the
Intermediary.
"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.
"Credit Documents" shall mean the Participation Agreement, the Mortgage
Note Loan Agreement, the Credit Note Loan Agreement, the Notes, the Security
Documents, Cash Collateral Security Documents and any other Operative Agreement
which relates to or governs the relationship among the Agent, the Lenders and/or
the Borrower.
"Credit Lender Mortgage Instruments" means each deed of trust, mortgage
and any other instrument executed by the Lessor or the Lessee in favor of the
Agent (for the benefit of the Credit Lenders and the Lessor) and evidencing a
Lien on the Property or the other Collateral described therein, in form and
substance reasonably acceptable to the Credit Lenders, the Lessee (if party
thereto) and the Lessor.
"Credit Lenders" shall mean the various financial institutions and
institutional investors from time to time party to the Credit Note Loan
Agreement in accordance with the Participation Agreement that commit to make
Loans to the Lessor thereunder or otherwise hold from time to time the Credit
Notes in accordance with the Participation Agreement.
"Credit Note" shall have the meaning given to it in Section 2.2 of the
Credit Note Loan Agreement.
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"Credit Note Commitments" shall mean the obligation of the Credit Lenders
to make Loans to the Lessor in an aggregate principal amount not to exceed the
aggregate of the amounts set forth opposite each Credit Lender's name on
Schedule 1 to the Participation Agreement; provided, no Credit Lender shall be
obligated to make Loans to the Lessor in excess of such Credit Lender's share of
the Credit Note Commitments as set forth adjacent to such Credit Lender's name
on Schedule 1 to the Participation Agreement.
"Credit Note Loan" shall mean a Loan by a Credit Lender.
"Credit Note Loan Agreement" shall mean that certain Credit Note Loan
Agreement dated as of the Closing Date among the Credit Lenders, the Lessor and
the Agent.
"Credit Note Loan 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 Note Loan Agreement Event of Default.
"Credit Note Loan Agreement Event of Default" shall mean an "Event of
Default" as defined in Section 6 of the Credit Note Loan Agreement.
"Current Ratio" shall mean calculated with respect to the Lessee and its
Consolidated Subsidiaries as of the date of determination, the ratio of (a) the
sum of cash (excluding restricted cash), Cash Equivalents, Available for Sale
Securities and Accounts Receivable to (b) current liabilities as defined in
accordance with GAAP.
"Debt Rating" shall mean, as of any date of determination thereof and with
respect to any Person, the ratings most recently published by the Rating
Agencies relating to the unsecured, unsupported senior long-term debt
obligations of such Person.
"Deed" shall mean a warranty deed (or such similar deed) regarding the
Land and/or Improvements constituting the Property in form and substance
satisfactory to the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Credit Lender" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Defaulting Mortgage Lender" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Dispute" shall mean any claim or controversy arising out of, or relating
to, the Operative Agreements between or among the parties thereto.
"Documents" shall have the meaning given to such term in Section 1 of the
Security Agreement.
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"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"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.
"Eligible Lessor" shall mean a Person (a) domiciled in the U.S., (b) with
a minimum net worth of at least $350,000,000.00 and a Debt Rating of a Rating
Agency of "A" or higher and (c) not a competitor of Lessee or its Affiliates.
"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) relating to or affecting any Property 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 with
respect to a Hazardous Substance or an Environmental Law or (d) from any actual
or alleged damage, injury, threat, or harm to the extent relating 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 the period provided 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 the period
provided under such Environmental Law) to result in noncompliance with any
Environmental Law relating to or affecting any Property.
"Equipment" shall mean (excluding Non Integral Equipment) equipment,
apparatus, furnishings, fittings and personal property of every kind and nature
whatsoever purchased, leased or otherwise acquired using the proceeds of any
Advance and all Modifications (to the extent titled in Lessor's name or deemed
to be Lessor's property) thereto and substitutions 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, including but without limiting the generality of the
foregoing, all equipment
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described in the Appraisal including without limitation all heating, electrical,
and mechanical equipment, lighting fixtures, switchboards, plumbing,
ventilation, air conditioning and air-cooling apparatus, refrigerating, and
incinerating equipment, escalators, elevators, loading and unloading equipment
and systems, cleaning systems (including without limitation window cleaning
apparatus), telephones, communications systems (including without limitation
satellite dishes and antennae), televisions, computers, sprinkler systems and
other fire prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description excluding the items of
equipment set forth in Schedule 3 to the Participation Agreement to the extent
such equipment was not (i) acquired using the proceeds of any Advance or any
Proceeds, (ii) a substitution or replacement thereof or (iii) a Modification
required by the Lease.
"Equipment Schedule" shall mean each Equipment Schedule attached to the
applicable Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" means 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.
"Eurocurrency Reserve Requirements" shall mean for any day as applied to a
Loan or a Lessor Advance based on the Eurodollar Rate, 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 Lessor Advances" shall mean Lessor Advances the rate of Lessor
Yield applicable to which is based upon the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean for the Interest Period for any Eurodollar
Loan or Lessor Advance based on the Eurodollar Rate (including without
limitation conversions, extensions and renewals), a per annum interest rate
equal to a fraction (a) expressed as a percentage (rounded upward to the nearest
one sixteenth (1/16) of one percent (1%)) (i) with the numerator equal to a per
annum interest rate determined by the Agent (each such determination to be
conclusive and binding absent manifest error) on the basis of the offered rates
for deposits in dollars for a period of time corresponding to such Interest
Period (and commencing on the first day of such Interest Period), reported on
Telerate page 3750 (or such other page as may replace Telerate page 3750 on that
service or a successor service for the purpose of displaying London interbank
offered
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rates of major banks) as of 11:00 a.m. (London time) two (2) Business Days
before the first day of such Interest Period and (ii) the denominator equal to
100% minus the Eurocurrency Reserve Requirements. In the event no such offered
rates appear on Telerate page 3750 (or such other page as may replace Telerate
page 3750 on that service or a successor service for the purpose of displaying
London interbank offered rates of major banks), "Eurodollar Rate" shall mean for
the Interest Period for any such Loan or Lessor Advance (including without
limitation conversions, extensions and renewals), a per annum interest rate
equal to a fraction (b) expressed as a percentage (rounded upward to the nearest
one sixteenth (1/16) of one percent (1%)) (i) with the numerator equal to a per
annum interest rate determined by the Agent (each such determination to be
conclusive and binding absent manifest error) on the basis of the offered rates
for deposits in dollars for a period of time corresponding to such Interest
Period (and commencing on the first day of such Interest Period), which appear
on the Reuters Screen LIBO Page (or such other page as may replace Telerate page
3750 on that service or a successor service for the purpose of displaying London
interbank offered rates of major banks) as of 11:00 a.m. (London time) two (2)
Business Days before the first day of such Interest Period (provided that if at
least two (2) such offered rates appear on the Reuters Screen LIBO Page, the
rate in respect of such Interest Period will be the arithmetic mean of such
offered rates) and (ii) the denominator equal to 100% minus the Eurocurrency
Reserve Requirements. As used in the Operative Agreements, "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may replace the LIBO page on that service
or a successor service for the purpose of displaying London interbank offered
rates of major banks) ("RMMRS"). In the event the RMMRS is not then quoting such
offered rates, "Eurodollar Rate" shall mean for the Interest Period for any such
Loan or Lessor Advance (including without limitation conversions, extensions and
renewals), a per annum interest rate equal to a fraction (c) expressed as a
percentage (rounded upward to the nearest one-sixteenth (1/16) of one percent
(1%)) (i) with the numerator equal to the average per annum rate of interest
determined by the office of the Agent (each such determination to be conclusive
and binding absent manifest error) as of two (2) Business Days prior to the
first day of such Interest Period, as the effective rate at which deposits in
immediately available funds in U.S. dollars are being, have been, or would be
offered or quoted by the Agent to major banks in the applicable interbank market
for Eurodollar deposits at any time during the Business Day which is the second
Business Day immediately preceding the first day of such Interest Period, for a
term comparable to such Interest Period and in the amount comparable to such
Loan or Lessor Advance and (ii) the denominator equal to 100% minus the
Eurocurrency Reserve Requirements. If no such offers or quotes are generally
available for such amount, then the Agent shall be entitled to determine the
Eurodollar Rate from another recognized service or interbank quotation, or by
estimating in its reasonable judgment the per annum rate (as described above)
that would be applicable if such quote or offers were generally available.
"Event of Default" shall mean a Lease Event of Default, a Mortgage Note
Loan Agreement Event of Default, a Credit Note Loan Agreement Event of Default
or a Cash Collateral Agreement Event of Default.
"Event of Loss" shall mean any Casualty, Condemnation or Environmental
Violation that causes or results in the delivery of a Termination Notice by the
Lessee in accordance with Section 16.1 of the Lease.
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"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 any
Financing Party or any of its 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 any Financing Party or any of
its Affiliates (including without limitation the reasonable expenses of
any Financing Party incurred in connection with any such payment) for
performing or complying with any of the obligations of the Lessee under
and as permitted by any Operative Agreement;
(c) any amount payable to the Lessor or any other Primary Financing
Party by a transferee permitted under the Operative Agreements of the
Lessor or such other Primary Financing Party as the purchase price of the
Lessor's interest in the Lessor's Interest (which amount other than the
purchase price shall not include any amounts necessary to pay the
principal, interest and Make-Whole Amount on the Notes or any other amount
payable to the Agent or the Primary Financing Parties) or such Primary
Financing Party's interest in the transactions contemplated by the
Operative Agreements (or a portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable to any Financing Party;
(e) any insurance proceeds under policies maintained by the Lessor
or any other Financing Party pursuant to or in accordance with the terms
of the Operative Agreements;
(f) Transaction Expenses or other amounts, fees, disbursements or
expenses paid or payable to or for the benefit of the Lessor or any other
Financing Party;
(g) any payments in respect of interest to the extent attributable
to payments referred to in clauses (a) through (f) above; and
(h) any rights of the Financing Parties 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
Property Proceeds over the Termination Value for all Properties.
"Exculpated Persons" shall mean the Lessor (except with respect to the
representations and warranties and the other obligations of the Lessor pursuant
to the Operative Agreements
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solely with regard to the provision of Lessor Advances), its respective
successors, assigns, trustees, officers, directors, shareholders, partners,
employees, agents and Affiliates.
"Exempt Payments" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Expiration Date" shall mean the last day of the Term; provided, in no
event shall the Expiration Date be later than the fifth anniversary of the
Initial Closing Date, unless a later date has been expressly agreed to in
writing by each of the Lessor, the Lessee, the Agent, and each other Primary
Financing Party in accordance with the terms and conditions set forth in Section
2.2 of the Lease, in which case the Expiration Date shall in no event be later
than the twentieth anniversary of the Initial Closing Date.
"Fair Market Sales Value" shall mean, with respect to any Property or
Collateral (other than Cash Collateral), 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 Collateral. Fair Market Sales Value of the
applicable Property or Collateral (other than Cash Collateral) shall be
determined based on the assumption that, except for purposes of Section 17 of
the Lease, such Property or Collateral 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.
"Fifty Percent FMV Event" shall have the meaning given to such term in
Section 8.2(f) of the Participation Agreement.
"Finance Agreements" shall mean the Participation Agreement, the Mortgage
Note Loan Agreement, the Credit Note Loan Agreement, the Notes, the Security
Documents, Cash Collateral Security Documents and any other Operative Agreement
which relates to or governs the relationship among the Agent, the Lenders and/or
the Lessor.
"Financing" shall mean the financing extended pursuant to the Mortgage
Note Loan Agreement, the Credit Note Loan Agreement and the amount of the Lessor
Advances.
"Financing Parties" shall mean the Agent and the Primary Financing Parties
(each, a "Financing Party").
"Fixtures" shall mean all fixtures other than Non-Integral Equipment,
including without limitation all components thereof, purchased, leased or
otherwise acquired using the proceeds of any Advance, together with all
replacements and substitutions thereto and all fixtures which become property of
the Lessor pursuant to Articles X or XI of the Lease.
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"Form W-8BEN" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Form W-8ECI" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"GAAP" shall mean generally accepted accounting principles, consistently
applied, 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.
"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, operation and occupancy by Lessee of any Property
and by the zoning of any 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 that certain Amended and Restated Ground Lease
Agreement for the Property located in Hennipin County, Minnesota, dated as of
the Initial Closing Date and including amendments required by the Lessor or for
any other Property to be ground leased, a ground lease in form and substance and
on terms satisfactory to the Agent, in its sole discretion, provided, in each
case such ground lease shall include terms and conditions which comply with
Section 8.3(bb) of the Participation Agreement and the other terms and
conditions of the Operative Agreements.
"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.
"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 of any nature whatsoever ("Taxes")
including but not limited to (i) real and
A-16
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 Pension Benefit Guaranty Corp. or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and all interest, additions to tax and penalties, 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
Indemnified Person, any Property or any part thereof or interest therein; (b)
the leasing, financing, refinancing, purchase, acceptance, rejection,
substitution, subleasing, assignment, control, condition, occupancy, servicing,
maintenance, repair, ownership, possession, activity conducted on or in,
delivery, insuring, use, rental, lease, operation, improvement, sale, transfer
of title, return or other disposition of any Property or any part thereof or
interest therein; (c) the Notes, other indebtedness with respect to any
Property, 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 execution, performance or enforcement 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 relating to the
construction, acquisition or delivery of the Improvements or any part thereof or
interest therein; (h) the issuance of the Notes; (i) the Lessor or the Lessor's
Interest; or (j) otherwise in connection with the transactions contemplated by
the Operative Agreements.
"Improvements" shall mean, with respect to any Land, all buildings,
structures, Fixtures, and other improvements of every kind existing at any time
and from time to time on or under the Land purchased or otherwise acquired using
the proceeds of the Advance, 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 Closing Date as such Improvements may be referenced on the
applicable Requisition and (b) any Improvements made subsequent to the Closing
Date, provided, in all cases, "Improvements" shall exclude Non-Integral
Equipment.
"Indebtedness" for any Person, means: (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of
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business so long as such trade accounts payable are payable within 90 days of
the date the respective goods are delivered or the respective services are
rendered; (c) Indebtedness of others secured by a Lien on the property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) non-contingent obligations of such Person in respect of
letters of credit, bankers' acceptances or similar instruments issued or
accepted by banks and other financial institutions for account of such Person;
(e) Capital Lease Obligations of such Person; and (f) Indebtedness of others
guaranteed by such Person.
"Indemnified Person" shall mean the Agent, the Primary Financing Parties
and their respective successors, permitted assigns, directors, trustees,
shareholders, partners, officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean the Lessee.
"Initial Closing Date" shall mean June 27, 2003.
"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 and
all requirements of the issuer of any such policy and, regarding self insurance,
any other requirements of the Lessee.
"Intercreditor Agreement" shall mean that certain Intercreditor and Lien
Subordination Agreement, if any, dated after the Initial Closing Date among the
Financing Parties, provided, Lessee's consent shall be required with respect to
provisions therein that affect the Lessee.
"Interest Payment Date" shall mean (a) as to any payment of Lessor Yield
on any Lessor Advance based on the Eurodollar Rate and any interest payment on
any Eurodollar Loan, the last day of the Interest Period applicable to such
Lessor Advance or Eurodollar Loan, as applicable or respecting any Lessor
Advance based on the Eurodollar Rate and any Eurodollar Loan having an interest
period of six (6) months, the three (3) month anniversary of such Interest
Period, (b) as to any payment of Lessor Yield on any Lessor Advance based on the
ABR and any interest payment pursuant to any ABR Loan, the first day of each
month, unless such day is not a Business Day and in such case on the immediately
preceding Business Day and (c) as to all Financings, the date of any voluntary
or involuntary payment, prepayment, return or redemption, and the Expiration
Date, as the case may be.
"Interest Period" shall mean as to any Loan or Lessor Advance based on the
Eurodollar Rate (i) with respect to the initial Interest Period, the period
beginning on the Initial Closing Date and ending one (1) month, three (3) months
or to the extent available to the Lessor and all Lenders six (6) months
thereafter, as selected in accordance with the applicable provisions of the
Operative Agreements and (ii) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar Loan or
Eurodollar Lessor Advance and ending one (1) month, three (3) months or to the
extent available to the Lessor and all Lenders six (6) months thereafter, as
selected in accordance with the applicable provisions of the
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Operative Agreements; 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 Expiration Date, (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 and (D) there shall not be more than four (4)
Interest Periods outstanding at any one time.
"Intermediary" shall mean Wachovia Bank, National Association.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"Land" shall mean each parcel of real property described on (a) the
Requisition issued by the Lessee on the applicable Property Closing Date and (b)
the schedules to each applicable Lease Supplement executed and delivered in
accordance with the requirements of Section 2.4 of the Lease, including without
limitation, the Lease, together with all right, title and interest of such party
in and to (1) all streets, roads, alleys, easements, rights-of-way, licenses,
rights of ingress and egress, vehicle parking rights and public places, existing
or proposed, abutting, adjacent, used in connection with or pertaining to such
parcel of real property or any Improvements; (2) any strips or gores between
such parcel of real property and abutting or adjacent properties; and (3) all
water and water rights, timber, crops and mineral interests on or pertaining to
such parcel of real property.
"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 as of
the Closing Date, between the Lessor and the Lessee, together with the Lease
Supplement 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 the 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 Lessor, the Lessee,
the Agent, any Primary Financing Party or any Collateral, Property, or any Land,
Improvement, Equipment or the taxation, demolition, construction, use or
alteration of such Property, Land, Improvements, or Equipment whether now or
hereafter enacted and in force, including without limitation any that require
repairs,
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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, individually, any Credit Lender or any Mortgage
Lender, and "Lenders" shall mean, collectively, all of the Credit Lenders and
the Mortgage Lenders.
"Lessee" shall have the meaning set forth in the Lease.
"Lessee Secured Obligations" mean the collective reference to all
obligations, now existing or hereafter arising, owing by the Lessee and/or any
of its Affiliates to any Financing Party (unless specifically limited to certain
Financing Parties) under or pursuant to the Operative Agreements (including
without limitation all Cash Collateral Obligations and all Rent) whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with the
Participation Agreement, the Lease Agreement, or any of the other Operative
Agreements, whether on account of principal, advanced amounts, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees and disbursements of counsel
to the Agent or to the Lessor) that are required to be paid by the Lessee
pursuant to the terms of the Operative Agreements.
"Lessor" shall mean Wachovia Development Corporation, a North Carolina
corporation, and any successor, replacement and/or additional lessor or lessor
expressly permitted under the Operative Agreements.
"Lessor Advance" shall have the meaning given to such term in Section
5.2(c) of the Participation Agreement.
"Lessor Commitments" shall mean the obligation of the Lessor to make the
Lessor Advance in an amount not to exceed $3,780,000.00.
"Lessor Default Enforcement Costs" shall mean the reasonable legal fees
and expenses of the Financing Parties associated with their exercise of remedies
with respect to a Limited Recourse Event of Default.
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and authorized 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.
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"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 not resulting
from the transactions contemplated by the Operative Agreements, (b) any act or
omission of the Lessor 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 with respect to Taxes or Transaction Expenses against which
the Lessee is not required to indemnify the Lessor 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
any Property, the Collateral, the Lessor's Interest or the Operative Agreements
other than the transfer of title to or possession of any Property or the
Collateral by the Lessor pursuant to and in accordance with the Lease, the
Credit Note Loan Agreement, the Mortgage Note Loan Agreement, the Security
Agreement or the Participation Agreement, including without limitation, pursuant
to the exercise of the remedies set forth in Article XVII of the Lease.
"Lessor Notice" shall have the meaning given to such term in Section
8.2(f) of the Participation Agreement.
"Lessor Overdue Rate" shall mean the lesser of (a) the then-current rate
of Lessor Yield based on the ABR plus two percent (2%) and (b) the highest rate
permitted by applicable Law.
"Lessor Yield" shall mean with respect to the Lessor Advance from time to
time either the Eurodollar Rate plus the Applicable Percentage or the ABR, as
elected by the Lessor; provided, however, (a) in the event the Agent is unable
to determine the Eurodollar Rate as provided in Section 5B.6(c) of the
Participation Agreement, the outstanding Lessor Advance shall bear a yield at
the ABR applicable from time to time from and after the dates and during the
periods specified in Section 5B.6(c) of the Participation Agreement, and (b)
upon the delivery by Lessor of the notice described in Section 11.3(d) of the
Participation Agreement, the Lessor Advance shall bear a yield at the ABR
applicable from time to time after the dates and during the periods specified in
Section 11.3(d) of the Participation Agreement.
"Lessor's Interest" shall mean the Lessor's rights in, to and under the
Property, the Operative Agreements, any other property contributed on behalf of
the Lessee, the Collateral and any and all other property or assets from time to
time of the Lessor obtained with respect to the Operative Agreements, including,
without limitation, Modifications to the extent Lessor has an interest therein,
and all amounts of Rent, Property Proceeds, indemnity or other payments of any
kind received by the Lessor pursuant to the Operative Agreements; provided, the
term "Lessor's Interest" shall not include any Lessor Advance or Lessor Yield.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Limited Recourse Amount" shall mean with respect to any Property, as of
any Payment Date, an amount equal to the Termination Value with respect to such
Property on each Payment Date, less the Maximum Residual Guarantee Amount as of
such date with respect to such Property.
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"Limited Recourse Event of Default" shall have the meaning given to such
term in Section 17.12 of the Lease.
"Loans" shall mean the loans extended by the Lenders to the Lessor
pursuant to the Credit Note Loan Agreement and/or the Mortgage Note Loan
Agreement.
"LRED Period" shall have the meaning given to such term in Section 17.12
of the Lease.
"Majority Credit Lenders" shall mean at any time, Credit Lenders whose
Credit Notes outstanding represent at least sixty-six and two/thirds percent (66
2/3%) of the aggregate Credit Notes outstanding.
"Majority Mortgage Lenders" shall mean at any time, Mortgage Lenders whose
Mortgage Notes outstanding represent at least sixty-six and two/thirds percent
(66 2/3%) of the aggregate Mortgage Notes outstanding.
"Majority Secured Parties" shall mean at any time, Primary Financing
Parties whose Loans and/or Lessor Advances outstanding represent at least
sixty-six and two/thirds percent (66 2/3%) of (a) the aggregate Financing
outstanding or (b) to the extent there is no Financing outstanding, the
aggregate of the Primary Financing Party Commitments.
"Make-Whole Amount" shall mean $0 with respect to the Wachovia Mortgage
Lender and with respect to any Mortgage Lenders, other than the Wachovia
Mortgage Lender, an amount equal to (a) from the Initial Closing Date through
and including the first anniversary of the Initial Closing Date, the product of
two percent (2%) and the aggregate amount of Mortgage Loans owed to such
Mortgage Lenders with respect to all Properties, as of the date of
determination, but calculated prior to payment of the Termination Value or any
other principal prepayments and (b) from, but excluding the first anniversary of
the Initial Closing Date through and including the second anniversary of the
Initial Closing Date, the product of one percent (1%) and the aggregate amount
of Mortgage Loans owed to such Mortgage Lenders with respect to all Properties,
as of the date of determination, but calculated prior to payment of the
Termination Value or any other principal prepayments; provided, in either (a) or
(b), if a Lease Event of Default occurring solely as a result of violation of
Section 8A.9 of the Participation Agreement has occurred and is continuing, then
during the continuance of such Event of Default, the Make-Whole Amount shall be
deemed to be $0.
"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 Agent or the Primary Financing Parties thereunder, (d) the validity,
priority or enforceability of any Lien on any Property or the Collateral created
by any of the Operative Agreements, or (e)
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the fair market 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.
"Material Plan" shall have the meaning given to such term in Section
17.1(n) of the Lease.
"Maximum Residual Guarantee Amount" shall mean for each Property (or as
set forth in such Schedule 4 to the Participation Agreement the Land and
Improvements on a separate basis) the amount set forth on Schedule 4 to the
Participation Agreement.
"Memorandum of Lease" shall mean the Memorandum of Lease substantially in
the form of Exhibit B to the Lease, together with all attachments and schedules
thereto.
"Modifications" shall have the meaning specified in Section 11.1(a) of the
Lease.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage Instruments" shall mean each deed of trust, mortgage and any
other instrument executed by the Lessor and the Lessee in favor of the Agent
(for the benefit of the Secured Parties) and evidencing a Lien on any Property
or other Collateral, in form and substance reasonably acceptable to the Agent,
including without limitation the Credit Lender Mortgage Instruments and the
Mortgage Lender Mortgage Instruments.
"Mortgage Lender Mortgage Instruments" means each deed of trust, mortgage
and any other instrument executed by the Lessor and the Lessee in favor of the
Agent (for the benefit of the Mortgage Lender) and evidencing a Lien on the
Property or other Collateral described therein, in form and substance reasonably
acceptable to the Mortgage Lender.
"Mortgage Lenders" shall mean the various financial institutions and
institutional investors from time to time party to the Mortgage Note Loan
Agreement in accordance with the Participation Agreement that commit to make
Loans to the Lessor thereunder or otherwise hold from time to time the Mortgage
Notes in accordance with the Participation Agreement.
"Mortgage Note" shall have the meaning given to it in Section 2.2 of the
Mortgage Note Loan Agreement.
"Mortgage Note Commitments" shall mean the obligation of the Mortgage
Lenders to make Loans to the Lessor in an aggregate principal amount at any one
time outstanding not to exceed the aggregate of the amounts set forth opposite
each Mortgage Lender's name on Schedule 2 to the Participation Agreement, as
such amount may be increased or reduced from time to time in accordance with the
provisions of the Operative Agreements; provided, no Mortgage Lender shall be
obligated to make Loans to the Lessor in excess of such Mortgage Lender's share
of the Mortgage Note Commitments as set forth adjacent to such Mortgage Lender's
name on Schedule 2 to the Participation Agreement.
"Mortgage Note Loan" shall mean a Loan by a Mortgage Lender.
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"Mortgage Note Loan Agreement" shall mean the Mortgage Note Loan
Agreement, dated as of the Closing Date, among the Lessor, the Agent and the
Mortgage Lenders, as specified therein.
"Mortgage Note Loan Agreement Default" shall mean any event or condition
which, with the lapse of time or the giving of notice, or both, would constitute
a Mortgage Note Loan Agreement Event of Default.
"Mortgage Note Loan Agreement Event of Default" shall mean any event or
condition defined as an "Event of Default" in Section 6 of the Mortgage Note
Loan Agreement.
"Mortgage Obligations" mean the collective reference to all obligations,
now existing or hereafter arising, owing by the Lessee and/or any of its
affiliates to the Lessor under or pursuant to the Operative Agreements whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter incurred, which may arise under, out of, or in connection with the
Participation Agreement, the Lease Agreement, or any of the other Operative
Agreements, whether on account of principal, advanced amounts, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees and disbursements of counsel
to the Agent or to the Lessor) that are required to be paid by the Lessee
pursuant to the terms of the Operative Agreements.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Lessee or
any ERISA Affiliate and that is covered by Title IV of ERISA.
"Non-Integral Equipment" shall mean Equipment which (a) is personal
property that is severable and can be removed without causing material damage,
after taking into account repairs which are actually completed or caused to be
completed by Lessee, at no cost or expense to any Financing Party, at the time
of such removal and (b) is not any of the following: (i) a Required
Modification, (ii) financed by any Advance or Property Proceeds, or (iii) a
replacement, renovation or substitution to any component of any Property or part
thereof which was financed by Advances or Property Proceeds.
"Notes" shall mean those notes issued to the Primary Financing Parties
pursuant to the Credit Note Loan Agreement or the Mortgage Note Loan Agreement
and shall include both the Credit Notes and the Mortgage Notes.
"Obligations" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Officer's Certificate" with respect to any person shall mean a
certificate executed on behalf of such person by a Responsible Person who has
made or caused to be made such examination or investigation as is necessary to
enable such Responsible Person to express an informed opinion with respect to
the subject matter of such Officer's Certificate.
A-24
"Operative Agreements" shall mean the following: the Participation
Agreement, the Credit Note Loan Agreement, the Mortgage Note Loan Agreement, the
Notes, the Lease, the Lease Supplements, the Security Agreement, the
Intercreditor Agreement, the Mortgage Instruments, the other Security Documents,
the Cash Collateral Agreement, the Control Agreement, the Deeds, each Ground
Lease, the Bills of Sale 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.
"Parent" means, with respect to any Primary Financing Party, any Person
controlling such Primary Financing Party.
"Participant" shall have the meaning given to such term in Section 9.7 of
the Credit Note Loan Agreement or Section 9.7 of the Mortgage Note Loan
Agreement, as applicable.
"Participation Agreement" shall mean the Participation Agreement dated as
of the Closing Date, among the Lessee, the Lessor, the Primary Financing Parties
and the Agent.
"Payment Date" shall mean any Interest Payment Date, the Expiration Date
and any other date on which interest in connection with a prepayment of
principal on the Financing (including Lessor Yield in connection with a
prepayment of the Lessor Advance) is due under the Mortgage Note Loan Agreement,
the Credit Note Loan Agreement, the Notes or any other Operative 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 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 the Properties identified in the Lease
Supplements dated as of the Initial Closing Date and each additional parcel of
real property (together with improvements existing or to be built thereon)
selected by the Lessee and acceptable to the Agent, in its sole discretion, that
comply with industry standards and are fit for their intended use as office,
research and design facilities.
"Permitted Liens" shall mean, with respect to any Property and the other
Collateral (excluding the Cash Collateral):
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements (including
the Liens in favor of the
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Secured Parties pursuant to the Security Documents and the Lien of the
Lease in favor of the Lessor);
(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 Agent
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;
(g) Liens in favor of municipalities to the extent agreed to by the
Lessor and the Agent;
(h) Liens that are expressly set forth as title exceptions on the
title commitment or policy issued under Section 5.3(g) of the
Participation Agreement;
(i) all encumbrances, exceptions, restrictions, easements, rights of
way, servitudes, encroachments and irregularities in title, other than
Liens which, in the reasonable assessment of the Agent, will have a
Material Adverse Effect; and
(j) any other Lien expressly consented to or approved by the Agent.
"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.
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"Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either (a) maintained by a member of the ERISA Group for
employees of a member of the ERISA Group or (b) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the ERISA Group is
then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Primary Financing Party Commitments" shall mean the Primary Financing
Party Commitment of (i) each Credit Lender as set forth on Schedule 1 to the
Participation Agreement, as such Schedule 1 may be amended and replaced from
time to time and (ii) each Mortgage Lender as set forth in Schedule 2 to the
Participation Agreement as such Schedule 2 may be amended and replaced from time
to time and (iii) the Lessor Commitments.
"Primary Financing Parties" shall mean the Lessor, the Credit Lenders, the
Mortgage Lenders and any other banks, financial institutions or other
institutional investors which may be from time to time a Credit Lender or a
Mortgage Lender to the Participation Agreement and either the Credit Note Loan
Agreement or the Mortgage Note Loan Agreement pursuant to the terms thereof.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Property" shall mean each Permitted Facility that is (or is to be)
acquired pursuant to the terms of the Operative Agreements, the Land (whether
owned by Lessor or ground leased by Lessor pursuant to a Ground Lease), the
Appurtenant Rights related thereto and each item of Equipment and the various
Improvements, in each case located on such Land or identified in the Lease
Supplements and any Property Proceeds relating thereto.
"Property Closing Date" shall mean the date on which the Lessor purchases
or ground leases a Property, which with respect to certain Properties may be the
Initial Closing Date, or, with respect to the first Advance, the date on which
the Lessor seeks reimbursement for Property previously purchased by the Lessor.
"Property Cost" shall mean, with respect to any Property at any date of
determination, an amount equal to (a) the aggregate principal amount of the
Advances made on or prior to such date and advanced to or for the benefit of the
Lessee pursuant to and for the purposes set forth in Section 5.1 of the
Participation Agreement with respect to such Property minus, to the extent not
duplicative or otherwise credited, (b) the aggregate amount of prepayments or
repayments as the case may be of the Credit Notes, the Mortgage Notes, or the
Lessor Advance allocated to reduce the Property Cost of such Property.
"Property Proceeds" shall mean all sums payable pursuant to Section
15.1(e)(ii) of the Lease and any other proceeds with respect to the applicable
Property or all Properties, as the context requires, from a Casualty,
Condemnation or a Claim paid which relates to damage to a
A-27
Property which is not an Excepted Payment, Exempted Payment, payment of
Supplemental Rent or the proceeds from any Financing Party's insurance policy.
"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 Note Loan Agreement or Section 9.8(a) of the Mortgage Note
Loan Agreement, as applicable.
"QPAM Exemption" shall mean Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Rating Agencies" shall mean Xxxxx'x, S&P and Fitch Investors Service,
L.P. or, in each case, any successor nationally recognized statistical rating
organization.
"Register" shall have the meaning given to such term in Section 9.9 of the
Credit Note Loan Agreement or Section 9.9 of the Mortgage Note Loan Agreement,
as applicable.
"Regulation D" shall mean Regulation D of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Regulation T" shall mean Regulation T of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Regulation U" shall mean Regulation U of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Regulation X" shall mean Regulation X of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Related Financing Party" shall have the meaning given to such term in
Section 3.12 of the Intercreditor Agreement.
"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 Expense" shall mean any expense actually paid to any third
party, including Lessor and Agent by Lessee in association with the remarketing
of any property either at the Expiration Date or upon the occurrence of a
Limited Recourse Event of Default, including, but not limited to, appraisal
costs, Lessor Default Enforcement Costs, brokers' fees or transfer taxes on any
sale of a Property.
"Renewal Term" shall have the meaning given to such term in Section 2.2 of
the Lease.
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"Rent" shall mean, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Lease.
"Requested Funds" shall mean any funds requested by the Lessee in
accordance with Section 5 of the Participation Agreement.
"Required Cash Collateral Balance" shall mean the aggregate Property Cost
for all Properties, as of the date of determination, less the outstanding
amounts under Mortgage Notes owed to Mortgage Lenders other than the Wachovia
Mortgage Lender.
"Required Modification" shall have the meaning specified in Section 11.1
of the Lease.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"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 Chief Executive Officer, the President, any Senior Vice
President or Executive Vice President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, or any Assistant Treasurer.
"Restoration" shall have the meaning given to such term in Section
15.1(e)(i) of the Lease.
"Rule 144A" shall mean Rule 144A of the Securities Act.
"S&P" shall mean Standard and Poor's Rating Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"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 Agent 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.
"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 Property if it has been determined that the Fair
Market Sales Value of the Property 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.
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"Secured Parties" shall have the meaning given to such term in the
Security Agreement.
"Secured Party 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
Agent in the Collateral subject to the Security Documents.
"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 as of the
Closing Date between the Lessor and the Agent, for the benefit of the Secured
Parties, and accepted and agreed to by the Lessee.
"Security Assets" shall have the meaning given to such term in Section 2
of the Security Agreement.
"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, the Cash
Collateral Security Documents and all other security documents hereafter
delivered to the Agent granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities under the Lease, the Credit Note Loan
Agreement, the Mortgage Note Loan Agreement and/or under any of the other
Financing Agreements.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition of the Properties, 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 fees and expenses of the Lessor payable or
reimbursable under the Operative Agreements and costs and expenses incurred
pursuant to Sections 7.3(a) and 7.3(b) of the Participation Agreement.
"Split Property" shall have the meaning given to such term in Section
8.7(b)(viii) of the Participation Agreement.
"Stock Purchase Assistance Plan" shall mean that certain
shareholder-approved 2001 Employee Stock Purchase Assistance Plan and amendments
and restatements thereof.
"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 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.
A-30
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Credit Note Loan Agreement or Section 9.18 of the Mortgage
Note Loan Agreement, as applicable.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor,
the Agent, the Primary Financing Parties 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".
"Term" shall mean the Basic Term and each Renewal Term, if any, provided,
in no event shall the Term extend beyond the twentieth anniversary of the
Initial Closing Date.
"Termination Date" shall have the meaning specified in Section 16.2(a) of
the Lease.
"Termination Notice" shall have the meaning specified in Section 16.1 of
the Lease.
"Termination Value" shall mean on the applicable date of determination, as
the context may require, the sum of (a) either (i) with respect to all
Properties, an amount equal to the aggregate outstanding Property Cost for all
the Properties, or (ii) with respect to a particular Property, an amount equal
to the outstanding 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, any and all
Lessor Yield on the Lessor Advances related to the applicable Property Cost, any
and all breakage costs and any and all Make-Whole Amounts 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 Operative
Agreements (including without limitation amounts under Section 11.1 and 11.2 of
the Participation Agreement and all costs and expenses referred to in Sections
22.1(a) and 22.3 of the Lease).
"Total Coverage Amount" shall mean on any date of determination the sum of
(a) the market value of the Class A Cash Collateral plus (b) the quotient of the
market value of Class B Cash Collateral divided by 1.05.
"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 costs and expenses described in
Section 7 of the Participation Agreement and the following:
(a) the reasonable fees, out-of-pocket expenses and disbursements of
Xxxxx & Xxx Xxxxx PLLC, as counsel to the Financing Parties, 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
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other services customary for counsel representing parties to transactions
of the types involved in the transactions contemplated by the Operative
Agreements, but excluding in all cases the fees, expenses and
disbursements of counsel to any individual Credit Lender or Mortgage
Lender;
(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 Primary Financing Parties, the Agent, the Lessor or any
broker which arises under any of the Operative Agreements;
(d) any other reasonable fees, out-of-pocket expenses, disbursements
or costs 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 Agreements.
"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.
"Type" shall mean, as to any Loan, whether it is an ABR Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Secured Party
Financing Statements and the Lessor Financing Statements.
"Unanimous Vote Matters" shall have the meaning given it in Section 12.4
of the Participation 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 accrued 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 Lessee 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.
"U.S. Person" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
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"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Voting Stock" means outstanding shares of stock having voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power because of default in dividends or some
other default.
"Wachovia Mortgage Lender" shall mean Wachovia Bank, National Association
or any of its Affiliates solely in their capacity as a Mortgage Lender.
"Withdraw Liability" shall have the meaning given to such term under Part
I of Subtitle E of Title IV of ERISA.
"Wholly-Owned Entity" shall mean a Person all of the shares of capital
stock or other ownership interest of which are owned by a referent Person and/or
one of such referent Person's wholly-owned Subsidiaries or other wholly-owned
entities.
"Withholdings" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
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