AMENDED AND RESTATED PARTICIPATION AGREEMENT
dated as of June 22, 2000
among
TELETECH SERVICES CORPORATION,
as Lessee,
TELETECH HOLDINGS, INC., as
Guarantor,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, except as expressly
stated herein, but solely as Certificate Trustee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as expressly
stated herein, but solely as Administrative Agent,
THE FINANCIAL INSTITUTIONS NAMED ON SCHEDULE I HERETO,
as Certificate Holders,
and
THE FINANCIAL INSTITUTIONS NAMED ON SCHEDULE II HERETO,
as Lenders,
SECURITY PACIFIC LEASING CORPORATION,
as Arranger
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; INTERPRETATION.................................... 3
SECTION 1.1. Definitions; Interpretation............................ 3
ARTICLE II DOCUMENT CLOSING DATE; ACQUISITION DATE........................ 3
SECTION 2.1. Effectiveness of Agreement............................. 3
SECTION 2.2. Construction Costs..................................... 4
ARTICLE III FUNDING OF ADVANCE............................................. 4
SECTION 3.1. Funding................................................ 4
SECTION 3.2. Appointment of Construction Agent;
Payment of Construction Costs and Fees;
Application of Funds................................... 8
SECTION 3.3. Advance Dates.......................................... 8
SECTION 3.4. Capitalization of Certain Amounts During
Interim Term........................................... 11
SECTION 3.5. Non-Funding Lender's Portion........................... 11
SECTION 3.6. Non-Funding Certificate Holder's Portion............... 13
SECTION 3.7. Additional Rights of Lessee............................ 15
ARTICLE IV YIELD; INTEREST; COMMITMENT REDUCTION; FEES.................... 15
SECTION 4.1. Yield.................................................. 15
SECTION 4.2. Interest on Loans...................................... 15
SECTION 4.3. Payments and Prepayments of Loans and
Certificate Amounts and Other Amounts.................. 15
SECTION 4.4. Fees................................................... 16
SECTION 4.5. Obligations Several.................................... 17
SECTION 4.6. Highest Lawful Rate.................................... 17
ARTICLE V CERTAIN INTENTIONS OF THE PARTIES.............................. 19
SECTION 5.1. Nature of Transaction.................................. 19
SECTION 5.2. Amounts Due Under Lease................................ 20
SECTION 5.3. Distribution........................................... 21
SECTION 5.4 Adjustments............................................ 25
ARTICLE VI CONDITIONS PRECEDENT TO ADVANCES AND REQUIREMENT
FOR COMPLETION................................................. 25
SECTION 6.1. Conditions Precedent to Initial Advance................ 25
SECTION 6.2. Conditions Precedent to Each Advance................... 33
SECTION 6.3. Deliveries Upon Substantial Completion................. 36
ARTICLE VII REPRESENTATIONS................................................ 37
SECTION 7.1. Representations of the Participants.................... 37
SECTION 7.2. Representations of Lessee and Guarantor................ 39
SECTION 7.3. Representations of Lessor.............................. 48
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TABLE OF CONTENTS
(continued)
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SECTION 7.4. Representations and Warranties of
Administrative Agent................................... 51
ARTICLE VIII COVENANTS OF LESSEE, CONSTRUCTION AGENT AND
GUARANTOR...................................................... 52
SECTION 8.1. Construction Matters................................... 52
SECTION 8.2. Additional Covenants of Lessee and
Guarantor.............................................. 54
SECTION 8.3. Financial Covenants.................................... 58
SECTION 8.4. Credit Agreement Covenants............................. 58
ARTICLE IX OTHER COVENANTS AND AGREEMENTS................................. 59
SECTION 9.1. Covenants of the Participants, the
Administrative Agent and the Bank...................... 59
ARTICLE X REPLACEMENT OF PARTICIPANTS.................................... 61
SECTION 10.1. Replacement of Participants............................ 61
SECTION 10.2. Cooperation............................................ 62
ARTICLE XI TRANSFERS OF PARTICIPANTS' INTERESTS........................... 62
SECTION 11.1. Assignments............................................ 62
SECTION 11.2. Participations......................................... 64
SECTION 11.3. Withholding Taxes; Disclosure of
Information; Pledge Under Regulation A................. 65
ARTICLE XII INDEMNIFICATION................................................ 67
SECTION 12.1. Indemnification........................................ 67
SECTION 12.2. Environmental Indemnity................................ 72
SECTION 12.3. End of Term Indemnity.................................. 73
SECTION 12.4. Proceedings in Respect of Claims....................... 74
SECTION 12.5. General Tax Indemnity.................................. 76
SECTION 12.6. Gross Up............................................... 83
ARTICLE XIII CONTINGENT LIBOR AND OTHER COSTS............................... 84
SECTION 13.1. LIBO Rate Lending Unlawful............................. 84
SECTION 13.2. Deposits Unavailable................................... 84
SECTION 13.3. Increased Costs, etc................................... 85
SECTION 13.4. Funding Losses......................................... 86
SECTION 13.5. Increased Capital Costs................................ 87
SECTION 13.6. After Tax Basis........................................ 87
SECTION 13.7. Funding Office......................................... 87
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(continued)
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ARTICLE XIV LIMITATION ON RECOURSE LIABILITY DURING INTERIM
TERM........................................................... 88
ARTICLE XV MISCELLANEOUS.................................................. 88
SECTION 15.1. Survival of Agreements................................. 88
SECTION 15.2. No Broker, etc......................................... 89
SECTION 15.3. Notices................................................ 89
SECTION 15.4. Counterparts........................................... 89
SECTION 15.5. Amendments............................................. 89
SECTION 15.6. Headings, etc.......................................... 91
SECTION 15.7. Parties in Interest.................................... 91
SECTION 15.8. GOVERNING LAW.......................................... 91
SECTION 15.9. Severability........................................... 91
SECTION 15.10. Liability Limited...................................... 91
SECTION 15.11. Submission to Jurisdiction............................. 92
SECTION 15.12. WAIVER OF JURY TRIAL................................... 92
SECTION 15.13. Confidentiality........................................ 93
SECTION 15.14. Limited Liability of Lessor............................ 94
SECTION 15.15. Limited Liability of Agent............................. 94
SECTION 15.16. Payment of Transaction Expenses and Other
Costs.................................................. 95
SECTION 15.17. Reproduction of Documents.............................. 95
SECTION 15.18. Role of Security Pacific Leasing
Corporation............................................ 96
SECTION 15.19. Deliveries to Participants............................. 96
ARTICLE XVI ADMINISTRATIVE AGENT........................................... 97
SECTION 16.1. Appointment............................................ 97
SECTION 16.2. Delegation of Duties................................... 97
SECTION 16.3. Exculpatory Provisions................................. 97
SECTION 16.4. Reliance by Administrative Agent....................... 98
SECTION 16.5. Notice of Default...................................... 98
SECTION 16.6. Non-Reliance on Administrative Agent and
Other Lenders.......................................... 99
SECTION 16.7. Indemnification........................................ 100
SECTION 16.8. Administrative Agent in Its Individual
Capacity............................................... 100
SECTION 16.9. Successor Administrative Agent......................... 100
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(continued)
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SCHEDULES
SCHEDULE I - Certificate Holders' Commitments
SCHEDULE II - Lenders' Commitments
SCHEDULE III - Notice Information, Payment Offices and
Applicable Lending Offices
SCHEDULE 6.1(j) - Filings and Recordings
SCHEDULE 7.2(e) - Litigation
SCHEDULE 7.2(g) - ERISA Violations
SCHEDULE 7.2(j) - Material Indebtedness and Other
Liabilities
SCHEDULE 7.2(k) - Environmental Violations
EXHIBITS
EXHIBIT A - Form of Advance Request
EXHIBIT B-1 - Form of Officer's Certificate of Lessee
EXHIBIT B-2 - Form of Officer's Certificate of Guarantor
EXHIBIT B-3 - Form of Officer's Certificate of Certificate
Trustee
EXHIBIT C-1 - Form of Responsible Officer's Certificate of
Lessee
EXHIBIT C-2 - Form of Responsible Officer's Certificate of
Guarantor
EXHIBIT D-1 - Form of Opinion of Special Counsel to
Certificate Trustee
EXHIBIT D-2 - Form of Opinion of Special Counsel to Lessee
and Guarantor
EXHIBIT D-3 - Form of Enforceability/Perfection Opinion of
Counsel to Guarantor
EXHIBIT E - Initial Advance Date Construction
Certificate
EXHIBIT F - Offeree Letter
EXHIBIT G - Architect's Professional Opinion
EXHIBIT H - Construction Certificate
EXHIBIT I - Construction Consultant's Certificate
EXHIBIT J - Architect's Certificate
EXHIBIT K - General Contractor Certificate
EXHIBIT L - Architect's Certificate at Completion
EXHIBIT M - Construction Certificate at Completion
EXHIBIT N - Form of Assignment Agreement
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TABLE OF CONTENTS
(continued)
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EXHIBIT O - Form of Compliance Certificate
EXHIBIT P - Form of Participant Guarantee
EXHIBIT Q - Lessee Funding Schedule
APPENDICES
APPENDIX 1 - Definitions and Interpretation
APPENDIX 2 - Conditions Precedent to Second Document
Closing Date
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AMENDED AND RESTATED PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT (this "PARTICIPATION
AGREEMENT"), dated as of June 22, 2000, is entered into by and among TELETECH
SERVICES CORPORATION, a Colorado corporation, as Lessee (together with its
permitted successors and assigns in its capacity as Lessee and Construction
Agent (together with its permitted successors and assigns, in its capacity as
either Lessee or Construction Agent, the "LESSEE"); TELETECH HOLDINGS, INC., a
Delaware corporation, as Guarantor (together with its permitted successors and
assigns in its capacity as Guarantor, "GUARANTOR"); STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity,
except as expressly stated herein, but solely as Certificate Trustee under the
Trust Agreement and as Lessor under certain other Operative Documents (together
with its successors and permitted assigns under the Trust Agreement, in its
capacity as either Certificate Trustee or Lessor, the "LESSOR"); FIRST SECURITY
BANK, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly
stated herein, but solely as Administrative Agent ("ADMINISTRATIVE AGENT"); the
financial institutions named on SCHEDULE I hereto (together with their
respective permitted successors, assigns and transferees, each a "CERTIFICATE
HOLDER" and collectively the "CERTIFICATE HOLDERS"); the financial institutions
listed on SCHEDULE II hereto as Lenders (together with their permitted
successors, assigns and transferees, each as a Lender, a "LENDER" and
collectively the "LENDERS").
W I T N E S S E T H:
A. Lessee, Lessor, Guarantor, the Initial Certificate Holder, the Initial
Lender and Administrative Agent entered into the Original Participation
Agreement and the other Original Operative Documents for the purpose of
financing the acquisition of the Land.
B. Subject to the terms and conditions of the Original Participation
Agreement and the other Original Operative Documents, on the First Document
Closing Date, among other things, Lessee and Lessor entered into the Lease
pursuant to which Lessor agreed to lease to Lessee, and Lessee agreed to lease
from Lessor, the Leased Property pursuant to the Lease; and Initial Certificate
Holder and Initial Lender funded the Advance occurring on March 6, 2000, to
pay Land Acquisition Costs (including Fees and other Transaction Expenses)
accruing on or prior to such date (the "ORIGINAL ADVANCE");
C. The parties hereto desire to enter into this Participation Agreement
and the other Operative Documents for the purposes of amending and restating the
Original Participation Agreement and the other Original Operative Documents in
their entirety, including to add the New Participant, increase the Aggregate
Commitment Amount to Twenty-Six Million Six Hundred Sixty-Five Thousand Dollars
($26,665,000); provide Advances to also fund the Construction of the Financed
Improvements; extend the Commitment Period and the Expiration Date; provide for
the purchase by the New Lender of a portion of Initial Lender's loans evidenced
by the Initial Note and Loan Commitment held by the Initial Lender; and provide
for the purchase by the New Certificate Holders of a portion of the Certificate
Amounts and Certificate Commitment held by Initial Certificate Holder.
D. Following the Second Document Closing Date, Lessor, using amounts
Funded by the Participants, will provide Advances during the Commitment Period
to pay Construction Costs (other than Lessee Funded Tenant Improvement Costs).
E. Notwithstanding the effectiveness of certain covenants and terms of
the Lease during the Interim Term, Lessee will not be required to make scheduled
payments of Basic Rent under the Lease until the Base Term Commencement Date.
F. Subject to the terms and conditions of this Participation Agreement
and the other Operative Documents, the Certificate Holders are willing to
provide to Lessor a portion of the fundings of each Advance and the New
Certificate Holder is willing to purchase on the Second Document Closing Date a
portion of the Certificate Amounts and Certificate Commitments of Initial
Certificate Holder as provided for at SECTION 2.1.
G. Subject to the terms and conditions of this Participation Agreement
and the other Operative Documents, the Lenders are willing to provide loans to
Lessor for the remaining portion of the Advances and the New Lender is willing
to purchase on the Second Document Closing Date a portion of the Loans and the
Loan Commitment of Initial Lender as provided for at SECTION 2.1.
H. To induce the Participants to provide the funds for such Advances and
purchases and to enter into this Participation Agreement, the Trust Agreement,
each of the other Operative
2
Documents and the transactions contemplated hereby and thereby, Guarantor
desires to, and it is a condition to the effectiveness of the Overall
Transaction that Guarantor, enter into and deliver to Administrative Agent, for
the benefit of the Participants, the Guarantees.
I. To secure the repayment of the Participants' respective Certificate
Amounts and Loans, the Administrative Agent, on behalf of the Participants, will
have the benefit of a Lien on the Trust Estate, including the Leased Property,
and the other TeleTech Collateral.
NOW, THEREFORE, in consideration of the mutual agreements contained in this
Participation Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.1. DEFINITIONS; INTERPRETATION. Unless the context shall
otherwise require, capitalized terms used and not defined herein shall have the
meanings assigned thereto in APPENDIX 1 hereto for all purposes hereof; and the
rules of interpretation set forth in APPENDIX 1 hereto shall apply to this
Participation Agreement.
ARTICLE II
DOCUMENT CLOSING DATE; ACQUISITION DATE
SECTION 2.1. EFFECTIVENESS OF AGREEMENT. This Participation Agreement shall
be effective as of the earliest date (on or before June 30, 2000) (the "SECOND
DOCUMENT CLOSING DATE") on which all of the conditions precedent set forth in
APPENDIX 2 hereto have been satisfied or waived by the applicable parties as set
forth therein, and upon such effective date, this Participation Agreement shall
amend and completely restate and supersede the Original Participation Agreement.
(a) On the Second Document Closing Date, pursuant to the Certificate
Transfer Instructions and conditioned on the receipt by Initial Certificate
Holder in immediately available funds of the amount set forth in the Certificate
Transfer Instructions, Initial Certificate Holder shall transfer to the New
Certificate Holders, pro rata in accordance with their respective percentages
set forth
3
in the Certificate Transfer Instructions, and each of the New Certificate
Holders agrees to acquire pursuant to the Certificate Transfer Instructions its
respective percentage of the Transferred Certificate Interests, which interests
will represent Certificate Amounts funded by the New Certificate Holders as
represented by their respective Certificates to be issued to each of them by
Lessor on the Second Document Closing Date;
(b) On the Second Document Closing Date, pursuant to the Loan
Transfer Instructions and conditioned on the receipt by Initial Lender of
immediately available funds in the amount set forth in the Loan Transfer
Instructions, Initial Lender shall transfer to the New Lenders the Transferred
Loan Interests, which interests upon such transfer will represent Loans funded
by the New Lenders as represented by their respective Notes to be issued to each
of them by Lessor on the Second Document Closing Date.
(c) Subject to the conditions set forth in this Participation
Agreement and pursuant to the terms hereof, on the Second Document Closing Date,
(i) Lessee, in its capacity as Construction Agent, and Lessor shall enter into
the Construction Agency Agreement, (ii) Lessor and Lessee will enter into the
Lease pursuant to which Lessor shall lease to Lessee, and Lessee shall lease
from Lessor, the Leased Property (including both the Land and the Financed
Improvements) for the Term.
SECTION 2.2. CONSTRUCTION COSTS. Subject to the terms and conditions of
this Participation Agreement, on each Advance Date Lessor shall make an Advance
of the proceeds of which shall be used to pay directly, or to reimburse
Construction Agent for the payment of, Construction Costs accrued prior to the
Base Term Commencement Date (including Capitalized Interest and Capitalized
Yield relating to any Interest and Yield that has accrued during the Payment
Period immediately preceding such Advance and the payment of accrued Fees and
Transaction Expenses).
ARTICLE III
FUNDING OF ADVANCE
SECTION 3.1. FUNDING.
(a) AMOUNT OF FUNDING. Subject to the terms and conditions of this
Participation Agreement and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, upon
receipt of an Advance Request, on each Advance Date each Certificate Holder
shall
4
acquire its interest in the Trust Estate and each Lender shall assist in funding
Lessor's Advance, in each case by making available to Lessor by wire transfer in
accordance with the instructions set forth in the Advance Request an amount in
immediately available funds on such Advance Date equal to such Participant's
Commitment Percentage of the aggregate amount of the requested Advance (unless
any portion of such Advance consists of amounts described in CLAUSE (iii) in the
next sentence of this SECTION 3.1(a), in which case such Participant will so
make available funds equal to such Participant's Commitment Percentage of the
portion of such Advance not consisting of Noneligible Accrued Amounts and each
Certificate Holder will so make available funds equal to such Certificate
Holder's Noneligible Accrued Amounts Commitment Percentage of the portion of the
Advance consisting of Noneligible Accrued Amounts). Notwithstanding the
foregoing, (i) the Funding by each Participant on such Advance Date shall not
exceed such Participant's Available Commitment, (ii) the Advance to be made by
Lessor to Construction Agent on such Advance Date, together with all prior
Advances (including the Original Advance), shall not exceed the Aggregate
Commitment Amount, and (iii) with respect to any Noneligible Accrued Amounts
otherwise payable on any Advance Date, the Certificate Holders shall (subject to
clauses (i) and (ii) above) Fund on a pro rata basis the portion of such Advance
equal to the aggregate amount of such Noneligible Accrued Amounts. No amounts
paid or prepaid with respect to any Certificate Amount or the Loans may be
readvanced.
(b) NOTES AND CERTIFICATES. Each Lender's Loan shall be evidenced by
a separate Note issued to such Lender in the amount of its Loan Commitment and
repayable in accordance with, and with Interest accruing pursuant to, the terms
of the Loan Agreement. The amounts made available by each Certificate Holder
shall be evidenced by a separate Certificate issued by Lessor to each
Certificate Holder in the amount of its Certificate Comment. Each Certificate
shall accrue Yield at the Yield Rate on the Certificate Amount thereof, payable
as more fully set forth in the Trust Agreement. Each Lender and Certificate
Holder is authorized and entitled to make notations on its respective Notes and
Certificates in accordance with the Loan Documents and the Trust Agreement, each
of which notations, to the extent permitted by law, shall constitute PRIMA FACIE
evidence of the accuracy of the information so noted, absent manifest error.
Following the transfers described at SECTION 2.1, the Initial Lender and Initial
Certificate Holder shall exchange their Original Note and Original Certificate
for a new Note and Certificate in the amount of their revised Loan Commitment
and Certificate Commitment, respectively.
5
(c) ADVANCES, REQUIREMENTS, PROCEDURES AND LIMITATIONS. Each Advance
required to be made by Lessor pursuant to the Operative Documents shall be made
by the Participants making a Funding directly to Administrative Agent. Such
Funding by the Participants to Administrative Agent with respect to an Advance
shall be deemed to constitute the required Funding from the Participants to
Lessor, and the corresponding Advance by Administrative Agent in the manner
provided for below or to any Person entitled to payments constituting
Construction Costs, including Fees, Interest, Yield or Transaction Expenses,
shall be deemed to constitute the required Advance by Lessor.
(d) ADVANCES; LIMITATIONS AND LIMITS. In addition to any other
provision hereof, Lessor shall not be obligated to make an Advance to
Construction Agent, and no Lender shall be obligated to Fund any Loan and no
Certificate Holder shall be required to Fund any Certificate Amount, if, after
giving effect to such Advance, the aggregate outstanding amount of the Loans and
the Certificate Amounts would exceed the aggregate amount of the Available
Commitments immediately prior to such Advance. No Advance shall be made in
connection with any costs or expenses associated with the construction of the
Tenant Improvements until Lessee has delivered to Administrative Agent evidence
satisfactory to Administrative Agent that Lessee has funded the Lessee Funding
Amount and such funds have been applied to payment of the construction costs and
expenses of the Tenant Improvements that are set forth in the Approved
Construction Budget. Pursuant to SECTION 3.2, (i) each Advance shall be used
solely, except as provided in the immediately succeeding clause (ii) of this
sentence, to reimburse Construction Agent for any Construction Costs (other than
Lessee Funded Tenant Improvement Costs) paid by Construction Agent prior to the
date of the Advance Request for such Advance for which Construction Agent has
not previously been reimbursed hereunder or to pay Construction Costs (other
than Lessee Funded Tenant Improvement Costs) which are due and payable on or
prior to the proposed Advance Date, including the Funding of Capitalized
Interest, Capitalized Yield, and to pay Fees provided for, and in the manner set
forth, in SECTION 4.4, and (ii) in the case of the final Advance and provided
that Substantial Completion has been achieved, Construction Agent may request
that such Advance be made in such amount, not exceeding the aggregate of any
then remaining unfunded Commitment Amounts to pay any retainages due the General
Contractor or any subcontractor. The Advance Date for any Advance requested by
Construction Agent pursuant to clause (ii) of the preceding sentence shall be no
later than the Commitment Period Termination Date. Lessor shall be obligated to
make such Advance for the final Construction Cost (other than Lessee Funded
Tenant
6
Improvement Costs), provided that the same is made in conformity with the
foregoing requirements, and the funds comprising such Advance shall be deposited
by Lessor in an account established by it at such bank as shall be directed by
Administrative Agent and shall be held in such account for the purpose of
funding future advances requested by Construction Agent for the foregoing
purposes. Administrative Agent shall have a first priority lien on the amounts
in said account until such amounts are released to fund an Advance as
contemplated herein. Each request by Construction Agent for withdrawal of funds
from such account shall include a certification by Construction Agent that such
funds will be used for the purposes permitted thereby and shall itemize the
amounts of and purposes for which such payments are to be made. Each Advance
also shall be subject to the limitations on amounts and types of Construction
Costs for which an Advance may be requested as set forth in the Construction
Budget.
(e) ADDITIONAL ADVANCE REQUIREMENTS AND PROCEDURES. Each Advance Date
shall be a Business Day, and there shall be no more than one Advance during any
calendar month (excluding any Advance made or deemed made solely to pay
Capitalized Fees, Capitalized Interest or Capitalized Yield). Each Advance
(excluding any Advance made or deemed made solely to pay Capitalized Fees,
Capitalized Interest or Capitalized Yield) shall be in a minimum amount equal to
$500,000, or an integral multiple of $100,000, in excess thereof, provided, that
so long as an Advance is for the full amount of the aggregate Available
Commitment and exceeds the minimum threshold of $500,000, such Advance need not
be in an integral multiple of $100,000. All remittances made by Certificate
Holders and Lenders for the Funding of any Advance shall be made in immediately
available federal funds by wire transfer to Administrative Agent, on behalf of
Lessor, at Administrative Agent's address referred to in SCHEDULE III hereto
prior to 12:00 noon (Salt Lake City time) on the Advance Date specified in the
relevant Advance Request; PROVIDED, that if the terms and conditions for such
Advance set forth herein have not been satisfied by 11:00 AM (Salt Lake City
time) on the Advance Date specified in such Advance Request, no Participant
shall be obligated to maintain the availability of its funds for such Advance
unless such Participant has received a satisfactory indemnity for the overnight
investment of such funds. Promptly upon Administrative Agent's receipt of such
funds from the Participants, subject to the conditions provided for herein
(including SECTION 3.2), Administrative Agent shall wire such funds to
Construction Agent (including for this purpose any escrow account designated by
Construction Agent) for deposit on the applicable Advance Date to such account
as Construction Agent shall
7
have indicated in the Advance Request or, if applicable, in the case of the
final Advance, to Lessor for deposit in the account provided for in SECTION
3.1(d). The Funding by each Certificate Holder and each Lender to Administrative
Agent of its respective portion of an Advance shall constitute authorization and
direction by such party to Administrative Agent to make an Advance pursuant to
this ARTICLE III.
(f) TERMINATION OF COMMITMENTS. Notwithstanding anything in this
Participation Agreement to the contrary, the Commitments shall terminate and
Lessor shall not be obligated to make any Advance, and no Participant shall be
obligated to make any Fundings, and no Advance Date may occur upon the
occurrence of the earlier of (i) 12:00 noon Salt Lake City time on the last day
of the Commitment Period or (ii) a termination of the Lenders' Commitment
pursuant to SECTION 2.1 of the Loan Agreement.
SECTION 3.2. APPOINTMENT OF CONSTRUCTION AGENT; PAYMENT OF CONSTRUCTION
COSTS AND FEES; APPLICATION OF FUNDS. Effective on the Second Document Closing
Date, Lessee is hereby appointed as Construction Agent to serve as Lessor's
agent to construct the Financed Improvements on the terms and conditions set
forth herein and in the Construction Agency Agreement. Construction Agent shall
timely request Advances for the purposes herein provided and fund the Lessee
Funding Amount when required pursuant to SECTION 8.1. On the initial Advance
Date and on each subsequent Advance Date, upon the satisfaction or waiver of the
terms and conditions of this Participation Agreement, Lessor shall make an
Advance from funds made available by the Participants pursuant to SECTION 3.1(c)
in the amount specified in the applicable Advance Request either, (i) to the
extent Construction Costs have not been previously paid and are then due and
payable, to the Person(s) entitled to the payment thereof, (ii) to Construction
Agent to reimburse Construction Agent for Construction Costs (other than Lessee
Funded Tenant Improvement Costs) incurred and paid by or, to the extent provided
in SECTION 3.1(d) in the case of the final Advance, to be paid, by Construction
Agent on behalf of Lessor and for which Construction Agent has not been
previously reimbursed, PROVIDED, HOWEVER, that all Fundings for Capitalized
Interest, Capitalized Yield, Capitalized Fees or other Supplemental Rent (if
any) payable to any Participant will be Funded directly to the Participant to
which such amount is due.
SECTION 3.3. ADVANCE DATES.
(a) NOTICE AND CLOSING. At least three (3) Business Days prior to
each Advance Date, Lessee shall deliver to
8
Administrative Agent an irrevocable written notice substantially in the form of
EXHIBIT A (an "ADVANCE REQUEST") (and Administrative Agent shall promptly
forward a copy of such Advance Request to each Participant and Lessor) setting
forth:
(i) the proposed Advance Date and with respect to the Initial
Advance, the Estimated Completion Date;
(ii) a statement of the amount of the requested Advance
(including a statement of the amount thereof, if any, that will be used to
Fund Capitalized Interest, Capitalized Yield, and Capitalized Fees and to
pay Transaction Expenses);
(iii) a description of all Construction Costs, by type and
amount, to which such Advance applies, indicating which portion of such
Construction Costs has been paid by Construction Agent or, in the case of
the final Advance, is to be paid by Construction Agent for the purposes
specified in clause (ii) of the second sentence of SECTION 3.1(d) and for
which Construction Agent has not been reimbursed hereunder, and which
portion of such Construction Costs is then due and unpaid, and Persons that
have been so paid or that are so entitled to payment (including a
description of all Soft Costs and Transaction Expenses);
(iv) a certification by Construction Agent that: (I) such Advance
complies with the limitations and conditions set forth in SECTION 3.1 and
all conditions to such Advance set forth in ARTICLE VI have been fully
satisfied,(II) the aggregate amount to be Funded by the Participants on
such Advance Date, together with the Advances made on all prior Advance
Dates (including the Original Advance), does not exceed the lesser of: (1)
the Aggregate Commitment Amount or (2) 114% of the aggregate Fair Market
Value of the "as-built" Fair Market Value of the Financed Improvements and
the Land, as of the Completion Date as set forth in the Appraisal, (III)
the aggregate amount to be funded by the Participants on such Advance Date,
together with all Advances made on all prior Advance Dates, and each
specific Construction Cost requested on such Advance Date does not exceed
the aggregate amounts set forth in the Approved Construction Budget or,
with respect to any specific Construction Cost, does not exceed the
applicable budget item for such costs (plus any reserve specifically for
such item) set forth in the Approved Construction Budget taking into
consideration the allocation of any Savings and the remaining Contingency
Reserve available in respect of such costs (each such allocation so applied
9
reducing thereafter the then remaining Contingency Reserve); (IV) all
conditions to Construction Agent's right to request an Advance for
Construction Costs pursuant to the Construction Agency Agreement have been
fully satisfied to the extent not waived in accordance with the Operative
Documents, and (V) all conditions set forth in the Construction Agency
Agreement to the disbursement of all prior Advances to Construction Agent
in respect of Construction Costs have been fully satisfied to the extent
not waived in accordance with the Operative Documents; and
(v) wire transfer instructions for the disbursement of the
appropriate amount of funds to Construction Agent or to such other Persons
as may be entitled to such Advance.
Any such Advance Request shall also be accompanied by the certifications
required under the Construction Agency Agreement.
All documents and instruments required to be delivered on the Second
Document Closing Date and the Initial Advance Date pursuant to this
Participation Agreement shall be delivered at the offices of Xxxxx, Xxxxx &
Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
or at such other location as Administrative Agent and Lessee may agree. All
documents and instruments required to be delivered on any subsequent
Advance Date pursuant to this Participation Agreement shall be delivered to
Administrative Agent, or at such other location as the Required
Participants, Administrative Agent, Lessor and Lessee may agree. On the
scheduled Advance Date, and subject to the satisfaction or waiver of the
conditions set forth in ARTICLE VI, Participants shall Fund the Advance by
wire transfer directly to Administrative Agent. Notwithstanding the
foregoing, in the event that Lessor elects to terminate the Construction
Agency Agreement and to cause the completion of the Financed Improvements
to be constructed pursuant to SECTION 5.3(c) of the Construction Agency
Agreement, then Lessor may submit Advance Requests, the aggregate amount
available to be Funded by the Participants shall equal the aggregate amount
of the Available Commitments (without regard to the limitations in SECTION
3.3(a)(iv), but in all cases subject to the limitations and limits set
forth in SECTION 3.1(d)), and such amounts shall be disbursed directly to
Lessor for the payment of Construction Costs.
10
(b) COMMITMENT. Subject to compliance by Construction Agent with the terms
of this Participation Agreement and the satisfaction or waiver of the conditions
set forth in this ARTICLE III and in ARTICLE VI, the Participants shall disburse
the respective amounts of their Commitments in accordance with the requirements
of this Participation Agreement.
SECTION 3.4. CAPITALIZATION OF CERTAIN AMOUNTS DURING INTERIM TERM.
(a) During the Interim Term, on each date which is three (3) Business
Days prior to any Payment Date, Construction Agent shall be deemed to have
requested an Advance in an amount equal to the applicable Capitalized Interest,
Capitalized Yield and Capitalized Fees accrued on or with respect to the Loans
and Certificate Amounts, with an Interest Period ending on such Payment Date.
The Advance Date with respect to each such Advance for such Capitalized
Interest, Capitalized Yield and Capitalized Fees shall be the relevant Payment
Date (subject to the terms and conditions for an Advance set forth in this
Participation Agreement) and the proceeds of such Advance shall be applied to
pay such Capitalized Interest, Capitalized Yield and Capitalized Fees. On each
such Advance Date as to which such an Advance is being made, the Construction
Costs shall be increased by an amount equal to the Capitalized Interest, the
Capitalized Yield and the Capitalized Fees so Funded; PROVIDED, HOWEVER, that if
an Advance hereunder would exceed the limitations and limits set forth in the
first paragraph of SECTION 3.1(d), no Participant shall have any obligation to
make any such Advance.
(b) If any Participant shall request Lessor to capitalize the amount
of any Claims relating to a Nonrelated Construction Event or any loss or
liability resulting from a Casualty or Condemnation occurring during the Interim
Term, any such amount shall be capitalized by automatically treating such amount
as an Advance (funded by such Participant) and shall correspondingly increase
the Participant Balance of such Participant. Administrative Agent shall notify
Lessee and each Participant of each amount so capitalized and treated as an
Advance (and the related increase in Participant Balances therein) under this
SECTION 3.4 within fifteen (15) days after each such Advance.
SECTION 3.5. NON-FUNDING LENDER'S PORTION.
(a) In the event that any Lender (a "DEFAULTING LENDER") fails to
make available to Administrative Agent on the applicable Advance Date an amount
equal to such Lender's Commitment Percentage
11
of the amount of the Advance required by the terms hereof to be funded on such
Advance Date (a "DEFAULTED AMOUNT"), or Administrative Agent determines that a
Lender will become a Defaulting Lender on the applicable Advance Date,
Administrative Agent shall promptly notify Lessee thereof and Lessee shall have
the following options: (x) except in respect of any Advance pursuant to SECTION
3.4 and without in any way waiving the occurrence of any Payment Default, Lessee
may elect to postpone the Funding of the entire Advance (PROVIDED, HOWEVER, that
such postponement shall in no event relieve Lessee of its obligation to pay as
Contingent Rent any Break Costs suffered or incurred by any Participant as
required by and pursuant to ARTICLE XIII), (y) Lessee may elect to have the
provisions of CLAUSE (b) of this SECTION 3.5 be applicable. In either case,
Lessor or Administrative Agent may elect to have the Defaulting Lender replaced
with a new Lender acceptable to Lessee and Administrative Agent and the
Defaulting Lender shall cooperate (at no cost to Lessee) in replacing such
Defaulting Lender. Any replacement of a Defaulting Lender shall not affect any
claim, action or right Lessee may have against such Defaulting Lender.
(b) At the Lessee's option, the Administrative Agent shall (i)
promptly notify each other Lender (each, a "NON-DEFAULTING LENDER") with a copy
to the Defaulting Lender, (ii) specify the then Available Commitment (as used in
this SECTION 3.5(b), the "DEFAULTED LENDER COMMITMENT AMOUNT") of the Defaulting
Lender and (iii) give to all Non-Defaulting Lenders the opportunity to increase
their respective Commitments by notice in writing to Administrative Agent within
five (5) Business Days of Administrative Agent's notice in CLAUSE (i) above. If
the Non-Defaulting Lenders offer to increase their Commitments in an amount in
the aggregate greater than the Defaulted Lender Commitment Amount,
Administrative Agent shall increase the Commitments of the participating
Non-Defaulting Lenders on a pro-rata basis in accordance with the respective
amounts by which such Non-Defaulting Lenders have offered to participate, it
being understood that in no event shall the aggregate amount funded by any
Lender exceed the amount of such Lender's Commitment, after giving effect to any
increase in such Commitment pursuant to this sentence. The Administrator shall
provide the Administrative Agent with such information as is necessary for the
Administrative Agent to give such notification.
As soon as practical after receipt of notices from Non-Defaulting
Lenders electing to participate in the Defaulted Lender Commitment Amount in an
amount equal to or greater than the Defaulted Lender Commitment Amount,
Administrative Agent shall
12
notify each participating Lender of its revised Loan Commitment, Lessee may
resubmit such Advance Request and each Lender shall transfer to Administrative
Agent, in immediately available funds, its pro rata share of the requested
Advance, determined in proportion to the revised Loan Commitments of the
Lenders. Following a revision of the Loan Commitments as described above, a
Defaulting Lender shall not have the right to Fund its Defaulted Lender
Commitment Amount. Notwithstanding anything set forth herein or in any other
Operative Document to the contrary, the right of the Defaulting Lender to
receive any payments made under the Notes or otherwise in accordance with the
Operative Documents shall be subordinate in all respects to the right of the
Non-Defaulting Lenders to receive payments of amounts due under the Notes or
otherwise in accordance with the Operative Documents, and no such payments shall
be made to the Defaulting Lender until each Non-Defaulting Lender and
Non-Defaulting Certificate Holder shall have received all such sums then due to
it.
Unless either (i) Non-Defaulting Lenders offer to increase their Loan
Commitments in an amount equal to or greater than the Defaulted Lender
Commitment Amount or (ii) the Defaulting Lender is replaced pursuant to SECTION
3.5(a) such that the aggregate Available Commitments of the Non-Defaulting
Lenders are equal to the remaining unfunded Loan Commitment, no Non-Defaulting
Lender shall be obligated to fund any Advances.
SECTION 3.6. NON-FUNDING CERTIFICATE HOLDER'S PORTION.
(a) In the event that any Certificate Holder (a "DEFAULTING
CERTIFICATE HOLDER") fails to Fund to the Administrative Agent on the applicable
Advance Date an amount equal to such Certificate Holder's Commitment Percentage
of the amount of the Advance required by the terms hereof to be funded on such
Advance Date, or the Administrative Agent determines that a Certificate Holder
will become a Defaulting Certificate Holder on the applicable Advance Date, the
Administrative Agent shall promptly notify the Lessee thereof and the Lessee
shall have either or both of the following options: (x) the Lessee may elect to
postpone the funding of the entire Advance (PROVIDED, HOWEVER, that such
postponement shall in no event relieve Lessee of its obligation to pay as
Contingent Rent any Break Costs suffered or incurred by any Participant), (y)
the Lessee may elect to have the provisions of CLAUSE (b) of this SECTION 3.6 be
applicable. The Lessee or the Administrative Agent may elect to have the
Defaulting Certificate Holder replaced with a new Certificate Holder acceptable
to the Lessee, and the Administrative Agent and the Defaulting Certificate
Holder shall cooperate (at no cost to the
13
Lessee) in replacing such Defaulting Certificate Holder. Any replacement of a
Defaulting Certificate Holder shall not affect any claim, action or right Lessee
may have against such Defaulting Certificate Holder.
(b) At the Lessee's option, the Administrative Agent shall (i)
promptly notify each other Certificate Holder (each, a "NON-DEFAULTING
CERTIFICATE HOLDER") with a copy to the Defaulting Certificate Holder, (ii)
specify the then Available Commitment (as used in this SECTION 3.6(b), the
"DEFAULTED CERTIFICATE HOLDER COMMITMENT AMOUNT") of the Defaulting Certificate
Holder and (iii) give to all Non-Defaulting Certificate Holders the opportunity
to increase their respective Commitments by notice in writing to Administrative
Agent within five (5) Business Days of Administrative Agent's notice in CLAUSE
(i) above. If the Non-Defaulting Certificate Holders offer to increase their
Commitments in the aggregate in an amount greater than the Defaulted Certificate
Holder Commitment Amount, Administrative Agent shall increase the Commitments of
the participating Non-Defaulting Certificate Holders on a pro-rata basis in
accordance with the respective amounts by which such Non-Defaulting Certificate
Holders have offered to participate, it being understood that in no event shall
the aggregate amount funded by any Certificate Holder exceed the amount of such
Certificate Holder's Commitment, after giving effect to any increase in such
Commitment pursuant to this sentence.
As soon as practical after receipt of notices from Non-Defaulting
Certificate Holders electing to participate in the Defaulted Certificate Holder
Commitment Amount in an amount equal to or greater than the Defaulted
Certificate Holder Commitment Amount, Administrative Agent shall notify each
participating Certificate Holder of its revised Certificate Commitment, Lessee
may resubmit such Advance Request, and each Certificate Holder shall transfer to
Administrative Agent, in immediately available funds, its pro rata share of the
requested Advance, determined in proportion to the revised Certificate
Commitments of the Certificate Holders. Following a revision of the Certificate
Commitments as described above, a Defaulting Certificate Holder shall not have
the right to fund its Defaulted Certificate Holder Commitment Amount.
Notwithstanding anything set forth herein or in any other Operative Document to
the contrary, the right of the Defaulting Certificate Holder to receive any
payments made under its Certificate(s) or otherwise in accordance with the
Operative Documents shall be subordinate in all respects to the right of the
Non-Defaulting Certificate Holders and Non-Defaulting Lenders to receive
payments of amounts due under the Notes and the
14
Certificates or otherwise in accordance with the Operative Documents, and no
such payments shall be made to the Defaulting Certificate Holder until each
Non-Defaulting Certificate Holder and Non-Defaulting Lender shall have received
all such sums then due to it.
Unless either (i) Non-Defaulting Certificate Holders offer to increase
their Certificate Commitments in an amount equal to or greater than the
Defaulted Certificate Holder Commitment Amount or (ii) the Defaulting
Certificate Holder is replaced pursuant to SECTION 3.6(a) such that the
aggregate Available Commitments of the Non-Defaulting Certificate Holders are
equal to the remaining unfunded Certificate Commitment, no Non-Defaulting
Certificate Holder shall be obligated to fund any Advances.
SECTION 3.7. ADDITIONAL RIGHTS OF LESSEE. In the case Lessee receives
notice from Administrative Agent of any Defaulted Amounts under either SECTION
3.5 or SECTION 3.6, or both, the Lessee shall have the rights set forth under
ARTICLE X.
ARTICLE IV
YIELD; INTEREST; COMMITMENT REDUCTION; FEES
SECTION 4.1. YIELD. The amount of the Certificate Amounts outstanding from
time to time shall accrue Yield at the Yield Rate, calculated using the actual
number of days elapsed and, when the Yield Rate is based on the LIBO Rate, a
360-day year basis and, otherwise, a 365- (or, if applicable, 366-) day year
basis. If all or any portion of the Certificate Amounts, any Yield payable
thereon or any other amount payable hereunder shall not be paid when due
(whether at stated maturity, acceleration thereof or otherwise), such overdue
amount shall bear interest at a rate per annum which is equal to the Overdue
Rate.
SECTION 4.2. INTEREST ON LOANS. Each Loan shall accrue Interest computed
and payable in accordance with the terms of the Loan Agreement.
SECTION 4.3. PAYMENTS AND PREPAYMENTS OF LOANS AND CERTIFICATE AMOUNTS AND
OTHER AMOUNTS.
(a) Lessor hereby directs Lessee to pay to Administrative Agent all
Rent that is due from time to time (other than Excepted Payments and other
Supplemental Rent payable to third parties, which Lessor hereby directs Lessee
to make directly to the applicable Person entitled thereto). Except as provided
in the
15
following sentence and excluding amounts payable by other Persons which Lessee
or Construction Agent is required to pay over to Lessor, Administrative Agent or
any Participant, none of the Fees provided to be paid herein, including those
payable pursuant to SECTION 4.4, and no Supplemental Rent due prior to the Base
Term Commencement Date pursuant to any provision of this Agreement or any other
Operative Document shall be recourse obligations of Lessee, and the same shall
be payable by Lessor solely from Advances made, at the request of Lessee in its
capacity as Construction Agent, to pay such amounts pursuant to the terms and
conditions of SECTION 3.1, to the extent of the Available Commitments. All
Payments or other amounts (i) of accrued but unpaid Rent due under the Original
Lease for the period commencing on and including the First Document Closing Date
("ORIGINAL PERIOD RENTS"), through but excluding the Second Closing Date which
shall be due and payable by Lessee on the first Scheduled Payment Date following
the Second Document Closing Date, (ii) required to be made by Lessee prior to
the Base Term Commencement Date pursuant to ARTICLE XII or XIII, (iii)
Construction Costs constituting Lessee Funding Amounts and (iv) subject to the
limitation set forth in SECTIONS 14.1(e), 15.1(c) and 16.7 of the Lease and
SECTION 5.4 of the Construction Agency Agreement (to the extent applicable),
payable by Lessee pursuant to any of ARTICLES XIV, XV, XVI or XVIII of the Lease
or by Construction Agent pursuant to ARTICLE V of the Construction Agency
Agreement, shall be the direct recourse obligations of Lessee and shall not be
payable with Advances.
(b) In the event that Lessee pays the Lease Balance in connection
with Lessee's purchase of the Leased Property in accordance with SECTION 15.1,
16.2(e), 18.1, 18.2 or ARTICLE XIX of the Lease, Lessor will prepay the entire
outstanding principal amount of the Loans and all of the Certificate Amounts.
Each of the Participants hereby acknowledges that its Loans or Certificate
Amounts, as the case may be, may be so prepaid without any prepayment premium
(other than Break Costs, if any).
SECTION 4.4. FEES. Lessee agrees to pay when due the following described
fees (collectively, the "FEES"); PROVIDED, that during the Interim Term, the
Fees shall, as provided in SECTION 4.3(a), be paid with Advances pursuant to the
terms and conditions set forth in SECTION 3.1.
(a) DRAWING FEE. Lessee shall pay on each Advance Date the Drawing
Fee to the Administrative Agent for the benefit of the Participants.
16
(b) OTHER FEES. Lessee also agrees to pay (i) to the Bank, for its
own account, the fees set forth in the Trustee Fee Letter, payable in the
amounts and on the dates set forth therein, (ii) to Administrative Agent, for
its own account, the fees set forth in the Agent Fee Letter, payable in the
amounts and on the dates set forth therein including the Arrangement Fee which
shall be payable on the initial Advance Date following the Second Closing Date
and (iii) to the Arranger, the Arrangement Fee on the Advance Date.
SECTION 4.5. OBLIGATIONS SEVERAL. The obligations of the Participants
hereunder or elsewhere in the Operative Documents shall be several and not
joint; and no Participant shall be liable or responsible for the acts or
defaults of any other party hereunder or under any other Operative Document.
SECTION 4.6. HIGHEST LAWFUL RATE. It is the intention of the parties hereto
to conform strictly to Applicable Laws regarding usury and, anything herein to
the contrary notwithstanding, the obligations of (x) Lessee to Lessor under this
Participation Agreement and the Lease, (y) Lessor to the Certificate Holders
under the Trust Agreement and the Certificates and to the Lenders under the Loan
Agreement and the Notes, and (z) of either Lessee or Lessor or any other party
under any other Operative Document, shall be subject to the limitation that
payments of interest or of other amounts constituting interest under Applicable
Laws shall not be required to the extent that receipt thereof would be in excess
of the Highest Lawful Rate (as defined below), or otherwise contrary to
provisions of law applicable to the recipient limiting rates of interest which
may be charged or collected by the recipient. Accordingly, if the transactions
or the amount paid or otherwise agreed to be paid for the use, forbearance or
detention of money under this Participation Agreement, the Lease, the Trust
Agreement, the Certificates, the Loan Agreement, the Notes or any other
Operative Document would exceed the Highest Lawful Rate or otherwise be usurious
under Applicable Laws (including the federal and state laws of the United
States, or of any other jurisdiction whose laws may be mandatorily applicable)
with respect to the recipient of any such amount, then, in that event,
notwithstanding anything to the contrary in this Participation Agreement, the
Lease, the Trust Agreement, the Certificates, the Loan Agreement, the Notes or
any other Operative Document, it is agreed as follows as to the recipient of any
such amount:
(a) the provisions of this SECTION 4.6 shall govern and control over
any other provision in this Participation Agreement, the Lease, the Trust
Agreement, the Certificates, the Loan
17
Agreement, the Notes and any other Operative Document and each provision set
forth therein is hereby so limited;
(b) the aggregate of all consideration which constitutes interest
under Applicable Laws that is contracted for, charged or received under this
Participation Agreement, the Lease, the Trust Agreement, the Certificates, the
Loan Agreement, the Notes or any other Operative Document shall under no
circumstances exceed the maximum amount of interest allowed by Applicable Laws
(such maximum lawful interest rate, if any, with respect to such recipient
herein called the "HIGHEST LAWFUL RATE"), and all amounts owed under this
Participation Agreement, the Lease, the Trust Agreement, the Certificates, the
Loan Agreement, the Notes and any other Operative Document shall be held subject
to reduction and (i) the amount of interest which would otherwise be payable to
the recipient hereunder and under the Lease, the Trust Agreement, the
Certificates, the Loan Agreement, the Notes and any other Operative Document,
shall be automatically reduced to the amount allowed under Applicable Laws and
(ii) any unearned interest paid in excess of the Highest Lawful Rate shall be
credited to the payor by the recipient (or, if such consideration shall have
been paid in full, refunded to the payor);
(c) all sums paid, or agreed to be paid for the use, forbearance and
detention of the money under this Participation Agreement, the Lease, the Trust
Agreement, the Certificates, the Loan Agreement, the Notes or any other
Operative Document shall, to the extent permitted by Applicable Laws be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest is
uniform throughout the full term thereof;
(d) if at any time the interest, together with any other fees, late
charges and other sums payable pursuant to or in connection with this
Participation Agreement, the Lease, the Trust Agreement, the Certificates, the
Loan Agreement, the Notes and any other Operative Document executed in
connection herewith or therewith, and deemed interest under Applicable Laws
exceeds that amount which would have accrued at the Highest Lawful Rate, the
amount of interest and any such fees, charges and sums to accrue to the
recipient of such interest, fees, charges and sums pursuant to the Operative
Documents shall be limited, notwithstanding anything to the contrary in the
Operative Documents to that amount which would have accrued at the Highest
Lawful Rate for the recipient, but any subsequent reductions, as applicable,
shall not reduce the interest to accrue pursuant to the Operative Documents
below the recipient's Highest Lawful Rate until the total amount of interest
18
payable to the recipient (including all consideration which constitutes
interest) equals the amount of interest which would have been payable to the
recipient (including all consideration which constitutes interest), PLUS the
amount of fees which would have been received but for the effect of this SECTION
4.6.
ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1. NATURE OF TRANSACTION. It is the intention of the parties
that:
(a) the Overall Transaction constitutes an operating lease from
Lessor to Lessee for purposes of Lessee's and Guarantor's financial reporting,
including, without limitation, under Financial Accounting Standards Board
Statement No. 13;
(b) for federal and all state and local income and transfer taxes,
bankruptcy, insolvency, conservatorship and receivership law (including the
substantive law upon which bankruptcy, conservatorship and insolvency and
receivership proceedings are based), and real estate and Uniform Commercial Code
purposes:
(i) the Overall Transaction (including the transactions and
activities during the Interim Term referred to or contemplated by the
Construction Agency Agreement) constitutes a financing by the Participants
to Lessee and preserves beneficial ownership in the Leased Property in
Lessee, Lessee will be entitled to all tax benefits ordinarily available to
owners of property similar to the Leased Property for tax purposes
(including, without limitation, depreciation), and the obligations of
Lessee to pay Basic Rent shall be treated as payments of interest to the
Participants, and the payment by Lessee of any other amounts in respect of
the Lease Balance shall be treated as payments of principal to the
Participants;
(ii) the Lease grants a security interest or Lien, as the case
may be, in the Leased Property and the other TeleTech Collateral in favor
of Lessor, and for the benefit of the Participants, to secure Lessee's
payment and performance of the Obligations; and
(iii) the Deed of Trust creates Liens and security interests in
the Mortgaged Property in favor of Administrative
19
Agent for the benefit of all of the Participants to secure Lessee's payment
and performance of the Obligations.
Nevertheless, Lessee and Guarantor acknowledge and agree that none of Lessor,
Administrative Agent, Arranger or any Participant has made any representations
or warranties concerning the tax, accounting or legal characteristics of the
Operative Documents or any aspect of the Overall Transaction and that Lessee and
Guarantor have obtained and relied upon such tax, accounting and legal advice
concerning the Operative Documents and the Overall Transaction as each of them
deems appropriate; provided, however, none of the Lessor, Administrative Agent,
Arranger or any Participant shall treat the Overall Transaction for federal or
state tax purposes other than as a financing preserving beneficial ownership in
the Leased Property in the Lessee in the manner described in this SECTION
5.1(b).
(c) Specifically, without limiting the generality of CLAUSE (b), the
parties hereto intend and agree that in the event of any insolvency,
conservatorship or receivership proceedings or matters or a petition under the
United States bankruptcy laws, as amended from time to time, or any other
applicable insolvency, conservatorship or receivership laws or statute of the
United States of America or any State or Commonwealth thereof affecting Lessee,
Guarantor, Lessor, the Certificate Holders or the Lenders or any collection
actions, the transactions evidenced by the Operative Documents (including the
Lease) constitute loans made directly to Lessee by the Participants, in each
case as unrelated third party lenders, and that Lessor holds title to the Leased
Property for the benefit of the Participants to secure Lessee's obligations to
repay such loans to the Participants and all other amounts due under any of the
Operative Documents.
SECTION 5.2. AMOUNTS DUE UNDER LEASE. Anything else herein or elsewhere in
the Operative Documents to the contrary notwithstanding, it is the intention of
Lessee, Guarantor, Lessor, the Certificate Holders and the Lenders that: (i) the
amount and timing of installments of Basic Rent due and payable from time to
time from Lessee under the Lease shall be equal to the aggregate payments due
and payable as Interest on the Loans and Yield on the Certificate Amounts on
each Payment Date; (ii) if Lessee elects the Early Termination Option (other
than any partial purchases pursuant to Section 18.1(b) of the Lease), the
Purchase Option or becomes obligated or otherwise elects to purchase the Leased
Property under the Lease, then the Loans, the Certificate Amounts, all Interest,
Yield and Fees and all other obligations of Lessee owing to Lessor and the
Participants shall be paid in full by Lessee; (iii) if
20
Lessee properly elects the Sale Option with respect to the Leased Property, and
subject to ARTICLES XX and XXI of the Lease, Lessee shall only be required to
pay to Administrative Agent the proceeds of the sale of the Leased Property, the
Sale Option Recourse Amount with respect to the Leased Property and any amounts
due pursuant to SECTION 20.2 of the Lease (which aggregate amounts may be less
than the Lease Balance), together with all other amounts due and payable by
Lessee; and (iv) upon an Event of Default resulting in an acceleration of
Lessee's obligation to purchase the Leased Property under the Lease at any time,
the amounts then due and payable by Lessee under the Lease shall include all
amounts necessary to pay in full the Lease Balance, PLUS, to the extent not
included in the Lease Balance, all other amounts then due from Lessee to the
Participants under the Operative Documents.
SECTION 5.3. DISTRIBUTION.
(a) Each payment of Basic Rent (and any payment of interest on
overdue installments of Basic Rent) received by Administrative Agent shall be
distributed by Administrative Agent to the Participants, PRO RATA in accordance
with, and for application to, the amount of Interest and Yield then due on the
Loans and the Certificate Amounts, as well as any overdue interest due to each
Lender or Certificate Holder (to the extent permitted by Applicable Laws);
provided, however that Original Period Rent paid on the first Scheduled Payment
Date following the Second Document Closing Date shall be paid in full to the
Initial Lender and the Initial Certificate Holder in accordance with the
respective Commitment Percentages under the Original Participation Agreement.
(b) Any payment received by Administrative Agent as a result of:
(i) the purchase of all of the Leased Property in connection
with Lessee's exercise of its Early Termination Option or the Purchase
Option under SECTION 18.1(a) or 19.1 of the Lease,
(ii) Lessee's compliance with its obligation to purchase (or
cause its designee to purchase) the Leased Property in accordance with the
Lease,
(iii) the payment of the Lease Balance in accordance with SECTION
15.1 of the Lease, or
21
(iv) Lessee failing to fulfill one or more of the conditions to
the exercise of the Sale Option and Administrative Agent's receipt of the
Lease Balance from Lessee pursuant to SECTION 20.1 of the Lease,
shall be distributed by Administrative Agent to pay in full the Participant
Balance of each Participant, and any payment received by Administrative Agent as
a result of the partial purchase under SECTION 18.1(b) shall be distributed pro
rata among the Participants.
(c) The payment by Lessee of the Sale Option Recourse Amount to
Administrative Agent in accordance with SECTION 20.1 of the Lease upon Lessee's
exercise of the Sale Option shall be distributed by Administrative Agent in the
following amounts and order of priority:
FIRST, on a pro rata basis based on their respective shares of the
Loan Balance, to the Lenders for application to pay in full the Loan
Balance owing to them; and
SECOND, on a pro rata basis based on their respective shares of the
Certificate Balance, to the Certificate Holders to pay in full the
Certificate Balance.
(d) Any payments received by Administrative Agent as Gross Proceeds from
the sale of the Leased Property pursuant to Lessee's exercise of the Sale Option
pursuant to ARTICLE XX of the Lease, together with any payment made by Lessee as
a result of an appraisal pursuant to SECTION 12.3, shall be distributed by
Administrative Agent upon receipt thereof in the following order of priority:
FIRST, on a pro rata basis based on their respective shares of the
Loan Balance, to the Lenders for application to pay in full the Loan
Balance;
SECOND, on a pro rata basis based on their respective shares of the
Certificate Balance, to the Certificate Holders for application to pay in
full the Certificate Balance; and
THIRD, the balance, if any, shall be promptly distributed to, or as
directed by, Lessee.
(e) All payments of Supplemental Rent received by Administrative Agent
(excluding any amounts payable pursuant to the preceding provisions of this
SECTION 5.3) shall be distributed
22
promptly by Administrative Agent upon receipt thereof to the Persons entitled
thereto pursuant to the Operative Documents.
(f) Notwithstanding any other provision of this SECTION 5.3, any Excepted
Payment received at any time by Administrative Agent shall be distributed
promptly to the Person entitled to receive such Excepted Payment pursuant to the
Operative Documents.
(g)(i) All payments received and amounts realized by Administrative Agent
as a result of an Event of Default (including any amounts received by
Administrative Agent in connection with (x) any sale of all or any part of the
Leased Property as a result of an Event of Default or a return of the Leased
Property pursuant to SECTION 15.1(c)(z) or of the Lease or (y) any Casualty or
Condemnation after the occurrence and during the continuance of an Event of
Default (if not paid to Lessee for restoration) shall be distributed by
Administrative Agent in the following order of priority:
FIRST, so much of such payments or amounts as shall be required to pay
the then existing or prior Participants the amounts payable to them
pursuant to any expense reimbursement or indemnification provisions of the
Operative Documents shall be distributed to each such Participant without
priority of one over the other in accordance with the amount of such
payment or payments payable to each such Person;
SECOND, on a pro rata basis based on their respective shares of the
Loan Balance, to the Lenders for application to pay the Loan Balance in
full;
THIRD, on a pro rata basis based on their respective shares of the
Certificate Balance, to the Certificate Holders for application to pay the
Certificate Balance in full; and
FOURTH, the balance, if any, of such payment or amounts remaining
thereafter shall be promptly distributed to, or as directed by, Lessee.
(ii) During the occurrence and continuance of an Event of Default, all
amounts (other than Excepted Payments) received or realized by
Administrative Agent and otherwise distributable pursuant to SECTIONS
5.3(a) and 5.3(b) shall be distributed as provided for in CLAUSE (g)(i)
above.
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(h)(i) Subject to SECTIONS 5.3(h)(ii) and 5.3(h)(iii), any payment received
by Administrative Agent for which no provision as to the application thereof is
made in the Operative Documents or elsewhere in this SECTION 5.3 shall be
distributed PRO RATA among the Lenders and the Certificate Holders for
application to pay the Loan Balance and the Certificate Balance as applicable,
without priority of one over the other, in the proportion that the Participant
Balance of each bears to the Lease Balance.
(ii) Except as otherwise provided in SECTIONS 5.3(a), 5.3(b) and
5.3(g)(i), all payments received and amounts realized by Administrative
Agent under the Lease or otherwise with respect to the Leased Property, or
any proceeds thereof, to the extent received or realized at any time after
an indefeasible payment in full of the Participant Balances of all of the
Participants and all other amounts due and owing to the Participants, shall
be distributed forthwith by Administrative Agent to, or as directed by,
Lessee.
(iii) Any payment received by Administrative Agent for which provision
as to the application thereof is made in an Operative Document, but not
elsewhere in this SECTION 5.3, shall be distributed forthwith by
Administrative Agent to the Person and for the purpose for which such
payment was made in accordance with the terms of such Operative Document.
(i) Any amounts payable to Administrative Agent as a result of a Casualty
or Condemnation pursuant to SECTION 14.1 of the Lease shall be distributed as
follows: (x) if a Termination Notice shall have been given, all amounts that are
to be applied to the purchase price of the Leased Property in accordance with
SECTION 15.1(b) or 15.1(c)(y) of the Lease shall be distributed by
Administrative Agent in accordance with SECTION 5.3(b); or if a Termination
Notice is not given, any proceeds are to be used in accordance with clause (y)
below, and any excess proceeds shall be distributed by Administrative Agent in
accordance with SECTION 5.3(b); and (y) all amounts payable to Lessee for the
restoration or repair of damage caused by such Casualty or Condemnation in
accordance with SECTION 14.1(a) of the Lease shall be distributed to, or as
directed by, Lessee.
(j) To the extent any payment made to any Participant is insufficient to
pay in full the Participant Balance of such Participant, then each such payment
shall first be applied to accrued Interest or Yield, as applicable, and then to
principal outstanding on the Loans or the Certificate Amounts, as applicable.
24
SECTION 5.4 ADJUSTMENTS. If any Participant (a "BENEFITTED PARTICIPANT")
shall at any time receive any payment of all or part of its Loan or Certificate
Amount, as applicable, or Interest or Yield thereon, as applicable, or receive
any of the collateral in respect thereof (whether voluntarily or involuntarily,
by setoff, or otherwise), in an amount greater than the amount to which such
Participant was entitled pursuant to SECTION 5.3, such Participant shall return
such amount or collateral to Administrative Agent for distribution to the
Person(s) entitled thereto in accordance with SECTION 5.3; PROVIDED, HOWEVER,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Participant, such excess payment or benefits, as
applicable, shall be returned to the Benefitted Participant, to the extent of
such recovery, but without interest.
ARTICLE VI
CONDITIONS PRECEDENT TO ADVANCES AND REQUIREMENT FOR COMPLETION
SECTION 6.1. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligations of
Lessor (through Administrative Agent) to make the Advance on the initial Advance
Date, the obligations of the Certificate Holders to Fund the related Certificate
Amounts on the initial Advance Date and the obligation of the Lenders to make
the related Funding of their Loans on the initial Advance Date are subject to
the satisfaction or waiver of each of the following conditions precedent:
(a) RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC. OF LESSEE AND
GUARANTOR.
(i) Lessee shall have delivered to Administrative Agent (A) a
good standing certificate with respect to Lessee from the Secretary of
State of the State of Colorado issued by such office no earlier than thirty
(30) days prior to the Advance Date and (B) an Officer's Certificate of
Lessee substantially in the form of EXHIBIT B-1, attaching and certifying
as to (1) the corporate authority for the execution, delivery and
performance by Lessee of each Operative Document to which it is or will be
a party, (2) its organizational documents, (3) its by-laws and (4) the
incumbency and signature of persons authorized to execute and deliver on
its behalf the Operative Documents to which it is a party.
(ii) Guarantor shall have delivered to Administrative Agent (A) a
good standing certificate with respect to
25
Guarantor from the Office of the Secretary of State of the State of
Delaware issued by such office no earlier than thirty (30) days prior to
the Advance Date and (B) an Officer's Certificate of Guarantor
substantially in the form of EXHIBIT B-2, attaching and certifying as to
(1) the corporate authority for the execution, delivery and performance by
Guarantor of each Operative Document to which it is or will be a party, (2)
its organizational documents, (3) its by-laws and (4) the incumbency and
signature of persons authorized to execute and deliver on its behalf the
Operative Documents to which it is a party.
(b) RESPONSIBLE OFFICER'S CERTIFICATES OF LESSEE AND GUARANTOR.
Administrative Agent shall have received a Responsible Officer's Certificate of
Lessee and Guarantor, in substantially the form of EXHIBITS C-1 and C-2 attached
hereto, dated as of the Initial Advance Date, stating on behalf of Lessee and
Guarantor, respectively, that: (i) each and every representation and warranty of
Lessee and Guarantor contained in each Operative Document to which it is a party
is true and correct on and as of the Initial Date, except to the extent such
representation or warranty relates solely to an earlier date, in which case such
certificate shall state that such representation or warranty shall have been
true and correct on and as of such earlier date; (ii) no Default, Event of
Default, Casualty or Condemnation has occurred and is continuing, and each of
Lessee and Guarantor, each after due inquiry and investigation is not aware of
any existing or threatened condemnations, actions, suits or proceedings with
respect to all or any portion of the Leased Property; (iii) each Operative
Document to which Lessee or Guarantor is a party is in full force and effect
with respect to it; and (iv) each of Lessee and Guarantor has duly performed and
complied in all material respects with all covenants contained herein or in any
other Operative Document required to be performed by it on or prior to the
Advance Date.
(c) CERTIFICATE OF LESSOR. Administrative Agent shall have received (i) a
certificate of the Secretary or an Assistant Secretary of Bank substantially in
the form of EXHIBIT B-3 attaching and certifying as to (A) the corporate
authority for the execution, delivery and performance by Bank of each Operative
Document to which it is or will be a party in its individual capacity or as
Lessor, (B) its organizational documents, (C) its by-laws and (D) the incumbency
and signature of persons authorized to execute and deliver on its behalf the
Operative Documents to which it is a party in its individual capacity or as
Lessor and (ii) a certificate as to the authority of the Bank to conduct
26
banking business and exercise fiduciary powers from the Comptroller of the
Currency.
(d) OPINIONS OF COUNSEL. Administrative Agent and the Participants shall
have received opinions of counsel dated the initial Advance Date substantially
in the forms of XXXXXXXX X-0, X-0 and D-3 with respect to the Operative
Documents executed and delivered in connection with the Advance Date and the
perfection and validity of the Administrative Agent's Liens in the Leased
Property and the other TeleTech Collateral. Lessor, Administrative Agent and the
Participants shall also have received opinions of counsel, in form and content
satisfactory to such parties, as to the sufficiency in form of the Financing
Statements to be filed and/or recorded in the State of Colorado and the State of
Connecticut and the location of such filing and recording as is necessary to
perfect the interests of such parties in the collateral described in such
Financing Statements.
(e) AGREEMENTS OF ARCHITECT AND GENERAL CONTRACTOR. The Architect and the
General Contractor shall have each executed written instruments reasonably
satisfactory to Lessor, the Certificate Holders and the Lenders pursuant to
which each of the Architect and the General Contractor shall have agreed to
perform its obligations under the Construction Documents to which it is a party
for the benefit of Lessor and the Participants, when and if Lessor or
Administrative Agent, acting at the direction of the Participants, shall
exercise their rights under the Construction Documents Assignment.
(f) CONSTRUCTION AGENT'S CERTIFICATE. On or prior to the initial Advance
Date, Construction Agent shall have delivered to Administrative Agent an Initial
Advance Date Construction Certificate in the form of EXHIBIT E hereto.
(g) TAXES. Any and all taxes, fees and other charges in connection with
the execution, delivery, recording, filing and registration of the Operative
Documents and the acquisition of the Leased Property shall have been paid or
provisions for such payment shall have been made by Lessee to the satisfaction
of Administrative Agent.
(h) APPRAISAL AND IMPROVEMENTS MATTERS. Not less than fifteen (15) days
prior to the Advance Date, Lessee shall have delivered to Lessor and each
Participant:
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(i) descriptions of the Financed Improvements, which shall be in a
form and substance reasonably satisfactory to the Participants;
(ii) an appraisal (the "APPRAISAL") in form and substance satisfactory
to each of the Participants which shall establish (by the use of appraisal
methods satisfactory to the Participants) (A) the Fair Market Value of the
Land as of the Land Acquisition Date, (B) the "as-built" Fair Market Value
of the Leased Property (assuming the Substantial Completion of the Financed
Improvements in accordance with the Approved Plans and Specifications) as
of the Estimated Completion Date and as of the last day of the Base Term
and each Lease Renewal Term, and (C) that the Aggregate Commitment Amount
will not exceed 114% of (x) the Fair Market Value of the Financed
Improvements plus the Fair Market Value of the Land in accordance with
clause (B) of this Section 6.1(h)(ii). The Appraisal shall be prepared in
accordance with FIRREA and be performed by the Appraiser. The Appraisal
shall assume that all of the Financed Improvements shall have been
completed in a good and workmanlike manner, in compliance with Applicable
Laws; and
(iii) the Approved Construction Budget, in a form and substance
reasonably satisfactory to the Participants, which shall set forth the Land
Acquisition Cost, including related Transaction Expenses, and all costs
associated with the construction of the Financed Improvements, including
all hard and soft construction costs, the Lessee Funding Amount and other
Transaction Expenses and other costs relating to the maintenance of the
Leased Property prior to the Base Term Commencement Date and shall include
the Contingency Reserve equal to One Million Two Hundred Seventy One
Thousand Seven Hundred Ninety Six Dollars ($1,271,796) (the "CONTINGENCY
RESERVE"). The Approved Construction Budget shall allocate the Aggregate
Commitment Amount between the Construction Costs and, within each such
allocation, set forth categories for each type of cost and expense and the
portion of the Aggregate Commitment to be allocated to each such category
and amounts necessary to Fund Transaction Expenses, Capitalized Interest
and Capitalized Yield and Fees during the Interim Term, and which establish
the Contingency Reserve, all as described in the budget attached hereto as
SCHEDULE 6.1(h);
(iv) the Approved Construction Schedule, in a form and substance
reasonably satisfactory to the Participants.
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(i) FILINGS AND RECORDINGS. All filings or recordings enumerated and
described in SCHEDULE 6.1(j), as well as all other filings and recordings
necessary or advisable, including precautionary financing statements and
mortgage filings, reasonably deemed necessary by Administrative Agent to perfect
the rights, titles and interests of Lessor and Administrative Agent for the
benefit of the Participants intended to be created by the Operative Documents
shall have been made in the appropriate places or offices, including any
recordings and filings (including, without limitation, any amended and restated
recordings and filings) necessary to create, perfect, preserve and protect: (i)
Lessor's interest in the Leased Property and any other property and interests
included in the Trust Estate, (ii) first mortgage liens and mortgages of record
on the Mortgaged Property, subject to Permitted Liens, and (iii) a first
priority perfected security interest in all fixtures appurtenant to the Leased
Property, subject to Permitted Liens. All recording and filing fees and taxes
with respect to any recordings or filings made pursuant to this SECTION 6.1(i)
shall have been paid in full by Lessee out of Supplemental Rent, pursuant to and
subject to the limitations of SECTION 4.3(a), and satisfactory evidence thereof
shall have been delivered to Lessor and Administrative Agent, or arrangements
for such payment shall have been made by Lessee to the reasonable satisfaction
of Administrative Agent.
(j) REQUIREMENTS OF LAW. In the reasonable opinion of Lessor,
Administrative Agent and the Participants and their respective counsel, the
Overall Transaction does not and will not violate in any respect any material
Applicable Law and does not and will not subject any such Person to any material
adverse regulatory prohibitions or constraints.
(k) ADVANCE DATE. The initial Advance hereunder shall occur on or prior to
July 15, 2000.
(l) SEARCHES. Administrative Agent shall have received a report (which may
be included in the commitment for title insurance prepared by the Title
Insurance Company with respect to the following matters other than Uniform
Commercial Code filings), as of a current date and reasonably acceptable in form
and substance to Administrative Agent, of judgment liens, lis pendens, and tax
lien filings with respect to Lessee and the Leased Property filed of record in
Arapahoe County, Colorado and Uniform Commercial Code filings for Lessee filed
in the Office of the Secretary of State of the State of Colorado and in Arapahoe
County, Colorado, as applicable.
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(m) SURVEY. Lessee shall have delivered, or shall have caused to be
delivered, to Administrative Agent and to the Title Insurance Company an ALTA
survey of the Land in a form reasonably satisfactory to the Title Insurance
Company (and including any applicable flood zone designation (with property
annotations based on Federal Flood Insurance Rate Maps or the local equivalent)
by scaled map location and graphic plotting) in order to issue the Title
Policies and showing no state of facts unsatisfactory to Administrative Agent.
(n) TITLE AND TITLE INSURANCE. Lessor shall have received from the Title
Insurance Company a current ALTA 1970 owner's policy of title insurance with
respect to the Leased Property, including the Land and the Financed Improvements
(or an irrevocable commitment for the issuance thereof), reasonably acceptable
in form and substance to Administrative Agent (the "OWNER'S POLICY"), insuring
that Lessor has good and indefeasible title to the Leased Property, subject to
other exceptions to title as are reasonably acceptable to each Participant, in
an amount equal to the aggregate Commitments, together with complete, legible
copies of all encumbrances, maps and surveys of record. Alternatively, Lessor
shall have received from the Title Insurance Company (or an irrevocable
commitment for the issuance thereof) such title endorsements (including, without
limitation, a date-down endorsement and CLTA Endorsement Form 107.2 (or the
Colorado equivalent) to Lessor's owner's policy of title insurance (Policy No.
CTAN705337, dated as of March 7, 2000)), reasonably acceptable in form and
substance to Administrative Agent, sufficient to insure Lessor in the same
manner as the Owner's Policy referred to above. Administrative Agent, for the
benefit of the Participants, shall have received from the Title Insurance
Company (or an irrevocable commitment for the issuance thereof), an ALTA 1970
lenders' policy of title insurance (the "LENDERS' POLICY"; and, together with
the Owner's Policy, the "TITLE POLICIES"), reasonably acceptable in form and
substance to Administrative Agent, insuring the Lien of the Deed of Trust as a
valid first priority Lien against the Mortgaged Property, subject to such
exceptions to title as are reasonably acceptable to Administrative Agent, in an
amount equal to the aggregate Commitments, together with complete, legible
copies of all encumbrances and plats of record. Alternatively, Administrative
Agent, for the benefit of the Participants, shall have received from the Title
Insurance Company (or an irrevocable commitment for the issuance thereof) such
title endorsements (including, without limitation, CLTA Endorsement Forms 110.5
and 107.2 (or the Colorado equivalent) to Administrative Agent's lender's policy
of title insurance (Policy Xx. XXXX000000, dated as of March 7, 2000)),
reasonably acceptable in form and substance
30
to Administrative Agent, sufficient to insure Administrative Agent's Lien under
the Deed of Trust in the same manner as the Lenders' Policy referred to above.
The Title Policies shall be dated as of the Advance Date and, to the extent
permitted under Applicable Laws, shall: (x) contain affirmative endorsements as
to mechanics' liens, doing business, usury, Form 3.0 zoning, Form B-1
comprehensive coverage, encroachments, the nonviolation of covenants and
restrictions, variable rate, survey and creditor's rights exception revisions
and revision of the standard tax exception, (y) contain endorsements or other
assurances acceptable to Administrative Agent in its sole discretion, regarding
the effect of recharacterization of the Lease and (z) contain such other
endorsements as shall reasonably be requested by Administrative Agent
(including, without limitation, the title endorsements previously issued by the
Title Insurance Company in connection with Lessor's owner's title policy and
Administrative Agent's lender's title policy previously issued in connection
with the Leased Property and the Mortgaged Property, respectively).
(o) APPROVED PLANS AND SPECIFICATIONS; ARCHITECT'S AGREEMENT; ASSIGNMENT.
Administrative Agent shall have received and the Participants shall have
reasonably approved: (i) the plans and specifications proposed as the Approved
Plans and Specifications, with the first page of a copy of the Approved Plans
and Specifications having been signed, and all other pages thereof having been
initialed, by Construction Agent and the General Contractor (if any), (ii) a
copy of Construction Agent's or Lessee's agreement with the Architect, if any,
(iii) a copy of the Construction Contract, and (iv) an assignment from Lessee
and/or Construction Agent, as applicable, in favor of Lessor, of Lessee's and
Construction Agent's interest in the Approved Plans and Specifications, the
Architect's agreement and the Construction Contract, in the form required by the
Construction Agency Agreement, and attached thereto the Architect's and, if
applicable, General Contractor's written consent to such assignment.
(p) INSURANCE. Insurance complying with the provisions of Article XIII of
the Lease shall be in full force and effect as evidenced by certificates of
insurance, broker's reports or insurance binders delivered to Administrative
Agent and Lessor, all in form and substance reasonably satisfactory to the
Participants, provided, however, that prior to the Completion Date, such
insurance shall contain no deductible amount, unless any such deductible shall
be approved by Administrative Agent upon the direction of the Required
Participants and fully reserved as a separate contingency item in the Approved
Construction Budget.
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(q) OFFEREE LETTER. Administrative Agent and Lessee shall have received
certificate, substantially in the form of EXHIBIT F, from the Arranger, dated
the Second Document Closing Date, with respect to offerees of the Notes and the
Certificates (the "OFFEREE LETTER"). All documents and instruments required to
be delivered on the initial Advance Date shall be delivered at the offices of
Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, or at such other location as may be determined by
Administrative Agent and Lessee.
(r) BONDING OF THE GENERAL CONTRACTOR. The General Contractor shall have
provided, to Administrative Agent for the benefit of each of the Participants, a
payment and performance bond or letter of credit, in either case reasonably
acceptable in form and substance to each of the Participants, securing the
timely performance of the obligations of the General Contractor and the timely
completion of the Construction of the Financed Improvements. The bonding company
or issuer of the letter of credit, as applicable, shall be subject to the prior
written approval of each of the Participants.
(s) ARCHITECT'S STATEMENT OF PROFESSIONAL OPINION. Administrative Agent
shall have received a statement of professional opinion from the Architect, in
substantially the form of EXHIBIT G hereto reasonably satisfactory to
Administrative Agent, certifying that (i) the Leased Property, as improved in
accordance with the Approved Plans and Specifications, and the contemplated use
thereof by Lessee, will comply with Requirements of Law (including zoning and
land use laws and Environmental Laws) and (ii) the Approved Plans and
Specifications have been prepared in accordance with applicable Requirements of
Law (including applicable Environmental Laws and building, planning, zoning and
fire codes) and upon completion of the Financed Improvements in accordance with
the Approved Plans and Specifications, such Financed Improvements will not
encroach in any manner onto any adjoining land to the best of the Architect's
knowledge based on information received (except as permitted by express written
easements or as insured by appropriate title insurance).
(t) CONSULTANT'S CERTIFICATE. Administrative Agent and each Participant
shall have received a certificate executed by the Construction Consultant in the
form of EXHIBIT I.
(u) APPRAISAL OF THE DEDICATION. Administrative Agent and Lessor shall
have received a certification from the Appraiser
32
that the Dedication will not reduce the Fair Market Value of the Leased Property
after giving effect to the Dedication.
SECTION 6.2. CONDITIONS PRECEDENT TO EACH ADVANCE. The obligations of
Lessor (through Administrative Agent) to make an Advance on each Advance Date,
the obligation of Certificate Holders to Fund the related Certificate Amounts on
such Advance Date, and the obligation of the Lenders to make the related
Fundings of their Loans on such Advance Date are subject to satisfaction or
waiver of the following conditions precedent.
(a) ADVANCE REQUEST. Administrative Agent shall have received a fully
executed counterpart of the Advance Request, executed by Construction Agent in
accordance with SECTION 3.3(a).
Each delivery of an Advance Request and the acceptance by Construction
Agent of the proceeds of such Advance shall constitute a representation and
warranty by Lessee and/or Construction Agent, as applicable, that on the
applicable Advance Date (both immediately before and after giving effect to the
making of such Advance and the application of the proceeds thereof), the
representations and warranties made in SECTION 7.2 are true and correct as of
such date and the conditions precedent to such Advance and the related
Certificate Amount and Loans have been satisfied or waived in accordance with
the Operative Documents.
(b) CONSTRUCTION CERTIFICATE. With respect to any Construction Costs to be
paid or reimbursed using the proceeds of such Advance, Administrative Agent
shall have received from Construction Agent, prior to or contemporaneously with
the applicable Advance Request, a Construction Certificate in the form of
EXHIBIT H hereto (a "CONSTRUCTION CERTIFICATE"), together with all attachments
thereto.
(c) FEES. Each Agent and Participant shall have received all Fees due and
payable pursuant to SECTION 4.4 or such payment shall be made out of the
requested Advance.
(d) REPRESENTATIONS AND WARRANTIES. On the Advance Date, the
representations and warranties of Lessee and Guarantor herein and in each of the
other Operative Documents shall be true and correct in all material respects as
though made on and as of such date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects on and
as of such earlier date.
33
(e) LITIGATION. No action or proceeding shall have been instituted, nor
shall any action or proceeding be threatened, before any Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any Governmental Authority (i) to set aside, restrain, enjoin or
prevent the full performance of this Participation Agreement, any other
Operative Document or any transaction contemplated as part of the Overall
Transaction, (ii) that questions the validity of the Operative Documents or the
rights or remedies of Lessor, Guarantor, the Administrative Agent or the
Participants with respect to Lessee or the Leased Property under the Operative
Documents, or (iii) which in the reasonable judgment of the Required
Participants is reasonably likely to have a Material Adverse Effect.
(f) EVENT OF DEFAULT; SIGNIFICANT CASUALTY, SIGNIFICANT CONDEMNATION.
There shall not have occurred and be continuing any Event of Default, and no
Event of Default shall have occurred after giving effect to the making of the
Advance requested by such Advance Request, Lessee shall not have received a
Termination Notice pursuant to SECTION 15.1 of the Lease; no Construction Period
Excluded Claim, or basis therefore, shall have occurred.
(g) COMMITMENT AMOUNT. After giving effect to the applicable Advance, the
aggregate amount of all Advances shall not exceed the Aggregate Commitment
Amount and the aggregate amount of all Advances made by each Participant shall
not exceed the Available Commitment of such Participant.
(h) NO MATERIAL ADVERSE CHANGE. Immediately prior to, and after giving
effect to, the Advance, there shall have occurred (i) no material adverse change
with respect to the Leased Property or (ii) any change in the financial
condition of Lessee or Guarantor which could reasonably be expected to have a
Material Adverse Effect in the reasonable judgment of the Required Participants.
(i) TRANSACTION EXPENSES. Lessee shall have paid all applicable
Transaction Expenses, out of prior Advances pursuant to and subject to the
limitations of SECTION 4.3(a), or such payment shall be made out of the
requested Advance.
(j) CERTIFICATE OF ARCHITECT. Administrative Agent shall have received a
certificate from Architect, substantially in the form of EXHIBIT J hereto,
certifying (i) that after giving effect to the applicable Advance, the estimated
as yet unpaid cost to the Construction Agent of completing the Construction
pursuant to the Construction Documents will not exceed the aggregate
34
Available Commitments, net of any portion of the aggregate Available Commitments
that shall be allocated for Advances in respect of Capitalized Interest,
Capitalized Yield, and Fees; (ii) that the Leased Property is being improved in
a good and workmanlike manner and in accordance with the Approved Plans and
Specifications, and the contemplated use thereof by Lessee will comply with
Requirements of Law (including all zoning and land use laws and Environmental
Laws); (iii) the stage and percentage of completion which has been achieved by
each of the various trades engaged in the construction of the Financed
Improvements, and that the Construction is proceeding in accordance with the
Approved Construction Schedule; and (iv) that the amount of the Advance (other
than amounts attributable to Capitalized Interest, Capitalized Yield or amounts
used to fund Fees or Transaction Expenses) is not greater than the actual value
of the materials incorporated into the Financed Improvements and the work and
labor performed in connection therewith.
(k) BUILDING PERMITS. Any building permits required by any Governmental
Authority in connection with the Construction for which the applicable Advance
is being made shall have been obtained.
(l) TITLE POLICY ENDORSEMENT. Lessor and Administrative Agent shall have
received on the date of such Advance (other than with respect to the initial
Advance) an endorsement to the Title Policies (i) indicating that since the date
of the preceding Advance there has been no change in the state of title (except
changes approved by Administrative Agent), (ii) updating the Title Policies to
the date of such Advance, and (iii) increasing the coverage of the Title
Policies by an amount equal to such Advance if the Title Policies do not by
their own terms provide for such an increase.
(m) CONTRACTOR RECEIPTS AND CERTIFICATION. Administrative Agent shall have
received (i) a copy of any invoice which is the subject of such Advance and
which is in excess of One Hundred Thousand Dollars ($100,000) from the General
Contractor and all subcontractors engaged in the Construction together with
evidence that all sums previously advanced for Construction Costs have been
expended for such Construction Costs and that no further amounts are owing with
respect to such previously invoiced Construction Costs, (ii) copies of all
documents required to be submitted by Lessee as of such date pursuant to the
terms of the contracts with the General Contractor and (iii) a certificate from
the General Contractor, substantially in the form of EXHIBIT K hereto,
certifying that the progress of the Construction is such
35
that Substantial Completion of the Financed Improvements can occur on or prior
to the Outside Completion Date.
(n) INTERIM TERM. No Advance shall be made after the termination of the
Commitment Period.
SECTION 6.3. DELIVERIES UPON SUBSTANTIAL COMPLETION. Within fifteen (15)
Business Days following the earlier of (i) the date of substantial completion of
the Financed Improvements in accordance with the Approved Plans and
Specifications or (ii) the date Administrative Agent gives Lessee notice of the
determination described in the definition of the term "SUBSTANTIAL COMPLETION":
(a) ARCHITECT'S CERTIFICATE. Construction Agent shall furnish to
Administrative Agent a certificate of the Architect (substantially in the form
of EXHIBIT L) dated at or about the Completion Date and stating that: (i) the
Construction has been completed in all material respects in accordance with the
Approved Plans and Specifications, and (ii) the Financed Improvements, as so
completed, and the Leased Property complies in all material respects with all
Applicable Laws, and certifying that attached thereto are true and complete
copies of an "as built" or "record" set of the Approved Plans and
Specifications).
(b) CONSTRUCTION AGENT'S CERTIFICATION. Construction Agent shall furnish
to Administrative Agent a certification of Construction Agent (substantially in
the form of EXHIBIT M) as follows:
(i) the representations and warranties of Lessee with respect to the
Leased Property set forth in SECTION 7.2 are true and correct in all
material respects as of the Completion Date and that all amounts owing to
third parties for the Construction have been paid in full (other than
contingent obligations for which adequate reserves have been made);
(ii) no changes or modifications were made to the Approved Plans and
Specifications delivered to the Appraiser for purposes of preparing the
Appraisal that, individually or in the aggregate, have caused or reasonably
could cause, the Fair Market Value of the Leased Property to be materially
less than the Fair Market Value thereof at Substantial Completion as set
forth in the Appraisal, other than modifications approved by the
Administrative Agent;
(iii) there are no defects to the Financed Improvements, including the
plumbing, heating, air conditioning and
36
electrical systems thereof, or the Leased Property, which, individually or
in the aggregate, have caused or reasonably could cause, the Fair Market
Value of the Leased Property to be materially less than the Fair Market
Value thereof at Substantial Completion as set forth in the Appraisal; and
(iv) all water, sewer, electric, gas, telephone and drainage
facilities and all other utilities required to adequately service the
Leased Property, including the Financed Improvements, for its intended use
are available pursuant to adequate permits (including any that are required
under applicable Environmental Laws) except to the extent the
unavailability thereof individually or in the aggregate would not have a
Material Adverse Effect.
(c) AS BUILT SURVEY; TITLE INSURANCE ENDORSEMENTS. Construction Agent
shall furnish to Administrative Agent and Lessor true, correct and complete
copies, certified by the Construction Agent, of the following (to the extent not
previously delivered to Lessor):
(i) an "as built" ALTA survey of the Leased Property, certified to
Administrative Agent and Lessor, showing the location of the completed
Financed Improvements, the location of all points of access to the Land and
the location of all easements affecting the Land and certifying that there
are no encroachments of the Financed Improvements onto any easements
affecting the Land or onto any adjoining property (other than Permitted
Liens) and that all applicable setback requirements and other restrictions
have been complied with; and
(ii) a date-down endorsement, dated not earlier than the date of
Substantial Completion of the Financed Improvements, to the Title Insurance
Policies.
ARTICLE VII
REPRESENTATIONS
SECTION 7.1. REPRESENTATIONS OF THE PARTICIPANTS. As of the date of its
execution of this Participation Agreement, each Participant represents and
warrants, severally and only as to itself, to the other Participants, Lessor,
the Administrative Agent, Lessee and Guarantor that:
(a) ERISA. Such Participant is not and will not be making its Loans or
funding Certificate Amounts hereunder, and is
37
not performing its obligations under the Operative Documents, with the assets of
an "employee benefit plan" (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or a "plan" (as defined in Section 4975(e)(1) of the
Code).
(b) STATUS. Such Participant is a commercial bank, branch or agency of a
foreign bank or other similar financial institution, or an Affiliate thereof.
(c) POWER AND AUTHORITY. Such Participant has the requisite power and
authority to enter into and perform its obligations under the Operative
Documents to which it is a party.
(d) LESSOR LIENS. There are no Lessor Liens attributable to such
Participant upon the Lease or the Leased Property.
(e) ORGANIZATION, ETC. Such Participant is a corporation or banking
association duly organized, validly existing and in good standing under the laws
of the State or jurisdiction of its creation.
(f) INVESTMENT. The Certificate or Note being acquired by such Participant
is being acquired by such Participant for investment and not with a view to or
in connection with the resale or distribution of such interest or any part
thereof, but without prejudice, however, to the right of such Participant at all
times to sell or otherwise dispose of all or any part of such interest under a
registration available under the Securities Act or under an exemption from such
registration available under the Securities Act, it being understood that
(subject to the Securities Act) the disposition by the undersigned of the
Certificate or Note to be purchased by such Participant shall, at all times,
remain entirely within its control.
(g) OFFER OF SECURITIES, ETC. Neither such Participant nor any Person
authorized to act on its behalf has, directly or indirectly, offered to sell the
Notes, the Certificates or any other similar securities (the sale or offer of
which would be integrated with the sale or offer of the Notes or the
Certificates), for sale to, or solicited any offer to acquire any of the same
from, any Person.
(h) NO REGISTRATION. Such Participant understands and acknowledges that
(1) neither the Notes and the Certificates nor the Guarantees have been or will
be registered under the Securities Act, in reliance upon the exemption provided
in Section 4(2) of the
38
Securities Act, (2) neither the Notes and the Certificates nor the Guarantees
have been or will be registered or qualified under the securities or "blue sky"
laws of any jurisdiction, (3) the Notes and the Certificates (including the
Guarantees) may be resold (which resale is not currently contemplated, or
otherwise transferred only if so registered or qualified or if an exemption from
registration or qualification is available, (4) none of Lessee, Lessor or the
Administrative Agent is required to register the Notes or the Certificates, and
(5) any transfer must comply with the provisions of the Operative Documents
relating thereto. Such Participant will comply with all applicable federal and
state securities laws in connection with any subsequent resale of the Notes or
the Certificates held by it.
(i) INSTITUTIONAL INVESTOR. Such Participant is a sophisticated
institutional investor and is an "accredited investor" as defined in paragraph
(1), (2), (3) or (7) of Rule 501(a) of the Securities Act, and has substantial
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Notes or the
Certificates (and the Guarantees) and is able to bear the economic risk of such
investment for an indefinite period of time. Such Participant has been given all
such information concerning the Notes and the Certificates (and the Guarantees),
the other Operative Documents, the Leased Property, Lessor, Lessee and Guarantor
as it has requested.
(j) LEGEND. Such Participant understands and acknowledges that the Note or
Certificate which it is acquiring will bear a legend as set forth in the form of
Note included in the Loan Agreement or the form of Certificate included in the
Trust Agreement, as applicable.
The making of any Loan or the advancing of any Certificate Amount on any
Advance Date shall constitute an affirmation by the subject assignee or
acquiring Participant of each of the preceding representations and warranties.
SECTION 7.2. REPRESENTATIONS OF LESSEE AND GUARANTOR. Each of Lessee and
Guarantor, jointly and severally, represents and warrants to each of the other
parties hereto as of the Second Document Closing Date and each Advance Date
that:
(a) CORPORATE EXISTENCE AND POWER. Each of Lessee and Guarantor:
39
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(ii) has the corporate power and authority, the legal right and all
governmental licenses, authorizations, consents and approvals to own its
assets, to lease the property (including the Leased Property) it operates
as lessee, to carry on its business and to execute, deliver and perform its
obligations under the Operative Documents;
(iii) is duly qualified as a foreign corporation and is licensed and
in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license; and
(iv) is in compliance with all Requirements of Law;
except in each case referred to in CLAUSE (iii) or (iv) of this SECTION 7.2, to
the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(b) CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by Lessee and Guarantor of this Participation Agreement and each
other Operative Document to which such Person is or will be party have been duly
authorized by all necessary corporate action and do not and will not:
(i) contravene the terms of any of Lessee's or Guarantor's Organic
Documents;
(ii) conflict with or result in any breach or contravention of, or the
creation of any Lien (other than Permitted Liens) under, any document
evidencing any obligations to which Lessee or Guarantor is a party
(including any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement) or any order, injunction, writ, decree or permit of any
Governmental Authority to which Lessee or Guarantor or any of such Person's
property is subject; or
(iii) violate any Applicable Law (including, without limitation,
Regulation U or Regulation X).
(c) GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by or notice to, or filing with any Governmental
Authority or any other Person is
40
necessary or required by or in respect of Lessee or Guarantor in connection with
the execution, delivery or performance by, or enforcement against, Lessee or
Guarantor, or the validity or enforceability of any Operative Document.
(d) BINDING EFFECT. This Participation Agreement and each other Operative
Documents to which Lessee or Guarantor is a party have been or will be duly
executed and delivered on behalf of Lessee or Guarantor, as applicable, and
constitutes the legal, valid and binding obligation of Lessee or Guarantor to
the extent it is a party thereto, enforceable against such Person in accordance
with its respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
(e) LITIGATION. Except as set forth in SCHEDULE 7.2(e), there are no
actions, suits, proceedings, claims or disputes pending or, to the best
knowledge of Lessee and Guarantor, threatened or contemplated at law, in equity,
in arbitration or before any Governmental Authority against Lessee or Guarantor,
or any of their respective properties:
(i) which purport to affect or pertain to this Participation
Agreement or any other Operative Documents or the Overall Transaction; or
(ii) as to which (either individually or in the aggregate) there
exists a substantial likelihood of an adverse determination, which
determination could reasonably be expected to have a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of
this Participation Agreement or any other Operative Document, or directing
that the Overall Transaction not be consummated as herein or therein
provided.
(f) NO DEFAULT. No Default or Event of Default exists or would occur as a
result of, or after giving effect to, the Advance or the Overall Transaction.
Neither Lessee nor Guarantor is in default under or with respect to any
contractual obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Second Document Closing
Date, create an Event of Default.
41
(g) ERISA COMPLIANCE. Except as specifically disclosed in SCHEDULE 7.2(g),
(i) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best
knowledge of Guarantor, nothing has occurred which would cause the loss of
such qualifications. Guarantor and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to
any Plan.
(ii) There are no pending or, to the best knowledge of Guarantor,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably
be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected
to result in a Material Adverse Effect.
(iii) (A)No ERISA Event has occurred or is reasonably expected to
occur; (B) the Pension Plans do not have aggregate Unfunded Pension
Liabilities in excess of $1,000,000; (C) neither Guarantor nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due
and not delinquent under Section 4007 of ERISA); (D) neither Guarantor nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (E) neither
Guarantor nor any ERISA Affiliate has engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA.
(h) TITLE TO PROPERTIES. Each of Lessee and Guarantor has good title
in fee simple to, or a valid leasehold interest in, all real property necessary
or used in the ordinary conduct of its respective businesses, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
42
(i) TAXES. Lessee and Guarantor have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or on their properties, income or assets otherwise
due and payable, expect those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Lessee or
Guarantor that would, if made, have a Material Adverse Effect.
(j) FINANCIAL CONDITION. (i) Each of (A) the audited consolidated
financial statements of Guarantor and its subsidiaries as of December 31, 1998
and the related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal year ended on that date and (B) the
unaudited consolidated financial statements of Guarantor and its subsidiaries as
of September 30, 1999 and the related consolidated statements of income,
shareholders' equity and cash flows for the period ended on that date:
(x) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein;
(y) fairly present the financial position of Guarantor and its
subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(z) except as specifically disclosed in SCHEDULE 7.2(j), show in
accordance with GAAP all material indebtedness and other liabilities,
direct or contingent, of Guarantor and its consolidated subsidiaries as of
the date thereof, including liabilities for taxes, material commitments and
contingent obligations.
(ii) Since December 31, 1998 there has been no Material Adverse Effect.
(k) ENVIRONMENTAL MATTERS. (i) Except as specifically disclosed in
SCHEDULE 7.2(k), the ongoing operations of Lessee and Guarantor comply in all
respects with all Environmental Laws, except such noncompliance which would not
(if enforced in accordance with Applicable Law) result in liability in excess of
$1,000,000 in the aggregate.
43
(ii) Except as specifically disclosed in SCHEDULE 7.2(k) Lessee and
Guarantor have obtained all material licenses, permits, authorization and
registrations required under any Environmental Law and necessary for their
respective ordinary course operations ("ENVIRONMENTAL PERMITS"), all such
Environmental Permits are in good standing and Lessee and Guarantor are in
compliance with all material terms and conditions of such Environmental
Permits.
(iii) Except as specifically disclosed in SCHEDULE 7.2(k), none of
Lessee, Guarantor, or any of their respective present property or
operations is subject to any outstanding written order from or agreement
with any Governmental Authority, nor subject to (I) any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Substance or (II) any claim, proceeding or
written notice from any Person regarding any Environmental Law,
Environmental Claim or Hazardous Substance.
(iv) Except as specifically disclosed in SCHEDULE 7.2(k), there are no
Hazardous Substance or other conditions or circumstances exiting with
respect to any property of Lessee or Guarantor, or arising from operations
prior to the Advance Date of Lessee or Guarantor that would reasonably be
expected to give rise to Environmental Claims with a potential liability in
excess of $5,000,000 in the aggregate for all such conditions,
circumstances and properties. In addition, to Lessee's and Guarantor's
knowledge, (I) neither Lessee nor Guarantor has any underground storage
tanks (x) that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing of Hazardous
Substance off-site, which in any such case could reasonably be expected to
have a Material Adverse Effect, and (II) Lessee and Guarantor have met all
material notification requirements under Title III of CERCLA and all other
Environmental Laws.
(l) REGULATED ENTITIES. None of Lessee, Guarantor or any Person
controlling Lessee and Guarantor is an "Investment Company" within the meaning
of the Investment Company Act of 1940. Neither Lessee nor Guarantor is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
44
(m) NO BURDENSOME RESTRICTIONS. Neither Lessee nor Guarantor is a party to
or bound by any Business Obligations, or subject to any restriction in any
charter or other organizational document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect, other than any
Material Adverse Effect arising as a result of any reduction in billable
services provided by Lessee or Guarantor or any termination of any customer
service agreement (in either case, by parties other than Lessee and Guarantor)
pursuant to any provision included in the Business Obligations.
(n) COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. Lessee and
Guarantor own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective business and the Leased Property, without
infringing upon or violating the legal rights of any other Person. To the best
knowledge of Lessee and Guarantor, no material slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by Lessee or Guarantor infringes
upon any rights held by any other Person. No claim or litigation regarding any
of the foregoing is pending or, to Lessee and Guarantor's knowledge, threatened,
and no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the knowledge of Lessee and
Guarantor, proposed, which, in either case, could reasonably be expected to have
a Material Adverse Effect.
(o) FULL DISCLOSURE. None of the representations or warranties made by
Lessee or Guarantor in the Operative Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of Lessee or Guarantor in connection with the Operative
Documents (including the offering and disclosure materials delivered by or on
behalf of Lessee and Guarantor to the Participants prior to the Second Document
Closing Date), contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
(p) CHIEF EXECUTIVE OFFICES OF LESSEE. The Lessee's "place of business" or
"chief executive office" (if it has more than one place of business), as such
terms are used in
45
Section 9-103(3) of the UCC, are located at 0000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx.
(q) SOLVENCY. Each of Lessee and Guarantor is, and after the making of the
Advance and the consummation of the Overall Transaction will be, Solvent.
(r) APPRAISAL DATA. Taken as a whole, the information provided by
Guarantor, Lessee and their Affiliates to the Appraiser was true and correct in
all material respects when provided, and when provided did not omit any
information known to Lessee, Guarantor or any such Affiliate regarding the
title, physical condition, or use of the Leased Property or any of their
Affiliates which Lessee or Guarantor or any of their Affiliates knew or should
reasonably have known was necessary to make the information provided not
materially misleading.
(s) UTILITIES. All water, sewer, electric, gas, telephone and drainage
facilities, all other utilities required to adequately service the Leased
Property for its intended use and means of access between the Financed
Improvements and public highways for pedestrians and motor vehicles will be
available pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). No fire or other casualty has occurred. All
utilities serving the Leased Property, or proposed to serve the Leased Property
in accordance with the Approved Plans and Specifications, are or will be located
in, and vehicular access to the Leased Property, including to the Financed
Improvements, is provided by, either public rights-of-way abutting the Leased
Property or Appurtenant Rights.
(t) LEASED PROPERTY. The contemplated use of the Leased Property by Lessee
and its agents, assignees, employees, lessees, licenses and tenants will comply
in all material respects with all Applicable Laws (including, without
limitation, all zoning and land use laws and Environmental Laws) and Insurance
Requirements. With respect to the Leased Property, all material licenses,
approvals, authorizations, consents, permits (including, without limitation,
building, demolition and environmental permits, licenses, approvals,
authorizations and consents), easements and rights-of-way, including proof and
dedication, required for (x) the use, treatment, storage, transport, disposal or
disposition of any Hazardous Substance on, at, under or from the Leased Property
during the construction of the applicable Improvements thereon, (y) construction
of the Financed Improvements in accordance with the Approved Plans and
Specifications and the Construction Agency Agreement and (z) the use, occupancy
and operation of the Leased
46
Property have either been obtained from the appropriate Governmental Authorities
having jurisdiction or from private parties, as the case may be, or will be
obtained from the appropriate Governmental Authorities having jurisdiction or
from private parties, as the case may be, prior to commencing any such
construction or use and operation as applicable.
(u) FLOOD HAZARD AREAS. No portion of the Leased Property is located in an
area identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable Governmental Authority. If the Leased
Property is located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable Governmental Authority,
then, to the extent required by Applicable Laws, flood insurance has been
obtained by Lessee in accordance with the National Flood Insurance Act of 1968,
as amended.
(v) OWNERSHIP, NATURE, CONDITION AND USE OF THE LEASED PROPERTY.
(i) Lessor has acquired and holds the fee interest in the Leased
Property free and clear of all liens other than Permitted Liens. None of
Guarantor, Lessee or any of their Affiliates, including TeleTech Customer
Care Management, Inc., is a party to any contract or agreement to sell,
transfer or encumber any interest in the Leased Property or any part
thereof, other than pursuant to this Participation Agreement and the Lease.
(ii) The Leased Property is located in the State of Colorado, County
of Arapahoe. The Leased Property and any present use and presently
anticipated future use thereof by Lessee and its agents, assignees,
employees, invitees, lessees, licensees and tenants comply in all material
respects with all Applicable Laws (including zoning and land use laws and
Environmental Laws), except for such instances of non-compliance that would
not have, individually or in the aggregate, a Material Adverse Effect, and
Insurance Requirements. No notices, complaints or orders of violation or
non-compliance or liability have been issued or, to the best knowledge of
Lessee and Guarantor, threatened by any Person with respect to the Leased
Property or the present or intended future use thereof, except for such
violations and instances of non-compliance as could not have, individually
or in the aggregate, a Material Adverse Effect, and neither Lessee nor
Guarantor is aware of any circumstances which could
47
give rise to the issuance of any such notices, complaints or orders.
(w) PERFECTION OF SECURITY INTEREST; FILINGS. The Lease constitutes an
enforceable, first priority lien of record and perfected security interest of
record in Lessee's interest in the Leased Property in favor of Lessor, subject
to Permitted Liens, as against all Persons, including Lessee and its creditors.
Except for the filings and recordings listed in SCHEDULE 6.1(j) (which filings
or recordings, or arrangements therefor meeting the requirements specified
herein, shall have been duly made on or before the Advance Date (including the
payment of any fees or taxes relating to any of the foregoing)), no other
filings or recordings are necessary to validly and effectively convey to Lessor
good and marketable fee simple title in the Land, and Administrative Agent has a
valid and enforceable first priority Lien for the benefit of the Participants in
the Leased Property and the other TeleTech Collateral free and clear of all
other Liens, other than Permitted Liens. Neither Lessee, Guarantor nor any of
their Affiliates has created, consented to, incurred or suffered to exist any
Lien upon the Leased Property, other than Permitted Liens.
(x) OFFER OF SECURITIES, ETC. Neither Lessee or Guarantor, nor any Person
authorized to act on behalf of either of them, has directly or indirectly
offered the Notes or the Certificates (including the related Guarantees) or any
other similar securities (the sale or offer of which would be integrated with
the sale or offer of the Notes, the Certificates or the Guarantees), for sale
to, or solicited any offer to acquire any of the same from, any Person other
than the Participants and other "accredited investors" (as defined in the
Regulation D of the SEC), each of whom was offered a portion thereof at private
sale for investment.
(y) ADVANCE. The amount of each Advance requested represents amounts owed
by Construction Agent in respect of Construction Costs incurred prior to the
date of such Advance and for which Construction Agent has not previously been
reimbursed by an Advance or represent amounts with respect to Capitalized
Interest, Capitalized Yield or Capitalized Fees.
SECTION 7.3. REPRESENTATIONS OF LESSOR. The Bank, in its individual
capacity and not as Lessor (except to the extent specifically provided for
below), represents and warrants to each of the other parties hereto as follows:
48
(a) CHIEF EXECUTIVE OFFICE. The Bank's chief executive office or place of
business (if it has only one place of business) and the place where the
documents, accounts and records relating to the Overall Transaction are kept are
located at its address set forth in SCHEDULE III.
(b) DUE ORGANIZATION, ETC. The Bank is a national banking association duly
organized and validly existing in good standing under the laws of the United
States and has full corporate power and authority to execute, deliver and
perform its obligations: (i) in its individual capacity under the Trust
Agreement and, to the extent it is a party hereto in its individual capacity,
this Participation Agreement, and (ii) acting as Lessor under the Trust
Agreement, under this Participation Agreement and each other Operative Document
to which it is or will be a party as Lessor.
(c) DUE AUTHORIZATION; ENFORCEABILITY, ETC. This Participation Agreement
and each other Operative Document to which the Bank is or will be a party have
been or will be (to the extent it is to be a party thereto in its individual
capacity), duly authorized, executed and delivered by or on behalf of the Bank
(in its individual capacity) and are, or upon execution and delivery will be,
legal, valid and binding obligations of the Bank (in its individual capacity),
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting creditors' rights generally and by general equitable principles.
The Operative Documents to which Lessor is a party constitute the legal, valid
and binding obligation of Lessor (acting solely as Lessor under the Trust
Agreement, and not in its individual capacity), except as such enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general equitable principles.
(d) NO CONFLICT. The execution and delivery by (i) the Bank, in its
individual capacity, of the Trust Agreement and, to the extent it is a party
hereto in its individual capacity, this Participation Agreement and (ii) the
Bank, in its capacity as Lessor, of each Operative Document to which Lessor is
or will be a party, are not and will not be, and the performance by the Bank, in
its individual capacity or as Lessor, as the case may be, of its obligations
under each are not and will not be, inconsistent with the articles of
association or by-laws of the Bank, do not and will not contravene any
Applicable Laws of the United States of America or the State of Connecticut
relating to the banking or trust powers of the Bank and do not and will not
contravene any provision of, or
49
constitute a default under, any indenture, mortgage, chattel mortgage, deed of
trust, lease, conditional sales contract, loan or credit arrangement or other
agreement or instrument to which the Bank is a party or by which it or its
properties may be bound or affected.
(e) NO APPROVALS, ETC. Neither the execution and delivery by the Bank in
its individual capacity or (assuming the due authorization, execution and
delivery of the Trust Agreement by each Certificate Holder) as Lessor, as the
case may be, of any of the Operative Documents to which it is a party requires
the consent or approval of, or the giving of notice to or registration with, or
the taking of any other action in respect of, the United States of America or
the Governmental Authority of Connecticut governing its banking practices.
(f) LESSOR LIENS. The Leased Property is free and clear of all Lessor
Liens attributable to the Bank and no act or omission by it has occurred which
would give rise to a Lessor Lien attributable to it.
(g) LITIGATION. There is no action, proceeding or investigation pending
or, to the best knowledge of the Bank, threatened against the Bank or Lessor
which questions the validity of any of the Operative Documents, and there is no
action, proceeding or investigation pending or, to the best knowledge of the
Bank, threatened which is likely to result, either in any case or in the
aggregate, in any material adverse change in the ability of the Bank or Lessor
to perform its obligations under the Operative Documents to which it is a party.
(h) SECURITIES ACT. Neither the Bank nor Lessor nor any Person authorized
to act on its behalf has offered or sold any interest in the Notes or
Certificates (including the Guarantees), or in any similar security relating to
the Leased Property, or in any security, the offering of which for the purposes
of the Securities Act would be deemed to be part of the same offering as the
offering of the aforementioned securities, to, or solicited any offer to acquire
any of the same from, any Person other than, in the case of the Notes, the
Lenders, and in the case of the Certificates, the Certificate Holders, each of
whom was offered a portion thereof at private sale for investment, and neither
the Bank nor Lessor nor any Person authorized to act on its behalf will take any
action which would require registration of the offer or sale of any interest in
the Notes or Certificates (or the Guarantees) pursuant to the provisions of
Section 5 of the Securities Act or any state securities laws.
50
SECTION 7.4. REPRESENTATIONS AND WARRANTIES OF ADMINISTRATIVE AGENT. First
Security Bank, National Association, in its individual capacity and not as
Administrative Agent (except as specifically provided for below), hereby
represents and warrants to each of the other parties hereto that:
(a) ORGANIZATION AND AUTHORITY. It is duly organized as a national banking
association under the laws of the United States and has the power and authority
to enter into and perform its obligations under the Operative Documents.
(b) AUTHORIZATION; BINDING EFFECT. The Operative Documents to which
Administrative Agent is or will be a party have been or will be, on the date
required to be delivered hereby, duly authorized, executed and delivered by
Administrative Agent, and this Participation Agreement is, and such other
Operative Documents are, or, when so executed and delivered by Administrative
Agent will be, valid, legal and binding agreements of Administrative Agent,
enforceable against Administrative Agent in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(c) NON-CONTRAVENTION. Neither the execution and delivery by
Administrative Agent of the Operative Documents to which it is or will be a
party, either in its individual capacity, or as Administrative Agent, or both,
nor compliance with the terms and provisions thereof, conflicts with, results in
a breach of, constitutes a default under (with or without the giving of notice
or lapse of time or both), or violates any of the terms, conditions or
provisions of: (i) its charter documents or bylaws; (ii) any bond, debenture,
note, mortgage, indenture, agreement, lease or other instrument to which it is
now a party or by which it or its property, either in its individual capacity,
or as Administrative Agent, or both, is bound or affected, where such conflict,
breach, default or violation would be reasonably likely to materially and
adversely affect the ability of Administrative Agent, either in its individual
capacity, or as Administrative Agent, or both, to perform its obligations under
any Operative Document to which it is or will be a party, either in its
individual capacity, or as Administrative Agent, or both; or (iii) any of the
terms, conditions or provisions of any law, rule, regulation, order, injunction
or decree of any federal banking or Utah Governmental Authority applicable to it
in its individual capacity or as Administrative Agent, or both, where such
conflict, breach, default or violation would be reasonably likely to materially
and adversely
51
affect the ability of Administrative Agent, either in its individual capacity,
or as Administrative Agent, or both, to perform its obligations under any
Operative Document to which it is or will be a party.
(d) ABSENCE OF LITIGATION, ETC. There is no litigation (including
derivative actions), arbitration or governmental proceedings pending or, to the
best knowledge of Administrative Agent, threatened against it which would be
reasonably likely to adversely affect Administrative Agent's ability to perform
its obligations under the Operative Documents to which it is or will be a party.
(e) GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required by Administrative Agent in connection with the Overall
Transaction, except those which have been made or obtained or will be obtained
on a timely basis in the ordinary course of Administrative Agent's business, and
which are in full force and effect.
ARTICLE VIII
COVENANTS OF LESSEE, CONSTRUCTION AGENT AND GUARANTOR
SECTION 8.1. CONSTRUCTION MATTERS. Each of TeleTech Services Corporation,
as Lessee and as Construction Agent, and Guarantor, jointly and severally,
covenants and agrees with Lessor, Administrative Agent and each of the
Participants that from the Second Document Closing Date through the Completion
Date, Lessee, in its individual capacity and as Construction Agent, and
Guarantor, shall comply, and Guarantor shall cause TeleTech Services Corporation
in such capacities to comply, with the following provisions of this SECTION 8.1.
(a) COMPLETION; FINAL COMPLETION. Construction Agent shall cause
Substantial Completion to occur prior to the Outside Completion Date in
accordance with the standards set forth at SECTION 6.3. No proceeds of any of
the Advances shall be used to pay for personal property, including, without
limitation, furniture, trade fixtures or equipment. Construction Agent shall
cause Final Completion to occur not later than one hundred eighty (180) days
after the Outside Completion Date.
(b) CONSTRUCTION ASSURANCES. Each Person engaged by Construction Agent on
behalf of Lessor that is a signatory to each Major Construction Document shall
covenant and agree in a writing
52
(which writing may be incorporated in an acknowledgment or consent to an
assignment of such Major Construction Document to Administrative Agent) that:
(i) none of Lessor, any Agent or any Participant is personally liable for any
claims or obligations incurred under such contract, (ii) such Person will
provide written notice to Lessor and Agents of any material breach under such
contract and, during the existence of an Event of Default, Lessor and
Administrative Agent shall have at least sixty (60) days following the receipt
of such notice to cure such breach, and (iii) upon written request of Lessor or
Administrative Agent, such Person shall provide to Lessor and Administrative
Agent an estoppel certificate in respect of such contract in a form reasonably
requested by Lessor or Administrative Agent.
(c) CONSTRUCTION PROGRESS INFORMATION. Construction Agent shall furnish or
cause to be furnished to Lessor or, if requested in lieu thereof, Administrative
Agent, upon request (but, so long as no Event of Default has occurred and is
continuing, not more than once per calendar month or such shorter period to
coincide with Advance Requests), on forms approved by Administrative Agent, such
details concerning the Construction as Lessor or Administrative Agent, as
applicable, shall reasonably require, including: (i) the costs incurred and the
progress of the Financed Improvements, (ii) copies of any modifications or
changes to the Approved Plans and Specifications, and (iii) a list of the names
and addresses of Construction Agent's and General Contractor's materials dealers
and subcontractors with whom written agreements have been made by Construction
or the General Contractor.
(d) LESSEE'S FUNDING OF TENANT IMPROVEMENTS. Lessee shall pay directly,
from its own funds, for a portion of the costs and expenses associated with
construction of the Tenant Improvements in an amount equal to the Lessee Funding
Amount, which payments shall be made in accordance with the schedule set forth
in the Lessee Funding Schedule; provided that Lessee shall not be obligated to
make any such payments until three (3) months after the initial Advance Date.
Notwithstanding any statement contained in any of the Operative Documents to the
contrary, the parties hereto acknowledge and agree that in no event shall any of
the Participants be required to fund any amounts under their respective
Commitment for the costs associated with the construction of the Tenant
Improvements until Lessee has fully contributed the Lessee Funding Amount toward
the payment of such costs; provided, however, the Participants agree that so
long as all of the other conditions precedent to Funding set forth in the
Operative Documents have otherwise been satisfied, the Participants agree to
fund the first
53
$300,000 of Tenant Improvement construction costs during the first three (3)
months after the initial Advance Date, if, and only if, Construction Agent
determines it is necessary that the Funding for such costs be made during such
time period.
SECTION 8.2. ADDITIONAL COVENANTS OF LESSEE AND GUARANTOR. Each of Lessee
and Guarantor, jointly and severally, covenants and agrees with Lessor,
Administrative Agent and each of the Participants that Lessee and Guarantor
shall comply with the following provisions of this SECTION 8.2, applicable to
it, it being understood that the following covenants are in addition to, and not
by way of limitation of, any covenant set forth in the Construction Agency
Agreement or the Lease.
(a) FURTHER ASSURANCES. Each of Lessee and Guarantor, at its cost and
expense, will (i) cause to be promptly and duly taken, executed, acknowledged
and delivered all such further acts, documents and assurances as Lessor,
Administrative Agent or any Participant reasonably may request from time to time
in order to carry out more effectively the intent and purposes of this
Participation Agreement and the other Operative Documents and the Overall
Transaction; and (ii) cause all financing statements (including precautionary
financing statements), fixture filings, mortgages and other documents, to be
recorded or filed at such places and times in such manner, and will take all
such other actions or cause such actions to be taken, as may be necessary or as
may be reasonably requested by the Administrative Agent, any Participant or
Lessor in order to establish, preserve, protect and perfect the title and Lien
of Lessor and/or Administrative Agent in the Leased Property and Lessor's,
Administrative Agent's and/or any Participant's rights under this Participation
Agreement and the other Operative Documents.
(b) LIENS. Lessee shall not, by any act or omission to act, incur or
suffer to exist any Lien on the Leased Property other than Permitted Liens.
(c) CHANGE OF NAME OR ADDRESS. Lessee and Guarantor shall each provide
Lessor and Administrative Agent thirty (30) days' prior written notice of any
change in name, or the address of its chief executive office (or place of
business if it has only one place of business) or the office where it keeps its
records concerning its accounts and the Leased Property.
(d) FINANCIAL AND OTHER INFORMATION. Lessee and Guarantor shall furnish,
or cause to be furnished, to the Administrative Agent, in form and detail
reasonably satisfactory to
54
the Administrative Agent, with sufficient copies for Lessor and each
Participant:
(i) As soon as available, but not later than the earlier of (i) five
(5) days after the filing thereof with the SEC and (ii) 120 days after the
end of each fiscal year (commencing with the fiscal year ended December 31,
1999), a copy of the audited consolidated balance sheet of Guarantor and
its subsidiaries as of the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, and accompanied by the opinion of Xxxxxx Xxxxxxxx
LLP or another nationally-recognized independent public accounting firm
("INDEPENDENT AUDITOR") which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a
restricted or limited examination by the Independent Auditor of any
material portion of Guarantor's or any Subsidiary's records.
(ii) As soon as available, but not later than the earlier of (i) five
(5) days after the filing thereof with the SEC and (ii) 45 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy
of the unaudited consolidated balance sheet of Guarantor and its
subsidiaries as of the end of such quarter and the related consolidated
statements of income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such quarter,
setting forth in each case in comparative form the figures for the previous
fiscal year and certified by a Responsible Officer as fairly presenting, in
accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of
Guarantor and its subsidiaries.
(iii) Concurrently with the delivery of the financial statements
referred to in SECTION 8.2(d)(i), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate.
(iv) Concurrently with the delivery of the financial statements
referred to in SECTION 8.2(d)(i) and (d)(ii) a certificate of the chief
financial officer of Guarantor, in
55
the form of EXHIBIT O hereto, (A) demonstrating, in reasonable detail and
with the supporting calculations, compliance with the financial covenants
set forth in SECTION 8.2 or in the Credit Agreement to the extent
incorporated by reference herein at SECTION 8.4 and (B) stating that no
Event of Default or Default has occurred and is continuing, setting forth
details of such Event of Default or Default and the action that Lessee or
Guarantor, as applicable, have taken and proposes to take with respect
thereto;
(v) Concurrently with the delivery of the financial statements
referred to in SECTION 8.2(d)(i), (i) a consolidating income statement for
such year (which need not be audited), and (ii) a budget for the next
succeeding fiscal year.
(vi) Concurrently with the delivery of the financial statements
referred to in SECTION 8.2(d)(ii), a consolidating income statement for
such quarter.
(vii) Promptly, copies of all financial statements and reports that
Guarantor sends to its shareholders and within five (5) days of filing with
the SEC, copies of all financial statements and regular, periodic or
special reports (including Forms 10K, 10Q and 8K) that Guarantor or any
subsidiary may make to, or file with, the SEC.
(viii) Promptly, such additional information regarding the business,
financial or corporate affairs of Guarantor or any subsidiary as the
Administrative Agent, at the request of any Participant, may from time to
time reasonably request.
(ix) Within five Business Days after the occurrence of any event which
constitutes an Event of Default or Default, if such occurrence is then
continuing notice of such occurrence together with a statement by a
Responsible Officer of Guarantor stating the facts with respect thereto and
the actions that the Lessee or Guarantor, as applicable, have taken or
proposed to take with respect thereto;
(x) As soon as possible and in any event within five days after the
commencement of litigation against the Lessee, Guarantor, or any of
Guarantor's Subsidiaries, or the receipt of a notice of default by the
Lessee or Guarantor or any of Guarantor's Subsidiaries, that could
reasonably be expected to have a Material Adverse Effect, notice of such
litigation or notice of default describing in reasonable detail the facts
56
and circumstances concerning such litigation or default and Lessee's,
Guarantor's or Guarantor's Subsidiary's, as applicable, proposed actions in
connection therewith; and
(xi) Such other information respecting the condition or operations,
financial or otherwise, of Lessee, Guarantor or any Subsidiary of Guarantor
as any Participant through the Administrative Agent may from time to time
reasonably request.
(e) RATES. With respect to each determination of Interest and Yield
pursuant to this Participation Agreement, the Loan Agreement, the Trust
Agreement and Basic Rent under the Lease, Lessee acknowledges and agrees to
Sections 2.5, 2.6 and 2.7 of the Loan Agreement, Sections 2.4 and 2.5 of the
Trust Agreement, and SECTIONS 4.1, 4.2 and 4.3 (a) hereof and the applicable
definitions in APPENDIX 1.
(f) OWNERSHIP INTEREST IN LESSEE. Guarantor shall cause Lessee to remain a
directly or indirectly wholly-owned Subsidiary of Guarantor.
(g) REAPPRAISAL; ADDITIONAL COLLATERAL. Unless otherwise waived in writing
by the Required Participants Lessee on the second (2nd) anniversary of the
Second Closing Date, Administrative Agent shall have received an appraisal in
form and substance satisfactory to each of the Participants which shall
establish (by the use of appraisal methods satisfactory to the Participants) the
Fair Market Value of the Leased Property as of such second (2nd) anniversary of
the Second Closing Date. In the event the Fair Market Value of the Leased
Property evidenced by such appraisal (the "SECOND ANNIVERSARY FMV") is less than
the then outstanding Lease Balance ("SECOND ANNIVERSARY LEASE BALANCE"), within
ten (10) days of the request therefor, Lessee shall deliver to Administrative
Agent, on behalf of and for the benefit of the Participants, cash collateral or
other acceptable non-cash securities collateral, in the amount of the difference
between the Second Anniversary FMV and the Second Anniversary Lease Balance (but
in no event in an amount greater than the difference between the Aggregate
Commitment Amount and the "as-built" Fair Market Value as of the Estimated
Completion Date of the Leased Property set forth in the Appraisal obtained under
Section 6.1(h)(ii)). Lessee shall, promptly upon request, execute and deliver,
or cause to be executed and delivered, any and all documents and instruments and
to take such other actions as are required by the Participants in order to
effectuate the provisions of this paragraph and to create perfected security
interests in and to the additional
57
collateral (including all investments, return or proceeds thereof) referred to
herein in favor of the Participants. Such additional collateral shall be deemed
part of the Teletech Collateral.
SECTION 8.3. FINANCIAL COVENANTS.
(a) DEBT TO EBITDAR RATIO. Guarantor shall not, as of the last day of any
fiscal quarter, permit its Debt to EBITDAR Ratio to be greater than 3.0 to 1.0.
(b) FIXED CHARGE COVERAGE RATIO. Guarantor shall not, as of the last day
of any fiscal quarter, permit its ratio of (a) EBITDAR for the period of four
concurrent fiscal quarters than ending to (b) Fixed Charges for such four fiscal
quarter period to be less than 2.5 to 1.0.
(c) QUARTERLY PROFITABILITY. Guarantor shall have Net Income for each
fiscal quarter of at least $1.00.
(d) Guarantor shall not, at any time, permit its aggregate Liquid Assets
to be less than $25,000,000.
SECTION 8.4. CREDIT AGREEMENT COVENANTS. Lessee will perform, comply with
and be bound by, for the benefit of Lessor and each Participant, each of its
agreements, covenants and obligations contained in Articles VI and VII (other
than Sections 6.01, 6.02, 6.03(a), 6.12, 6.13, 7.16, 7.17 and 7.18) of the
Credit Agreement (together with the related definitions and ancillary
provisions) as in effect on the date hereof. The above-specified provisions of
the Credit Agreement are incorporated herein by reference and will be deemed to
continue in effect for the benefit of the Lessor, Administrative Agent and the
Participants until the Expiration Date, without limiting the foregoing, whether
or not the Credit Agreement or any Commitment thereunder remains in effect or
the "Obligations" (as that term is therein defined in the Credit Agreement) are
paid and discharged. For purposes of the foregoing, references to the provisions
of the Credit Agreement incorporated herein by reference (i) to "Company" shall
refer to Guarantor, (ii) "Lender" or "Lenders" shall refer to Participant or
Participants respectively, (iii) "Administrative Agent" shall refer to
Administrative Agent, and (iv) "Agreement" shall refer to this Participation
Agreement.
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ARTICLE IX
OTHER COVENANTS AND AGREEMENTS
SECTION 9.1. COVENANTS OF THE PARTICIPANTS, THE ADMINISTRATIVE AGENT AND
THE BANK.
(a) LESSOR LIENS. Each of the Participants (severally and not jointly with
any other Participants), the Administrative Agent and the Bank hereby agrees
that so long as this Participation Agreement is in effect it:
(i) will not create, incur, assume or suffer to exist any Lessor Lien
attributable to it upon the Lease or the Leased Property (other than as
contemplated by any of the Operative Documents); and
(ii) will remove any Lessor Lien created or incurred by it and use its
best efforts to remove any Lessor Lien attributable to it assumed or
suffered to exist by it upon the Lease or the Leased Property (other than
the Deed of Trust and such other Liens as are contemplated by any of the
Operative Documents); PROVIDED, HOWEVER, that any action taken pursuant to
this CLAUSE (ii) shall not limit Lessee's rights or remedies under any of
the Operative Documents. In the event of any Lessor Lien attributable to
Bank, in addition to complying with its obligations under this CLAUSE (ii),
Bank will cause restitution to be made to the Trust Estate in the amount of
any diminution of the value thereof as a result of such Lessor Lien.
(b) TRUST AGREEMENT. Without prejudice to any right under the Trust
Agreement of Bank to resign as Lessor, or the Certificate Holders' rights under
the Trust Agreement to remove Lessor, each of the Certificate Holders hereby
agrees with Lessee (so long as no Event of Default shall have occurred and be
continuing), the Lenders and the Administrative Agent (i) not to terminate or
revoke the trust created by the Trust Agreement, except as permitted by the
Trust Agreement, prior to the later of the Expiration Date or the payment in
full of the obligations under the Notes and Certificates, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of the Trust
Agreement prior to the Expiration Date in such a manner as to materially and
adversely affect the rights of any such party, (iii) except as otherwise
expressly authorized under the Operative Documents, not to withdraw from the
Trust Estate any funds other than amounts payable to it by Administrative Agent
as distributions of Basic Rent and Supplemental Rent (including Excepted
Payments)
59
without the prior written consent of each such party and (iv) to comply with all
of the terms of the Trust Agreement applicable to it, the nonperformance of
which would adversely affect such party.
(c) SUCCESSOR CERTIFICATE TRUSTEE. Lessor or any successor may resign or
be removed by the Participants as Certificate Trustee, a successor Certificate
Trustee may be appointed, and a corporation may become Lessor under the Trust
Agreement, only in accordance with the provisions of the Trust Agreement.
Notwithstanding anything to the contrary contained in this Participation
Agreement or the Trust Agreement, so long as no Event of Default shall be
continuing, the appointment of a successor Certificate Trustee shall be subject
to the consent of Lessee (such consent not to be unreasonably withheld or
delayed).
(d) INDEBTEDNESS; OTHER BUSINESS. Bank agrees that it, in its capacity as
Lessor, shall not, on behalf of the Trust, contract for, create, incur or assume
any Indebtedness, or enter into any business or other activity, other than
pursuant to or under the Operative Documents and, for the benefit of Lessee,
Administrative Agent and the Lenders, Bank agrees in such capacity to be bound
by Section 1.2(b) and Article III of the Trust Agreement.
(e) CHANGE OF PRINCIPAL PLACE OF BUSINESS. Bank agrees that it, in its
capacity as Lessor, shall give prompt notice to the Certificate Holders, Lessee
and Administrative Agent, if Lessor's principal place of business or chief
executive office (if it has more than one place of business), or the office
where the records concerning the accounts or contract rights relating to the
Overall Transaction are kept, shall cease to be located at the address in the
State of Connecticut set forth on SCHEDULE III, or if it shall change its name
or identity.
(f) ACCEPTANCE OF PROVISIONS OF LEASE. The Participants, the
Administrative Agent and Lessor hereby acknowledge and accept the provisions of
Sections 13.4 and 21.1 of the Lease.
(g) DEPRECIATION. Prior to the Expiration Date and during the continuance
of the Sale Option Period, neither Lessor nor any Participant shall claim any
federal or state tax attributes or benefits (including depreciation) relating to
the Leased Property unless required to do so by an appropriate taxing authority
or after a clearly applicable change in Applicable Laws or as a protective
response to a proposed adjustment by a Governmental Authority; PROVIDED,
HOWEVER, that if an appropriate
60
taxing authority shall require Lessor or any Participant to claim any such
federal or state tax attributes or benefits, such Person shall promptly notify
Lessee thereof and shall permit Lessee to contest such requirement in a manner
similar to the contest rights provided in, and subject to any applicable
limitation to a contest contained in, SECTION 12.5(b).
(h) INSOLVENCY PROCEEDINGS. Each of the Participants, Lessor, in its
individual capacity, and the Administrative Agent, in its respective individual
capacity, and Lessee covenants as to itself, not jointly with any other Person,
that it shall not (i) commence any action, proceeding or other case with respect
to Lessor under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, arrangement,
winding up, liquidation, dissolution, composition or other relief with respect
to indebtedness, (ii) seek appointment of a receiver, trustee, custodian or
other similar official with respect to Lessor and for all or any substantial
benefit of the creditors of Lessor, or (iii) take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in this CLAUSE (i), except in each case, as expressly permitted
pursuant to the Loan Agreement upon the occurrence of a Loan Event of Default.
(i) RELEASE OF DOCUMENTS. Administrative Agent hereby agrees that, upon a
sale of the Leased Property pursuant to Section 20.1 of the Lease and payment of
all amounts due and owing from Lessee and Construction Agent under the Operative
Documents or repayment in full of all Loans and Certificate Amounts and all
other amounts due and owing from Lessee and Construction Agent under the
Operative Documents to Administrative Agent and the Participants, Administrative
Agent shall promptly execute and deliver to Lessee a release of the Mortgage,
releases of the Construction Agency Agreement Assignment, and releases of all
other Liens created by the Operative Documents, and termination statements for
any financing statements relating to the Leased Property which are then of
record naming Administrative Agent as secured party or assignee thereof.
ARTICLE X
REPLACEMENT OF PARTICIPANTS
SECTION 10.1. REPLACEMENT OF PARTICIPANTS. Lessee or Arranger, acting at
the direction of the Required Participants and with the approval of Lessee, may
replace (a) any Certificate Holder or any Lender that breaches its obligation
under SECTION 3.1 or
61
3.2, as the case may be, to fund a Certificate Amount or make a Loan, or (b) any
Certificate Holder or Lender with respect to which, (i) the right to pay
Interest or Yield by reference to the LIBO Rate shall be suspended under SECTION
13.1 or 13.2, or (ii) there are or would be any claim for reimbursement or
compensation under SECTION 13.3(a) or 13.5.
SECTION 10.2. COOPERATION. Administrative Agent and Lessor hereby agree to
cooperate with Lessee, at Lessee's sole cost and expense if Lessee is acting
pursuant to SECTION 10.1, in Lessee's efforts to arrange one or more Replacement
Participants as contemplated by this SECTION 10.2.
ARTICLE XI
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 11.1. ASSIGNMENTS.
(a) All or any part of the interest of any Lender in, to or under this
Participation Agreement, the other Operative Documents, the Leased Property or
the Notes may be assigned or transferred by such Lender at any time to any
Person; PROVIDED, HOWEVER, that (i) each assignment or transfer shall comply
with all applicable securities laws; (ii) each assignment or transfer shall
consist of a transfer of equivalent portions of such Lender's Notes and
equivalent portions of such Lender's rights and obligations under the Loan
Agreement; (iii) unless both parties to the assignment are Participants
immediately prior to giving effect to the assignment, each assignment or
transfer of Loans shall be in a minimum aggregate amount of $10,000,000 (or if
less, the entire amount of such Participant's Commitment) and $1,000,000
integral multiples in excess thereof (or such Participant's entire Commitment);
(iv) each such assignment shall be to an Eligible Assignee; (v) unless the
assignee or transferee is a then existing Participant, or a then existing lender
under the Credit Agreement, or an Event of Default has occurred and is
continuing, the transferee or assignee shall be a Person consented to in writing
by Lessee, such consent not to be unreasonably withheld or delayed; (vi)
Administrative Agent shall have received from the assignee/transferee or the
assignor/transferor a transfer fee in the amount of $2,500; and (vii) each
assignee or transferee shall (A) comply, as of the date of the transfer, with
the delivery requirements of SECTION 11.3(a); (B) acknowledge in writing,
addressed and delivered to each of the Persons then party to this Participation
Agreement, that the obligations to be performed from and after the date of such
transfer or assignment under this
62
Participation Agreement and all other Operative Documents are its obligations,
including the obligations imposed by this SECTION 11.1(a) (and the transferor
and transferee Participant shall deliver to Lessee, Administrative Agent and
Lessor an Assignment Agreement, in substantially the form of EXHIBIT N and an
Investor's Letter in substantially the form of SCHEDULE II to EXHIBIT N, each
executed by the assignee or transferee) and (C) represent and warrant to Lessor,
Administrative Agent, each Participant and Lessee in writing each of the
representations and warranties as set forth in SECTION 7.1 and that:
(w) it has the requisite power and authority to accept such
assignment or transfer;
(x) it will not transfer any Note unless the proposed transferee
makes the foregoing representations and covenants;
(y) it will not take any action with respect to such Note that would
violate any applicable securities laws; and
(z) it will not assign or transfer any interest in its Note except in
compliance with this SECTION 11.1.
Any transfer or assignment made in violation of the above requirements shall not
be effective against the other parties to this Participation Agreement until
such requirements are satisfied.
(b) Any Certificate Holder may assign or transfer all or any part of its
interest in, to and under this Participation Agreement, the other Operative
Documents and the Leased Property at any time to any Person; PROVIDED, HOWEVER,
that (i) unless the assignee or transferee is a then existing Participant or a
then existing lender under the Credit Agreement or an Event of Default has
occurred and is continuing, the assignee or transferee shall be a Person
consented to in writing by Lessee, such consent not to be unreasonably withheld
or delayed; (ii) each such assignment shall be of a constant, and not a varying,
percentage of all such rights and obligations, (iii) unless both parties to the
assignment are Participants immediately prior to giving effect to the
assignment, the amount of the commitment of the assigning Certificate Holder
being assigned pursuant to each such assignment shall not be less than
$5,000,000 (or if less, the entire amount of such Participant's Commitment) and
shall be an integral multiple of $1,000,000 (or such Participant's entire
commitment), (iv) each such assignment shall be to an Eligible Assignee, (v) the
Administrative Agent shall have received from assignee/transferee or the
assignor/transferor a transfer fee in the amount of $2,500;
63
PROVIDED, HOWEVER, that only one fee need be paid if transfers under both
SECTION 11.1(a) and 11.1(b) are made concurrently, (vi) each assignment or
transfer shall comply with all applicable securities laws; and (vii) each
assignee or transferee shall (A) comply, as of the date of the transfer, with
the delivery requirements of SECTION 11.3(a); (B) acknowledge in writing,
addressed and delivered to each of the Persons then party to this Participation
Agreement, that the obligations to be performed from and after the date of such
transfer or assignment under this Participation Agreement and all other
Operative Documents are its obligations, including the obligations imposed by
this SECTION 11.1(b) (and the transferor and transferee Certificate Holder shall
deliver to Lessee, Lessor and Administrative Agent an Assignment Agreement, in
substantially the form of EXHIBIT N and an Investor's Letter in substantially
the form of SCHEDULE II to EXHIBIT N, executed by the assignee or transferee)
and (C) represent and warrant to Lessor, Administrative Agent, each Participant
and Lessee as set forth in SECTION 7.1 and that:
(v) it has the requisite power and authority to accept such
assignment or transfer and to engage in the Overall Transaction;
(w) it will not take any action with respect to its Certificate that
would violate any applicable securities laws;
(x) it will not assign or transfer any Certificate except in
compliance with this SECTION 11.1(b); and
(y) it will not transfer any Certificate unless the proposed
transferee makes the foregoing representations and covenants.
Any transfer or assignment made in violation of the above requirements shall not
be effective against the other parties to this Participation Agreement until
such requirements are satisfied.
SECTION 11.2. PARTICIPATIONS. Any Participant may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "SUB-PARTICIPANT") participating interests
in all or a portion of its rights and obligations under this Participation
Agreement, the other Operative Documents, or its Notes or Certificates
(including, without limitation, all or portion of the Rent owing to it);
PROVIDED, HOWEVER, that:
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(a) no participation contemplated in this SECTION 11.2 shall relieve such
Participant from its obligations hereunder or under any other Operative
Document;
(b) such Participant shall remain solely responsible for the performance
of its Commitment and such other obligations;
(c) Lessee shall continue to deal solely and directly with such
Participant in connection with such Participant's rights and obligations under
this Participation Agreement and each of the other Operative Documents;
(d) each such Sub-Participant will make representations and warranties to
the Participant that are consistent with SECTION 7.1, MUTATIS MUTANDIS;
(e) no Sub-Participant, unless such Sub-Participant is an Affiliate of
such Participant, or is itself a Participant, shall be entitled to have any
right to vote or grant or withhold consents or otherwise to require such
Participant or Lessee to take or refrain from taking any action hereunder or
under any other Operative Document;
(f) no Sub-Participant shall be entitled to the benefits of ARTICLE XIII
in excess of the right of the Participant selling the relevant participating
interest; and
(g) unless such Sub-Participant is an existing Participant, such
participation shall be subject to the consent of Lessee, not to be unreasonably
withheld or delayed; provided, however, that no consent shall be required during
the existence and continuation of an Event of Default.
SECTION 11.3. WITHHOLDING TAXES; DISCLOSURE OF INFORMATION; PLEDGE UNDER
REGULATION A.
(a) If any Participant or any assignee of, or Sub-Participant in, any Note
or Certificate (each such assignee or Sub-Participant, a "TRANSFEREE") is
organized under the laws of any jurisdiction other than the United States or any
State thereof, then such Participant or Transferee, as applicable, shall (as a
condition precedent to acquiring or participating in any Loan or Certificate and
as a continuing obligation to Lessor and Lessee) (i) furnish to Lessor,
Administrative Agent and Lessee in duplicate, for each taxable year of such
Participant or Transferee during the Term, a properly completed and executed
copy of either Internal Revenue Service Form W-8 ECI or Internal Revenue Service
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Form 1001 and Internal Revenue Service Form W-8 BEN and Internal Revenue Service
Form W-8 BEN or Internal Revenue Service Form W-8 or Internal Revenue Form W-9
and any additional form (and such other form) as is necessary to claim complete
exemption from United States withholding taxes on all payments hereunder, and
(ii) provide to Lessor, Administrative Agent and Lessee a new Internal Revenue
Service Form W-8 ECI or Internal Revenue Service Form 1001 and Internal Revenue
Service Form W-8 BEN or Internal Revenue Service Form W-8 BEN or Internal
Revenue Service Form W-8 or Internal Revenue Service Form W-9 and any such
additional form (or any successor form or forms) upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable United States laws and regulations and amendments
duly executed and completed by such Participant or Transferee, and to comply
from time to time with all applicable United States laws and regulations with
regard to such withholding tax exemption. By its acceptance of a participation
or assignment of a Participant's Note or Certificate, each Transferee shall be
deemed bound by the provisions set forth in this ARTICLE XI. No Participant or
Transferee that fails to comply with the requirements of this SECTION 11.3(a)
shall be entitled to the benefit of any tax indemnity for gross-up of payments
in respect of withholding taxes pursuant to SECTION 12.4 or 12.5.
(b) Subject to SECTION 15.13 hereof, any Participant, Administrative Agent
or Lessor may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this ARTICLE XI, disclose to the
assignee or participant or proposed assignee or participant any information
relating to Lessee, Guarantor, their Affiliates and the Leased Property.
(c) Anything in this ARTICLE XI to the contrary notwithstanding, any
Participant may, without the consent of Lessee, assign and pledge all or any
portion of the Notes or Certificates held by it to any Federal Reserve Bank, the
United States Treasury or to any other financial institution as collateral
security pursuant to Regulation A of the F.R.S. Board and any operating circular
issued by the Federal Reserve System and/or the Federal Reserve Bank or
otherwise, but no such assignment shall relieve any Participant of its
obligations hereunder.
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ARTICLE XII
INDEMNIFICATION
SECTION 12.1. INDEMNIFICATION.
(a) GENERAL INDEMNIFICATION. (i) Prior to the Base Term Commencement Date
and without limitation on the rights of any Indemnitee under any other
indemnification set forth in this ARTICLE XII:
A. Lessee shall pay and assume liability for, and does hereby agree,
whether or not any of the transactions contemplated hereby shall be
consummated, to indemnify, protect, defend, save and keep harmless Lessor
from and against any and all Claims that may be imposed on, incurred by or
asserted against Lessor (whether because of action or omission by Lessor or
any other Indemnitee), whether or not such Claim is covered by any other
indemnification under this ARTICLE XII or Lessor shall also be indemnified
as to any such Claim by any other Person whenever such Claim arises or
accrues, including whether or not such Claim arises or accrues at any time
prior to or after the Expiration Date, and which in all cases include any
Claim for which Lessor has an obligation to indemnify any Person, or for
which Lessor otherwise has liability, under SECTION 12.1(a)(i)(B), and
X. Xxxxxx shall pay and assume liability for, and does hereby agree
to indemnify, protect, defend, save and keep harmless each Construction
Period Participant Indemnitee from and against any and all Claims that may
be imposed on, incurred by or asserted against any such Construction Period
Participant Indemnitee (whether because of action or omission by such
Construction Period Participant Indemnitee), whether or not such Claim is
covered by any other indemnification under this ARTICLE XII or such
Construction Period Participant Indemnitee shall also be indemnified as to
any such Claim by any other Person, and
(ii) Commencing upon the Base Term Commencement Date, and without
limitation on the rights of any Indemnitee under any other indemnification set
forth in this ARTICLE XII, whether or not any of the transactions contemplated
hereby shall be consummated, Lessee shall pay and assume liability for, and does
hereby agree to indemnify, protect, defend, save and keep harmless each
Indemnitee from and against any and all Claims that may be imposed on, incurred
by or asserted against such Indemnitee (whether because of action or omission by
such Indemnitee), whether or not such Claim
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is covered by any other indemnification under this ARTICLE XII or such
Indemnitee shall also be indemnified as to any such Claim by any other Person,
and whether or not such Claim arises or accrues after the Expiration Date,
in each case under this SECTION 12.1(a)(i) or (ii), in any way
arising out of or relating to:
A. any of the Operative Documents or any of the transactions
contemplated thereby or any investigation, litigation or proceeding in
connection therewith, and any amendment, modification or waiver in respect
thereof;
B. the Leased Property, including the Land, the Improvements or any
part thereof or interest therein;
C. the purchase, mortgaging, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
purchase, ownership, possession, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing,
operation, condition, sale (including, without limitation, any sale or
other transfer pursuant to the Lease), return or other disposition of all
or any part of any interest in the Leased Property, or the imposition of
any Lien (or incurring of any liability to refund or pay over any amount as
a result of any Lien) thereon, including: (i) Claims or penalties arising
from any violation of law or in tort (strict liability or otherwise),
including Claims made by invitees of Lessee or any assignee, or any
sublessor of either thereof, or by any other person entering on the Leased
Property, (ii) any Claim resulting from or related to latent or other
defects, whether or not discoverable, (iii) any Claim resulting from or
related to the acquisition of the Leased Property or any construction
thereon (including the Construction) or use thereof, (iv) any Claim based
upon a violation or alleged violation of the terms of any restriction,
easement, condition or covenant or other matter affecting title to the
Leased Property, (v) the making of any Modifications in violation of any
standards imposed by any insurance policies required to be maintained by
Lessee pursuant to the Lease which are in effect at any time with respect
to the Leased Property or any part thereof, (vi) any Claim for patent,
trademark or copyright infringement, or (vii) Claims arising from any
public improvements with respect to the Leased Property resulting in any
change or special assessments being levied against the Leased Property or
any
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plans to widen, modify or realign any street or highway adjacent to the
Leased Property, or any Claim for utility "tap-in" fees;
D. the offer, issuance, sale, transfer or delivery of the
Certificates and Notes;
E. the breach or alleged breach by Lessee, Construction Agent or
Guarantor of any covenant, representation or warranty made by it or deemed
made by it in any Operative Document, any Construction Document or any
certificate delivered by it;
F. the transactions contemplated hereby or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B of
Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code;
G. the retaining or employment of any broker, finder or financial
advisor by Lessee, in its individual capacity or as Construction Agent or
Guarantor to act on its behalf in connection with this Participation
Agreement; or
H. any other agreement entered into or assumed by Lessee including,
in its capacity as Construction Agent or Guarantor in connection with the
Leased Property, including the Improvements and the Land or by Lessor in
the purchase of the Land (including, in connection with each of the matters
described in this SECTION 12.1 to which this indemnity shall apply, matters
based on or arising from the negligence of any Indemnitee).
It is expressly understood and agreed that the indemnity provided for herein
shall (i) survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document and
(ii) not adversely affect and are in addition to any right to Indemnity under
SECTION 12.1 of the Original Participation Agreement with respect to any Claim
relating to any act, omission or existence of facts existing or arising prior to
the Second Document Closing Date, which shall be deemed to survive for purposes
hereof.
(b) EXCLUSIONS FROM INDEMNITIES; LIMITATIONS ON LESSOR INDEMNITIES.
(i) Notwithstanding the foregoing provisions of this ARTICLE XII,
Lessee shall not be obligated to indemnify an Indemnitee under SECTION
12.1(a)(i) and Lessor shall not be
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required or obligated to indemnify a Construction Period Participant
Indemnitee under SECTION 12.1(a)(ii) for any Claim to the extent that such
Claim is, or is attributable to: (A) the gross negligence or willful
misconduct of such Indemnitee; (B) the breach by such Indemnitee of its
representations and warranties in SECTION 7.1, 7.4 or 7.5 as the case may
be, or the breach by such Indemnitee of its covenants as set forth in this
Participation Agreement or in any other Operative Document to which such
Indemnitee is a party; (C) any Claim resulting from the imposition of any
Lessor Lien that such Indemnitee is responsible for discharging under the
Operative Documents; and (D) in respect of any indemnification under
SECTION 12.1(a)(i), any Claim to the extent such Claim arises as a result
of a Nonrelated Construction Event; PROVIDED, HOWEVER, that nothing in the
foregoing clauses (A) through (D) shall be deemed to exclude or limit (x)
any Claim that Lessor or any Construction Period Participant and any
Indemnitee may have under any Operative Document or Applicable Laws for
damages from Lessee for breach by Lessee of its representations, warranties
or covenants made or deemed made by it in any Operative Document or (y) any
remedy under or claim for or right to damages pursuant to ARTICLE XVI of
the Lease.
(ii) Lessor's obligation to indemnify and hold harmless any
Construction Period Participant Indemnitee under SECTION 12.1(a)(ii) or Tax
Indemnitee under SECTION 12.5(a)(ii):
(A) is not an individual or personal obligation of Lessor, but solely
its obligation in its capacity as Lessor, and nothing herein shall be
construed as creating any liability on Lessor, individually or personally,
to pay, indemnify or hold harmless any Indemnitee under this ARTICLE XII;
(B) is not an obligation binding on Lessor except to the extent of
any payment received by Lessor pursuant to SECTION 12.1(a)(i) or SECTION
12.5(a)(ii);
(C) shall be paid and discharged solely and exclusively from amounts
received by Lessor pursuant to SECTION 12.1(a)(i) or SECTION 12.5(a)(ii),
and it is expressly agreed by each Construction Period Participant
Indemnitee that the sole recourse of each such Person for payment or
discharge of the indemnification obligations created under SECTION
12.1(a)(ii)
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shall be to such amounts paid by Lessor pursuant to SECTION 12.1(a)(i); and
(D) is the sole and exclusive right of each Construction Period
Participant Indemnitee against Lessor, and any right to proceed against
Lessor individually or otherwise under common law, federal or state
securities laws or otherwise for indemnification or contribution in
connection with the matters covered by this SECTION 12(a)(ii) or SECTION
12.5(a)(ii) is hereby expressly waived by each Construction Period
Participant Indemnitee (other than claims that may be made against Lessor,
individually or personally, for fraud, gross negligence or willful
misconduct).
Except as otherwise set forth in this SECTION 12.1(b), nothing in this
ARTICLE XII is intended as or shall be construed as a limitation on the right of
any Indemnitee to make indemnification, contribution or other claims of any kind
against Lessee, to the extent that such claims otherwise may be made, with
respect to any matter, including indemnification for Claims of the type referred
to in SECTION 12.1(a)(i) and 12.1(a)(ii). To the extent that any payments made
pursuant to SECTION 12.1(a)(i) and SECTION 12.1(a)(ii) are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by Lessor to a trustee, debtor in possession, receiver or other Person
under any Bankruptcy Law, common law or equitable cause, then to such extent,
the Indemnitee who received any such payments from Lessor (or any portion
thereof) shall repay any such amounts to Lessor, or as may otherwise be directed
by a court of competent jurisdiction.
The indemnification obligations of Lessor under SECTION 12.1(a)(ii)
shall survive and be reinstated to the same extent, for the same period and in
the same manner as the indemnification obligations of Lessee.
The right of any Construction Period Participant Indemnitee or Tax
Indemnitee to seek indemnification from Lessor under SECTION 12.1(a)(ii) or
12.5(a)(ii) is subject to and conditioned upon compliance by any such Indemnitee
with the notice, cooperation, appointment of counsel, contest rights and other
provisions in SECTION 12.4, except that any reference in such Sections to Lessee
shall be deemed to be a reference to Lessor.
Without limiting the foregoing, Lessor hereby, subject to the terms of this
SECTION 12.1(b), grants to each Construction Period
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Participant Indemnitee and each Tax Indemnitee a nonexclusive assignment of the
right to enforce Lessor's indemnification rights under SECTIONS 12.1(a)(i)(A)
and 12.5(a)(i)(A) with respect to Claims or Impositions of such Construction
Period Participant Indemnitees for which Lessor is indemnified under such
SECTIONS 12.1(a)(i)(A) and 12.5(a)(i)(A). Lessee acknowledges and agrees that
Lessor, (i) has indemnified the Construction Period Participant Indemnitees and
Tax Indemnitees under SECTIONS 12.1(a)(i)(B) and 12.5(a)(i)(B), and (ii) has
granted to such Construction Period Participant Indemnitees a nonexclusive
assignment of the right to enforce Lessor's indemnification rights under such
Sections. Any Claim for indemnification to be made by any Construction Period
Participant Indemnitee by its exercise of the above described nonexclusive
assignment will be brought on behalf of each Construction Period Participant
Indemnitee to be so indemnified by Administrative Agent following a demand by
any such Indemnitee, and solely for purposes of SECTION 12.4 and 12.5(b)
Administrative Agent shall be deemed to be the Indemnitee or Tax Indemnitee as
applicable.
SECTION 12.2. ENVIRONMENTAL INDEMNITY. Without limitation of the other
provisions of this ARTICLE XII, Lessee hereby agrees to indemnify, hold harmless
and defend each Indemnitee from and against any and all Claims, losses, damages,
liabilities, fines, penalties, charges, administrative and judicial proceedings
(including informal proceedings) and orders, judgments, remedial action,
requirements, enforcement actions of any kind, and all reasonable and documented
costs and expenses incurred in connection therewith (including reasonable and
documented attorneys' and/or paralegals' fees and expenses), including all costs
incurred in connection with any investigation or monitoring of the condition of
the Leased Property or any clean-up, remedial, removal or restoration work by
any Governmental Authority, arising in whole or in part, out of:
(a) the presence on, under or around the Leased Property or any
portion thereof of any Hazardous Substance, or any releases or discharges
of any Hazardous Substance on, under, from, onto or around the Leased
Property or any portion thereof,
(b) any activity, including, without limitation, construction
(including construction of the Financed Improvements), carried on or
undertaken on or off the Leased Property or any portion thereof, and
whether by Lessee or any of its Affiliates or any predecessor in title or
any employees, agents, sublessees, contractors or subcontractors
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of Lessee, any of its Affiliates or any predecessor in title, or any other
Persons (including such Indemnitee), in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Substance that at any time are located or present
on, under or around, or that at any time migrate, flow, percolate, diffuse
or in any way move onto or under the Leased Property or any portion
thereof,
(c) loss of or damage to any property or the environment arising
from, or in any way related to, the Leased Property or Lessee or any of its
Affiliates (including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines and penalties and natural resource damages), or
death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and fauna, and
any mitigative action required by or under Environmental Laws, in each case
arising from, or in any way related to, the Leased Property, Lessee, any of
its Affiliates or the Overall Transaction or any portion thereof,
(d) any claim concerning lack of compliance with Environmental Laws,
or any act or omission causing an environmental condition that requires
remediation or would allow any Governmental Authority to record a Lien
against the Leased Property or any portion thereof, or
(e) any residual contamination on or under any of the Leased
Property, or affecting any natural resources, and any contamination of any
property or natural resources arising in connection with the generation,
use, handling, storage, transport or disposal of any such Hazardous
Substance, in each case arising from, or in any way related to, the Leased
Property, Lessee, any of its Affiliates, or the Overall Transaction or any
portion thereof, and irrespective of whether any of such activities were or
will be undertaken in accordance with Applicable Laws.
SECTION 12.3. END OF TERM INDEMNITY. If (a) Lessee elects the Sale Option
and (b) after paying to Administrative Agent, for the benefit of the
Participants, any amounts due under ARTICLES XX and XXI of the Lease, the Lease
Balance shall not have been reduced to zero, then Lessee shall promptly pay an
amount equal to the shortfall to Administrative Agent on the Expiration Date to
the extent that an appraisal report conforming to the requirements of this
SECTION 12.3 indicates that such shortfall is due to any of
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the following events, circumstances or conditions, whether or not permitted
under the Lease: (i) the failure to maintain the Leased Property as required by
the Lease and the other Operative Documents, and in at least as good a condition
as it was in on the Completion Date, ordinary wear and tear excepted; (ii) the
carrying out of or the failure to undertake any improvements or Modifications
(including the Financed Improvements) by Lessee whether or not permitted
pursuant to the Operative Documents, ordinary wear and tear excepted; (iii) any
change or modification to the Approved Plans and Specifications following the
earlier of (x) the Second Document Closing Date and (y) the delivery of the
Approved Plans and Specifications pursuant to SECTION 6.1(o), whether or not
permitted pursuant to the Operative Documents, (iv) the existence of any
environmental condition at or affecting the Leased Property, whether or not such
condition existed on the initial Advance Date; (v) any defect, exception,
easement, restriction or other encumbrance on or title to the Leased Property
within the power of Lessee to control or affect, whether or not created or
existing on the initial Advance Date, (vi) the dependence of the Leased Property
on any improvement or facility not fully located on the Leased Property; (vii)
any restoration or rebuilding carried out by Lessee or any sublessee; (viii) any
use of the Leased Property or any part thereof by Lessee or any sublessee other
than as an office building, or (ix) any other cause or condition within the
power of Lessee to control or affect, other than ordinary wear and tear. For
purposes of making the determination provided for in this SECTION 12.3, Lessor
may request, and Lessee shall thereupon provide not less than 15 Business Days
prior to the consummation of the sale of the Leased Property, at Lessee's sole
cost and expense, a report from an appraiser selected by the Required
Participants and reasonably approved by Lessee, in form and substance
satisfactory to the Required Participants and using approved methods
satisfactory to the Required Participants, concerning the extent to which the
fact that the actual Fair Market Value of the Leased Property as of the
Expiration Date is less than the Fair Market Value anticipated for such date in
the Appraisal is due to any of the factors enumerated in the preceding sentence
hereof.
SECTION 12.4. PROCEEDINGS IN RESPECT OF CLAIMS. With respect to any amount
that Lessee is requested by an Indemnitee to pay by reason of SECTION 12.1(a) or
12.2, such Indemnitee shall, if so requested by Lessee and prior to any payment,
submit such additional information to Lessee as Lessee may reasonably request
and which is in the possession of such Indemnitee to substantiate properly the
requested payment.
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In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify Lessee of the commencement thereof, and
Lessee shall be entitled, at its expense, to participate in, and, to the extent
that Lessee desires to, assume and control the defense thereof through its own
counsel, which shall be subject to the reasonable approval of the Required
Participants, on behalf of the Indemnitee; PROVIDED, HOWEVER, that Lessee shall
have acknowledged in writing its obligation to fully indemnify such Indemnitee
in accordance with the terms of the Operative Documents in respect of such
action, suit or proceeding, and, at the request of the Indemnitee, Lessee shall
keep such Indemnitee fully appraised of the status of such action, suit or
proceeding and shall provide such Indemnitee with all information with respect
to such action, suit or proceeding as such Indemnitee shall reasonably request.
Lessee must indicate its election to assume such defense by written notice to
the Indemnitee within ninety (90) days following receipt of Indemnitee's notice
of the Claim, or in the case of a third party claim which requires a shorter
time for response then within such shorter period as specified in the
Indemnitee's notice of Claim, PROVIDED that such Indemnitee has given Lessee
notice thereof. Lessee shall not be entitled to assume and control the defense
of any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnitee, (x) such action, suit or proceeding
involves any risk of imposition of criminal liability or any material risk of
imposition of material civil liability on such Indemnitee or will involve a
material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on the Leased Property or any part thereof unless,
in the case of civil liability, Lessee shall have posted a bond or other
security reasonably satisfactory to the relevant Indemnitees in respect to such
risk or (y) the control of such action, suit or proceeding would involve an
actual or potential conflict of interest, (B) such proceeding involves Claims
not fully indemnified by Lessee which Lessee and the Indemnitee have been unable
to sever from the indemnified Claim(s), or (C) an Event of Default has occurred
and is continuing. The Indemnitee may participate in a reasonable manner at its
own expense and with its own counsel in any proceeding conducted by Lessee in
accordance with the foregoing. Lessee shall not enter into any settlement or
other compromise with respect to any Claim which is entitled to be indemnified
under SECTION 12.1 or 12.2, as applicable, without the prior written consent of
the Indemnitee, which consent shall not be unreasonably withheld or delayed in
the case of a money settlement not involving an admission of liability of such
Indemnitee.
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Each Indemnitee shall supply Lessee with such information and documents
reasonably requested by Lessee as are necessary or advisable for Lessee to
participate in any action, suit or proceeding to the extent permitted by SECTION
12.1 or 12.2, as applicable, and Lessee shall reimburse the Indemnitee for the
reasonable out-of-pocket expenses of supplying such information and documents.
Unless an Event of Default shall have occurred and be continuing, no Indemnitee
shall enter into any settlement or other compromise with respect to any Claim
which is entitled to be indemnified under SECTION 12.1 or 12.2, as applicable,
without the prior written consent of Lessee, which consent shall not be
unreasonably withheld, unless such Indemnitee waives its right to be indemnified
under SECTION 12.1 or 12.2, as applicable, with respect to such Claim, does not
admit any criminal liability or civil liability on behalf of Lessee in
connection with such Claim, and uses reasonable efforts to advise Lessee on the
status of proceedings from time to time during the pendency of such Claim.
Upon payment in full of any Claim by Lessee pursuant to SECTION 12.1 or
12.2, as applicable, to or on behalf of an Indemnitee, Lessee, without any
further action, shall be subrogated to any and all claims that such Indemnitee
may have relating thereto (other than claims in respect of insurance policies
maintained by such Indemnitee at its own expense), and such Indemnitee shall
execute such instruments of assignment and conveyance, evidence of claims and
payment and such other documents, instruments and agreements as may be necessary
to preserve any such claims and otherwise cooperate with Lessee and give such
further assurances as are necessary or advisable to enable Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to SECTION 12.1 or 12.2 shall
be paid to such Indemnitee promptly upon receipt of a written demand therefor
from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
SECTION 12.5. GENERAL TAX INDEMNITY.
(a) INDEMNIFICATION.
(i) Prior to the Base Term Commencement Date and without limitation
on the rights of any Indemnitee under any other indemnification set forth
in this ARTICLE XII:
A. Lessee shall pay and assume liability for, and does hereby agree,
whether or not any of the transactions
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contemplated hereby shall be consummated, to indemnify, protect, defend and
hold harmless Lessor from and against, all Impositions on an After Tax
Basis; and
X. Xxxxxx shall pay and assume liability for, and does hereby agree
to indemnify, protect, defend and hold harmless each Construction Period
Participant Indemnitee from and against, any and all Impositions on an
After Tax Basis; and
(ii) Commencing upon the Base Term Commencement Date, and without
limitation on the rights of any Indemnitee under any other indemnification
set forth in this ARTICLE XII, Lessee shall pay and assume liability for,
and does hereby agree to indemnify, protect, defend and hold harmless, each
Tax Indemnitee and the Leased Property from and against any and all
Impositions on an After Tax Basis.
(b) CONTESTS. If any claim shall be made against any Tax Indemnitee or if
any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Imposition as to which Lessee may
have an indemnity obligation pursuant to this SECTION 12.5, or if any Tax
Indemnitee shall determine that any Imposition for which Lessee may have an
indemnity obligation pursuant to this SECTION 12.5 may be payable, such Tax
Indemnitee shall promptly (and in any event, within thirty (30) days) notify
Lessee in writing (PROVIDED that failure to so notify Lessee within thirty (30)
days shall not alter such Tax Indemnitee's rights under this SECTION 12.5,
except to the extent such failure precludes or materially adversely affects the
ability to conduct a contest of any indemnified Taxes) and shall not take any
action with respect to such claim, proceeding or Imposition without the written
consent of Lessee (such consent not to be unreasonably withheld or unreasonably
delayed) for thirty (30) days after the receipt of such notice by Lessee;
PROVIDED, HOWEVER, that in the case of any such claim or proceeding, if such Tax
Indemnitee shall be required by law or regulation to take action prior to the
end of such 30-day period, such Tax Indemnitee shall in such notice to Lessee,
so inform Lessee, and such Tax Indemnitee shall not take any action with respect
to such claim, proceeding or Imposition without the consent of Lessee (such
consent not to be unreasonably withheld or unreasonably delayed) for ten (10)
days after the receipt of such notice by Lessee, unless the Tax Indemnitee shall
be required by law or regulation to take action prior to the end of such 10-day
period, in which case Tax Indemnitee shall promptly notify Lessee.
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Lessee shall be entitled for a period of thirty (30) days from receipt of
such notice from the Tax Indemnitee (or such shorter period as the Indemnitee
has notified Lessee is required by law or regulation for the Tax Indemnitee to
commence such contest), to request in writing that such Tax Indemnitee contest
such Imposition, at Lessee's expense. If (x) such contest can be pursued in the
name of Lessee and independently from any other proceeding involving an
Imposition for which Lessee has not agreed to indemnify such Tax Indemnitee, (y)
such contest must be pursued in the name of the Tax Indemnitee, but can be
pursued independently from any other proceeding involving an Imposition for
which Lessee has not agreed to indemnify such Tax Indemnitee or (z) the Tax
Indemnitee so requests, then Lessee shall be permitted to control the contest of
such claim PROVIDED, that in order to take control of the contest, Lessee must
first acknowledge in writing its obligation to indemnify for the Imposition
which is the subject of the contest if the outcome thereof is adverse, and
PROVIDED, FURTHER, that in determining the application of CLAUSES (x) and (y) of
the preceding sentence, each Tax Indemnitee shall take any and all reasonable
steps to segregate claims for any Taxes for which Lessee indemnifies hereunder
from Taxes Lessee is not obligated to indemnify hereunder, so that Lessee can
control the contest of the former. In all other claims requested to be contested
by Lessee, the Tax Indemnitee shall control the contest of such claim, acting
through counsel reasonably acceptable to Lessee. In no event shall Lessee be
permitted to contest (or the Tax Indemnitee required to contest) any claim (A)
if such Tax Indemnitee provides Lessee with a legal opinion of independent
counsel that such action, suit or proceeding involves a material risk of
imposition of criminal liability or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien)
on the Leased Property or any part thereof unless Lessee shall have posted and
maintained a bond or other security reasonably satisfactory to the relevant Tax
Indemnitee in respect to such risk, (B) if an Event of Default has occurred and
is continuing, unless Lessee shall have posted and maintained a bond or other
security reasonably satisfactory to the relevant Tax Indemnitee in respect of
the Impositions subject to such claim and all expenses for which Lessee is
responsible hereunder reasonably foreseeable in connection with the contest of
such claim, (C) unless Lessee shall have agreed to pay and shall pay to such Tax
Indemnitee on demand all reasonable out-of-pocket costs, losses and expenses
that such Tax Indemnitee may incur in connection with contesting such
Imposition, including all reasonable legal, accounting and investigatory fees
and disbursements, or (D) if such contest shall involve the payment of the
Impositions prior to the contest, unless Lessee shall provide to the Tax
Indemnitee an
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interest-free advance in an amount equal to the Imposition that the Tax
Indemnitee is required to pay (with no additional net after-tax costs (including
Taxes) to such Tax Indemnitee). In addition, for Tax Indemnitee-controlled
contests and claims contested in the name of the Tax Indemnitee in a public
forum, no contest shall be required: (A) unless, in the case of an income tax,
the amount of the potential indemnity (taking into account all similar or
logically related claims that have been or could be raised in any audit
involving such Indemnitee for which Lessee may be liable to pay an indemnity
under this SECTION 12.5) exceeds $50,000 and (B) unless, if requested by the Tax
Indemnitee, Lessee shall have provided to the Indemnitee an opinion of counsel
selected by Lessee (which may be in-house counsel, except that in the case of
income taxes indemnified hereunder such opinion shall be that of independent tax
counsel selected by the Tax Indemnitee and reasonably acceptable to Lessee) that
a reasonable basis exists to contest such claim. In no event shall a Tax
Indemnitee be required to appeal an adverse judicial determination to the United
States Supreme Court.
The party conducting the contest shall consult in good faith with the other
party and its counsel with respect to the contest of such claim for Impositions
(or claim for refund) but the decisions regarding what actions to be taken shall
be made by the controlling party in its sole judgment, PROVIDED, HOWEVER, that
if the Tax Indemnitee is the controlling party and Lessee recommends the
acceptance of a settlement offer made by the relevant Governmental Authority and
such Tax Indemnitee rejects such settlement offer then the amount for which
Lessee will be required to indemnify such Tax Indemnitee with respect to the
Taxes subject to such offer shall not exceed the amount which it would have owed
if such settlement offer had been accepted. In addition, the controlling party
shall keep the noncontrolling party reasonably informed as to the progress of
the contest, and shall provide the noncontrolling party with a copy of (or
appropriate excerpts from) any reports or claims issued by the relevant auditing
agent or taxing authority to the controlling party thereof, in connection with
such claim or the contest thereof.
Each Tax Indemnitee shall supply Lessee with such information and documents
reasonably requested by Lessee as are necessary or advisable for Lessee to
participate in any action, suit or proceeding to the extent permitted by this
SECTION 12.5(b), and Lessee shall promptly reimburse such Tax Indemnitee for the
reasonable out-of-pocket expenses of supplying such information and documents.
Unless an Event of Default shall have occurred and be continuing, no Tax
Indemnitee shall enter into any settlement or
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other compromise or fail to appeal an adverse ruling with respect to any claim
which is entitled to be indemnified under this SECTION 12.5 (and with respect to
which contest is required under this SECTION 12.5(b)) without the prior written
consent of Lessee (such consent not to be unreasonably withheld), unless such
Tax Indemnitee waives its right to be indemnified under this SECTION 12.5 with
respect to such claim.
Notwithstanding anything contained herein to the contrary, a Tax Indemnitee
will not be required to contest (and Lessee shall not be permitted to contest) a
claim with respect to any Imposition if (i) such Tax Indemnitee shall waive its
right to indemnification under this SECTION 12.5 with respect to such claim (and
any claim with respect to such year or any other taxable year, the contest of
which is materially adversely affected as a result of such waiver) or (ii) such
Imposition is the sole result of a claim of a continuing and consistent nature,
which claim has previously been resolved against the relevant Tax Indemnitee
(unless a change in law or facts has occurred since such prior adverse
resolution and Lessee provides an opinion of independent tax counsel to the
effect that it is more likely than not that such change in law or facts will
result in a favorable resolution of the claim at issue).
(c) PAYMENTS. (i) TO, OR FOR THE ACCOUNT OF, A TAX INDEMNITEE. Any
Imposition indemnifiable under this SECTION 12.5 shall be paid directly when due
to the applicable taxing authority if direct payment is practicable and
permitted. If direct payment to the applicable taxing authority is not permitted
or is otherwise not made, any amount payable to Tax Indemnitee pursuant to this
SECTION 12.5 shall be paid within thirty (30) days after receipt of a written
demand therefor from such Tax Indemnitee (accompanied by a written statement
describing in reasonable detail the amount so payable), but not before two
Business Days prior to the date that the relevant Taxes are due. Any payments
made to a Tax Indemnitee pursuant to this SECTION 12.5 shall be made directly to
the Tax Indemnitee entitled thereto in immediately available funds at such bank
or to such account as specified by the Tax Indemnitee in written directions to
Lessee, or, if no such direction shall have been given, by check of Lessee
payable to the order of the Tax Indemnitee by certified mail, postage prepaid at
its address as set forth in this Participation Agreement. Upon the request of
any Tax Indemnitee with respect to an Imposition that Lessee is required to pay
directly to the taxing authority, Lessee shall furnish to such Tax Indemnitee
the original or a certified copy of a receipt for Lessee's payment of such
Imposition or such other evidence of payment as is reasonably acceptable to such
Tax Indemnitee.
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(ii) TO LESSEE. (x) If any Tax Indemnitee shall actually realize a Tax
benefit (whether by way of deduction, credit, allocation or apportionment or
otherwise) with respect to a Tax not indemnifiable hereunder which would not
have been realized but for any Tax with respect to which Lessee has reimbursed
or indemnified such Tax Indemnitee pursuant to the Operative Documents, which
benefit was not previously taken into account in determining the amount of
Lessee's payment to such Tax Indemnitee, such Tax Indemnitee shall pay to Lessee
an amount equal to the amount of such Tax benefit, increased by any actual Tax
savings realized by such Tax Indemnitee and net of any additional Taxes actually
borne by such Tax Indemnitee as a result of such payment (I.E., on a "GROSSED-UP
BASIS"); PROVIDED, HOWEVER, that no payment shall be made as long as an Event of
Default is continuing; PROVIDED, FURTHER, however, that no Tax Indemnitee shall
be required to pay to Lessee any Tax benefit to the extent such payment would be
greater than the amount of such Taxes in respect of which the reimbursement or
indemnification was paid by Lessee, reduced by all prior payments by such Tax
Indemnitee under this SECTION 12.5(c)(ii)(x) in respect of such amount; any
payment to Lessee which is so limited shall, to the extent of such unpaid
excess, be carried over and shall be available to offset any future obligations
of Lessee under this SECTION 12.5. If such repaid Tax benefit is thereafter
lost, the additional Tax payable shall be treated as a Tax indemnifiable
hereunder without regard to the exclusions set forth in clauses (i) through (ix)
of the definition of Impositions.
(y) Upon receipt by a Tax Indemnitee of a refund or credit of all or
part of any Taxes paid or indemnified against by Lessee, which refund or credit
was not previously taken into account in determining the amount of Lessee's
payment to such Tax Indemnitee, such Tax Indemnitee shall pay to Lessee, on a
Grossed-Up Basis, an amount equal to the amount of such refund or credit, plus
any interest received by or credited to such Tax Indemnitee with respect to such
refund; PROVIDED, HOWEVER, that no such payment shall be made as long as an
Event of Default is continuing; PROVIDED, FURTHER, however, that no Tax
Indemnitee shall be required to pay to Lessee any refund or credit to the extent
such refund or credit is greater than the amount of Taxes in respect of which
payment or indemnification was made by Lessee, reduced by all prior payments by
such Tax Indemnitee under this SECTION 12.5(c)(ii)(y) in respect of such amount.
If such repaid refund or credit is thereafter lost, the additional Tax payable
shall be treated as a Tax indemnifiable hereunder without regard to the
exclusions set forth in clauses (i) through (ix) of the definition of
Impositions.
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(z) The Tax Indemnitee will, at Lessee's expense, pursue refunds and
tax benefits that would result in any such payments to Lessee, but only if the
Tax Indemnitee has been notified in writing by Lessee that such refunds or tax
benefits are available and should be pursued.
(d) REPORTS. In the case of any report, return or statement required to be
filed with respect to any Impositions that are subject to indemnification under
this SECTION 12.5 and of which Lessee has knowledge, Lessee shall promptly
notify the Tax Indemnitee of such requirement and, at Lessee's expense (i) if
Lessee is permitted (unless otherwise requested by the Tax Indemnitee) by
Applicable Laws, timely file such report, return or statement in its own name or
(ii) if such report, return or statement is required to be in the name of or
filed by such Tax Indemnitee or the Tax Indemnitee otherwise requests that such
report, return or statement be filed in the name of or by such Tax Indemnitee,
Lessee shall prepare such report, return or statement for filing by such Tax
Indemnitee in such manner as shall be reasonably satisfactory to such Tax
Indemnitee and send the same to the Tax Indemnitee for filing no later than ten
(10) days prior to the due date therefor. In any case in which the Tax
Indemnitee will file any such report, return or statement, Lessee shall, upon
written request of such Tax Indemnitee, provide such Tax Indemnitee with such
information as is reasonably necessary to allow the Tax Indemnitee to file such
report, return or statement.
(e) WITHHOLDING TAXES.
(i) Lessor or its agent shall withhold any Taxes required by
Applicable Laws to be withheld on any payment to any Participant, except to
the extent that the Participant has furnished such information to Lessor or
its agent as shall be sufficient under Applicable Laws to entitle such
Person to an exemption from withholding Taxes. The amount payable to
Lessor, any Participant or any Sub-Participant shall be reduced by the
amount of any withholding Taxes required to be withheld by Lessor or its
agent pursuant to the preceding sentence and, except to the extent set
forth in SECTION 13.3, Lessee and Lessor shall have no liability or
obligation to the Participants with respect to any such withholding Taxes.
In accepting and carrying out its duties with respect to withholding Taxes
pursuant to this SECTION 12.5(e), Lessor shall act as the duly authorized
agent of Lessee to act on behalf of Lessee under the withholding provisions
of Chapter 3 of the Code. Lessee shall file notice of such appointment in
accordance with applicable Treasury regulations order Code
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Section 1441. Such agency shall terminate in the event that Applicable Laws
are amended so as to release Lessee of the obligation to withhold Taxes
with respect to payments made by Lessee to Lessor under the Lease and in
any event upon termination or expiration of the Lease.
(ii) If and to the extent Lessor or its agent has in good faith
attempted to comply with its obligation to withhold Taxes in accordance
with CLAUSE (i) and a claim regarding withholding Taxes is made against
Lessor or its agent, as between Lessee and Lessor (or its agent), Lessee
shall be responsible for, and Lessee shall indemnify and hold harmless
Lessor (and its agent) (without duplication of any indemnification required
by SUBSECTION (a)) on an After Tax Basis against, such claim to the extent,
but only to the extent, Lessor or its agent has actually paid funds to a
taxing authority with respect to such withholding taxes or receives a
demand for such payment from any taxing authority, but subject to the
provisions of SECTION 12.5(b).
(iii) Each Participant agrees to reimburse Lessor or its agent for any
withholding Taxes for which Lessor or its agent becomes liable and to
reimburse Lessee for any Taxes other than those for which Lessee is liable
pursuant to SECTION 13.3 or other amounts paid by Lessee pursuant to CLAUSE
(ii) hereof.
(iv) For purposes of determining whether withholding Taxes apply to
payments under the Lease, it shall be assumed that the Lease constitutes a
loan for United States Federal income tax purposes (as is the parties'
intention).
SECTION 12.6. GROSS UP. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Lessee is required to pay or reimburse under any other provision of this ARTICLE
XII (each such payment or reimbursement under this ARTICLE XII, an "original
payment") and which original payment constitutes income to such Indemnitee when
accrued or received, then Lessee shall pay to, or for the account of, such
Indemnitee on demand the amount of such original payment on an After Tax Basis.
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ARTICLE XIII
CONTINGENT LIBOR AND OTHER COSTS
SECTION 13.1. LIBO RATE LENDING UNLAWFUL. If any Participant shall
determine (which determination shall, upon notice thereof to Lessee and the
Participants, be conclusive and binding on Lessee) that any change in or in the
interpretation of any law after the date hereof makes it unlawful, or any
central bank or other Governmental Authority asserts that it is unlawful, for
such Participant to make available, continue or maintain any Loan or Certificate
Amount that bears Interest or Yield based upon the LIBO Rate, as the case may
be, the obligation of such Participant to make available, continue or maintain
any such Loan or Certificate Amount, as the case may be, shall, upon such
determination, forthwith be suspended until such Participant shall notify Lessee
and Lessor that the circumstances causing such suspension no longer exist and,
to the extent required by any such introduction of or change in or in the
interpretation of any law, all Loans or Certificate Amounts, as the case may be,
of such Participant shall automatically bear Interest or accrue Yield at the
Alternate Base Rate either (a) on the last day of the then current Interest
Period applicable to such Loan or Certificate Amount, as the case may be, if
such Participant may lawfully continue to maintain and fund such Loan or
Certificate Amount, or (b) immediately if such Participant shall determine that
it may not lawfully continue to maintain and fund such Loan or Certificate
Amount, as the case may be, to such day thereto or sooner, if required by such
law or assertion.
SECTION 13.2. DEPOSITS UNAVAILABLE. If after the date hereof the
Administrative Agent shall have determined, in good faith, that for any reason:
(a) Dollar deposits in the relevant amount and for the relevant Interest
Period are not available to Participants in the relevant market; or
(b) adequate and reasonable means do not exist for ascertaining the LIBO
Rate applicable to Participants' Loans or Certificate Amounts or that the LIBO
Rate applicable to Loans or Certificate Amounts for any Interest Period does not
adequately and fairly reflect the cost to Participants of funding any Loan or
Certificate Amount,
then, upon notice from Administrative Agent to Lessee and the other
Participants, (i) the obligations of the Participants to make available Loans or
Certificate Amounts, as the case may be, shall be suspended and (ii) each
outstanding Loan or Certificate Xxxxxx,
00
as the case may be, shall begin to bear Interest or accrue Yield at the
Alternate Base Rate on the last day of the then current Interest Period
applicable thereto.
SECTION 13.3. INCREASED COSTS, ETC. (a) If any Participant reasonably
determines that, after the date hereof, any change in, or the adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any court, central bank, regulator or other Governmental
Authority increases or would increase the cost to any Participant (including
cost increase through the establishment or increase by the FRB of any reserve
requirements) of, or reduces or would reduce the amount of any sum receivable
by, such Participant in respect of, making available, continuing or maintaining
(or of its obligation to make available, continue or maintain) or prevents or
would prevent any Participant from being legally entitled to a complete
exemption from withholding as described in SECTION 11.3 with respect to, any
Loans or Certificate Amounts, as the case may be, Lessee agrees to reimburse
such Participant for each such increased cost or reduced amount when applicable
to such Participant or its parent, as applicable (on an After Tax Basis). Such
Participant shall promptly notify Lessor and Lessee in writing of the occurrence
of any such event, such notice to state, in reasonable detail, the reasons
therefor and the calculation of the additional amount required fully to
compensate such Participant for such increased cost or reduced amount. Such
additional amounts shall be payable by Lessee as Supplemental Rent directly to
such Participant within five (5) days of its receipt of such notice. A statement
of a Participant as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on Lessee; PROVIDED, HOWEVER, that upon
request, Lessee shall be entitled to review and verify non-confidential
information of any Participant related to the determinations set forth in such
statement of such Participant and discuss such non-confidential information and
determinations with such Participant. In determining such amount, each
Participant shall use any method of averaging or attribution that it (in its
reasonable discretion) shall deem applicable.
(b) Lessee shall pay to each Participant, as long as such Participant
shall be required under regulations of the FRB to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency funds or
deposits, additional costs on the unpaid principal amount of each such
Participant's Loan or the Certificate Amount of such Participant's Certificate,
as applicable, equal to the actual costs of such reserves allocated to
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such Loan by the Participant (as determined by the Participant in good faith,
which determination shall be conclusive in the absence of manifest error), which
additional costs amount shall be payable on each Payment Date as Supplemental
Rent, provided that Lessee shall have received at least 15 days prior written
notice of such additional costs from such Participant. If a Participant fails to
give notice 15 days prior to the relevant Payment Date, such Supplemental Rent
shall be payable 15 days from the Lessee's receipt of such notice. A statement
of such Participant as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall be presumed correct and binding
on Lessee absent manifest error; PROVIDED, HOWEVER, that upon request, Lessee
shall be entitled to review and verify non-confidential information of any
Participant related to the determinations set forth in such statement of such
Participant and discuss such non-confidential information and determinations
with such Participant. In determining such amount, such Participant shall use
its standard practice in determining such amount, and, in the absence of such
standard practice, may use any reasonable method of averaging and attribution
that it shall deem applicable.
SECTION 13.4. FUNDING LOSSES. In the event any Participant shall incur any
loss or out-of-pocket expense (including any Break Costs, any loss or
out-of-pocket expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Participant to make available, continue
or maintain any portion of the principal amount of any Loan or Certificate
Amount, as the case may be and any fees payable to terminate the deposits from
which such funds were obtained) as a result of:
(a) any conversion or repayment or prepayment of the principal amount of
any Loans or Certificate Amounts, as the case may be, on a date other than the
scheduled last day of the Interest Period applicable thereto; or
(b) any Loans or Certificate Amounts, as the case may be, not being made
in accordance with the Advance Request therefor (unless such failure to make
such Loans or fund such Certificate Amounts, as the case may be, constitutes a
breach by the applicable Participant of its obligations under ARTICLE III),
then, upon the written notice of such Participant to Lessee (with a copy to
Lessor), Lessee shall, within five (5) days of its receipt thereof, pay directly
to such Participant as Supplemental Rent such amount (determined on the basis of
such Participant's standard practices) as will reimburse such Participant for
such loss or out-of-pocket expense (excluding loss of the Applicable
86
Certificate Holder Margin and Applicable Lender Margin). Such written notice
(which shall include calculations in sufficiently reasonable detail to indicate
the incurrence and amount of such loss and out-of-pocket expense) shall be
presumed correct and binding on Lessee absent manifest error.
SECTION 13.5. INCREASED CAPITAL COSTS. If, after the date hereof, any
change in, or the adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other Governmental Authority affects or would affect the amount of capital
required or expected to be maintained by any Participant or any Person
controlling such Participant, and such Participant reasonably determines that
the rate of return on its or such controlling Person's capital as a consequence
of its Commitment or the Loans or Certificate Amounts, as the case may be, made
available by such Participant is reduced to a level below that which such
Participant or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Participant to Lessee, Lessee shall immediately pay
directly to such Participant or such controlling Persons, as Supplemental Rent,
additional amounts sufficient to compensate such Participant or such controlling
Persons for such reduction in rate of return. A statement of such Participant as
to any such additional amount or amounts (including calculations thereof in
reasonable detail) shall be presumed correct and binding on Lessee absent
manifest error; PROVIDED, HOWEVER, that upon request, Lessee shall be entitled
to review and verify non-confidential information of any Participant related to
the determinations set forth in such statement of such Participant and discuss
such non-confidential information and determinations with such Participant. In
determining such amount, such Participant shall use its standard practice in
determining such amount, and, in the absence of such standard practice, may use
any reasonable method of averaging and attribution that it shall deem
applicable.
SECTION 13.6. AFTER TAX BASIS. Lessee shall pay all amounts owing under
this ARTICLE XIII on an After Tax Basis.
SECTION 13.7. FUNDING OFFICE. If Lessee is required to pay additional
amounts to or for the account of any Participant pursuant to SECTIONS 13.1, 13.2
or 13.3, to the extent applicable, then such Participant will agree to use
reasonable efforts to change the jurisdiction of its Applicable Lending Office
so as to eliminate or reduce any such additional payment which may
87
thereafter accrue if such change, in the reasonable judgment of such
Participant, is not otherwise disadvantageous to such Participant.
ARTICLE XIV
LIMITATION ON RECOURSE LIABILITY DURING INTERIM TERM
Notwithstanding any other provision set forth in this Participation
Agreement or any of the other Operative Documents, in the event of the
occurrence of a Construction Agency Event of Default at any time following the
Second Document Closing Date but prior to the Base Term Commencement Date
neither Lessee nor Construction Agent shall be required to pay more than the
Construction Recourse Amount on a recourse basis with respect to any damages
(which shall include Construction Breakage Costs and amounts payable by
Construction Agent as Default Completion Costs) which relate to or arise from
any such Construction Agency Event of Default; provided, however, that the
foregoing limitation shall not apply (i) with respect to any Full Recourse
Construction Period Event of Default, (ii) with respect to the rights of parties
to seek all damages, without regard to such limitation, from the proceeds of the
Leased Property or any other TeleTech Collateral or (iii) to any Claim for
indemnity under Article XII.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. SURVIVAL OF AGREEMENTS. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Participation Agreement and any of the other Operative Documents, the
transfer of the interest in the Leased Property as provided herein or in any
other Operative Documents (and shall not be merged into any deed, ground lease
or any other conveyance or transfer document), any disposition of any interest
of Lessor in the Leased Property, the purchase and sale of the Notes or
Certificates, payment therefor and any disposition thereof, and shall be and
continue in effect notwithstanding any investigation made by any party hereto or
to any of the other Operative Documents and the fact that any such party may
waive compliance with any of the other terms, provisions or conditions of any of
the Operative Documents.
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SECTION 15.2. NO BROKER, ETC. Except for Lessee's dealing with Security
Pacific Leasing Corporation, as Arranger, each of the parties hereto represents
to the others that it has not retained or employed any arranger, broker, finder
or financial advisor to act on its behalf in connection with this Participation
Agreement, nor has it authorized any arranger, broker, finder or financial
adviser retained or employed by any other Person so to act, nor has it incurred
any fees or commissions to which Lessor, Administrative Agent or any Participant
might be subjected by virtue of their entering into the Overall Transaction. Any
party who is in breach of this representation shall indemnify and hold the other
parties harmless from and against any liability arising out of such breach of
this representation.
SECTION 15.3. NOTICES. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given and shall be effective: (i) in
the case of notice by letter, the earlier of when delivered to the addressee by
hand or courier if delivered on a Business Day and, if not delivered on a
Business Day, the first Business Day thereafter or on the third Business Day
after depositing the same in the mails, registered or certified mail, postage
prepaid, return receipt requested, (ii) in the case of a prepaid delivery to a
reputable national overnight air courier service, on the Business Day following
such date of delivery, and (iii) in the case of notice by facsimile or bank
wire, when receipt is confirmed if delivered on a Business Day and, if not
delivered on a Business Day, the first Business Day thereafter, addressed as
provided on SCHEDULE III hereto, or to such other address as any of the parties
hereto may designate by written notice.
SECTION 15.4. COUNTERPARTS. This Participation Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 15.5. AMENDMENTS. The Operative Documents or any of the terms
thereof may be terminated (except as specifically contemplated herein), amended,
supplemented, waived or modified only with the written agreement or consent of
Lessor, Administrative Agent, Lessee and the Required Participants; PROVIDED,
HOWEVER, that SECTION 15.18 hereof may not be terminated, amended, supplemented,
waived or modified without the written agreement or consent of the Arranger; and
PROVIDED, FURTHER, that such termination, amendment, supplement, waiver or
modification shall require the written agreement or consent of each Participant
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(or, in the case of CLAUSE (b) below, each Certificate Holder) if such
termination, amendment, supplement, waiver or modification would:
(a) modify any of the provisions of this SECTION 15.5, change the
definition of "Required Participants" or modify or waive any provision of
an Operative Document requiring action by each Participant;
(b) change the definition of "Required Certificate Holders" or modify
or waive any provision of an Operative Document requiring action by each
Certificate Holder;
(c) amend, modify, waive or supplement any of the provisions of
SECTIONS 4.1, 4.2, or 5.3 hereof or Section 2.5, 2.6, 2.7 or 2.8 of the
Loan Agreement;
(d) reduce, modify, amend or waive any fees or indemnities in favor
of any Participant, including without limitation amounts payable pursuant
to ARTICLE XII (except that any Person may consent to any reduction,
modification, amendment or waiver of any indemnity payable to it);
(e) modify, postpone, reduce or forgive, in whole or in part, any
payment of Rent (other than pursuant to the terms of the Operative
Documents), any Loan or Certificate Amount, the Lease Balance, the Loan
Balance, Sale Option Recourse Amount, Construction Recourse Amount, the
Lessee Funding Amount, any Fees, amounts due pursuant to Section 20.2 of
the Lease, Interest or Yield (except that any Person may consent to any
modification, postponement, reduction or forgiveness of any payment of any
Commitment Fee payable to it) or, subject to CLAUSE (c) above, any other
amount payable under the Lease or this Participation Agreement, or modify
the definition or method of calculation of any Rent (other than pursuant to
the terms of the Operative Documents), Loans or Certificate Amounts, Lease
Balance, Loan Balance, Certificate Balance, Sale Option Recourse Amount,
Construction Recourse Amount, Construction Costs, Estimated Contract Costs,
any Fees, Participant Balance or any other definition which would affect
the amounts advanced or which are payable under the Operative Documents;
(f) consent to any assignment of the Lease by Lessee, releasing
Lessee from its obligations in respect of the payments of Rent, Loan
Balance, Certificate Balance or Lease
90
Balance or changing the absolute and unconditional character of such
obligations; or
(g) release of any Lien granted by Lessee or Lessor under the
Operative Documents, except as provided in the Operative Documents.
SECTION 15.6. HEADINGS, ETC. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
SECTION 15.7. PARTIES IN INTEREST. Except as expressly provided in SECTION
11.1 or elsewhere herein, none of the provisions of this Participation Agreement
is intended for the benefit of any Person except the parties hereto. Lessee
shall not assign or transfer any of its rights or obligations under the
Operative Documents without the prior written consent of the Required
Participants. Except as provided in SECTION 9.1(b) and (c), Lessor shall not
assign or transfer any of its rights or obligations under the Operative
Documents without the prior written consent of Lessee and the Required
Participants.
SECTION 15.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF COLORADO WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES.
SECTION 15.9. SEVERABILITY. Any provision of this Participation Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 15.10. LIABILITY LIMITED. No Participant shall have any obligation
to any other Participant or to Lessee, Guarantor, Lessor or Administrative Agent
with respect to the Overall Transaction, except those obligations of such
Participant expressly set forth in the Operative Documents, including any
liability any such Participant may have with respect to any inaccuracy or breach
of the representations and warranties of such Participant expressly set forth
herein, or except as set forth in the instruments delivered in connection
therewith, and no Participant shall be liable for performance by any other party
hereto of such other
91
party's obligations under the Operative Documents, except as otherwise so set
forth.
SECTION 15.11. SUBMISSION TO JURISDICTION. Each party hereto irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Participation Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the United States District Court
for the District of Colorado, and appellate courts from any thereof;
(b) consents that any such action or proceedings may be brought to
such courts, and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such party at its
address set forth on SCHEDULE III or at such other address of which the other
parties hereto shall have been notified pursuant to SECTION 15.3; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction.
SECTION 15.12. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO AND THERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY
WILL NOT SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN
WHICH A JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION
15.12 HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO
NO EXCEPTIONS. LESSEE AND GUARANTOR EACH ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTICIPANTS ENTERING INTO THIS
PARTICIPATION AGREEMENT AND EACH OTHER OPERATIVE DOCUMENT.
92
SECTION 15.13. CONFIDENTIALITY. Each party hereto agrees to take and to
cause its Affiliates to take normal and reasonable precautions, in accordance
with such party's customary procedures for handling confidential information of
this nature, and exercise due care to maintain the confidentiality of all
information identified as "nonpublic", "confidential" or "secret" by Lessee or
Guarantor and provided to it by Lessee or Guarantor, or by the Administrative
Agent on Lessee's or Guarantor's behalf, under this Agreement or any other
Operative Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this
Participation Agreement and the other Documents or in connection with other
business now or hereafter existing or contemplated with the Lessee or Guarantor;
except to the extent such information (a) was or becomes generally available to
the public other than as a result of disclosure by such party or its Affiliates,
or (b) was or becomes available on a non-confidential basis from a source other
Lessee or Guarantor, provided that such source is not bound by a confidentiality
agreement with the Lessee or Guarantor known to such party; PROVIDED, HOWEVER,
that any party may disclose such information (i) at the request or pursuant to
any requirement of any Governmental Authority to which such party is subject or
in connection with an examination of such Lender by any such authority; (ii)
pursuant to subpoena or other court process; (iii) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (iv) to the
extent reasonably required in connection with any litigation or proceeding to
which the Administrative Agent, any Participant, Lessor or their respective
Affiliates may be party; (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Operative Document;
(vi) to such party independent auditors and other professional advisors,
provided that such Person is informed of the confidential nature of such
information and the obligation to keep such information confidential pursuant to
the terms and subject to the conditions of this SECTION 15.13; (vii) to any
participant or assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required of
the parties hereunder; (viii) as to any party or its Affiliate, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Lessee or Guarantor is party or is deemed party
with such party or such Affiliate; (ix) to its Affiliates; and (x) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that required access to information
about such party's investment portfolio in connection with ratings issued with
respect to such party.
93
SECTION 15.14. LIMITED LIABILITY OF LESSOR. The parties hereto agree that
Bank shall have no personal liability whatsoever to Lessee, Guarantor, the
Certificate Holders, the Lenders, Administrative Agent or any of their
respective successors and assigns for any Claim based on or in respect of this
Participation Agreement or any of the other Operative Documents or arising in
any way from the Overall Transaction; PROVIDED, HOWEVER, that Bank shall be
liable in its individual capacity: (a) for its own willful misconduct or gross
negligence (or negligence in the handling of funds), (b) for liabilities that
may result from the inaccuracy or incorrectness of any representation or
warranty made by it in its individual capacity or as Lessor in this
Participation Agreement or in any certificate or document delivered pursuant
hereto, or from the failure of Bank to perform the covenants and agreements set
forth in SECTION 9.1 hereof, whether as to itself or as Lessor, or any other
breach by Bank of any of its other covenants or obligations under any of the
Operative Documents (regardless of whether such covenants and agreements concern
Bank, as such, or Bank acting as Lessor), or (c) for any Tax based on or
measured by any fees, commission or compensation received by it for actions
contemplated by the Operative Documents.
SECTION 15.15. LIMITED LIABILITY OF AGENT. The parties hereto agree that
Administrative Agent, in its individual capacity, shall have no personal
liability whatsoever to Lessee, Guarantor the Certificate Holders, the Lenders,
any other agent, Lessor or any of their respective successors and assigns for
any Claim based on or in respect of this Participation Agreement or any of the
other Operative Documents or arising in any way from the Overall Transaction;
PROVIDED, HOWEVER, that Administrative Agent shall be liable in its individual
capacity: (a) for its own willful misconduct or gross negligence (or negligence
in the handling of funds) and, to each Participant for the breach of its
obligations to such Participant in respect of the Operative Documents and the
Leased Property, (b) for liabilities that may result from the incorrectness of
any representation or warranty expressly made by it in this Participation
Agreement, whether in its individual capacity, or as Administrative Agent, or
from its failure to perform the covenants and agreements set forth in this
Participation Agreement or any other Operative Document, or (c) for any Tax
based on or measured by any fees, commission or compensation received by it for
actions contemplated by the Operative Documents. It is understood and agreed
that, except as provided in the preceding proviso, Administrative Agent shall
have no personal liability under any of the Operative Documents as a result of
acting pursuant to and consistent with any of the Operative Documents.
94
SECTION 15.16. PAYMENT OF TRANSACTION EXPENSES AND OTHER COSTS.
(a) TRANSACTION EXPENSES AND CONTINUING EXPENSES. As and when any
portion of Transaction Expenses becomes due and payable, including the
continuing fees, expenses and disbursements (including reasonable counsel fees)
of Lessor, as Lessor under the Lease, Borrower under the Loan Agreement, and as
trustee under the Trust Agreement, with respect to the administration of the
Trust Estate and each agent under the Operative Documents, such Transaction
Expenses shall be paid by Lessee as Supplemental Rent subject to and in
accordance with the provisions of Section 4.3(a) prior to the Base Term
Commencement Date.
(b) PAYMENT BY ADVANCE. Subject to the other provisions of this
SECTION 15.16 and without limiting the application of SECTION 15.16(a), all
Transaction Expenses incurred following the Original Advance and prior to the
Base Term Commencement Advance Date shall be paid through Advances, and Lessee
may seek reimbursement for Transaction Expenses paid by Lessee following the
Original Advance and prior to the initial Advance Date for which Lessee has not
been previously reimbursed, in each case to the extent there are Available
Commitments and such Transaction Expenses to be paid or reimbursed are reserved
for in the Approved Construction Budget.
(c) AMENDMENTS, SUPPLEMENTS AND APPRAISAL. Without limitation of the
foregoing, Lessee agrees to pay to the Participants, Lessor and Administrative
Agent all costs and expenses (including reasonable legal fees and expenses of
special counsel to Administrative Agent and Lessor and a single document counsel
for the Participants) incurred by any of them in connection with: (i) the
considering, evaluating, investigating, negotiating and entering into or giving
or withholding of any amendments or supplements or waivers or consents with
respect to any Operative Document; (ii) any Casualty, Condemnation or
termination of the Lease or any other Operative Document; (iii) the negotiation
and documentation of any restructuring or "workout", whether or not consummated,
of any Operative Document; (iv) the enforcement of the rights or remedies
against Lessee or Guarantor under the Operative Documents or (v) any transfer by
Lessor or a Participant of any interest in the Operative Documents during the
continuance of an Event of Default.
SECTION 15.17. REPRODUCTION OF DOCUMENTS. This Participation Agreement, all
documents constituting an Appendix, Schedule or Exhibit hereto, and all
documents relating hereto received by a
95
party hereto, including, without limitation: (a) consents, waivers and
modifications that may hereafter be executed; (b) documents received by the
Participants or Lessor in connection with the receipt and/or acquisition of the
Leased Property; and (c) financial statements, certificates, and other
information previously or hereafter furnished to Lessor, Administrative Agent or
any Participant may be reproduced by the party receiving the same by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. Each of the parties hereto agrees and stipulates that, to
the extent permitted by law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such party in the regular course of business) and that,
to the extent permitted by law, any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 15.18. ROLE OF SECURITY PACIFIC LEASING CORPORATION. Each party
hereto acknowledges hereby that it is aware of the fact that Security Pacific
Leasing Corporation has acted as an "arranger" with respect to the Overall
Transaction. The parties hereto acknowledge and agree that Arranger and its
Affiliates, including Bank of America, National Association, have not made any
representations or warranties concerning, and that they have not relied upon
Arranger as to, the tax, accounting or legal characterization or validity of (i)
the Operative Documents or (ii) any aspect of the Overall Transaction. The
parties hereto acknowledge and agree that Arranger has no duties, express or
implied, under the Operative Documents in its capacity as Arranger. The parties
hereto further agree that SECTION 4.4(b)(iii), SECTION 16.6, the first proviso
in the first sentence of SECTION 15.5, SECTION 15.15(a) to the extent of its
application to Arranger, and this SECTION 15.18 are for the express benefit of
Arranger, and Arranger shall be entitled to rely thereon as if it were a party
hereto and such Sections and Subsections, to the extent applicable to Arranger,
shall not be amended or waived without the written consent of Arranger.
SECTION 15.19. DELIVERIES TO PARTICIPANTS. Lessee may fulfill its
obligations hereunder and under each of the other Operative Documents to provide
any item (other than any notices) to any Participant by providing sufficient
copies of such item directly to Administrative Agent, along with the costs of
postage, with instructions to Administrative Agent to deliver such item to such
Participant.
96
ARTICLE XVI
ADMINISTRATIVE AGENT
SECTION 16.1. APPOINTMENT. Each Participant hereby irrevocably designates
and appoints Administrative Agent as the agent of such Participant under this
Participation Agreement and the other Operative Documents, and each such
Participant irrevocably authorizes Administrative Agent, in such capacity, to
take such action on its behalf under the provisions of this Participation
Agreement and the other Operative Documents and to exercise such powers and
perform such duties as are expressly delegated to Administrative Agent by the
terms of this Participation Agreement and the other Operative Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Participation
Agreement, Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein and in the other Operative Documents, or
any fiduciary relationship with any Participant or any other party to the
Operative Documents, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Participation
Agreement or any other Operative Document or otherwise exist against
Administrative Agent.
SECTION 16.2. DELEGATION OF DUTIES. Administrative Agent may execute any of
its duties under this Participation Agreement and the other Operative Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 16.3. EXCULPATORY PROVISIONS. Neither Administrative Agent (in its
capacity as such) 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 Participation Agreement or any other Operative Document, except for its or
such Person's own willful misconduct or gross negligence (or negligence in the
handling of funds) or (b) responsible in any manner to any of the Participants
or any other party to the Operative Documents for any recitals, statements,
representations or warranties made by Lessor, Lessee or Guarantor or any officer
thereof contained in this Participation Agreement or any other Operative
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by Administrative Agent under or in connection
with, this Participation Agreement or any other
97
Operative Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Participation Agreement or any other
Operative Document or for any failure of Lessor, Lessee or Guarantor to perform
its obligations hereunder or thereunder. Administrative Agent shall not be under
any obligation to any Lender or any other party to the Operative Documents to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Participation Agreement or any
other Operative Document, or to inspect the properties, books or records of
Lessor, Lessee or Guarantor.
SECTION 16.4. RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
Certificate, writing, resolution, notice, consent, certificate, affidavit,
letter, facsimile message, statement, order or other document or other written
communication believed by it in good faith 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 counsel to Lessor or Lessee), independent
accountants and other experts selected by Administrative Agent. Administrative
Agent may deem and treat the payee of any Note or Certificate as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with Administrative Agent. Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Participation Agreement or any other Operative Document unless it shall
first receive the advice or concurrence of the Required Participants, or it
shall first be indemnified to its satisfaction by the applicable Participants
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Participation Agreement and the other Operative Documents in accordance with a
request of the Required Participants, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Participants and
all future holders of the applicable Notes or Certificates. Wherever in the
Operative Documents the consent or approval of Administrative Agent is required,
such consent or approval may be given by Administrative Agent only upon its
receipt of such consent or approval from the Required Participants.
SECTION 16.5. NOTICE OF DEFAULT. Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
unless Administrative Agent has
98
received notice from a Participant or Lessor referring to this Participation
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that Administrative Agent receives
such a notice, Administrative Agent shall promptly give notice thereof to the
Participants, Lessor and Lessee. Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be directed by the
Required Participants; PROVIDED, HOWEVER, that unless and until Administrative
Agent shall have received such directions, Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Participants.
SECTION 16.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Participant expressly acknowledges that neither Administrative Agent nor the
Arranger, nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates, has made any representations or warranties to
it and that no act by Administrative Agent or the Arranger hereinafter taken,
including any review of the affairs of Lessor, Lessee or Guarantor, shall be
deemed to constitute any representation or warranty by Administrative Agent or
the Arranger to any Participant. Each Participant represents to Administrative
Agent and the Arranger that it has, independently and without reliance upon
Administrative Agent, Administrator, the Arranger or any other Participant, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of Lessor, Lessee and
Guarantor and made its own decision to enter into this Participation Agreement.
Each Participant also represents that it will, independently and without
reliance upon Administrative Agent, the Arranger or any other Participant, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Participation Agreement and the other
Operative Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of Lessor, Lessee and Guarantor. Except for
notices, reports and other documents expressly required to be furnished to the
Participants by Administrative Agent hereunder, neither Administrative Agent nor
the Arranger shall have any duty or responsibility to provide any Participant
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
Lessor, Lessee or Guarantor which
99
may come into the possession of Administrative Agent, the Arranger or any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
SECTION 16.7. INDEMNIFICATION. Except as provided in SECTION 16.4
hereunder, Administrative Agent agrees to look solely to Lessee under ARTICLE
XII, and not to any other party hereto, for any claim for indemnification which
may arise hereunder or under any other Operative Document.
SECTION 16.8. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Each
Participant acknowledges that First Security Bank, National Association is
acting as Administrative Agent hereunder. First Security Bank, National
Association and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with Lessor, Lessee and their Affiliates as though it was not
Administrative Agent hereunder and under the other Operative Documents and
without notice to or consent of the Participants. Each Participant acknowledges
that, pursuant to such activities, First Security Bank, National Association or
its Affiliates may receive information regarding Lessee, Lessor or their
Affiliates (including information that may be subject to confidentiality
obligations in favor of Lessee, Lessor or their Affiliates) and acknowledges
that such Persons shall be under no obligation to provide such information to
them.
SECTION 16.9. SUCCESSOR ADMINISTRATIVE AGENT. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below,
Administrative Agent may resign at any time by giving notice thereof to each
Participant or may be removed at any time by written notice from the Required
Participants, such resignation or removal to be effective only upon appointment
of a successor as herein provided and such successor's acceptance of such
appointment. Upon any such resignation or removal, the Required Participants at
the time of the resignation or removal shall have the right to appoint (so long
as no Event of Default attributable to its or Guarantor's action or failure to
act has occurred and is continuing, with the prior written consent of Lessee) a
successor Administrative Agent which shall be a commercial bank organized under
the laws of the United States of America or any State thereof or under the laws
of another country which is doing business in the United States of America and
having a combined capital, surplus and undivided profits of at least
$500,000,000. If, within 30 calendar days after the retiring Administrative
Agent's giving of notice of resignation or receipt
100
of a written notice of removal, a successor Administrative Agent is not so
appointed and does not accept such appointment, then the retiring or removed
Administrative Agent may appoint a successor Administrative Agent and transfer
to such successor Administrative Agent all rights and obligations of the
retiring Administrative Agent. Such successor Administrative Agent shall be a
commercial bank organized under the laws of the United States of America or any
State thereof or under the laws of another country which is doing business in
the United States of America and having a combined capital, surplus and
undivided profits of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent, and the term "Administrative Agent" shall mean
such successor agent effective upon such appointment and approval, and the
retiring or removed Administrative Agent shall be discharged from duties and
obligations as Administrative Agent thereafter arising hereunder and under any
related document without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Participation
Agreement or any holders of the Notes or the Certificates. If the retiring
Administrative Agent does not appoint a successor, Lessee (so long as no Event
of Default attributable to its or Guarantor's actions or failures to act has
occurred and is continuing) may do so, or any Participant shall be entitled to
apply to a court of competent jurisdiction for such appointment, and in any such
case the successor so appointed shall act until such time, if any, as a
successor shall have been appointed as above provided. After any retiring
Administrative Agent's resignation as Administrative Agent, all of the
provisions of this ARTICLE XVI shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Participation Agreement and the other Operative Documents.
[END OF PAGE]
[SIGNATURE PAGES FOLLOW]
101
PARTICIPATION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
TELETECH SERVICES CORPORATION, as Lessee
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: SVP
TELETECH HOLDINGS, INC., as Guarantor
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: SVP
S-1
PARTICIPATION AGREEMENT
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not
in its individual capacity, except as
expressly stated herein, but solely as
Certificate Trustee
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Secretary
S-2
PARTICIPATION AGREEMENT
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, except as expressly stated
herein, but solely as Administrative
Agent
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: VP
S-3
PARTICIPATION AGREEMENT
CERTIFICATE HOLDERS:
SECURITY PACIFIC LEASING CORPORATION,
as Certificate Holder
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------------
Title: VP
----------------------------------
S-4
PARTICIPATION AGREEMENT
XXXXX FARGO BANK, N.A., a
CERTIFICATE HOLDER
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
-----------------------------------
Title: VP
----------------------------------
S-5
PARTICIPATION AGREEMENT
LENDERS:
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Lender
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------------
Title: VP
----------------------------------
S-6
PARTICIPATION AGREEMENT
XXXXX FARGO BANK, N.A., AS LENDER
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxx
-----------------------------------
Title: VP
----------------------------------
S-7
APPENDIX 1
to
PARTICIPATION AGREEMENT
(TeleTech Trust No. 2000-A)
DEFINITIONS
APPENDIX 2
to
PARTICIPATION AGREEMENT
(TeleTech Trust No. 2000-A)
CONDITIONS PRECEDENT TO SECOND DOCUMENT CLOSING DATE
(a) AUTHORIZATION, EXECUTION AND DELIVERY OF DOCUMENTS; NO DEFAULT. The
Participation Agreement, the Lease, the Memorandum of Lease, the Construction
Agency Agreement, the Construction Agency Agreement Assignment, the Guarantees,
the Deed or Trust, the Trust Agreement, the Fee Letters, the Certificates, the
Loan Agreement and the Notes shall have been duly authorized, executed and
delivered by each of the other parties thereto, shall (to the extent the form
and substance thereof shall not be prescribed hereby) be in form and substance
satisfactory to each Participant and an executed counterpart of each thereof
(except for the Certificates and the Notes, originals of which shall only be
delivered to the applicable Participant, and for each Fee Letter, originals and
copies of which shall only be delivered to the parties thereto) shall have been
received by each of the Participants, the Agents and Lessor. Each Participant
shall have received an original, duly executed Note and Certificate registered
in such Participant's name. Each of the Operative Documents listed in this
clause (a) shall be in full force and effect as to all other parties and no
Default, Event of Default, Loan Agreement Default or Loan Agreement Event of
Default shall have occurred or be continuing.
(b) LITIGATION. No action or proceeding shall have been instituted or
threatened, nor shall any governmental action be instituted or threatened before
any Governmental Authority, nor shall any order, judgment or decree have been
issued or proposed to be issued by any Governmental Authority, to set aside,
restrain, enjoin or prevent the performance of this Participation Agreement or
any transaction contemplated hereby or by any other Operative Document or which
is reasonably likely, in the sole opinion of the Required Participants, to be
expected to have a Material Adverse Effect.
(c) LEGALITY, ETC. In the opinion of each Participant, the Overall
Transaction shall not violate any Applicable Laws and no change shall have
occurred or been proposed in Applicable Laws that would make it uneconomic or
illegal for any party to any Operative Document to participate in any of the
transactions contemplated by the Operative Documents or otherwise would prohibit
the
consummation of any transaction contemplated by the Operative Documents or
expand the duties, obligations and risks of such Participant.
(d) GOVERNMENTAL APPROVALS. All necessary (or, in the reasonable opinion of
Lessor or Administrative Agent (for the Required Participants), advisable)
Governmental Actions, in each case required by any Applicable Laws, shall have
been obtained or made and be in full force and effect.
(e) REQUIREMENTS OF LAW. In the reasonable opinion of Lessor, the Agents
and the Required Participants, the Overall Transaction does not and will not
violate any Applicable Laws and does not and will not subject Lessor, any Agent
or any Participant to any adverse regulatory prohibitions or constraints.
(f) LIABILITY INSURANCE. Lessee shall have provided evidence reasonably
satisfactory to Lessor, the Agents and the Participants that Lessee has obtained
or caused to be obtained, and that there is in place and effective, liability
insurance in accordance with and pursuant to the terms of Section 13.1(a) of the
Lease and the other terms and conditions of Article XIII of the Lease applicable
thereto.
(g) PAYMENT OF ACCRUED BUT UNPAID RENT. Lessee shall have paid to
Administrative Agent, by wire transfer of immediately available funds, all
accrued but unpaid Rent due and payable under the Original Lease for the period
commencing on the First Document Closing Date through and including June 5,
2000.
All documents and instruments required to be delivered on the Second
Document Closing Date shall be delivered at the offices of Xxxxx, Xxxxx & Xxxxx,
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at such
other location as Administrative Agent and Lessee may agree.
SCHEDULE I
TO
PARTICIPATION AGREEMENT
CERTIFICATE HOLDERS' COMMITMENTS
Noneligible
Accrued
Amounts
Commitment Commitment
Certificate Holder Commitment Percentage Percentage
------------------ ---------- ---------- ----------
Security Pacific
Leasing Corporation $ 500,902 1.5% 50%
Xxxxx Fargo Bank, N.A. $ 500,902 1.5% 50%
Total Certificate
Holders' Commitments: $ 1,001,804 3.0%
Total Loan Commitments: $25,663,196 97.0%
Total Commitments: $26,665,000 100.0%
SCHEDULE II
TO
PARTICIPATION AGREEMENT
LENDERS' COMMITMENTS
Commitment
Lender Commitment Percentage
------- ----------- ----------
Banc of America Leasing & $12,831,598 48.5%
Capital, LLC
Xxxxx Fargo Bank, N.A. $12,831,598 48.5%
Total Loan Commitments: $25,663,196 97.0%
Total Certificate
Holders' Commitments: $ 1,001,804 3.0%
Total Commitments: $26,665,000 100%
** Notwithstanding the percentages set forth above in this Schedule II or
anything else in the Operative Documents to the contrary, the Certificate
Holders shall Fund, in the aggregate, 100% of the Drawing Fees payable to
each Participant, the Arrangement Fee payable to the Arranger, the fees set
forth in the Trustee Fee Letter to the parties entitled thereto, and the
fees set forth in the Agent Fee Letter to the Administrative Agent with
each Certificate Holder Funding its pro rata portion of such Fees based on
its percentage share of the total Certificate Holders' Commitments.
