EXHIBIT 10.34
--------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Dated as of June 29, 1998
among
JP FOODSERVICE DISTRIBUTORS, INC.,
as the Construction Agent and as the Lessee,
THE VARIOUS PARTIES HERETO FROM TIME TO TIME,
as the Guarantors,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner Trustee
under the USF Real Estate Trust 1998-1,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Holders,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Lenders,
and
FIRST UNION NATIONAL BANK,
as the Agent for the Lenders
and respecting the Security Documents,
as the Agent for the Lenders and the Holders,
to the extent of their interests
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
SECTION 1A. INITIAL LENDER AND INITIAL HOLDER..........................................1
SECTION 1. THE LOANS...................................................................1
SECTION 2. HOLDER ADVANCES.............................................................2
SECTION 3. SUMMARY OF TRANSACTIONS.....................................................2
3.1. Operative Agreements..........................................................2
3.2. Property Purchase.............................................................2
3.3. Construction of Improvements; Commencement of Basic Rent......................3
SECTION 4. THE CLOSINGS................................................................3
4.1. Initial Closing Date..........................................................3
4.2. Transaction Expenses; Acquisition Advances; Construction Advances.............3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON
COMPLETION DATE; THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS...............3
5.1. General.......................................................................3
5.2. Procedures for Funding........................................................4
5.3. Conditions Precedent for the Lessor, the Agent, the Lenders and the
Holders Relating to the Initial Closing Date and the Advance of Funds for
the Acquisition of a Property......................................................6
5.4. Conditions Precedent for the Lessor, the Agent, the Lenders and the
Holders Relating to the Advance of Funds after the Acquisition Advance.............11
5.5. Additional Reporting and Delivery Requirements on Completion Date and
on Construction Period Termination Date............................................12
5.6. The Construction Agent Delivery of Construction Budget Modifications..........13
5.7. Restrictions on Liens.........................................................13
5.8 Joinder Agreement Requirements.................................................13
5.9 Payments.......................................................................14
SECTION 6. REPRESENTATIONS AND WARRANTIES..............................................14
6.1. Representations and Warranties of the Trust Company and the Borrower..........14
6.2. Representations and Warranties of Each Credit Party...........................17
SECTION 6B. GUARANTY...................................................................21
6B.1. Guaranty of Payment and Performance..........................................21
6B.2. Obligations Unconditional....................................................21
6B.3. Modifications................................................................22
6B.4. Waiver of Rights.............................................................23
6B.5. Reinstatement................................................................23
6B.6. Remedies.....................................................................24
6B.7. Limitation of Guaranty.......................................................24
6B.9. Release of Guarantors........................................................24
SECTION 7. PAYMENT OF CERTAIN EXPENSES..................................................25
7.1. Transaction Expenses..........................................................25
7.2. Brokers' Fees.................................................................26
7.3. Certain Fees and Expenses.....................................................26
i
7.4. Facility Fee..................................................................26
SECTION 8. OTHER COVENANTS AND AGREEMENTS..............................................27
8.1. Cooperation with the Construction Agent or the Lessee.........................27
8.2. Covenants of the Owner Trustee and the Holders................................27
8.3. Credit Party Covenants, Consent and Acknowledgment............................29
8.4. Sharing of Certain Payments...................................................33
8.5. Grant of Easements, etc.......................................................33
8.6. Appointment by the Agent, the Lenders, the Holders and the Owner Trustee......33
8.7. Collection and Allocation of Payments and Other Amounts.......................34
8.8. Release of Properties, etc....................................................37
8.9. Recordation of Memoranda of Lease and Lease Supplements.......................37
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT........................................38
9.1. The Construction Agent's and the Lessee's Credit Agreement Rights.............38
9.2. The Construction Agent's and the Lessee's Trust Agreement Rights..............39
SECTION 10. TRANSFER OF INTEREST.......................................................39
10.1. Restrictions on Transfer.....................................................39
10.2. Effect of Transfer...........................................................40
SECTION 11. INDEMNIFICATION............................................................40
11.1. General Indemnity............................................................40
11.2. General Tax Indemnity........................................................43
11.3. Increased Costs, Illegality, etc.............................................47
11.4. Funding/Contribution Indemnity...............................................49
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.......49
SECTION 12. MISCELLANEOUS..............................................................50
12.1. Survival of Agreements.......................................................50
12.2. Notices......................................................................50
12.3. Counterparts.................................................................52
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters..............52
12.5. Headings, etc................................................................53
12.6. Parties in Interest..........................................................53
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE;
ARBITRATION........................................................................54
12.8. Severability.................................................................56
12.9. Liability Limited............................................................56
12.10. Rights of the Credit Parties................................................57
12.11. Further Assurances..........................................................57
12.12. Calculations under Operative Agreements.....................................58
12.13. Confidentiality.............................................................58
12.14. Financial Reporting/Tax Characterization....................................59
12.15. Set-off.....................................................................59
12.16. Obligations of the Lenders, the Agent, the Owner Trustee, the Trust
Company and the Holders.....................................................60
ii
EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Officer's Certificate - Section 5.3(z)
D - Form of Secretary's Certificate - Section 5.3(aa)
E - Form of Officer's Certificate - Section 5.3(cc)
F - Form of Secretary's Certificate - Section 5.3(dd)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(ee)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(ff)
I - Form of Officer's Certificate - Section 5.5
J - Form of Joinder Agreement - Section 5.8(a)
K -Description of Material Litigation - Section 6.2(d)
L - State of Incorporation/Formation and Principal Place of Business of Each
Guarantor - Section 6.2(i)
M - Form of Officer's Compliance Certificate - Section 8.3(l)
N - Unrestricted Subsidiaries and Restricted Subsidiaries
Appendix A - Rules of Usage and Definitions
iii
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of June 29, 1998 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Agreement") is by and among JP FOODSERVICE DISTRIBUTORS, INC., a Delaware
----------
corporation (the "Lessee" or the "Construction Agent"); the various parties
------ ------------------
hereto from time to time as guarantors (subject to the definition of Guarantors
in Appendix A hereto, individually, a "Guarantor" and collectively, the
---------
"Guarantors"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
-----------
association, not individually, except as expressly stated herein (in its
individual capacity, the "Trust Company"), but solely as the Owner Trustee under
-------------
the USF Real Estate Trust 1998-1 (the "Owner Trustee", the "Borrower" or the
------------- --------
"Lessor"); the various banks and other lending institutions which are parties
-------
hereto from time to time as holders of certificates issued with respect to the
USF Real Estate Trust 1998-1 (subject to the definition of Holders in Appendix A
----------
hereto, individually, a "Holder" and collectively, the "Holders"); the various
------ -------
banks and other lending institutions which are parties hereto from time to time
as lenders (subject to the definition of Lenders in Appendix A hereto,
----------
individually, a "Lender" and collectively, the "Lenders"); and FIRST UNION
------ -------
NATIONAL BANK, a national banking association, as the agent for the Lenders and
respecting the Security Documents, as the agent for the Lenders and the Holders,
to the extent of their interests (in such capacity, the "Agent"). Capitalized
-----
terms used but not otherwise defined in this Agreement shall have the meanings
set forth in Appendix A hereto.
----------
In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION 1A. INITIAL LENDER AND INITIAL HOLDER.
Notwithstanding the various references in the Operative Agreements to multiple
Lenders and multiple Holders, First Union National Bank is the only Lender and
the only Holder as of the date of this Agreement. Additional Lenders and
additional Holders may become parties to the Operative Agreements subsequent to
the date hereof pursuant to the assignment provisions set forth in the
applicable Operative Agreements.
SECTION 1. THE LOANS.
Subject to the terms and conditions of this Agreement and the other Operative
Agreements and in reliance on the representations and warranties of each of the
parties hereto contained herein or made pursuant hereto, the Lenders have agreed
to make Loans to the Lessor from time to time in an aggregate principal amount
of up to the aggregate amount of the Commitments of the Lenders in order for the
Lessor to acquire the Properties and certain Improvements, to develop and
construct certain Improvements in accordance with the Agency Agreement and the
terms and provisions hereof and for the other purposes described herein, and in
consideration of the receipt of proceeds of the Loans, the Lessor will issue the
Notes. The Loans shall be made and the Notes shall be issued pursuant to the
Credit Agreement. Pursuant to
Section 5 of this Agreement and Section 2 of the Credit Agreement, the Loans
will be made to the Lessor from time to time at the request of the Construction
Agent in consideration for the Construction Agent agreeing for the benefit of
the Lessor, pursuant to the Agency Agreement, to acquire the Properties, to
acquire the Equipment, to construct certain Improvements and to cause the Lessee
to lease the Properties, each in accordance with the Agency Agreement and the
other Operative Agreements. The Loans and the obligations of the Lessor under
the Credit Agreement shall be secured by the Collateral.
SECTION 2. HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement and the other Operative
Agreements and in reliance on the representations and warranties of each of the
parties hereto contained herein or made pursuant hereto, on each date Advances
are requested to be made in accordance with Section 5 hereof, each Holder shall
make a Holder Advance on a pro rata basis to the Lessor with respect to the USF
Real Estate Trust 1998-1 based on its Holder Commitment in an amount in
immediately available funds such that the aggregate of all Holder Advances on
such date shall be three percent (3%) of the amount of the Requested Funds on
such date; provided, that no Holder shall be obligated for any Holder Advance in
--------
excess of its pro rata share of the Available Holder Commitment. The aggregate
amount of Holder Advances shall be up to the aggregate amount of the Holder
Commitments. No prepayment or any other payment with respect to any Advance
shall be permitted such that the Holder Advance with respect to such Advance is
less than three percent (3%) of the outstanding amount of such Advance, except
in connection with termination or expiration of the Term or in connection with
the exercise of remedies relating to the occurrence of a Lease Event of Default.
The representations, warranties, covenants and agreements of the Holders herein
and in the other Operative Agreements are several, and not joint or joint and
several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS.
--------------------
On the date hereof, each of the respective parties hereto and thereto shall
execute and deliver this Agreement, the Lease, each applicable Ground Lease, the
Agency Agreement, the Credit Agreement, the Notes, the Trust Agreement, the
Certificates, the Security Agreement, each applicable Mortgage Instrument and
such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.
3.2. PROPERTY PURCHASE.
-----------------
On each Property Closing Date and subject to the terms and conditions of this
Agreement (a) the Holders will each make a Holder Advance in accordance with
Sections 2 and 5 of this Agreement and the terms and provisions of the Trust
Agreement, (b) the Lenders will each make Loans in accordance with Sections 1
and 5 of this Agreement and the terms and provisions of the Credit Agreement,
(c) the Lessor will purchase and acquire good and marketable title to or ground
lease pursuant to a Ground Lease, the applicable Property, each to be within an
Approved State, identified by the Construction Agent, in each case pursuant to a
Deed, ▇▇▇▇ of Sale or
2
Ground Lease, as the case may be, and grant the Agent a lien on such Property by
execution of the required Security Documents, (d) the Agent, the Lessee and the
Lessor shall execute and deliver a Lease Supplement relating to such Property
and (e) the Term shall commence with respect to such Property.
3.3. CONSTRUCTION OF IMPROVEMENTS; COMMENCEMENT OF BASIC RENT.
--------------------------------------------------------
Construction Advances will be made with respect to particular Improvements to
be constructed and with respect to ongoing Work regarding the Equipment and
construction of particular Improvements, in each case, pursuant to the terms and
conditions of this Agreement and the Agency Agreement. The Construction Agent
will act as a construction agent on behalf of the Lessor respecting the Work
regarding the Equipment, the construction of such Improvements and the
expenditures of the Construction Advances related to the foregoing. The
Construction Agent shall promptly notify the Lessor upon Completion of the
Improvements and the Lessee shall commence to pay Basic Rent as of the Rent
Commencement Date.
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE.
--------------------
All documents and instruments required to be delivered on the Initial Closing
Date shall be delivered at the offices of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, Charlotte,
North Carolina, or at such other location as may be determined by the Lessor,
the Agent and the Lessee.
4.2. TRANSACTION EXPENSES; ACQUISITION ADVANCES; CONSTRUCTION ADVANCES.
-----------------------------------------------------------------
The Construction Agent shall deliver to the Agent a requisition (a
"Requisition"), in the form attached hereto as Exhibit A or in such other form
----------- ---------
as is satisfactory to the Agent, in its reasonable discretion, in connection
with (a) the Transaction Expenses and other fees, expenses and disbursements
payable, pursuant to Section 7.1, by the Lessor and (b) each Acquisition
Advance pursuant to Section 5.3 and (c) each Construction Advance pursuant to
Section 5.4.
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT;
REPORTING REQUIREMENTS ON COMPLETION DATE;
THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS.
5.1. GENERAL.
-------
(a) To the extent funds have been advanced to the Lessor as Loans by
the Lenders and as Holder Advances by the Holders, the Lessor will use such
funds from time to time in accordance with the terms and conditions of this
Agreement and the other Operative Agreements (i) at the direction of the
Construction Agent to acquire the Properties in accordance with the terms
of this Agreement, the Agency Agreement and the other Operative Agreements,
(ii) to make Advances to the Construction Agent to permit the acquisition,
testing, engineering, installation, development, construction,
modification, design, and renovation, as applicable, of the Properties (or
components
3
thereof) in accordance with the terms of the Agency Agreement and the other
Operative Agreements, and (iii) to pay Transaction Expenses, fees, expenses
and other disbursements payable by the Lessor under Sections 7.1(a) and
7.1(b).
(b) In lieu of the payment of interest on the Loans and Holder Yield on
the Holder Advances on any Scheduled Interest Payment Date with respect to
any Property during the period prior to the Rent Commencement Date with
respect to such Property, (i) each Lender's Loan shall automatically be
increased by the amount of interest accrued and unpaid on such Loan for
such period (except to the extent that at any time such increase would
cause such Lender's Loan to exceed such Lender's Available Commitment, in
which case the Lessee shall pay such excess amount to such Lender in
immediately available funds on the date such Lender's Available Commitment
was exceeded), and (ii) each Holder's Holder Advance shall automatically be
increased by the amount of Holder Yield accrued and unpaid on such Holder
Advance for such period (except to the extent that at any time such
increase would cause the Holder Advance of such Holder to exceed such
Holder's Available Holder Commitment, in which case the Lessee shall pay
such excess amount to such Holder in immediately available funds on the
date the Available Holder Commitment of such Holder was exceeded). Such
increases in a Lender's Loan and a Holder's Holder Advance shall occur
without any disbursement of funds by any Person but the applicable accrued
interest or accrued Holder Yield shall be deemed to be paid as a result of
such increase.
5.2. PROCEDURES FOR FUNDING.
----------------------
(a) The Construction Agent shall designate the date for Advances
hereunder in accordance with the terms and provisions hereof; provided,
--------
however, it is understood and agreed that no more than two (2) Advances
-------
(excluding any conversion and/or continuation of any Loans or Holder
Advances) may be requested during any calendar month. Prior to 12:00 Noon,
Charlotte, North Carolina time, at least (i) three (3) Business Days prior
to the Initial Closing Date and (ii) three (3) Business Days prior to the
date on which any Acquisition Advance or Construction Advance is to be
made, the Construction Agent shall deliver to the Agent, (A) with respect
to the Initial Closing Date and each Acquisition Advance, a Requisition as
described in Section 4.2 hereof (including without limitation a legal
description of the Land, if any, a schedule of the Improvements, if any,
and a schedule of the Equipment, if any, acquired or to be acquired on such
date, and a schedule of the Work, if any, to be performed, each of the
foregoing in a form reasonably acceptable to the Agent) and (B) with
respect to each Construction Advance, a Requisition identifying (among
other things) the Property to which such Construction Advance relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request funds in
an amount that is not in excess of the total aggregate of the Available
Commitments plus the Available Holder Commitments at such time, and (iii)
request that the Holders make Holder Advances and that the Lenders make
Loans to the Lessor for the payment of Transaction Expenses, Property
Acquisition Costs (in the case of an Acquisition Advance) or other Property
Costs (in the case of a Construction Advance) that have
4
previously been incurred or are to be incurred on the date of such Advance
to the extent such were not subject to a prior Requisition, in each case as
specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent set forth
in Sections 5.3 or 5.4, as applicable, and subject to the last sentence of
this Section 5.2(c), on each Property Closing Date or the date on which the
Construction Advance is to be made, as applicable, (i) the Lenders shall
make Loans based on their respective Lender Commitments to the Lessor in an
aggregate amount equal to ninety-seven percent (97%) of the Requested Funds
specified in any Requisition (ratably between the Tranche A Lenders and the
Tranche B Lenders with the Tranche A Lenders funding eighty-five percent
(85%) of the Requested Funds and the Tranche B Lenders funding twelve
percent (12%) of the Requested Funds), up to an aggregate principal amount
equal to the aggregate of the Available Commitments, (ii) each Holder shall
make a Holder Advance based on its Holder Commitment in an amount such that
the aggregate of all Holder Advances at such time shall be three percent
(3%) of the balance of the Requested Funds specified in such Requisition,
up to the aggregate advanced amount equal to the aggregate of the Available
Holder Commitments; and (iii) the total amount of such Loans and Holder
Advances made on such date shall (x) be used by the Lessor to pay Property
Costs and/or Transaction Expenses within three (3) Business Days of the
receipt by the Lessor of such Advance or (y) be advanced by the Lessor on
the date of such Advance to the Construction Agent or the Lessee to pay
Property Costs, as applicable. Notwithstanding that the Operative
Agreements state that Advances shall be directed to the Lessor, each
Advance shall in fact be directed to the Agent (for the benefit of the
Lessor) and applied by the Agent (for the benefit of the Lessor) pursuant
to the requirements imposed on the Lessor under the Operative Agreements.
(d) With respect to an Advance obtained by the Lessor to pay for
Property Costs and/or Transaction Expenses or other costs payable under
Section 7.1 hereof and not expended by the Lessor for such purpose on the
date of such Advance, such amounts shall be held by the Lessor (or the
Agent on behalf of the Lessor) until the time designated for use of such
funds or, if such funds are not used within three (3) Business Days of the
date of the Lessor's receipt of such Advance, shall be applied regarding
the applicable Advance to repay the Lenders and the Holders and shall
remain available for future Advances in accordance with the terms hereof,
and of the Credit Agreement and the Trust Agreement. Any such amounts held
by the Lessor (or the Agent on behalf of the Lessor) shall be subject to
the lien of the Security Agreement.
(e) All Operative Agreements which are to be delivered to the Lessor,
the Agent, the Lenders or the Holders shall be delivered to the Agent, on
behalf of the Lessor, the Agent, the Lenders or the Holders, and such items
(except for Notes, Certificates, Bills of Sale, the Ground Leases and
chattel paper originals, with respect to which in each case there shall be
only one original) shall be delivered with originals sufficient for the
Lessor, the Agent, each Lender and each Holder. All other items which are
to be delivered to the Lessor, the Agent, the Lenders or the Holders shall
be delivered to the Agent, on behalf of the Lessor, the Agent, the Lenders
or the Holders, and such other items shall be held by the Agent. To the
extent any such other items are requested
5
in writing from time to time by the Lessor, any Lender or any Holder, the
Agent shall provide a copy of such item to the party requesting it.
(f) Notwithstanding the completion of any closing under this Agreement
pursuant to Sections 5.3 or 5.4, each condition precedent in connection
with any such closing may be subsequently enforced by the Agent (unless
such has been expressly waived in writing by the Agent).
5.3. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS AND THE
--------------------------------------------------------------------
HOLDERS RELATING TO THE INITIAL CLOSING DATE AND THE ADVANCE OF FUNDS
---------------------------------------------------------------------
FOR THE ACQUISITION OF A PROPERTY.
---------------------------------
The obligations (i) on the Initial Closing Date of the Lessor, the Agent, the
Lenders and the Holders to enter into the transactions contemplated by this
Agreement, including without limitation the obligation to execute and deliver
the applicable Operative Agreements to which each is a party on the Initial
Closing Date, (ii) on the Initial Closing Date of the Holders to make Holder
Advances, and of the Lenders to make Loans in order to pay Transaction Expenses,
fees, expenses and other disbursements payable by the Lessor under Section
7.1(a) of this Agreement and (iii) on a Property Closing Date for the purpose of
providing funds to the Lessor necessary to pay the Transaction Expenses, fees,
expenses and other disbursements payable by the Lessor under Section 7.1(b) of
this Agreement and to acquire or ground lease a Property (an "Acquisition
-----------
Advance"), in each case (with regard to the foregoing Sections 5.3(i), (ii) and
-------
(iii)) are subject to the satisfaction or waiver of the following conditions
precedent on or prior to the Initial Closing Date or the applicable Property
Closing Date, as the case may be (to the extent such conditions precedent
require the delivery of any agreement, certificate, instrument, memorandum,
legal or other opinion, appraisal, commitment, title insurance commitment, lien
report or any other document of any kind or type, such shall be in form and
substance satisfactory to the Agent, in its reasonable discretion;
notwithstanding the foregoing, the obligations of each party shall not be
subject to any conditions contained in this Section 5.3 which are required to be
performed by such party):
(a) the material correctness of the representations and warranties of
the parties to this Agreement contained herein, in each of the other
Operative Agreements and each certificate delivered pursuant to any
Operative Agreement (including without limitation the Incorporated
Representations and Warranties) on each such date;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart copy of
the Requisition, appropriately completed;
(d) title to each such Property shall conform to the representations
and warranties set forth in Section 6.2(l) hereof;
6
(e) the Construction Agent shall have delivered to the Agent a good
standing certificate for the Construction Agent in the state where each
such Property is located, the Deed with respect to the Land and existing
Improvements (if any), a copy of the Ground Lease (if any), and a copy of
the ▇▇▇▇ of Sale with respect to the Equipment (if any), respecting such of
the foregoing as are being acquired or ground leased on each such date with
the proceeds of the Loans and Holder Advances or which have been previously
acquired or ground leased with the proceeds of the Loans and Holder
Advances and such Land, existing Improvements (if any) and Equipment (if
any) shall be located in an Approved State;
(f) there shall not have occurred and be continuing any Default or
Event of Default under any of the Operative Agreements and no Default or
Event of Default under any of the Operative Agreements will have occurred
after giving effect to the Advance requested by each such Requisition;
(g) the Construction Agent shall have delivered to the Agent title
insurance commitments to issue policies respecting each such Property in
favor of the Lessor and the Agent from a title insurance company reasonably
acceptable to the Agent, with such title exceptions thereto as are
reasonably acceptable to the Agent;
(h) the Construction Agent shall have delivered to the Agent a Phase I
environmental site assessment respecting each such Property prepared by an
independent recognized professional reasonably acceptable to the Agent;
(i) the Construction Agent shall have delivered to the Agent a survey
(with a flood hazard certification) respecting each such Property prepared
by an independent recognized professional reasonably acceptable to the
Agent;
(j) unless such an opinion has previously been delivered with respect
to a particular state, the Construction Agent shall have caused to be
delivered to the Agent a legal opinion in the form attached hereto as
Exhibit B or in such other form as is reasonably acceptable to the Agent
---------
with respect to local law real property issues respecting the state in
which each such Property is located addressed to the Lessor, the Agent, the
Lenders and the Holders, from counsel located in the state where each such
Property is located, prepared by counsel reasonably acceptable to the
Agent;
(k) [INTENTIONALLY OMITTED];
(l) the Construction Agent shall have delivered to the Agent invoices
for, or other reasonably satisfactory evidence of, the various Transaction
Expenses and other fees, expenses and disbursements referenced in Sections
7.1(a) or 7.1(b) of this Agreement, as appropriate;
(m) the Construction Agent shall have caused to be delivered to the
Agent a Mortgage Instrument (in such form as is reasonably acceptable to
the Agent, with
7
revisions as necessary to conform to applicable state law), Lessor
Financing Statements and Lender Financing Statements respecting each such
Property, all fully executed and in recordable form;
(n) the Lessee shall have delivered to the Agent with respect to each
such Property a Lease Supplement and a memorandum (or short form lease)
regarding the Lease and such Lease Supplement (such memorandum or short
form lease to be in the form attached to the Lease as Exhibit B or in such
---------
other form as is reasonably acceptable to the Agent, with modifications as
necessary to conform to applicable state law, and in form suitable for
recording);
(o) with respect to each Acquisition Advance, the sum of the Available
Commitment plus the Available Holder Commitment (after deducting the
Unfunded Amount, if any, and after giving effect to the Acquisition
Advance) will be sufficient to pay all amounts payable therefrom;
(p) if any such Property is subject to a Ground Lease, the Construction
Agent shall have caused a lease memorandum (or short form lease) to be
delivered to the Agent for such Ground Lease and, if requested by the
Agent, a landlord waiver and a mortgagee waiver (in each case, in such form
as is reasonably acceptable to the Agent);
(q) counsel (reasonably acceptable to the Agent) for the ground lessor
of each such Property subject to a Ground Lease shall have issued to the
Lessor, the Agent, the Lenders and the Holders, its opinion;
(r) the Construction Agent shall have delivered to the Agent a
preliminary Construction Budget for each such Property, if applicable;
(s) the Construction Agent shall have provided evidence to the Agent of
insurance with respect to each such Property as provided in the Lease;
(t) the Construction Agent shall have caused an Appraisal regarding
each such Property to be provided to the Agent from an appraiser reasonably
satisfactory to the Agent;
(u) the Construction Agent shall cause (i) Uniform Commercial Code lien
searches, tax lien searches and judgment lien searches regarding the Lessee
to be conducted (and copies thereof to be delivered to the Agent) in such
jurisdictions as determined by the Agent by a nationally recognized search
company reasonably acceptable to the Agent and (ii) the liens referenced in
such lien searches which are objectionable to the Agent to be either
removed or otherwise handled in a manner reasonably satisfactory to the
Agent; provided, that if such lien searches regarding the Lessee previously
--------
have been conducted in any jurisdiction, the Construction Agent shall cause
updates to such searches to be conducted in such jurisdictions;
8
(v) all taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of the Operative Agreements
and/or documents related thereto shall have been paid or provisions for
such payment shall have been made by Lessor to the reasonable satisfaction
of the Agent;
(w) in the reasonable opinion of the Agent (after consultation with its
counsel), the transactions contemplated by the Operative Agreements do not
and will not subject the Lessor, the Lenders, the Agent or the Holders to
any adverse regulatory prohibitions, constraints, penalties or fines;
(x) each of the Operative Agreements to be entered into on such date
shall have been duly authorized, executed and delivered by the parties
thereto, and shall be in full force and effect, and the Agent shall have
received a fully executed copy of each of the Operative Agreements;
(y) [INTENTIONALLY OMITTED].
(z) as of the Initial Closing Date only, the Agent shall have received
an Officer's Certificate, dated as of the Initial Closing Date, of the
Lessee in the form attached hereto as Exhibit C or in such other form as is
---------
reasonably acceptable to the Agent stating that (i) each and every
representation and warranty of each Credit Party contained in the Operative
Agreements to which it is a party is true and correct in all material
respects on and as of the Initial Closing Date (or, if as to an earlier
date, on and as of such earlier date); (ii) no Default or Event of Default
has occurred and is continuing under any Operative Agreement; (iii) each
Operative Agreement to which any Credit Party is a party is in full force
and effect with respect to it; and (iv) each Credit Party has duly
performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Agreement required to be performed or
complied with by it on or prior to the Initial Closing Date;
(aa) as of the Initial Closing Date only, the Agent shall have received
(i) a certificate of the Secretary or an Assistant Secretary of each Credit
Party, dated as of the Initial Closing Date, in the form attached hereto as
Exhibit D or in such other form as is reasonably acceptable to the Agent
---------
attaching and certifying as to (1) the resolutions of the Board of
Directors of such Credit Party duly authorizing the execution, delivery and
performance by such Credit Party of each of the Operative Agreements to
which it is or will be a party, (2) the articles of incorporation of such
Credit Party certified as of a recent date by the Secretary of State of its
state of incorporation and its by-laws and (3) the incumbency and signature
of persons authorized to execute and deliver on behalf of such Credit Party
the Operative Agreements to which it is or will be a party and (ii) a good
standing certificate (or local equivalent) from the respective states where
such Credit Party is incorporated and where the principal place of business
of such Credit Party is located as to its good standing in each such state.
To the extent any Credit Party is a partnership, a limited liability
company or is otherwise organized, such Person shall deliver to the Agent
(in form and substance reasonably satisfactory to the Agent) as of the
Initial Closing Date (A) a certificate regarding such Person and any
9
corporate general partners covering the matters described in Exhibit D and
---------
(B) a good standing certificate, a certificate of limited partnership or a
local equivalent of either the foregoing as applicable;
(bb) [INTENTIONALLY OMITTED];
(cc) as of the Initial Closing Date only, the Agent shall have received
an Officer's Certificate of the Lessor dated as of the Initial Closing Date
in the form attached hereto as Exhibit E or in such other form as is
---------
reasonably acceptable to the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct in all material
respects on and as of the Initial Closing Date (or, if as to an earlier
date, on and as of such earlier date), (ii) each Operative Agreement to
which the Lessor is a party is in full force and effect with respect to it
and (iii) the Lessor has duly performed and complied with all covenants,
agreements and conditions contained herein or in any Operative Agreement
required to be performed or complied with by it on or prior to the Initial
Closing Date;
(dd) as of the Initial Closing Date only, the Agent shall have received
(i) a certificate of the Secretary, an Assistant Secretary, Trust Officer
or Vice President of the Trust Company in the form attached hereto as
Exhibit F or in such other form as is reasonably acceptable to the Agent,
---------
attaching and certifying as to (A) the signing resolutions duly authorizing
the execution, delivery and performance by the Lessor of each of the
Operative Agreements to which it is or will be a party, (B) its articles of
association or other equivalent charter documents and its by-laws, as the
case may be, certified as of a recent date by an appropriate officer of the
Trust Company and (C) the incumbency and signature of persons authorized to
execute and deliver on its behalf the Operative Agreements to which it is a
party and (ii) a good standing certificate from the Office of the
Comptroller of the Currency;
(ee) as of the Initial Closing Date only, counsel for the Lessor
reasonably acceptable to the Agent shall have issued to the Lessee, the
Holders, the Lenders and the Agent its opinion in the form attached hereto
as Exhibit G or in such other form as is reasonably acceptable to the
---------
Agent; and
(ff) as of the Initial Closing Date only, the Construction Agent shall
have caused to be delivered to the Agent a legal opinion in the form
attached hereto as Exhibit H or in such other form as is reasonably
---------
acceptable to the Agent, addressed to the Lessor, the Agent, the Lenders
and the Holders, from counsel reasonably acceptable to the Agent; and
(gg) as of the Initial Closing Date only, the Construction Agent shall
cause (i) tax lien searches and judgment lien searches regarding each
Credit Party to be conducted (and copies thereof to be delivered to the
Agent) in such jurisdictions as determined by the Agent by a nationally
recognized search company reasonably acceptable to the Agent and (ii) the
liens referenced in such lien searches which are
10
objectionable to the Agent to be either removed or otherwise handled in a
manner reasonably satisfactory to the Agent.
5.4. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS AND THE
-------------------------------------------------------------------
HOLDERS RELATING TO THE ADVANCE OF FUNDS AFTER THE ACQUISITION
--------------------------------------------------------------
ADVANCE.
-------
The obligations of the Holders to make Holder Advances, and the Lenders to
make Loans in connection with all requests for Advances subsequent to the
acquisition of a Property (and to pay the Transaction Expenses, fees, expenses
and other disbursements payable by the Lessor under Section 7.1 of this
Agreement in connection therewith) are subject to the satisfaction or waiver of
the following conditions precedent (to the extent such conditions precedent
require the delivery of any agreement, certificate, instrument, memorandum,
legal or other opinion, appraisal, commitment, title insurance commitment, lien
report or any other document of any kind or type, such shall be in form and
substance satisfactory to the Agent, in its reasonable discretion;
notwithstanding the foregoing, the obligations of each party shall not be
subject to any conditions contained in this Section 5.4 which are required to be
performed by such party):
(a) the material correctness on such date of the representations and
warranties of the parties to this Agreement contained herein, in each of
the other Operative Agreements and in each certificate delivered pursuant
to any Operative Agreement (including without limitation the Incorporated
Representations and Warranties);
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart of the
Requisition, appropriately completed;
(d) based upon the applicable Construction Budget which shall satisfy
the requirements of this Agreement, the Available Commitments plus the
Available Holder Commitment (after deducting the Unfunded Amount, if any,
and after giving effect to the Construction Advance) will be sufficient to
complete the Improvements;
(e) there shall not have occurred and be continuing any Default or
Event of Default under any of the Operative Agreements and no Default or
Event of Default under any of the Operative Agreements will have occurred
after giving effect to the Construction Advance requested by the applicable
Requisition;
(f) the title insurance policy delivered in connection with the
requirements of Section 5.3(g) shall provide for (or shall be endorsed to
provide for) insurance in an amount at least equal to the maximum total
Property Cost indicated by the Construction Budget referred to in
subparagraph (d) above and there shall be no title change or exception
objectionable to the Agent in its reasonable discretion;
11
(g) the Construction Agent shall have delivered to the Agent copies of
the Plans and Specifications for the applicable Improvements;
(h) the Construction Agent shall have delivered to the Agent invoices
for, or other reasonably satisfactory evidence of, any Transaction Expenses
and other fees, expenses and disbursements referenced in Section 7.1(b)
that are to be paid with the Advance;
(i) the Construction Agent shall have delivered, or caused to be
delivered to the Agent, invoices, Bills of Sale or other documents
reasonably acceptable to the Agent, in each case with regard to any
Equipment or other components of such Property then being acquired with the
proceeds of the Loans and Holder Advances and naming the Lessor as
purchaser and transferee;
(j) all taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of the Operative Agreements
shall have been paid or provisions for such payment shall have been made by
Lessor to the reasonable satisfaction of the Agent;
(k) since the date of the most recent audited financial statements of
the Lessee, there shall not have occurred any event, condition or state of
facts which shall have or could reasonably be expected to have a Material
Adverse Effect, other than as specifically contemplated by the Operative
Agreements; and
(l) in the opinion of the Agent (after consultation with its counsel),
the transactions contemplated by the Operative Agreements do not and will
not subject the Lessor, the Lenders, the Agent or the Holders to any
adverse regulatory prohibitions, constraints, penalties or fines.
5.5. ADDITIONAL REPORTING AND DELIVERY REQUIREMENTS ON COMPLETION DATE AND
---------------------------------------------------------------------
ON CONSTRUCTION PERIOD TERMINATION DATE.
---------------------------------------
On or prior to the Completion Date for each Property, the Construction Agent
shall deliver to the Agent an Officer's Certificate in the form attached hereto
as Exhibit I or in such other form as is reasonably acceptable to the Agent
---------
specifying (a) the address for such Property, (b) the Completion Date for such
Property, (c) the aggregate Property Cost for such Property, (d) detailed,
itemized documentation supporting the asserted Property Cost figures and (e)
that all representations and warranties of the Construction Agent and Lessee in
each of the Operative Agreements and each certificate delivered pursuant thereto
(including without limitation the Incorporated Representations and Warranties)
are true and correct in all material respects as of the Completion Date (or, if
as to an earlier date, on and as of such earlier date). The Agent shall have
the right to contest the information contained in such Officer's Certificate.
Furthermore, on or prior to the Completion Date for each Property, the
Construction Agent shall deliver or cause to be delivered to the Agent (unless
previously delivered to the Agent) originals of the following, each of which
shall be in form and substance acceptable to the Agent, in its reasonable
discretion: (v) a title insurance endorsement regarding the title insurance
policy delivered in
12
connection with the requirements of Section 5.3(g), but only to the extent such
endorsement is necessary to provide for insurance in an amount at least equal to
the maximum total Property Cost and, if endorsed, the endorsement shall not
include a title change or exception objectionable to the Agent; (w) an as-built
survey for such Property, (x) insurance certificates respecting such Property as
required hereunder and under the Lease Agreement, (y) if requested by the Agent,
amendments to the Lessor Financing Statements executed by the appropriate
parties and (z) an Appraisal regarding such Property; provided, however, such
-------- -------
an Appraisal shall not be required if, as of such Completion Date, the Agent has
previously received Appraisal(s) pursuant to Section 5.3(t) for Properties that
are then subject to the Lease and that have an aggregate value (as established
by such Appraisal(s)) of at least $12,000,000. In addition, on the Completion
Date for such Property the Construction Agent covenants and agrees that the
recording fees, documentary stamp taxes or similar amounts required to be paid
in connection with the related Mortgage Instrument shall have been paid in an
amount required by applicable law, subject, however, to the obligations of the
Lenders and the Holders to fund such costs to the extent required pursuant to
Section 7.1.
5.6. THE CONSTRUCTION AGENT DELIVERY OF CONSTRUCTION BUDGET MODIFICATIONS.
--------------------------------------------------------------------
The Construction Agent covenants and agrees to deliver to the Agent each month
notification of any modification to any Construction Budget regarding any
Property if such modification increases the cost to construct such Property;
provided no Construction Budget may be increased unless (a) the title insurance
--------
policies referenced in Section 5.3(g) are also modified or endorsed, if
necessary, to provide for insurance in an amount that satisfies the requirements
of Section 5.4(f) of this Agreement and (b) after giving effect to any such
amendment, the Construction Budget remains in compliance with the requirements
of Section 5.4(d) of this Agreement.
5.7. RESTRICTIONS ON LIENS.
---------------------
On each Property Closing Date, the Construction Agent shall cause each
Property acquired by the Lessor on such date to be free and clear of all Liens
except those referenced in Sections 6.2(r)(i) and 6.2(r)(ii). On each date a
Property is either sold to a third party in accordance with the terms of the
Operative Agreements or, pursuant to Section 22.1(a) of the Lease Agreement,
retained by the Lessor, the Lessee shall cause such Property to be free and
clear of all Liens (other than Lessor Liens and such other Liens that are
expressly set forth as title exceptions on the title commitment issued under
Section 5.3(g) with respect to such Property, to the extent such title
commitment has been approved by the Agent).
5.8 JOINDER AGREEMENT REQUIREMENTS.
------------------------------
Each Restricted Subsidiary formed or acquired subsequent to the Initial
Closing Date shall become a Guarantor and shall satisfy the following conditions
within thirty (30) days after the formation or acquisition of such Restricted
Subsidiary:
(a) such Restricted Subsidiary shall execute and deliver to the Agent a
Joinder Agreement in the form attached hereto as EXHIBIT J;
---------
13
(b) such Restricted Subsidiary shall have delivered to the Agent (x) an
Officer's Certificate of such Restricted Subsidiary in the form attached
hereto as EXHIBIT C, (y) a certificate of the Secretary or an Assistant
---------
Secretary of such Restricted Subsidiary in the form attached hereto as
EXHIBIT D and (z) good standing certificates (or local equivalent) from the
---------
respective states where such Restricted Subsidiary is incorporated and
where the principal place of business of such Restricted Subsidiary is
located as to its good standing in each such state;
(c) such Restricted Subsidiary shall have delivered to the Agent an
opinion of counsel (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred
to in this Section 5.8), all in form, content and scope reasonably
satisfactory to the Agent; and
(d) the Agent shall have received such other documents, certificates
and information as the Agent shall have reasonably requested.
5.9 PAYMENTS.
--------
All payments of principal, interest, Holder Advances, Holder Yield and other
amounts to be made by the Construction Agent or the Lessee on behalf of the
Lessor under this Agreement or any other Operative Agreements (excluding
Excepted Payments which shall be paid directly to the party to whom such
payments are owed) shall be made to the Agent at the office designated by the
Agent from time to time in Dollars and in immediately available funds, without
setoff, deduction, or counterclaim. Subject to the definition of "Interest
Period" in Appendix A attached hereto, whenever any payment under this Agreement
----------
or any other Operative Agreements shall be stated to be due on a day that is not
a Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time in such case shall be included in the computation of
interest, Holder Yield and fees payable pursuant to the Operative Agreements, as
applicable and as the case may be.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE TRUST COMPANY AND THE BORROWER.
--------------------------------------------------------------------
Effective as of the Initial Closing Date and the date of each Advance, the
Trust Company in its individual capacity and as the Borrower, as indicated,
represents and warrants to each of the other parties hereto as follows,
provided, that the representations in the following paragraphs (h), (j) and (k)
--------
are made solely in its capacity as the Borrower:
(a) It is a national banking association and is duly organized and
validly existing and in good standing under the laws of the United States
of America and has the power and authority to enter into and perform its
obligations under the Trust Agreement and (assuming due authorization,
execution and delivery of the Trust Agreement by the Holders) has the
corporate and trust power and authority to act as the Owner Trustee and
14
to enter into and perform the obligations under each of the other Operative
Agreements to which the Trust Company or the Owner Trustee, as the case may
be, is or will be a party and each other agreement, instrument and document
to be executed and delivered by it on or before such Closing Date in
connection with or as contemplated by each such Operative Agreement to
which the Trust Company or the Owner Trustee, as the case may be, is or
will be a party;
(b) The execution, delivery and performance of each Operative Agreement
to which it is or will be a party, either in its individual capacity or
(assuming due authorization, execution and delivery of the Trust Agreement
by the Holders) as the Owner Trustee, as the case may be, has been duly
authorized by all necessary action on its part and neither the execution
and delivery thereof, nor the consummation of the transactions contemplated
thereby, nor compliance by it with any of the terms and provisions thereof
(i) does or will require any approval or consent of any trustee or holders
of any of its indebtedness or obligations, (ii) does or will contravene any
Legal Requirement relating to its banking or trust powers, (iii) does or
will contravene or result in any breach of or constitute any default under,
or result in the creation of any Lien upon any of its property under, (A)
its charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit agreement or
other agreement or instrument to which it is a party or by which it or its
properties may be bound or affected, which contravention, breach, default
or Lien under clause (B) would materially and adversely affect its ability,
in its individual capacity or as the Owner Trustee, to perform its
obligations under the Operative Agreements to which it is a party or (iv)
does or will require any Governmental Action by any Governmental Authority
regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is the legal,
valid and binding obligation of the Holders, each other Operative Agreement
to which the Trust Company or the Owner Trustee, as the case may be, is or
will be a party have been, or on or before such Closing Date will be, duly
executed and delivered by the Trust Company or the Owner Trustee, as the
case may be, and the Trust Agreement and each such other Operative
Agreement to which the Trust Company or the Owner Trustee, as the case may
be, is a party constitutes, or upon execution and delivery will constitute,
a legal, valid and binding obligation enforceable against the Trust Company
or the Owner Trustee, as the case may be, in accordance with the terms
thereof;
(d) There is no action or proceeding pending or, to its knowledge,
threatened to which it is or will be a party, either in its individual
capacity or as the Owner Trustee, before any Governmental Authority that,
if adversely determined, would materially and adversely affect its ability,
in its individual capacity or as the Owner Trustee, to perform its
obligations under the Operative Agreements to which it is a party or would
question the validity or enforceability of any of the Operative Agreements
to which it is or will become a party;
15
(e) It has not assigned or transferred any of its right, title or
interest in or under the Lease, the Agency Agreement or its interest in any
Property or any portion thereof, except in accordance with the Operative
Agreements;
(f) No Default of Event of Default under the Operative Agreements
attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative Agreements, the
proceeds of the Loans and Holder Advances shall not be applied by the Owner
Trustee for any purpose other than the purchase and/or lease of the
Properties, the acquisition, installation and testing of the Equipment, the
construction of Improvements and the payment of Transaction Expenses and
the fees, expenses and other disbursements referenced in Sections 7.1(a)
and 7.1(b) of this Agreement, in each case which accrue prior to the Rent
Commencement Date with respect to a particular Property;
(h) Neither the Owner Trustee nor any Person authorized by the Owner
Trustee to act on its behalf has offered or sold any interest in the Trust
Estate or the Notes, or in any similar security relating to a 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 Agent, and
neither the Owner Trustee nor any Person authorized by the Owner Trustee to
act on its behalf will take any action which would subject, as a direct
result of such action alone, the issuance or sale of any interest in the
Trust Estate or the Notes to the provisions of Section 5 of the Securities
Act or require the qualification of any Operative Agreement under the Trust
Indenture Act of 1939, as amended;
(i) The Owner Trustee's principal place of business, chief executive
office and office where the documents, accounts and records relating to the
transactions contemplated by this Agreement and each other Operative
Agreement are kept are located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇;
(j) The Owner Trustee is not engaged principally in, and does not have
as one (1) of its important activities, the business of extending credit
for the purpose of purchasing or carrying any margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System of the United States), and no part of the proceeds of the Loans or
the Holder Advances will be used by it to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or for any purpose that violates, or is
inconsistent with, the provisions of Regulations G, T, U, or X of the Board
of Governors of the Federal Reserve System of the United States;
(k) The Owner Trustee is not an "investment company" or a company
controlled by an "investment company" within the meaning of the Investment
Company Act;
16
(l) Each Property is free and clear of all Lessor Liens attributable to
the Owner Trustee in its individual capacity; and
(m) The Owner Trustee, in its trust capacity, is a party to no
documents, instruments or agreements other than the Operative Agreements to
which it is a party and any other documents delivered by the Owner Trustee
in connection with the Operative Agreements.
6.2. REPRESENTATIONS AND WARRANTIES OF EACH CREDIT PARTY.
---------------------------------------------------
Effective as of the Initial Closing Date, the date of each Advance, the date
each Restricted Subsidiary delivers a Joinder Agreement and the Rent
Commencement Date, each Credit Party represents and warrants to each of the
other parties hereto that:
(a) The Incorporated Representations and Warranties are true and
correct (unless such relate solely to an earlier point in time) and the
Lessee has delivered to the Agent the financial statements and other
reports referred to in Article IX of the Lessee Credit Agreement;
(b) The execution and delivery by each Credit Party of this Agreement
and the other applicable Operative Agreements as of such date and the
performance by each Credit Party of its respective obligations under this
Agreement and the other applicable Operative Agreements are within the
corporate, partnership or limited liability company (as the case may be)
powers of such Credit Party, have been duly authorized by all necessary
corporate, partnership or limited liability company (as the case may be)
action on the part of such Credit Party (including without limitation any
necessary shareholder action), have been duly executed and delivered, have
received all necessary governmental approval, and do not and will not (i)
violate any Legal Requirement which is binding on any Credit Party or any
of its Subsidiaries, (ii) contravene or conflict with, or result in a
breach of, any provision of the Articles of Incorporation, By-Laws or other
organizational documents of any Credit Party or any of its Subsidiaries or
of any agreement, indenture, instrument or other document which is binding
on any Credit Party or any of its Subsidiaries or (iii) result in, or
require, the creation or imposition of any Lien (other than pursuant to the
terms of the Operative Agreements) on any asset of any Credit Party or any
of its Subsidiaries;
(c) This Agreement and the other applicable Operative Agreements,
executed prior to and as of such date by any Credit Party, constitute the
legal, valid and binding obligation of such Credit Party, as applicable,
enforceable against such Credit Party, as applicable, in accordance with
their terms. Each Credit Party has executed the various Operative
Agreements required to be executed by such Credit Party as of such date;
(d) Except as described in EXHIBIT K, there are no material actions,
---------
suits or proceedings pending or, to the knowledge of such Credit Party,
threatened against any Credit Party in any court or before any Governmental
Authority (nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental
17
Authority to set aside, restrain, enjoin or prevent the full performance of
any Operative Agreement or any transaction contemplated thereby) that (i)
concern any Property or any Credit Party's interest therein, (ii) question
the validity or enforceability of any Operative Agreement to which any
Credit Party is a party or the overall transaction described in the
Operative Agreements to which any Credit Party is a party or (iii) have or
could reasonably be expected to have a Material Adverse Effect;
(e) No Governmental Action by any Governmental Authority or other
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person pursuant to any Legal Requirement,
contract, indenture, instrument or agreement or for any other reason is
required to authorize or is required in connection with (i) the execution,
delivery or performance by such Credit Party of any Operative Agreement,
(ii) the legality, validity, binding effect or enforceability of any
Operative Agreement with respect to such Credit Party, (iii) the
acquisition, ownership, construction, completion, occupancy, operation,
leasing or subleasing of any Property or (iv) any Advance, in each case,
except those which have been obtained and are in full force and effect;
(f) Upon the execution and delivery of each Lease Supplement to the
Lease, (i) the Lessee will have unconditionally accepted the Property
subject to the Lease Supplement and, to the Lessee's knowledge, will have a
valid and subsisting leasehold interest in such Property, subject only to
the Permitted Liens, and (ii) no offset will exist with respect to any Rent
or other sums payable under the Lease;
(g) Except as otherwise contemplated by the Operative Agreements, the
Construction Agent shall not use the proceeds of any Holder Advance or Loan
for any purpose other than the purchase and/or lease of the Properties, the
acquisition, installation and testing of the Equipment, the construction of
Improvements and the payment of Transaction Expenses and the fees, expenses
and other disbursements referenced in Sections 7.1(a) and 7.1(b) of this
Agreement, in each case which accrue prior to the Rent Commencement Date
with respect to a particular Property;
(h) All information heretofore or contemporaneously herewith furnished
by each Credit Party or its Subsidiaries to the Agent, the Owner Trustee,
any Lender or any Holder for purposes of or in connection with this
Agreement and the transactions contemplated hereby is, and all information
hereafter furnished by or on behalf of each Credit Party or its
Subsidiaries to the Agent, the Owner Trustee, any Lender or any Holder
pursuant hereto or in connection herewith will be, true and accurate in
every material respect on the date as of which such information is dated or
certified, and such information, taken as a whole, does not and will not
omit to state any material fact necessary to make such information, taken
as a whole, not misleading;
(i) The principal place of business, chief executive office and office
of the Construction Agent and the Lessee where the documents, accounts and
records relating to the transactions contemplated by this Agreement and
each other Operative Agreement are kept are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and the states of
18
formation and the chief executive offices of each other Credit Party are
located at the places set forth in EXHIBIT L;
---------
(j) The representations and warranties of each Credit Party set forth
in any of the Operative Agreements are true and correct in all material
respects on and as of each such date as if made on and as of such date (or,
if as to an earlier date, on and as of such earlier date). Each Credit
Party is in all material respects in compliance with its obligations under
the Operative Agreements and there exists no Default or Event of Default
under any of the Operative Agreements which is continuing and which has not
been cured within any cure period expressly granted under the terms of the
applicable Operative Agreement or otherwise waived in accordance with the
applicable Operative Agreement. No Default or Event of Default will occur
under any of the Operative Agreements as a result of, or after giving
effect to, the Advance requested by the Requisition on the date of each
Advance;
(k) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, each Property then being
financed consists of (i) unimproved Land or (ii) Land and existing
Improvements thereon which Improvements are either suitable for occupancy
at the time of acquisition or ground leasing or will be renovated and/or
modified in accordance with the terms of this Agreement. Each Property then
being financed is located at the location set forth on the applicable
Requisition, each of which is in one (1) of the Approved States;
(l) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, the Lessor has good and
marketable fee simple title to each Property, or, if any Property is the
subject of a Ground Lease, the Lessor will have a valid ground leasehold
interest enforceable against the ground lessor of such Property in
accordance with the terms of such Ground Lease, subject only to (i) such
Liens referenced in Sections 6.2(r)(i) and 6.2(r)(ii) on the applicable
Property Closing Date and (ii) subject to Section 5.7, Permitted Liens
after the applicable Property Closing Date;
(m) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, no portion of any Property is
located in an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency, or if any such
Property is located in an area identified as a special flood hazard area by
the Federal Emergency Management Agency or other applicable agency, then
flood insurance has been obtained for such Property in accordance with
Section 14.2(b) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended;
(n) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, each Property complies with
all Insurance Requirements and all standards of Lessee with respect to
similar properties owned by Lessee;
19
(o) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, each Property complies with
all Legal Requirements as of such date (including without limitation all
zoning and land use laws and Environmental Laws), except to the extent that
failure to comply therewith, individually or in the aggregate, shall not
have and could not reasonably be expected to have a Material Adverse
Effect;
(p) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, all utility services and
facilities necessary for the construction and operation of the Improvements
and the installation and operation of the Equipment regarding each Property
(including without limitation gas, electrical, water and sewage services
and facilities) are available at the applicable Land and will be
constructed prior to the Completion Date for such Property;
(q) As of each Property Closing Date, the date of each subsequent
Advance and the Rent Commencement Date only, acquisition, installation and
testing of the Equipment (if any) and construction of the Improvements (if
any) to such date shall have been performed in a good and workmanlike
manner, substantially in accordance with the applicable Plans and
Specifications;
(r) The Security Documents create, as security for the Obligations (as
such term is defined in the Security Agreement), valid and enforceable
security interests in, and Liens on, all of the Collateral, in favor of the
Agent, for the ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements, and such security
interests and Liens are subject to no other Liens other than Liens that are
expressly set forth as title exceptions on the title commitment issued
under Section 5.3(g) with respect to the applicable Property, to the extent
such title commitment has been approved by the Agent. Upon recordation of
the Mortgage Instrument in the real estate recording office in the
applicable Approved State identified by the Construction Agent or the
Lessee, the Lien created by the Mortgage Instrument in the real property
described therein shall be a perfected first priority mortgage Lien on such
real property in favor of the Agent, for the ratable benefit of the Lenders
and the Holders, as their respective interests appear in the Operative
Agreements. To the extent that the security interests in the portion of the
Collateral comprised of personal property can be perfected by filing in the
filing offices in the applicable Approved States or elsewhere identified by
the Construction Agent or the Lessee, upon filing of the Lender Financing
Statements in such filing offices, the security interests created by the
Security Agreement shall be perfected first priority security interests in
such personal property in favor of the Agent, for the ratable benefit of
the Lenders and the Holders, as their respective interests appear in the
Operative Agreements;
(s) The Plans and Specifications for each Property will be prepared
prior to the commencement of construction in accordance with all applicable
Legal Requirements (including without limitation all applicable
Environmental Laws and building, planning, zoning and fire codes), except
to the extent the failure to comply therewith, individually or in the
aggregate, shall not have and could not reasonably be expected to have a
20
Material Adverse Effect. Upon completion of the Improvements for each
Property in accordance with the applicable Plans and Specifications, such
Improvements will be within any building restriction lines and will not
encroach in any manner onto any adjoining land (except as permitted by
express written easements, which have been approved by the Agent);
(t) As of the Rent Commencement Date only, each Property shall be
improved in accordance with the applicable Plans and Specifications in a
good and workmanlike manner and shall be operational;
(u) As of the Initial Closing Date, each Restricted Subsidiary (formed
prior to or on such date) shall have executed this Agreement in its
capacity as a Guarantor; and
(v) As of each Property Closing Date only, each Property has been
acquired or ground leased pursuant to a Ground Lease at a price that is not
in excess of fair market value or fair market rental value, as the case may
be.
SECTION 6B. GUARANTY
6B.1. GUARANTY OF PAYMENT AND PERFORMANCE.
-----------------------------------
Subject to Section 6B.7, each Guarantor hereby, jointly and severally,
unconditionally guarantees to each Financing Party the prompt payment and
performance of the Company Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise) or when such
Obligations are otherwise to be performed; provided, notwithstanding the
--------
foregoing, the obligations of the Guarantors under this Section 6B shall not
constitute a direct guaranty of the indebtedness of the Lessor evidenced by the
Notes but rather a guaranty of the Company Obligations arising under the
Operative Agreements. This Section 6B is a guaranty of payment and performance
and not of collection and is a continuing guaranty and shall apply to all
Company Obligations whenever arising. All rights granted to the Financing
Parties under this Section 6B shall be subject to the provisions of Sections
8.2(h) and 8.6.
6B.2. OBLIGATIONS UNCONDITIONAL.
-------------------------
Each Guarantor agrees that the obligations of the Guarantors hereunder are
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Operative Agreements, or any other
agreement or instrument referred to therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Company
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety, guarantor or
co-obligor, it being the intent of this Section 6B.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that this Section 6B may be enforced by
the Financing Parties without the necessity at any time of resorting to or
exhausting any other security or collateral and without the necessity at any
time of having recourse to the Notes, the Certificates or any other of the
21
Operative Agreements or any collateral, if any, hereafter securing the Company
Obligations or otherwise and each Guarantor hereby waives the right to require
the Financing Parties to proceed against the Construction Agent, the Lessee or
any other Person (including without limitation a co-guarantor) or to require the
Financing Parties to pursue any other remedy or enforce any other right. Each
Guarantor further agrees that it hereby waives any and all right of subrogation,
indemnity, reimbursement or contribution against the Lessee and the Construction
Agent or any other Guarantor of the Company Obligations for amounts paid under
this Section 6B until such time as the Loans, Holder Advances, accrued but
unpaid interest, accrued but unpaid Holder Yield and all other amounts owing
under the Operative Agreements have been paid in full. Without limiting the
generality of the waiver provisions of this Section 6B, each Guarantor hereby
waives any rights to require the Financing Parties to proceed against the
Construction Agent, the Lessee or any co-guarantor or to require Lessor to
pursue any other remedy or enforce any other right, including without
limitation, any and all rights under N.C. Gen. Stat. (S) 26-7 through 26-9.
Each Guarantor further agrees that nothing contained herein shall prevent the
Financing Parties from suing on any Operative Agreement or foreclosing any
security interest in or Lien on any collateral, if any, securing the Company
Obligations or from exercising any other rights available to it under any
Operative Agreement, or any other instrument of security, if any, and the
exercise of any of the aforesaid rights and the completion of any foreclosure
proceedings shall not constitute a discharge of any Guarantor's obligations
hereunder; it being the purpose and intent of each Guarantor that its
obligations hereunder shall be absolute, independent and unconditional under any
and all circumstances; provided that any amounts due under this Section 6B which
--------
are paid to or for the benefit of any Financing Party shall reduce the Company
Obligations by a corresponding amount (unless required to be rescinded at a
later date). Neither any Guarantor's obligations under this Section 6B nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Construction Agent or the Lessee
or by reason of the bankruptcy or insolvency of the Construction Agent or the
Lessee. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Company Obligations and notice of or proof of
reliance by any Financing Party upon this Section 6B or acceptance of this
Section 6B. The Company Obligations shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Section 6B. All dealings between the Construction Agent, the
Lessee and any of the Guarantors, on the one hand, and the Financing Parties, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Section 6B.
6B.3. MODIFICATIONS.
-------------
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Company Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) no Financing Party shall have
any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Company
Obligations or the properties subject thereto; (c) with the written consent of
the Lessee, the time or place of payment of the Company Obligations may be
changed or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part; (d) the Construction Agent,
the Lessee and any other party liable for payment under the Operative Agreements
may be granted indulgences generally; (e) with the written consent of the
Lessee, any of the provisions of
22
the Notes, the Certificates or any of the other Operative Agreements may be
modified, amended or waived; (f) any party (including any co-guarantor) liable
for the payment thereof may be granted indulgences or be released; and (g) any
deposit balance for the credit of the Construction Agent, the Lessee or any
other party liable for the payment of the Company Obligations or liable upon any
security therefor may be released, in whole or in part, at, before or after the
stated, extended or accelerated maturity of the Company Obligations, all without
notice to or further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
6B.4. WAIVER OF RIGHTS.
----------------
Each Guarantor expressly waives to the fullest extent permitted by applicable
law: (a) notice of acceptance of this Section 6B by any Financing Party and of
all extensions of credit or other Advances to the Construction Agent and the
Lessee by the Lenders pursuant to the terms of the Operative Agreements; (b)
presentment and demand for payment or performance of any of the Company
Obligations; (c) protest and notice of dishonor or of default with respect to
the Company Obligations or with respect to any security therefor; (d) notice of
any Financing Party obtaining, amending, substituting for, releasing, waiving or
modifying any security interest, lien or encumbrance, if any, hereafter securing
the Company Obligations, or any Financing Party's subordinating, compromising,
discharging or releasing such security interests, liens or encumbrances, if any;
and (e) all other notices to which such Guarantor might otherwise be entitled.
Notwithstanding anything to the contrary herein, (i) each Guarantor's payments
hereunder shall be due five (5) Business Days after written demand by the Agent
for such payment (unless the Company Obligations are automatically accelerated
pursuant to the applicable provisions of the Operative Agreements in which case
the Guarantors' payments shall be automatically due) and (ii) any modification
of the Operative Agreements which has the effect of increasing the Company
Obligations shall not be enforceable against a Guarantor unless such Guarantor
executes the document evidencing such modification or otherwise reaffirms its
guaranty in writing in connection with such modification.
6B.5. REINSTATEMENT.
-------------
The obligations of the Guarantors under this Section 6B shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Company Obligations is rescinded or must be
otherwise restored by any holder of any of the Company Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify each Financing Party on demand for all
reasonable costs and expenses (including, without limitation, reasonable fees of
counsel) incurred by any Financing Party in connection with such rescission or
restoration, including without limitation any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
23
6B.6. REMEDIES.
--------
The Guarantors agree that, as between the Guarantors, on the one hand, and
each Financing Party, on the other hand, the Company Obligations may be declared
to be forthwith due and payable as provided in the applicable provisions of the
Operative Agreements (and shall be deemed to have become automatically due and
payable in the circumstances provided therein) notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing such
Company Obligations from becoming automatically due and payable) as against any
other Person and that, in the event of such declaration (or such Company
Obligations being deemed to have become automatically due and payable), such
Company Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors in accordance with the
applicable provisions of the Operative Agreements.
6B.7. LIMITATION OF GUARANTY.
----------------------
Notwithstanding any provision to the contrary contained herein or in any of
the other Operative Agreements, to the extent the obligations of any Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including
without limitation because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including without limitation the
Bankruptcy Code).
Subject to Section 6B.5, upon the satisfaction of the Company Obligations in
full, regardless of the source of payment, the Guarantors' obligations hereunder
shall be deemed satisfied, discharged and terminated other than indemnifications
set forth herein that expressly survive.
6B.8. PAYMENT OF AMOUNTS TO THE AGENT.
-------------------------------
Each Financing Party hereby instructs each Guarantor, and each Guarantor
hereby acknowledges and agrees, that until such time as the Loans and the Holder
Advances are paid in full and the Liens evidenced by the Security Agreement and
the Mortgage Instruments have been released any and all Rent (excluding Excepted
Payments which shall be payable to each Holder or other Person as appropriate)
and any and all other amounts of any kind or type under any of the Operative
Agreements due and owing or payable to any Person shall instead be paid directly
to the Agent (excluding Excepted Payments which shall be payable to each Holder
or other Person as appropriate) or as the Agent may direct from time to time for
allocation and distribution in accordance with the procedures set forth in
Section 8.7 hereof.
6B.9. RELEASE OF GUARANTORS.
---------------------
Each Financing Party hereby agrees that (a) the Agent shall be permitted to
release any Guarantor from its guaranty obligations under this Section 6B
without the consent of any other Financing Party if the release is granted in
connection with a disposition by the applicable Credit Party of all the shares
of stock or partnership or other equity interest in such Guarantor and such
disposition is permitted pursuant to the applicable provisions of the Operative
Agreements and the
24
Lessee Credit Agreement and (b) the Agent shall be permitted to release any
Guarantor from its guaranty obligations under this Section 6B.9 without the
consent of any other Financing Party if the release is requested by JPFDI in
connection with a dissolution of the Guarantor, subject to JPFDI providing to
the Agent written representations to the effect that such Guarantor has no
business operations and no assets.
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. TRANSACTION EXPENSES.
--------------------
(a) The Lessor agrees on the Initial Closing Date, to pay, or cause to
be paid, all Transaction Expenses arising from the Initial Closing Date,
including without limitation all reasonable fees, expenses and
disbursements of the various legal counsels for the Lessor and the Agent in
connection with the transactions contemplated by the Operative Agreements
and incurred in connection with such Initial Closing Date, the initial fees
and expenses of the Owner Trustee due and payable on such Initial Closing
Date, all fees, taxes and expenses for the recording, registration and
filing of documents and all other reasonable fees, expenses and
disbursements incurred in connection with such Initial Closing Date;
provided, however, the Lessor shall pay such amounts described in this
-------- -------
Section 7.1(a) only if (i) such amounts are properly described in a
Requisition delivered on or before the Initial Closing Date; provided, that
--------
Lessor shall provide to Lessee information regarding fees, expenses and
disbursements of its legal counsel, and (ii) funds are made available by
the Lenders and the Holders in connection with such Requisition in an
amount sufficient to allow such payment. On the Initial Closing Date after
delivery and receipt of the Requisition referenced in Section 4.2(a) hereof
and satisfaction of the other conditions precedent for such date, the
Holders shall make Holder Advances and the Lenders shall make Loans to the
Lessor to pay for the Transaction Expenses, fees, expenses and other
disbursements referenced in this Section 7.1(a).
(b) Subject to the provisions of Section 4.1(a) of the Agency Agreement
and assuming no Default or Event of Default shall have occurred and be
continuing and only for the period prior to the Rent Commencement Date, the
Lessor agrees on each Property Closing Date, on the date of any
Construction Advance and on the Completion Date to pay, or cause to be
paid, all Transaction Expenses including without limitation all reasonable
fees, expenses and disbursements of the various legal counsels for the
Lessor and the Agent in connection with the transactions contemplated by
the Operative Agreements and billed in connection with such Advance or such
Completion Date, all amounts described in Section 7.1(a) of this Agreement
which have not been previously paid, the annual fees and reasonable out-of-
pocket expenses of the Owner Trustee, all fees, expenses and disbursements
incurred with respect to the various items referenced in Sections 5.3, 5.4
and/or 5.5 (including without limitation any premiums for title insurance
policies and charges for any updates to such policies) and all other
reasonable fees, expenses and disbursements in connection with such Advance
or such Completion Date including without limitation all expenses relating
25
to and all fees, taxes and expenses for the recording, registration and
filing of documents and during the Commitment Period, all fees, expenses
and costs referenced in Sections 7.3(a), 7.3(b), 7.3(d) and 7.4; provided,
--------
however, the Lessor shall pay such amounts described in this Section 7.1(b)
-------
only if (i) such amounts are properly described in a Requisition delivered
on the applicable date and (ii) funds are made available by the Lenders and
the Holders in connection with such Requisition in an amount sufficient to
allow such payment. On each Property Closing Date, on the date of any
Construction Advance or any Completion Date, after delivery of the
applicable Requisition and satisfaction of the other conditions precedent
for such date, the Holders shall make a Holder Advance and the Lenders
shall make Loans to the Lessor to pay for the Transaction Expenses, fees,
expenses and other disbursements referenced in this Section 7.1(b).
7.2. BROKERS' FEES.
-------------
The Lessee agrees to pay or cause to be paid any and all brokers' fees, if
any, including without limitation any interest and penalties thereon, which are
payable in connection with the transactions contemplated by this Agreement and
the other Operative Agreements.
7.3. CERTAIN FEES AND EXPENSES.
-------------------------
The Lessee agrees to pay or cause to be paid (a) the initial and annual Owner
Trustee's fee and all reasonable expenses of the Owner Trustee and any co-
trustees (including without limitation reasonable counsel fees and expenses) or
any successor owner trustee and/or co-trustee, for acting as the owner trustee
under the Trust Agreement, (b) all reasonable costs and expenses incurred by the
Credit Parties, the Agent, the Lenders, the Holders or the Lessor in entering
into any Lease Supplement and any future amendments, modifications, supplements,
restatements and/or replacements with respect to any of the Operative
Agreements, whether or not such Lease Supplement, amendments, modifications,
supplements, restatements and/or replacements are ultimately entered into, or
giving or withholding of waivers of consents hereto or thereto, which have been
requested by any Credit Party, the Agent, the Lenders, the Holders or the
Lessor, (c) all reasonable costs and expenses incurred by the Credit Parties,
the Agent, the Lenders, the Holders or the Lessor in connection with any
exercise of remedies under any Operative Agreement or any purchase of any
Property by the Construction Agent, the Lessee or any third party and (d) all
reasonable costs and expenses incurred by the Credit Parties, the Agent, the
Lenders, the Holders or the Lessor in connection with any transfer or conveyance
of any Property, whether or not such transfer or conveyance is ultimately
accomplished.
7.4. FACILITY FEE.
------------
During the Commitment Period, the Lessee agrees to pay or to cause to be paid
to the Agent for the account of (a) the Lenders, respectively, a facility fee
(the "Lender Facility Fee") equal to the product of the Commitment of each
-------------------
Lender multiplied by a per annum rate equal to the Applicable Percentage for the
Lender Facility Fee and (b) the Holders, respectively, a facility fee (the
"Holder Facility Fee") equal to the product of the Holder Commitment of each
--------------------
Holder multiplied by a per annum rate equal to the Applicable Percentage for the
Holder Facility Fee. Such Facility Fees shall be calculated on the basis of a
year of three hundred sixty (360) days for
26
the actual days elapsed and shall be payable quarterly in arrears on each
Facility Fee Payment Date. If all or a portion of any such Facility Fee shall
not be paid when due, such overdue amount shall bear interest, payable by the
Lessee on demand, at a rate per annum equal to the ABR (or in the case of Holder
Yield, the ABR plus the Applicable Percentage for Eurodollar Holder Advances)
plus two percent (2%) from the date of such non-payment until such amount is
paid in full.
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. COOPERATION WITH THE CONSTRUCTION AGENT OR THE LESSEE.
-----------------------------------------------------
The Holders, the Lenders, the Lessor (at the direction of the Majority Secured
Parties) and the Agent shall, at the expense of and to the extent reasonably
requested by the Construction Agent or the Lessee (but without assuming
additional liabilities on account thereof and only to the extent such is
acceptable to the Holders, the Lenders, the Lessor (at the direction of the
Majority Secured Parties) and the Agent in their reasonable discretion),
cooperate with the Construction Agent or the Lessee in connection with the
Construction Agent or the Lessee satisfying its covenant obligations contained
in the Operative Agreements including without limitation at any time and from
time to time, promptly and duly executing and delivering any and all such
further instruments, documents and financing statements (and continuation
statements related thereto).
8.2. COVENANTS OF THE OWNER TRUSTEE AND THE HOLDERS.
----------------------------------------------
Each of the Owner Trustee and the Holders hereby agrees that so long as this
Agreement is in effect:
(a) Neither the Owner Trustee (in its trust capacity or in its
individual capacity) nor any Holder will create or permit to exist at any
time, and each of them will, at its own cost and expense, promptly take
such action as may be necessary duly to discharge, or to cause to be
discharged, all Lessor Liens on the Properties attributable to it;
provided, however, that the Owner Trustee and the Holders shall not be
-------- -------
required to so discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently prosecuted so
long as such proceedings shall not materially and adversely affect the
rights of the Lessee under the Lease and the other Operative Agreements or
involve any material danger of impairment of the Liens of the Security
Documents or of the sale, forfeiture or loss of, and shall not interfere
with the use or disposition of, any Property or title thereto or any
interest therein or the payment of Rent;
(b) Without prejudice to any right under the Trust Agreement of the
Owner Trustee to resign (subject to requirement set forth in the Trust
Agreement that such resignation shall not be effective until a successor
shall have agreed to accept such appointment), or the Holders' rights under
the Trust Agreement to remove the institution acting as the Owner Trustee
(after consent to such removal by the Agent as provided in the Trust
Agreement), each of the Owner Trustee and the Holders hereby agrees with
the
27
Lessee and the Agent (i) not to terminate or revoke the trust created by
the Trust Agreement except as permitted by Article VIII of the Trust
Agreement, (ii) not to amend, supplement, terminate or revoke or otherwise
modify any provision of the Trust Agreement in such a manner as to
adversely affect the rights of any such party without the prior written
consent of such party and (iii) to comply with all of the terms of the
Trust Agreement, the nonperformance of which would adversely affect such
party;
(c) The Owner Trustee or any successor may resign or be removed by the
Holders as the Owner Trustee, a successor Owner Trustee may be appointed
and a corporation may become the Owner Trustee under the Trust Agreement,
only in accordance with the provisions of Article IX of the Trust Agreement
and, with respect to such appointment, with the consent of the Lessee (so
long as no Lease Event of Default shall have occurred and be continuing),
which consent shall not be unreasonably withheld or delayed;
(d) The Owner Trustee, in its capacity as the Owner Trustee under the
Trust Agreement, and not in its individual capacity, shall not contract
for, create, incur or assume any Debt, or enter into any business or other
activity or enter into any contracts or agreements, other than pursuant to
or under the Operative Agreements;
(e) The Holders will not instruct the Owner Trustee to take any action
in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i) commence any
case, proceeding or other action with respect to the Owner Trustee under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, arrangement, winding-
up, liquidation, dissolution, composition or other relief with respect to
it or its debts, or (ii) seek appointment of a receiver, trustee, custodian
or other similar official with respect to the Owner Trustee or for all or
any substantial benefit of the creditors of the Owner Trustee; and neither
any Holder nor the Owner Trustee shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee, the
Holders and the Agent if the Owner Trustee's principal place of business or
chief executive office, or the office where the records concerning the
accounts or contract rights relating to any Property are kept, shall cease
to be located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or if it
shall change its name;
(h) The Owner Trustee shall take or refrain from taking such actions
and grant or refrain from granting such approvals with respect to the
Operative Agreements and/or relating to any Property in each case as
directed in writing by the Agent (until such time as the Loans are paid in
full, and then by the Majority Holders) or, in connection with Sections 8.5
and 9.2 hereof, the Lessee; provided, however, that notwithstanding the
-------- -------
foregoing provisions of this subparagraph (h) the Owner Trustee, the Agent,
the Lenders and the Holders each acknowledge, covenant and agree that
neither the Owner Trustee
28
nor the Agent shall act or refrain from acting, regarding each Unanimous
Vote Matter, until such party has received the approval of each Lender and
each Holder affected by such matter.
(i) The Owner Trustee shall maintain the trust power and authority to
act as the Owner Trustee and to perform its obligations under each of the
Operative Agreements to which it is a party;
(j) Except as otherwise provided in any Operative Agreement, and
provided no Event of Default shall have occurred and be continuing, the
Owner Trustee shall not make any Improvement with respect to any Property
without the consent of the Lessee (which shall not be unreasonably
withheld); and
(k) The Owner Trustee shall use its best efforts to provide the Lessee
or the Construction Agent, as the case may be, with any notices received in
connection with any Property or the transactions contemplated hereby,
unless the Owner Trustee, in its reasonable judgment, believes that such
notice has previously been provided to the Lessee or the Construction
Agent, as the case may be.
8.3. CREDIT PARTY COVENANTS, CONSENT AND ACKNOWLEDGMENT.
--------------------------------------------------
(a) Each Credit Party acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Agreement and the
Mortgage Instruments, shall create Liens respecting the various personal
property, fixtures and real property described therein in favor of the
Agent. Each Credit Party hereby irrevocably consents to the creation,
perfection and maintenance of such Liens. Each Credit Party shall, to the
extent reasonably requested by any of the other parties hereto, cooperate
with the other parties and shall from time to time duly execute and deliver
any and all such future instruments, documents and financing statements
(and continuation statements related thereto) as any other party hereto may
reasonably request for the purpose of more fully effectuating the
provisions of the Operative Agreements.
(b) The Lessor hereby instructs each Credit Party, and each Credit
Party hereby acknowledges and agrees, that until such time as the Loans and
the Holder Advances are paid in full and the Liens evidenced by the
Security Agreement and the Mortgage Instruments have been released (i) any
and all Rent (excluding Excepted Payments which shall be payable to each
Holder or other Person as appropriate) and any and all other amounts of any
kind or type under any of the Operative Agreements due and owing or payable
to any Person shall instead be paid directly to the Agent (excluding
Excepted Payments which shall be payable to each Holder or other Person as
appropriate) or as the Agent may direct from time to time for allocation
and distribution in accordance with the procedures set forth in Section 8.7
hereof, (ii) all rights of the Lessor under the Lease shall be exercised by
the Agent and (iii) each Credit Party shall cause all notices,
certificates, financial statements, communications and other information
which are delivered, or are required to be delivered, to the Lessor, to
also be delivered at the same time to the Agent.
29
(c) No Credit Party shall consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement except in accordance with Section 12.4 of this
Agreement.
(d) Each Credit Party hereby covenants and agrees that, except for
amounts payable as Basic Rent, any and all payment obligations owing from
time to time under the Operative Agreements by any Person to the Agent, any
Lender, any Holder or any other Person shall (without further action) be
deemed to be Supplemental Rent obligations payable by the Lessee and
guaranteed by the other Credit Parties. Without limitation, such
obligations shall include without limitation such arrangement fees,
administrative fees, facility fees, breakage costs, indemnities, trustee
fees and transaction expenses that the Operative Agreements provide are to
be paid by the Lessee and which are incurred by the parties hereto in
connection with the transactions contemplated by the Operative Agreements.
(e) The Lessee hereby covenants and agrees to cause an Appraisal or
reappraisal (in form and substance reasonably satisfactory to the Agent and
from an appraiser selected by the Agent) to be issued respecting any
Property as reasonably requested by the Agent from time to time (i) at each
and every time as such shall be required to satisfy any regulatory
requirements imposed on the Agent, the Lessor, the Trust Company, any
Lender and/or any Holder and (ii) after the occurrence of an Event of
Default.
(f) The Lessee hereby covenants and agrees that, except for amounts
payable as Basic Rent, any and all payment obligations owing from time to
time under the Operative Agreements by any Person to the Agent, any Lender,
any Holder or any other Person shall (without further action) be deemed to
be Supplemental Rent obligations payable by the Lessee. Without limitation,
such obligations of the Lessee shall include the Supplement Rent
obligations pursuant to Section 3.3 of the Lease, arrangement fees,
administrative fees, participation fees, commitment fees, facility fees,
prepayment penalties, breakage costs, indemnities, trustee fees and
transaction expenses incurred by the parties hereto in connection with the
transactions contemplated by the Operative Agreements.
(g) At any time the Lessor or the Agent is entitled under the Operative
Agreements to possession of a Property or any component thereof, each of
the Construction Agent and the Lessee hereby covenants and agrees, at its
own cost and expense, to assemble and make the same available to the Agent
(on behalf of the Lessor).
(h) The Lessee hereby covenants and agrees that Equipment (other than
Equipment that is essential to the operation of any individual parcel of
Property where such Equipment is located) respecting any individual parcel
of Property shall at no time constitute in excess of five percent (5%) of
the aggregate Advances respecting such parcel of Property funded at such
time under the Operative Agreements.
30
(i) The Lessee hereby covenants and agrees that as of Completion (i)
the Property Cost for each individual parcel of the Property shall be no
less than $5,000,000 and (ii) each parcel of the Property shall be a
Permitted Facility.
(j) The Lessee hereby covenants and agrees that it shall give prompt
notice to the Agent if the Lessee's principal place of business or chief
executive office, or the office where the records concerning the accounts
or contract rights relating to any Property are kept, shall cease to be
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or if it shall
change its name.
(k) Unless the Agent otherwise agrees in writing, the Lessee hereby
covenants and agrees that Lessee will not exercise its Purchase Option
prior to the Expiration Date with respect to less than all of the
Properties if, after the exercise of such Purchase Option, the aggregate
Property Cost of all Properties remaining after giving effect to such
purchase will be less than $15,000,000.
(l) Until all the obligations of the Credit Parties under the Operative
Agreements have been finally and indefeasibly paid and satisfied in full,
the Commitments and the Holder Commitments terminated and the Term has
expired or been earlier terminated, then unless consent has been obtained
from the Majority Secured Parties, the Lessee will furnish or cause to be
furnished to each Holder, each Lender and the Agent at their respective
addresses set forth or referenced in Section 12.2 of this Agreement, or
such other office as may be designated by any such Holder, Lender or the
Agent from time to time: (i) not later than forty-five (45) days after the
end of each fiscal quarter, a certificate duly signed by the chief
executive officer, chief operating officer, chief financial officer,
treasurer or controller of USF setting forth the Total Debt Ratio for the
period of four (4) consecutive fiscal quarters ending with such quarter-end
and setting forth the computations employed in calculating the ratio (the
"Margin Certificate") and (ii) at each time financial statements are
-------------------
delivered or to be delivered pursuant to Section 28.1 of the Lease, a
compliance certificate duly executed by the president, treasurer, chief
financial offer or controller of USF substantially in the form of EXHIBIT M
---------
attached hereto (the "Officer's Compliance Certificate").
--------------------------------
(m) The Lessee hereby covenants and agrees that the rights of the
Lessee under this Agreement and the Lease shall not impair or in any way
diminish the obligations of the Construction Agent and/or the rights of the
Lessor under the Agency Agreement.
(n) Each Credit Party hereby covenants and agrees to cause each
Restricted Subsidiary formed after the Initial Closing Date to execute a
Joinder Agreement within thirty (30) days of the formation of such
Restricted Subsidiary.
(o) Each Credit Party shall promptly notify the Agent, or cause the
Agent to be promptly notified, upon such Credit Party gaining knowledge of
the occurrence of any Default or Event of Default which is continuing at
such time. In any event, such notice shall be provided to the Agent within
ten (10) days of when such Credit Party gains such knowledge.
31
(p) Until all of the obligations under the Operative Agreements have
been finally and indefeasibly paid and satisfied in full and the
Commitments and the Holder Commitments terminated (unless consent has been
obtained from the Majority Secured Parties), each Credit Party will:
(i) except as permitted by the express provisions of the Lessee
Credit Agreement, preserve and maintain its separate legal existence
and all material rights, franchises, licenses and privileges necessary
to the conduct of its business, and qualify and remain qualified as a
foreign corporation (or partnership, limited liability company or
other such similar entity, as the case may be) and authorized to do
business in each jurisdiction in which the failure to do so qualify
would have a Material Adverse Effect;
(ii) pay and perform all obligations of the Credit Parties under
the Operative Agreements and pay and perform (A) all taxes,
assessments and other governmental charges that may be levied or
assessed upon it or any of its property, and (B) all other
indebtedness, obligations and liabilities in accordance with customary
trade practices, which if not paid would have a Material Adverse
Effect; provided that any Credit Party may contest any item described
--------
in this Section 8.3(p)(ii) in good faith so long as adequate reserves
are maintained with respect thereto in accordance with GAAP;
(iii) to the extent failure to do so would have a Material
Adverse Effect, observe and remain in compliance with all applicable
Laws and maintain in full force and effect all Governmental Actions,
in each case applicable to the conduct of its business, keep in full
force and effect all licenses, certifications or accreditations
necessary for any Facility to carry on its business, and not permit
the termination of any insurance reimbursement program available to
any Facility; and
(iv) provided that the Agent, the Lenders and the Holders use
reasonable efforts to minimize disruption to the business of the
Credit Parties, permit representatives of the Agent or any Lender or
Holder, from time to time, to visit and inspect its properties;
inspect, audit and make extracts from its books, records and files,
including without limitation management letters prepared by
independent accountants; and discuss with its principal officers, and
its independent accountants, its business, assets, liabilities,
financial condition, results of operations and business prospects.
(q) Lessee shall take all action as is necessary in Lessee's reasonable
opinion to assure that Lessee's computer based systems are able to operate
and effectively process data including dates on and after January 1, 2000.
32
(r) Lessee shall perform any and all obligations of Lessor under, and
cause Lessor to otherwise remain in full compliance with, the terms and
provisions of each Ground Lease, if any.
8.4. SHARING OF CERTAIN PAYMENTS.
---------------------------
Except for Excepted Payments, the parties hereto acknowledge and agree that
all payments due and owing by any Credit Party to the Lessor under the Lease or
any of the other Operative Agreements shall be made by any Credit Party directly
to the Agent as more particularly provided in Section 8.3 hereof. The Lessor,
the Holders, the Agent, the Lenders and the Credit Parties acknowledge the terms
of Section 8.7 of this Agreement regarding the allocation of payments and other
amounts made or received from time to time under the Operative Agreements and
agree that all such payments and amounts are to be allocated as provided in
Section 8.7 of this Agreement.
8.5. GRANT OF EASEMENTS, ETC.
------------------------
The Agent, the Lenders and the Holders hereby agree that, so long as no
Default or Event of Default shall have occurred and be continuing, the Owner
Trustee shall, from time to time at the request of the Lessee (and with the
prior consent of the Agent), in connection with the transactions contemplated by
the Agency Agreement, the Lease or the other Operative Agreements, (i) grant
easements and other rights in the nature of easements with respect to any
Property, (ii) release existing easements or other rights in the nature of
easements which are for the benefit of any Property, (iii) execute and deliver
to any Person any instrument appropriate to confirm or effect such grants or
releases, and (iv) execute and deliver to any Person such other documents or
materials in connection with the acquisition, development, construction, testing
or operation of any Property, including without limitation reciprocal easement
agreements, construction contracts, operating agreements, development
agreements, plats, replats or subdivision documents; provided, that each of the
--------
agreements referred to in this Section 8.5 shall be of the type normally
executed by the Lessee in the ordinary course of the Lessee's business and shall
be on commercially reasonable terms so as not to diminish the value of any
Property in any material respect.
8.6. APPOINTMENT BY THE AGENT, THE LENDERS, THE HOLDERS AND THE OWNER
----------------------------------------------------------------
TRUSTEE.
-------
The Holders hereby appoint the Agent to act as collateral agent for the
Holders in connection with the Lien granted by the Security Documents to secure
the Holder Amount. The Lenders and the Holders acknowledge and agree and direct
that the rights and remedies of the beneficiaries of the Lien of the Security
Documents shall be exercised by the Agent on behalf of the Lenders and the
Holders as directed from time to time by the Majority Secured Parties or,
pursuant to Sections 8.2(h) and 12.4, all of the Lenders and the Holders, as the
case may be; provided, in all cases, the Agent shall allocate payments and other
--------
amounts received in accordance with Section 8.7. The Agent is further appointed
to provide notices under the Operative Agreements on behalf of the Owner Trustee
(as determined by the Agent, in its reasonable discretion), to receive notices
under the Operative Agreements on behalf of the Owner Trustee and (subject to
Sections 8.5 and 9.2) to take such other action under the Operative
33
Agreements on behalf of the Owner Trustee as the Agent shall determine in its
reasonable discretion from time to time. The Agent hereby accepts such
appointments. For purposes hereof, the provisions of Section 7 of the Credit
Agreement, together with such other terms and provisions of the Credit Agreement
and the other Operative Agreements as required for the full interpretation and
operation of Section 7 of the Credit Agreement are hereby incorporated by
reference as if restated herein for the mutual benefit of the Agent and each
Holder as if each Holder were a Lender thereunder. Outstanding Holder Advances
and outstanding Loans shall each be taken into account for purposes of
determining Majority Secured Parties. Further, the Agent shall be entitled to
take such action on behalf of the Owner Trustee as is delegated to the Agent
under any Operative Agreement (whether express or implied) as may be reasonably
incidental thereto. The parties hereto hereby agree to the provisions contained
in this Section 8.6. Any appointment of a successor agent under Section 7.9 of
the Credit Agreement shall also be effective as an appointment of a successor
agent for purposes of this Section 8.6.
8.7. COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
-------------------------------------------------------
(a) Each Credit Party has agreed pursuant to Section 5.9 and otherwise
in accordance with the terms of this Agreement to pay to (i) the Agent any
and all Rent (excluding Excepted Payments) and any and all other amounts of
any kind or type under any of the Operative Agreements due and owing or
payable to any Person and (ii) each Person as appropriate the Excepted
Payments. Promptly after receipt, the Agent shall apply and allocate, in
accordance with the terms of this Section 8.7, such amounts received from
any Credit Party and all other payments, receipts and other consideration
of any kind whatsoever received by the Agent pursuant to the Security
Agreement or otherwise received by the Agent, the Holders or any of the
Lenders in connection with the Collateral, the Security Documents or any of
the other Operative Agreements. Ratable distributions among the Lenders and
the Holders under this Section 8.7 shall be made based on (in the case of
the Lenders) the ratio of the outstanding Loans to the aggregate Property
Cost and (in the case of the Holders) the ratio of the outstanding Holder
Advances to the aggregate Property Cost. Ratable distributions among the
Tranche A Lenders under this Section 8.7 shall be made based on the ratio
of the individual Tranche A Lender's Commitment for Tranche A Loans to the
aggregate of all the Tranche A Lenders' Commitments for Tranche A Loans.
Ratable distributions among the Tranche B Lenders under this Section 8.7
shall be made based on the ratio of the individual Tranche B Lender's
Commitment for Tranche B Loans to the aggregate of all the Tranche B
Lenders' Commitments for Tranche B Loans. Ratable distributions among the
Lenders (in situations where the Tranche A Lenders are not differentiated
from the Tranche B Lenders) shall be made based on the ratio of the
individual Lender's Commitment to the aggregate of all the Lenders'
Commitments. Ratable distributions among the Holders under this Section 8.7
shall be based on the ratio of the individual Holder's Holder Commitment to
the aggregate of all the Holders' Holder Commitments.
(b) Payments and other amounts received by the Agent from time to time
in accordance with the terms of subparagraph (a) shall be applied and
allocated as follows:
34
(i) Any such payment or amount identified as or deemed to be Basic
Rent shall be applied and allocated by the Agent first, ratably to the
-----
Lenders for application and allocation to the payment of interest on
the Loans and thereafter the principal of the Loans which is due and
payable on such date and second, to the Holders for the payment of
------
accrued Holder Yield with respect to the Holder Advances and
thereafter the portion of the Holder Advances which is due on such
date; and third, if no Default or Event of Default is in effect, any
-----
excess shall be paid to such Person or Persons as the Lessee may
designate; provided, that if a Default or Event of Default is in
--------
effect, such excess (if any) shall instead be held by the Agent until
the earlier of (I) the first date thereafter on which no Default or
Event of Default shall be in effect (in which case such payments or
returns shall then be made to such other Person or Persons as the
Lessee may designate) and (II) the Maturity Date or the Expiration
Date, as the case may be (or, if earlier, the date of any
Acceleration), in which case such amounts shall be applied and
allocated in the manner contemplated by Section 8.7(b)(iv).
(ii) If on any date the Agent or the Lessor shall receive any
amount in respect of (A) any Casualty or Condemnation pursuant to
Sections 15.1(a) or 15.1(g) of the Lease (excluding any payments in
respect thereof which are payable to the Lessee in accordance with the
Lease), or (B) the Termination Value in connection with the delivery
of a Termination Notice pursuant to Article XVI of the Lease, or (C)
the Termination Value in connection with the exercise of the Purchase
Option under Section 20.1 of the Lease or the exercise of the option
of the Lessor to transfer the Properties to the Lessee pursuant to
Section 20.3 of the Lease, or (D) any payment required to be made or
elected to be made by the Construction Agent to the Lessor pursuant to
the terms of the Agency Agreement, then in each case, the Lessor shall
be required to pay such amount received (1) if no Acceleration has
occurred, first to prepay the principal balance of the Loans and
------
accrued interest thereon, on a pro rata basis, and second, to prepay
the Holder Advances and accrued Holder Yield thereon, each on a pro
rata basis, or (2) if an Acceleration has occurred, to apply and
allocate the proceeds respecting Sections 8.7(b)(ii)(A) through
8.7(b)(ii)(D) in accordance with Section 8.7(b)(iii) hereof.
(iii) Subject to Section 8.7(c), an amount equal to any payment
identified as proceeds of the sale or other disposition (or lease upon
the exercise of remedies) of the Properties or any portion thereof,
whether pursuant to Article XXII of the Lease or the exercise of
remedies under the Security Documents or otherwise, the execution of
remedies set forth in the Lease and any payment in respect of excess
wear and tear pursuant to Section 22.3 of the Lease (whether such
payment relates to a period before or after the Construction Period
Termination Date) shall be applied and allocated by the Agent first,
-----
ratably to the payment of the principal and interest of the Tranche B
Loans then outstanding, , second, to the extent such amount exceeds
------
the maximum amount to be returned pursuant to the foregoing provisions
of this paragraph (iii), ratably to the payment of the principal and
interest of the Tranche A Loans then outstanding, third, to any and
-----
all other amounts owing under the Operative Agreements to the Lenders
35
under the Tranche B Loans, fourth, to any and all other amounts owing
------
under the Operative Agreements to the Lenders under the Tranche A
Loans, fifth, ratably to the payment to the Holders of the outstanding
-----
principal balance of all Holder Advances plus all outstanding Holder
Yield with respect to such outstanding Holder Advances, sixth, to any
-----
and all other amounts owing under the Operative Agreements to the
Holders, and seventh, to the extent moneys remain after application
-------
and allocation pursuant to clauses first through sixth above, to the
----- -----
Owner Trustee for application and allocation to any and all other
amounts owing to the Holders or the Owner Trustee and as the Holders
shall determine; provided, where no Event of Default shall exist and
--------
be continuing and a prepayment is made for any reason with respect to
less than the full amount of the outstanding principal amount of the
Loans and the outstanding Holder Advances, the proceeds shall be
applied and allocated ratably to the Lenders and to the Holders.
(iv) Subject to Section 8.7(c), an amount equal to (A) any such
payment identified as a payment pursuant to Section 22.1(b) of the
Lease (or otherwise) of the Maximum Residual Guarantee Amount (and any
such lesser amount as may be required by Section 22.1(b) of the Lease)
in respect of the Properties, (B) any other amount payable upon any
exercise of remedies after the occurrence of an Event of Default not
covered by Sections 8.7(b)(i) or 8.7(b)(iii) above (including without
limitation any amount received in connection with an Acceleration
which does not represent proceeds from the sale or liquidation of the
Properties) and (C) any other amount payable by any Guarantor pursuant
to Section 6B shall be applied and allocated by the Agent first,
-----
ratably, to the payment of the principal and interest balance of
Tranche A Loans then outstanding, second, ratably to the payment of
------
the principal and interest balance of the Tranche B Loans then
outstanding, third, to the payment of any other amounts owing to the
-----
Lenders hereunder or under any other Operative Agreement, fourth,
------
ratably to the payment of the principal balance of all Holder Advances
plus all outstanding Holder Yield with respect to such outstanding
Holder Advances, and fifth, to the extent moneys remain after
-----
application and allocation pursuant to clauses first through fourth
--------------------
above, to the Owner Trustee for application and allocation to Holder
Advances and Holder Yield and any other amounts owing to the Holders
or the Owner Trustee as the Holders shall determine.
(v) An amount equal to any such payment identified as Supplemental
Rent shall be applied and allocated by the Agent to the payment of any
amounts then owing to the Agent, the Lenders, the Holders and the
other parties to the Operative Agreements (or any of them) (other than
any such amounts payable pursuant to the preceding provisions of this
Section 8.7(b)) as shall be determined by the Agent in its reasonable
discretion; provided, however, that Supplemental Rent received upon
-------- -------
the exercise of remedies after the occurrence and continuance of an
Event of Default in lieu of or in substitution of the Maximum Residual
Guarantee Amount or as a partial payment thereon shall be applied and
allocated as set forth in Section 8.7(b)(iv).
36
(vi) The Agent in its reasonable judgment shall identify the nature
of each payment or amount received by the Agent and apply and allocate
each such amount in the manner specified above.
(c) Upon the termination of the Commitments and the payment in full of
the Loans and all other amounts owing by the Owner Trustee hereunder or
under any Credit Document and the payment in full of all amounts owing to
the Holders and the Owner Trustee under the Trust Agreement, any moneys
remaining with the Agent shall be returned to the Owner Trustee or such
other Person or Persons as the Holders may designate for application and
allocation to any and all other amounts owing to the Holders or the Owner
Trustee and as the Holders shall determine. In the event of an Acceleration
it is agreed that, prior to the application and allocation of amounts
received by the Agent in the order described in Section 8.7(b) above, any
such amounts shall first be applied and allocated to the payment of (i) any
and all sums advanced by the Agent in order to preserve the Collateral or
to preserve its Lien thereon, (ii) the expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing or realizing on
the Collateral, or of any exercise by the Agent of its rights under the
Security Documents, together with reasonable attorneys' fees and expenses
and court costs and (iii) any and all other amounts reasonably owed to the
Agent under or in connection with the transactions contemplated by the
Operative Agreements (including without limitation any accrued and unpaid
administration fees).
8.8. RELEASE OF PROPERTIES, ETC.
---------------------------
If the Lessee shall at any time purchase any Property pursuant to the Lease,
or the Construction Agent shall purchase any Property pursuant to the Agency
Agreement, or if any Property shall be sold in accordance with Article XXII of
the Lease, then, upon satisfaction by the Owner Trustee of its obligation to
prepay the Loans, Holder Advances and all other amounts owing to the Lenders and
the Holders under the Operative Agreements, the Agent is hereby authorized and
directed to release such Properties from the Liens created by the Security
Documents to the extent of its interest therein. In addition, upon the
termination of the Commitments and the Holder Commitments and the payment in
full of the Loans, the Holder Advances and all other amounts owing by the Owner
Trustee and the Lessee hereunder or under any other Operative Agreement the
Agent is hereby authorized and directed to release all of the Properties from
the Liens created by the Security Documents to the extent of its interest
therein. Upon request of the Owner Trustee following any such release, the
Agent shall, at the sole cost and expense of the Lessee, execute and deliver to
the Owner Trustee and the Lessee such documents as the Owner Trustee or the
Lessee shall reasonably request to evidence such release.
37
8.9. RECORDATION OF MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
-------------------------------------------------------
The Agent, the Lenders and the Holders hereby covenant and agree that, so long
as no Lease Event of Default exists, the Agent shall hold in escrow and shall
not record the Lease Supplements or memoranda of lease delivered to the Agent
from time to time in accordance with the terms of Section 5.3(n) hereof. In the
event that a Lease Event of Default occurs and is continuing, then (a) the Agent
may, in its sole discretion, record any memorandum of lease and/or any Lease
Supplement then held by (or thereafter delivered to) the Agent and (b) the
Lessee covenants and agrees to pay all necessary recording fees, documentary
stamp taxes and similar amounts required to be paid in connection with the
recording of such memoranda of lease and/or such Lease Supplements.
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
9.1. THE CONSTRUCTION AGENT'S AND THE LESSEE'S CREDIT AGREEMENT RIGHTS.
-----------------------------------------------------------------
Notwithstanding anything to the contrary contained in the Credit Agreement,
the Agent, the Lenders, the Holders, the Credit Parties and the Owner Trustee
hereby agree that, prior to the occurrence and continuation of any Default or
Event of Default, the Construction Agent or the Lessee, as the case may be,
shall have the following rights:
(a) the right to designate an account to which amounts funded under the
Operative Agreements shall be credited pursuant to Section 2.3(a) of the
Credit Agreement;
(b) the right to terminate or reduce the Commitments pursuant to
Section 2.5(a) of the Credit Agreement;
(c) the right to exercise the conversion and continuation options
pursuant to Section 2.7 of the Credit Agreement;
(d) the right to receive any notice and any certificate, in each case
issued pursuant to Section 2.11(a) of the Credit Agreement;
(e) the right to replace any Lender pursuant to Section 2.11(b) of the
Credit Agreement;
(f) the right to approve any successor agent pursuant to Section 7.9 of
the Credit Agreement; and
(g) the right to consent to any assignment by a Lender to which the
Lessor has the right to consent pursuant to Section 9.8 of the Credit
Agreement.
38
9.2. THE CONSTRUCTION AGENT'S AND THE LESSEE'S TRUST AGREEMENT RIGHTS.
----------------------------------------------------------------
Notwithstanding anything to the contrary contained in the Trust Agreement, the
Credit Parties, the Owner Trustee and the Holders hereby agree that, prior to
the occurrence and continuation of any Default or Event of Default, the
Construction Agent or the Lessee, as the case may be, shall have the following
rights:
(a) the right to exercise the conversion and continuation options
pursuant to Section 3.8 of the Trust Agreement;
(b) the right to receive any notice and any certificate, in each case
issued pursuant to Section 3.9(a) of the Trust Agreement;
(c) the right to replace any Holder pursuant to Section 3.9(b) of the
Trust Agreement;
(d) the right to exercise the removal options contained in Section 3.9
of the Trust Agreement; and
(e) no removal of the Owner Trustee and appointment of a successor
Owner Trustee pursuant to Section 9.1 of the Trust Agreement shall be made
without the prior written consent (not to be unreasonably withheld or
delayed) of the Lessee.
(f) the right to designate an account to which amounts funded under the
Operative Agreements shall be credited pursuant to Section 3.1(b) of the
Trust Agreement.
SECTION 10. TRANSFER OF INTEREST.
10.1. RESTRICTIONS ON TRANSFER.
------------------------
Each Lender may participate, assign or transfer all or a portion of its
interest hereunder and under the other Operative Agreements in accordance with
Sections 9.7 and 9.8 of the Credit Agreement; provided, each participant,
--------
assignee or transferee must obtain the same ratable interest in Tranche A Loans,
Tranche B Loans and Holder Advances. The Holders may, directly or indirectly,
assign, convey or otherwise transfer any of their right, title or interest in or
to the Trust Estate or the Trust Agreement with the prior written consent of the
Agent and the Lessee (which consent shall not be unreasonably withheld or
delayed) and in accordance with the terms of Section 11.8(b) of the Trust
Agreement; provided, each participant, assignee or tranferee must obtain the
---------
same ratable interest in Tranche A Loans, Tranche B Loans and Holder Advances.
The Owner Trustee may, subject to the rights of the Lessee under the Lease and
the other Operative Agreements and to the Lien of the applicable Security
Documents but only with the prior written consent of the Agent (which consent
may be withheld by the Agent in its sole discretion) and (provided, no Default
--------
or Event of Default has occurred and is continuing) with the consent of the
Lessee, directly or indirectly, assign, convey, appoint an agent with respect to
39
enforcement of, or otherwise transfer any of its right, title or interest in or
to any Property, the Lease, the Trust Agreement and the other Operative
Agreements (including without limitation any right to indemnification
thereunder), or any other document relating to a Property or any interest in a
Property as provided in the Trust Agreement and the Lease. The provisions of
the immediately preceding sentence shall not apply to the obligations of the
Owner Trustee to transfer Property to the Lessee or a third party purchaser
pursuant to Article XXII of the Lease upon payment for such Property in
accordance with the terms and conditions of the Lease. No Credit Party may
assign any of the Operative Agreements or any of their respective rights or
obligations thereunder or with respect to any Property in whole or in part to
any Person without the prior written consent of the Agent, the Lenders, the
Holders and the Lessor.
10.2. EFFECT OF TRANSFER.
------------------
From and after any transfer effected in accordance with this Section 10, the
transferor shall be released, to the extent of such transfer, from its liability
hereunder and under the other documents to which it is a party in respect of
obligations to be performed on or after the date of such transfer; provided,
--------
however, that any transferor shall remain liable hereunder and under such other
-------
documents to the extent that the transferee shall not have assumed the
obligations of the transferor thereunder. Upon any transfer by the Owner
Trustee, a Holder or a Lender as above provided, any such transferee shall
assume the obligations of the Owner Trustee, the Holder or the Lender, as the
case may be, and shall be deemed an "Owner Trustee", "Holder", or "Lender", as
the case may be, for all purposes of such documents and each reference herein to
the transferor shall thereafter be deemed a reference to such transferee for all
purposes, except as provided in the preceding sentence. Notwithstanding any
transfer of all or a portion of the transferor's interest as provided in this
Section 10, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer including without limitation rights to
indemnification under any such document.
SECTION 11. INDEMNIFICATION.
11.1. GENERAL INDEMNITY.
-----------------
Whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims, which may be imposed on, incurred by or
asserted against an Indemnified Person by any third party, including without
limitation Claims arising from the negligence of an Indemnified Person (but not
to the extent such Claims arise from the gross negligence or willful misconduct
of such Indemnified Person) in any way relating to or arising or alleged to
arise out of the execution, delivery, performance or enforcement of this
Agreement, the Lease or any other Operative Agreement or on or with respect to
any Property or any component thereof, including without limitation Claims in
any way relating to or arising or alleged to arise out of (a) the financing,
refinancing, purchase, acceptance, rejection, ownership, design, construction,
refurbishment, development, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, occupancy, operation, maintenance, repair,
modification, transportation, condition, sale, return, repossession (whether by
summary proceedings or otherwise), or any other disposition of any Property or
any
40
part thereof, including without limitation the acquisition, holding or
disposition of any interest in the Property, lease or agreement comprising a
portion of any thereof; (b) any latent or other defects in any Property or any
portion thereof whether or not discoverable by an Indemnified Person or the
Indemnity Provider; (c) an Environmental Violation, Environmental Claims or
other loss of or damage to any property or the environment relating to the
Property, the Lease, the Agency Agreement or the Indemnity Provider; (d) the
Operative Agreements, or any transaction contemplated thereby; (e) any breach by
the Indemnity Provider of any of its representations or warranties under the
Operative Agreements to which the Indemnity Provider is a party or failure by
the Indemnity Provider to perform or observe any covenant or agreement to be
performed by it under any of the Operative Agreements; and (f) personal injury,
death or property damage, including without limitation Claims based on strict or
absolute liability in tort.
If a written Claim is made against any Indemnified Person or if any proceeding
shall be commenced against such Indemnified Person (including without limitation
a written notice of such proceeding), for any Claim, such Indemnified Person
shall promptly notify the Indemnity Provider in writing and shall not take
action with respect to such Claim without the consent of the Indemnity Provider
for thirty (30) days after the receipt of such notice by the Indemnity Provider;
provided, however, that in the case of any such Claim, if action shall be
-------- -------
required by law or regulation to be taken prior to the end of such period of
thirty (30) days, such Indemnified Person shall endeavor to, in such notice to
the Indemnity Provider, inform the Indemnity Provider of such shorter period,
and no action shall be taken with respect to such Claim without the consent of
the Indemnity Provider before seven (7) days before the end of such shorter
period.
If, within thirty (30) days of receipt of such notice from the Indemnified
Person (or such shorter period as the Indemnified Person has notified the
Indemnity Provider is required by law or regulation for the Indemnified Person
to respond to such Claim), the Indemnity Provider shall request in writing that
such Indemnified Person respond to such Claim, the Indemnified Person shall, at
the expense of the Indemnity Provider, in good faith conduct and control such
action (including without limitation by pursuit of appeals) (provided, however,
-------- -------
that (A) if such Claim, in the Indemnity Provider's reasonable discretion, can
be pursued by the Indemnity Provider on behalf of or in the name of such
Indemnified Person, the Indemnified Person, at the Indemnity Provider's request,
shall allow the Indemnity Provider to conduct and control the response to such
Claim and (B) in the case of any Claim (and notwithstanding the provisions of
the foregoing subsection (A)), the Indemnified Person may request the Indemnity
Provider to conduct and control the response to such Claim (with counsel to be
selected by the Indemnity Provider and consented to by such Indemnified Person,
such consent not to be unreasonably withheld; provided, however, that any
-------- -------
Indemnified Person may retain separate counsel at the expense of the Indemnity
Provider in the event of a conflict of interest between such Indemnified Person
and the Indemnity Provider)) by, in the sole discretion of the Person conducting
and controlling the response to such Claim (1) resisting payment thereof, (2)
not paying the same except under protest, if protest is necessary and proper,
(3) if the payment be made, using reasonable efforts to obtain a refund thereof
in appropriate administrative and judicial proceedings, or (4) taking such other
action as is reasonably requested by the Indemnity Provider from time to time.
41
The party controlling the response to any Claim shall consult in good faith
with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
--------
that all decisions ultimately shall be made in the discretion of the controlling
party. The parties agree that an Indemnified Person may at any time decline to
take further action with respect to the response to such Claim and may settle
such Claim if such Indemnified Person shall waive its rights to any indemnity
from the Indemnity Provider that otherwise would be payable in respect of such
Claim (and any future Claim, the pursuit of which is precluded by reason of such
resolution of such Claim) and shall pay to the Indemnity Provider any amount
previously paid or advanced by the Indemnity Provider pursuant to this Section
11.1 by way of indemnification or advance for the payment of an amount regarding
such Claim, together with all reasonable costs and expenses incurred by the
Indemnity Provider in connection therewith.
Notwithstanding the foregoing provisions of this Section 11.1, an Indemnified
Person shall not be required to take any action and the Indemnity Provider shall
not be permitted to respond to any Claim in its own name or that of the
Indemnified Person unless (A) the Indemnity Provider shall have agreed to pay
and shall pay to such Indemnified Person on demand and on an After Tax Basis all
reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including without limitation all
reasonable legal, accounting and investigatory fees and disbursements and, if
the Indemnified Person has informed the Indemnity Provider that it intends to
contest such Claim (whether or not the control of the contest is then assumed by
the Indemnity Provider), the Indemnity Provider shall have agreed that the Claim
is an indemnifiable Claim hereunder, (B) in the case of a Claim that must be
pursued in the name of an Indemnified Person (or an Affiliate thereof), the
amount of the potential indemnity (taking into account all similar or logically
related Claims that have been or could be raised for which the Indemnity
Provider may be liable to pay an indemnity under this Section 11.1) exceeds
$10,000 (or such lesser amount as may be subsequently agreed between the
Indemnity Provider and the Indemnified Person), (C) the Indemnified Person shall
have reasonably determined that the action to be taken will not result in any
material danger of sale, forfeiture or loss of the Property, or any part thereof
or interest therein, will not interfere with the payment of Rent, and will not
result in risk of criminal liability, (D) if such Claim shall involve the
payment of any amount prior to the resolution of such Claim, the Indemnity
Provider shall provide to the Indemnified Person an interest-free advance in an
amount equal to the amount that the Indemnified Person is required to pay (with
no additional net after-tax cost to such Indemnified Person) prior to the date
such payment is due, (E) in the case of a Claim that must be pursued in the name
of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall
have demonstrated to the reasonable satisfaction of the Indemnified Person that
a reasonable basis exists to contest such Claim (or, in the case of an appeal of
an adverse determination, an opinion of such counsel to the effect that the
position asserted in such appeal will more likely than not prevail and (F) no
Event of Default shall have occurred and be continuing. In no event shall an
Indemnified Person be required to appeal an adverse judicial determination to
the United States Supreme Court. In addition, an Indemnified Person shall not
be required to contest any Claim in its name (or that of an Affiliate) if the
subject matter thereof shall be of a continuing nature and shall have previously
been decided adversely by a court of competent jurisdiction pursuant to the
contest provisions of this Section 11.1, unless there shall have been a change
in law (or interpretation thereof) and the Indemnified Person shall have
42
received, at the Indemnity Provider's expense, an opinion of independent counsel
selected by the Indemnity Provider and reasonably acceptable to the Indemnified
Person stating that as a result of such change in law (or interpretation
thereof), it is more likely than not that the Indemnified Person will prevail in
such contest. In no event shall the Indemnity Provider be permitted to adjust
or settle any Claim without the consent of the Indemnified Person to the extent
any such adjustment or settlement involves, or is reasonably likely to involve,
any performance by or adverse admission by or with respect to the Indemnified
Person.
11.2. GENERAL TAX INDEMNITY.
---------------------
(a) The Indemnity Provider shall pay and assume liability for, and does
hereby agree to indemnify, protect and defend each Property and all
Indemnified Persons, and hold them harmless against, all Impositions on an
After Tax Basis, and all payments pursuant to the Operative Agreements
shall be made free and clear of and without deduction for any and all
present and future Impositions.
(b) Notwithstanding anything to the contrary in Section 11.2(a)
hereof, the following shall be excluded from the indemnity required by
Section 11.2(a):
(i) Taxes (other than Taxes that are, or are in the nature of,
sales, use, rental, value added, transfer or property taxes) that are
imposed on a Indemnified Person (other than the Lessor, the Owner
Trustee and the Trust) by the United States federal government or any
foreign government that are based on or measured by the net income
(including without limitation taxes based on capital gains and minimum
taxes) of such Person; provided, that this clause (i) shall not be
--------
interpreted to prevent a payment from being made on an After Tax Basis
if such payment is otherwise required to be so made;
(ii) Taxes (other than Taxes that are, or are in the nature of,
sales, use, rental, value added, transfer or property taxes) that are
imposed on any Indemnified Person (other than the Lessor, the Owner
Trustee and the Trust) by any state or local jurisdiction or taxing
authority within any state or local jurisdiction and that are based
upon or measured by the net income (including without limitation taxes
based on capital gains and minimum taxes) of such Person; provided
--------
that such Taxes shall not be excluded under this subparagraph (ii) to
---
the extent such Taxes would have been imposed had the location,
possession or use of any Property in, the location or the operation of
the Lessee in, or the Lessee's making payments under the Operative
Agreements from, the jurisdiction imposing such Taxes been the sole
connection between such Indemnified Person and the jurisdiction
imposing such Taxes; provided, further, that this clause (ii) shall
-------- -------
not be interpreted to prevent a payment from being made on an After
Tax Basis if such payment is otherwise required to be so made;
(iii) any Tax to the extent it relates to any act, event or
omission that occurs after the termination of the Lease and redelivery
or sale of the Property in accordance with the terms of the Lease (but
not any Tax that relates to such
43
termination, redelivery or sale and/or to any period prior to such
termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified Person as a
result of the gross negligence or willful misconduct of such
Indemnified Person but not Taxes imposed as a result of ordinary
negligence of such Indemnified Person;
(c) (i) Subject to the terms of Section 11.2(f), the Indemnity
Provider shall pay or cause to be paid all Impositions directly to the
taxing authorities where feasible and otherwise to the Indemnified
Person, as appropriate, and the Indemnity Provider shall at its own
expense, upon such Indemnified Person's reasonable request, furnish to
such Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest is
conducted pursuant to Section 11.2(f) and which the Indemnity Provider
pays directly to the taxing authorities, the Indemnity Provider shall
pay such Impositions prior to the latest time permitted by the
relevant taxing authority for timely payment. In the case of
Impositions for which the Indemnity Provider reimburses an Indemnified
Person, the Indemnity Provider shall do so within thirty (30) days
after receipt by the Indemnity Provider of demand by such Indemnified
Person describing in reasonable detail the nature of the Imposition
and the basis for the demand (including without limitation the
computation of the amount payable), accompanied by receipts or other
reasonable evidence of such demand. In the case of Impositions for
which a contest is conducted pursuant to Section 11.2(f), the
Indemnity Provider shall pay such Impositions or reimburse such
Indemnified Person for such Impositions, to the extent not previously
paid or reimbursed pursuant to subsection (a), prior to the latest
time permitted by the relevant taxing authority for timely payment
after conclusion of all contests under Section 11.2(f).
(iii) At the Indemnity Provider's request, the amount of any
indemnification payment by the Indemnity Provider pursuant to
subsection (a) shall be verified and certified by an independent
public accounting firm mutually acceptable to the Indemnity Provider
and the Indemnified Person. The fees and expenses of such independent
public accounting firm shall be paid by the Indemnity Provider unless
such verification shall result in an adjustment in the Indemnity
Provider's favor of fifteen percent (15%) or more of the payment as
computed by the Indemnified Person, in which case such fee shall be
paid by the Indemnified Person.
(d) The Indemnity Provider shall be responsible for preparing and
filing any real and personal property or ad valorem tax returns in respect
of each Property and any other tax returns required for the Owner Trustee
respecting the transactions described in the Operative Agreements. In case
any other report or tax return shall be required to be made with respect to
any obligations of the Indemnity Provider under or arising out of
subsection (a) and of which the Indemnity Provider has knowledge or should
have
44
knowledge, the Indemnity Provider, at its sole cost and expense, shall
notify the relevant Indemnified Person of such requirement and (except if
such Indemnified Person notifies the Indemnity Provider that such
Indemnified Person intends to prepare and file such report or return) (A)
to the extent required or permitted by and consistent with Legal
Requirements, make and file in the Indemnity Provider's name such return,
statement or report; and (B) in the case of any other such return,
statement or report required to be made in the name of such Indemnified
Person, advise such Indemnified Person of such fact and prepare such
return, statement or report for filing by such Indemnified Person or, where
such return, statement or report shall be required to reflect items in
addition to any obligations of the Indemnity Provider under or arising out
of subsection (a), provide such Indemnified Person at the Indemnity
Provider's expense with information sufficient to permit such return,
statement or report to be properly made with respect to any obligations of
the Indemnity Provider under or arising out of subsection (a). Such
Indemnified Person shall, upon the Indemnity Provider's request and at the
Indemnity Provider's expense, provide any data maintained by such
Indemnified Person (and not otherwise available to or within the control of
the Indemnity Provider) with respect to each Property which the Indemnity
Provider may reasonably require to prepare any required tax returns or
reports.
(e) As between the Indemnity Provider on one hand, and each Financing
Party on the other hand, the Indemnity Provider shall be responsible for,
and the Indemnity Provider shall indemnify and hold harmless each Financing
Party (without duplication of any indemnification required by subsection
(a)) on an After Tax Basis against, any obligation for United States or
foreign withholding taxes or similar levies, imposts, charges, fees,
deductions or withholdings (collectively, "Withholdings") imposed in
------------
respect of the interest payable on the Notes, Holder Yield payable on the
Certificates or with respect to any other payments under the Operative
Agreement (all such payments being referred to herein as "Exempt Payments"
---------------
to be made without deduction, withholding or set off) (and, if any
Financing Party receives a demand for such payment from any taxing
authority or a Withholding is otherwise required with respect to any Exempt
Payment, the Indemnity Provider shall discharge such demand on behalf of
such Financing Party); provided, however, that the obligation of the
-------- -------
Indemnity Provider under this Section 11.2(e) shall not apply to:
(i) Withholdings on any Exempt Payment to any Financing Party
which is a non-U.S. Person unless such Financing Party is, on the date
hereof (or on the date it becomes a Financing Party hereunder) and on
the date of any change in the principal place of business or the
lending office of such Financing Party, entitled to submit a Form 1001
(relating to such Financing Party and entitling it to a complete
exemption from Withholding on such Exempt Payment) or Form 4224 or is
otherwise subject to exemption from Withholding with respect to such
Exempt Payment (except where the failure of the exemption results from
a change in the principal place of business of the Lessee; provided if
a failure of exemption for any Financing Party results from a change
in the principal place of business or lending office of any other
Financing Party, then such other Financing Party shall be liable for
any Withholding or indemnity with respect thereto), or
45
(ii) Any U.S. Taxes imposed solely by reason of the failure by a
non-U.S. Person to comply with applicable certification, information,
documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States
of America of such non-U.S. Person if such compliance is required by
statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Taxes.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean a
-----------
citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or under
any laws of the United States of America or any State thereof, or any
estate or trust that is subject to Federal income taxation regardless of
the source of its income, (B) "U.S. Taxes" shall mean any present or future
----------
tax, assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof or therein, (C)
"Form 1001" shall mean Form 1001 (Ownership, Exemption, or Reduced Rate
----------
Certificate) of the Department of the Treasury of the United States of
America and (D) "Form 4224" shall mean Form 4224 (Exemption from
---------
Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States) of the Department of Treasury of
the United States of America (or in relation to either such Form such
successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a
claim to which such Form relates). Each of the Forms referred to in the
foregoing clauses (C) and (D) shall include such successor and related
forms as may from time to time be adopted by the relevant taxing
authorities of the United States of America to document a claim to which
such Form relates.
If a Financing Party or an Affiliate with whom such Financing Party
files a consolidated tax return (or equivalent) subsequently receives the
benefit in any country of a tax credit or an allowance resulting from U.S.
Taxes with respect to which it has received a payment of an additional
amount under this Section 11.2(e), such Financing Party will pay to the
Indemnity Provider such part of that benefit as in the opinion of such
Financing Party will leave it (after such payment) in a position no more
and no less favorable than it would have been in if no additional payment
had been required to be paid, provided always that (i) such Financing Party
--------
will be the sole judge of the amount of any such benefit and of the date on
which it is received, so long as such Financing Party acts reasonably in
making such determination, (ii) such Financing Party will have the absolute
discretion as to the order and manner in which it employs or claims tax
credits and allowances available to it and (iii) such Financing Party will
not be obliged to disclose to the Borrower any information regarding its
tax affairs or tax computations.
Each non-U.S. Person that shall become a Financing Party after the date
hereof shall, upon the effectiveness of the related transfer or otherwise
upon becoming a Financing Party hereunder, be required to provide all of
the forms and statements referenced above or other evidences of exemption
from Withholdings.
46
(f) If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including
without limitation a written notice of such proceeding), for any
Impositions, the provisions in Section 11.1 relating to notification and
rights to contest shall apply; provided, however, that the Indemnity
-------- -------
Provider shall have the right to conduct and control such contest only if
such contest involves a Tax other than a Tax on net income of the
Indemnified Person and can be pursued independently from any other
proceeding involving a Tax liability of such Indemnified Person.
11.3. INCREASED COSTS, ILLEGALITY, ETC.
---------------------------------
(a) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request hereafter adopted, promulgated or made by any central
bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Financing Party of
agreeing to make or making, funding or maintaining Advances, then the
Lessee shall from time to time, upon demand by such Financing Party (with a
copy of such demand to the Agent but subject to the terms of Section 2.11
of the Credit Agreement and 3.9 of the Trust Agreement, as the case may
be), pay to the Agent for the account of such Financing Party additional
amounts sufficient to compensate such Financing Party for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Lessee and the Agent by such Financing Party, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Financing Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law, but in each
case promulgated or made after the date hereof) affects or would affect the
amount of capital required or expected to be maintained by such Financing
Party or any corporation controlling such Financing Party and that the
amount of such capital is increased by or based upon the existence of such
Financing Party's commitment to make Advances and other commitments of this
type or upon the Advances, then, upon demand by such Financing Party (with
a copy of such demand to the Agent but subject to the terms of Section 2.11
of the Credit Agreement and 3.9 of the Trust Agreement), the Lessee shall
pay to the Agent for the account of such Financing Party, from time to time
as specified by such Financing Party, additional amounts sufficient to
compensate such Financing Party or such corporation in the light of such
circumstances, to the extent that such Financing Party reasonably
determines such increase in capital to be allocable to the existence of
such Financing Party's commitment to make such Advances. A certificate as
to such amounts submitted to the Lessee and the Agent by such Financing
Party shall be conclusive and binding for all purposes, absent manifest
error.
(c) Without limiting the effect of the foregoing, the Lessee shall pay
to each Financing Party on the last day of the Interest Period therefor so
long as such Financing Party is maintaining reserves against "Eurocurrency
liabilities" under Regulation D an additional amount (determined by such
Financing Party and notified to the Lessee
47
through the Agent) equal to the product of the following for each
Eurodollar Loan or Eurodollar Holder Advance, as the case may be, for each
day during such Interest Period:
(i) the principal amount of such Eurodollar Loan or Eurodollar
Holder Advance, as the case may be, outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of which is
the rate (expressed as a decimal) at which interest accrues on such
Eurodollar Loan or Eurodollar Holder Advance, as the case may be, for
such Interest Period as provided in the Credit Agreement or the Trust
Agreement, as the case may be (less the Applicable Percentage), and
the denominator of which is one (1) minus the effective rate
-----
(expressed as a decimal) at which such reserve requirements are
imposed on such Financing Party on such day minus (y) such numerator;
and
(iii) 1/360.
(d) Without affecting its rights under Sections 11.3(a), 11.3(b) or
11.3(c) or any other provision of any Operative Agreement, each Financing
Party agrees that if there is any increase in any cost to or reduction in
any amount receivable by such Financing Party with respect to which the
Lessee would be obligated to compensate such Financing Party pursuant to
Sections 11.3(a) or 11.3(b), such Financing Party shall use reasonable
efforts to select an alternative office for Advances which would not result
in any such increase in any cost to or reduction in any amount receivable
by such Financing Party; provided, however, that no Financing Party shall
-------- -------
be obligated to select an alternative office for Advances if such Financing
Party determines that (i) as a result of such selection such Financing
Party would be in violation of any applicable law, regulation, treaty, or
guideline, or would incur additional costs or expenses or (ii) such
selection would be inadvisable for regulatory reasons or materially
inconsistent with the interests of such Financing Party.
(e) With reference to the obligations of the Lessee set forth in
Sections 11.3(a) through 11.3(d), the Lessee shall not have any obligation
to pay to any Financing Party amounts owing under such Sections for any
period which is more than one (1) year prior to the date upon which the
request for payment therefor is delivered to the Lessee.
(f) Notwithstanding any other provision of this Agreement, if any
Financing Party shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that
it is unlawful, for any Financing Party to perform its obligations
hereunder to make or maintain Eurodollar Loans or Eurodollar Holder
Advances, as the case may be, then (i) each Eurodollar Loan or Eurodollar
Holder Advance, as the case may be, will automatically, at the earlier of
the end of the Interest Period for such Eurodollar Loan or Eurodollar
Holder Advance, as the case may be, or the date required by law, convert
into an ABR Loan or an ABR Holder Advance, as the case may be, and (iii)
the obligation of the Financing Parties to make, convert or continue
Eurodollar Loans or Eurodollar Holder Advances, as the case may be, shall
be suspended
48
until the Agent shall notify the Lessee that such Financing Party has
determined that the circumstances causing such suspension no longer exist.
11.4. FUNDING/CONTRIBUTION INDEMNITY.
------------------------------
Subject to the provisions of Section 2.11(a) of the Credit Agreement and
3.9(a) of the Trust Agreement, as the case may be, the Lessee agrees to
indemnify each Financing Party and to hold each Financing Party harmless from
any loss or reasonable expense which such Financing Party may sustain or incur
as a consequence of (a) any failure in connection with the drawing of funds for
any Advance, (b) any failure in making any prepayment after a notice thereof has
been given in accordance with the provisions of the Operative Agreements or (c)
the making of a voluntary or involuntary prepayment of Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be
in an amount equal to the excess, if any, of (x) the amount of interest or
Holder Yield, as the case may be, which would have accrued on the amount so
prepaid, or not so borrowed for the period from the date of such prepayment or
of such failure to borrow to the last day of such Interest Period (or, in the
case of a failure to borrow the Interest Period that would have commenced on the
date of such failure) in each case at the applicable Eurodollar Rate plus the
Applicable Percentage for such Loan or Holder Advance, as the case may be, for
such Interest Period over (y) the amount of interest (as determined by such
Financing Party in its reasonable discretion) which would have accrued to such
Financing Party on such amount by (i) (in the case of the Lenders) reemploying
such funds in loans of the same type and amount during the period from the date
of prepayment or failure to borrow to the last day of the then applicable
Interest Period (or, in the case of a failure to borrow, the Interest Period
that would have commenced on the date of such failure) and (ii) (in the case of
the Holders) placing such amount on deposit for a comparable period with leading
banks in the relevant interest rate market. This covenant shall survive the
termination of the Operative Agreements and the payment of all other amounts
payable hereunder.
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY,
------------------------------------------------------------------
ETC.
----
WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF ANY AND
ALL OF THE OPERATIVE AGREEMENTS, EACH PERSON PROVIDING INDEMNIFICATION OF
ANOTHER PERSON UNDER ANY OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY RELEASES
EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE,
DESCRIBED IN ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON THE PART
OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES,
EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, LOSSES, COSTS,
LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE
ATTORNEY'S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH BENEFICIARY
(IRRESPECTIVE
49
OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH
INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT)
ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT
LIABILITY OF ANY SUCH BENEFICIARY.
SECTION 12. MISCELLANEOUS.
12.1. SURVIVAL OF AGREEMENTS.
----------------------
The representations, warranties, covenants, indemnities and agreements of the
parties provided for in the Operative Agreements, and the parties' obligations
under any and all thereof, shall survive the execution and delivery of this
Agreement, the transfer of any Property to the Owner Trustee, the acquisition of
any Property (or any of its components), the construction of any Improvements,
the Completion of any Property, any disposition of any interest of the Owner
Trustee in any Property or any interest of the Holders in the Trust Estate and
shall be and continue in effect notwithstanding any investigation made by any
party and the fact that any party may waive compliance with any of the other
terms, provisions or conditions of any of the Operative Agreements. Except as
otherwise expressly set forth herein or in other Operative Agreements, the
indemnities of the parties provided for in the Operative Agreements shall
survive the expiration or termination of any thereof.
12.2. NOTICES.
-------
All notices required or permitted to be given under any Operative Agreement
shall be in writing. Notices may be served by certified or registered mail,
postage paid with return receipt requested; by private courier, prepaid; by
telex, facsimile, or other telecommunication device capable of transmitting or
creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or acknowledged by the
addressee or its office. Personal delivery shall be effective when
accomplished. Unless a party changes its address by giving notice to the other
party as provided herein, notices shall be delivered to the parties at the
following addresses:
If to the Construction Agent or the Lessee, to such entity at the
following address:
JP Foodservice Distributors, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
50
If to any Guarantor, to such entity in care of JP Foodservice
Distributors, Inc. at the following address:
JP Foodservice Distributors, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Owner Trustee or the Borrower, to it at the following address:
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇,
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holders, to each such Holder at the address set forth for such
Holder on Schedule I of the Trust Agreement.
----------
If to the Agent, to it at the following address:
First Union National Bank
c/o First Union Capital Markets Group
DC-6
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Capital Markets Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender, to it at the address set forth for such Lender in
Schedule 1.1 of the Credit Agreement.
------------
From time to time any party may designate additional parties and/or
another address for notice purposes by notice to each of the other parties
hereto. Each notice hereunder shall be effective upon receipt or refusal
thereof.
51
12.3. COUNTERPARTS.
------------
This Agreement may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one (1) and the same instrument.
12.4. TERMINATIONS, AMENDMENTS, WAIVERS, ETC.; UNANIMOUS VOTE MATTERS.
---------------------------------------------------------------
Each Operative Agreement may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by, subject to Article VIII of
the Trust Agreement regarding termination of the Trust Agreement, the Majority
Secured Parties and each Credit Party (to the extent such Credit Party is a
party to such Operative Agreement); provided, to the extent no Default or Event
--------
of Default shall have occurred and be continuing, the Majority Secured Parties
shall not amend, supplement, waive or modify any provision of any Operative
Agreement in such a manner as to adversely affect the rights of any Credit Party
without the prior written consent (not to be unreasonably withheld or delayed)
of such Credit Party. In addition, (a) the Unanimous Vote Matters shall require
the consent of each Lender and each Holder affected by such matter and (b) any
provision of any Operative Agreement incorporated by reference or otherwise
referenced in a second Operative Agreement shall remain, respecting such second
Operative Agreement, in its original form without regard to any such
termination, amendment, supplement, waiver or modification in the first
Operative Agreement except if such has been agreed to by an instrument in
writing signed by, subject to Article VIII of the Trust Agreement regarding
termination of the Trust Agreement, the Majority Secured Parties and each Credit
Party (to the extent such Credit Party is a party to such Operative Agreement).
Notwithstanding the foregoing, no such termination, amendment, supplement,
waiver or modification shall, without the consent of the Agent and, to the
extent affected thereby, each Lender and each Holder (collectively, the
"Unanimous Vote Matters") (i) reduce the amount of any Note or any Certificate,
-----------------------
extend the scheduled date of maturity of any Note, extend the scheduled
Expiration Date, extend any payment date of any Note or Certificate, reduce the
stated rate of interest payable on any Note, reduce the stated Holder Yield
payable on any Certificate (other than as a result of waiving the applicability
of any post-default increase in interest rates or Holder Yields), modify the
priority of any Lien in favor of the Agent under any Security Document,
subordinate any obligation owed to any Lender or Holder, reduce any Lender
Facility Fees or any Holder Facility Fees payable under the Participation
Agreement, extend the scheduled date of payment of any Lender Facility Fees or
any Holder Facility Fees or increase the amount or extend the expiration date of
any Lender's Commitment or the Holder Commitment of any Holder, or (ii)
terminate, amend, supplement, waive or modify any provision of this Section 12.4
or reduce the percentages specified in the definitions of Majority Lenders,
Majority Holders or Majority Secured Parties, or consent to the assignment or
transfer by the Owner Trustee of any of its rights and obligations under any
Credit Document or release a material portion of the Collateral (except in
accordance with Section 8.8) or release any Credit Party from its obligations
under any Operative Agreement or otherwise alter any payment obligations of any
Credit Party to the Lessor or any Financing Party under the Operative
Agreements, or (iii) terminate, amend, supplement, waive or modify any provision
of Section 7 of the Credit Agreement, or (iv) permit Advances for Work in excess
of the Construction Budget,
52
or (v) eliminate the automatic option under Section 5.3(b) of the Agency
Agreement requiring that the Construction Agent pay certain liquidated damages
in exchange for the conveyance of a Property to the Construction Agent. Any such
termination, amendment, supplement, waiver or modification shall apply equally
to each of the Lenders and the Holders and shall be binding upon all the parties
to this Agreement. In the case of any waiver, each party to this Agreement shall
be restored to its former position and rights under the Operative Agreements,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Loan are, in the opinion of the Majority Lenders, satisfied,
any Lender shall fail to fulfill its obligations to make such Loan (any such
Lender, a "Defaulting Lender") then, for so long as such failure shall continue,
-----------------
the Defaulting Lender shall (unless the Lessee and the Majority Lenders,
determined as if the Defaulting Lender were not a "Lender", shall otherwise
consent in writing) be deemed for all purposes relating to terminations,
amendments, supplements, waivers or modifications under the Operative Agreements
to have no Loans, shall not be treated as a "Lender" when performing the
computation of Majority Lenders or Majority Secured Parties, and shall have no
rights under this Section 12.4; provided that any action taken pursuant to the
--------
second paragraph of this Section 12.4 shall not be effective as against the
Defaulting Lender.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Holder Advance are, in the opinion of the Majority Holders,
satisfied, any Holder shall fail to fulfill its obligations to make such Holder
Advance (any such Holder, a "Defaulting Holder") then, for so long as such
-----------------
failure shall continue, the Defaulting Holder shall (unless the Lessee and the
Majority Holders, determined as if the Defaulting Holder were not a "Holder",
shall otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Holder Advances, shall not be treated as a
"Holder" when performing the computation of Majority Holders or Majority Secured
Parties, and shall have no rights under this Section 12.4; provided that any
--------
action taken pursuant to the second paragraph of this Section 12.4 shall not be
effective as against the Defaulting Holder.
12.5. HEADINGS, ETC.
--------------
The Table of Contents and headings of the various Articles and Sections of
this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof.
12.6. PARTIES IN INTEREST.
-------------------
Except as expressly provided herein, none of the provisions of this Agreement
are intended for the benefit of any Person except the parties hereto.
53
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
----------------------------------------------------------------
VENUE; ARBITRATION.
------------------
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action
or proceeding with respect to this Agreement or any other Operative
Agreement may be brought in the courts of the State of North Carolina in
Mecklenburg County or of the United States for the Western District of
North Carolina, and, by execution and delivery of this Agreement, each of
the parties to this Agreement hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the parties to this Agreement further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at
the address set out for notices pursuant to Section 12.2, such service to
become effective three (3) days after such mailing. Nothing herein shall
affect the right of any party to serve process in any other manner
permitted by Law or to commence legal proceedings or to otherwise proceed
against any party in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE
FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY OTHER OPERATIVE
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Operative Agreement brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
(d) Notwithstanding the provisions of Section 12.7(a) or of any other
Operative Agreement to the contrary, upon demand of any party to this
Agreement and/or any other Operative Agreement, whether made before or
within three (3) months after institution of any judicial proceeding, any
dispute, claim or controversy arising out of, connected with or relating to
this Agreement and/or any other Operative Agreement between or among
parties to this Agreement and/or any other Operative Agreement ("Disputes")
--------
shall be resolved by binding arbitration as provided herein. Institution of
a judicial proceeding by a party does not waive the right of that party to
demand arbitration hereunder. Disputes may include without limitation tort
claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from
agreements executed in the future, or claims arising out of or connected
with the transaction reflected by this Agreement and/or any other Operative
Agreement.
54
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
-----------------
American Arbitration Association (the "AAA") and Title 9 of the United
---
States Code. All arbitration hearings shall be conducted in Charlotte,
North Carolina. A hearing shall begin within ninety (90) days of demand for
arbitration and all hearings shall be concluded within one hundred twenty
(120) days of demand for arbitration. These time limitations may not be
extended unless a party shows cause for extension and then no more than a
total extension of sixty (60) days. The expedited procedures set forth in
Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of
-- ---
less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys selected from the Commercial Financial
Disputes Arbitration Panel of the AAA. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of
general jurisdiction, state or federal, of the state where the hearing will
be conducted or if such person is not available to serve, the single
arbitrator may be a licensed attorney. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to swap
agreements.
Notwithstanding the immediately preceding binding arbitration
provisions, the parties to this Agreement and/or any other Operative
Agreement agree to preserve, without diminution, certain remedies that the
Agent on behalf of the Lenders and the Holders may employ or exercise
freely, independently or in connection with an arbitration proceeding or
after an arbitration action is brought. The Agent on behalf of the Lenders
and the Holders shall have the right to proceed in any court of proper
jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted
under any Operative Agreement or under applicable Law or by judicial
foreclosure and sale, including without limitation a proceeding to confirm
the sale; (ii) all rights of self-help including without limitation
peaceful occupation of real property and collection of rents, set-off and
peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including without limitation injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing
an involuntary bankruptcy proceeding; and (iv) when applicable, a judgment
by confession of judgment. Preservation of these remedies does not limit
the power of an arbitrator to grant similar remedies that may be requested
by a party in a Dispute. Notwithstanding the provisions of this Section
12.7, the Lessee and the Construction Agent shall have the right of access
to any court of proper jurisdiction in connection with the exercise by the
Agent of one or more of the remedies referred to in this paragraph.
The parties to this Agreement and/or any other Operative Agreement agree
that they shall not have a remedy of special, punitive or exemplary damages
against any other party in any Dispute and hereby waive any right or claim
to special, punitive or exemplary damages they have now or which may arise
in the future in connection with any Dispute whether the Dispute is
resolved by arbitration or judicially.
55
By execution and delivery of this Agreement and/or any other Operative
Agreement, each of the parties hereto and/or thereto accepts, for itself
and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction relating to any arbitration proceedings
conducted under the Arbitration Rules in Charlotte, North Carolina and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement and/or any other Operative Agreement from
which no appeal has been taken or is available.
12.8. SEVERABILITY.
------------
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12.9. LIABILITY LIMITED.
-----------------
(a) The Lenders, the Agent, the Credit Parties, the Owner Trustee and
the Holders each acknowledge and agree that the Owner Trustee is (except as
otherwise expressly provided herein or therein) entering into this
Agreement and the other Operative Agreements to which it is a party (other
than the Trust Agreement and in Sections 6.1 and 12.16 of this Agreement,
which the Trust Company is entering into in its individual capacity),
solely in its capacity as trustee under the Trust Agreement and not in its
individual capacity and that the Trust Company shall not be liable or
accountable under any circumstances whatsoever in its individual capacity
for or on account of any statements, representations, warranties, covenants
or obligations stated to be those of the Owner Trustee, except (i) for its
own gross negligence or willful misconduct and (ii) as otherwise expressly
provided in the Trust Agreement, Sections 6.1 and 12.16 or in the other
Operative Agreements.
(b) Subject to Section 12.16, anything to the contrary contained in
this Agreement, the Credit Agreement, the Notes or in any other Operative
Agreement notwithstanding (except for such Section 12.16), no Exculpated
Person shall be personally liable in any respect for any liability or
obligation arising hereunder or in any other Operative Agreement including
without limitation the payment of the principal of, or interest on, the
Notes, or for monetary damages for the breach of performance of any of the
covenants contained in the Credit Agreement, the Notes, this Agreement, the
Security Agreement or any of the other Operative Agreements. The Lenders,
the Holders and the Agent agree that, in the event any remedies under any
Operative Agreement are pursued, neither the Lenders, the Holders nor the
Agent shall have any recourse against any Exculpated Person, for any
deficiency, loss or Claim for monetary damages or otherwise resulting
therefrom and recourse shall be had solely and exclusively against the
Trust Estate (excluding Excepted Payments) and the Credit Parties (with
respect to the Credit Parties' obligations under the Operative Agreements);
56
but nothing contained herein shall be taken to prevent recourse against or
the enforcement of remedies against the Trust Estate (excluding Excepted
Payments) in respect of any and all liabilities, obligations and
undertakings contained herein and/or in any other Operative Agreement.
Notwithstanding the provisions of this Section, nothing in any Operative
Agreement shall: (i) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Notes and/or the Certificates
arising under any Operative Agreement or secured by any Operative
Agreement, but the same shall continue until paid or discharged; (ii)
relieve any Exculpated Person from liability and responsibility for (but
only to the extent of the damages arising by reason of): active waste
knowingly committed by any Exculpated Person with respect to any Property,
any fraud, gross negligence or willful misconduct on the part of any
Exculpated Person; (iii) relieve any Exculpated Person from liability and
responsibility for (but only to the extent of the moneys misappropriated,
misapplied or not turned over) (A) except for Excepted Payments,
misappropriation or misapplication by the Lessor (i.e., application in a
manner contrary to any of the Operative Agreements) of any insurance
proceeds or condemnation award paid or delivered to the Lessor by any
Person other than the Agent, (B) except for Excepted Payments, any deposits
or any escrows or amounts owed by the Construction Agent under the Agency
Agreement held by the Lessor or (C) except for Excepted Payments, any rent
or other income received by the Lessor from any Credit Party that is not
turned over to the Agent; or (iv) affect or in any way limit the Agent's
rights and remedies under any Operative Agreement with respect to the Rents
and rights and powers of the Agent under the Operative Agreements or to
obtain a judgment against the Lessee's interest in the Properties or the
Agent's rights and powers to obtain a judgment against the Lessor or any
Credit Party (provided, that no deficiency judgment or other money judgment
--------
shall be enforced against any Exculpated Person except to the extent of the
Lessor's interest in the Trust Estate (excluding Excepted Payments) or to
the extent the Lessor may be liable as otherwise contemplated in clauses
(ii) and (iii) of this Section 12.9(b)).
12.10. RIGHTS OF THE CREDIT PARTIES.
----------------------------
If at any time all obligations (i) of the Owner Trustee under the Credit
Agreement, the Security Documents and the other Operative Agreements and (ii) of
the Credit Parties under the Operative Agreements have in each case been
satisfied or discharged in full, then the Credit Parties shall be entitled to
(a) terminate the Lease and guaranty obligations under Section 6B and (b)
receive all amounts then held under the Operative Agreements and all proceeds
with respect to any of the Properties. Upon the termination of the Lease and
Section 6B pursuant to the foregoing clause (a), the Lessor shall transfer to
the Lessee all of its right, title and interest free and clear of the Lien of
the Lease, the Lien of the Security Documents and all Lessor Liens in and to any
Properties then subject to the Lease and any amounts or proceeds referred to in
the foregoing clause (b) shall be paid over to the Lessee.
12.11. FURTHER ASSURANCES.
------------------
The parties hereto shall promptly cause to be taken, executed, acknowledged or
delivered, at the sole expense of the Lessee, all such further acts,
conveyances, documents and assurances
57
as the other parties may from time to time reasonably request in order to carry
out and effectuate the intent and purposes of this Participation Agreement, the
other Operative Agreements and the transactions contemplated hereby and thereby
(including without limitation the preparation, execution and filing of any and
all Uniform Commercial Code financing statements, filings of Mortgage
Instruments and other filings or registrations which the parties hereto may from
time to time request to be filed or effected). The Lessee, at its own expense
and without need of any prior request from any other party, shall take such
action as may be necessary (including without limitation any action specified in
the preceding sentence), or (if the Owner Trustee shall so request) as so
requested, in order to maintain and protect all security interests provided for
hereunder or under any other Operative Agreement. In addition, in connection
with the sale or other disposition of any Property or any portion thereof, the
Lessee agrees to execute such instruments of conveyance as reasonably required
in connection therewith.
12.12. CALCULATIONS UNDER OPERATIVE AGREEMENTS.
---------------------------------------
The parties hereto agree that all calculations and numerical determinations to
be made under the Operative Agreements by the Owner Trustee shall be made by the
Agent and that such calculations and determinations shall be conclusive and
binding on the parties hereto in the absence of error.
12.13. CONFIDENTIALITY.
---------------
Each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to any Credit Party or any of
its Subsidiaries which is provided to it by any Credit Party or any of its
Subsidiaries and which an officer of any Credit Party or any of its Subsidiaries
has requested in writing be kept confidential (including non-public information
pertaining to the financing structure described in the unrecorded Operative
Agreements), and shall not intentionally disclose such information to any Person
except:
(a) to the extent such information is public when received by such
Person or becomes public thereafter due to the act or omission of any party
other than such Person;
(b) to the extent such information is independently obtained from a
source other than any Credit Party or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge, subject to
an obligation of confidentiality or, if such information is subject to an
obligation of confidentiality, that disclosure of such information is
permitted;
(c) to counsel, auditors or accountants retained by any such Person or
any Affiliates of any such Person (if such Affiliates are permitted to
receive such information pursuant to clause (f) or (g) below), provided
they agree to keep such information confidential as if such Person or
Affiliate were party to this Agreement and to financial institution
regulators, including examiners of any Financing Party or any Affiliate
thereof in the course of examinations of such Persons;
58
(d) in connection with any litigation or the enforcement or preservation
of the rights of any Financing Party under the Operative Agreements;
(e) to the extent required by any applicable statute, rule or regulation
or court order (including without limitation, by way of subpoena) or
pursuant to the request of any regulatory or Governmental Authority having
jurisdiction over any such Person; provided, however, that such Person
-------- --------
shall endeavor (if not otherwise prohibited by Law) to notify the Lessee
prior to any disclosure made pursuant to this clause (e), except that no
such Person shall be subject to any liability whatsoever for any failure to
so notify the Lessee;
(f) any Financing Party may disclose such information to another
Financing Party or to any Affiliate of a Financing Party that is a direct
or indirect owner of any Financing Party;
(g) any Financing Party may disclose such information to an Affiliate of
any Financing Party to the extent required in connection with the
transactions contemplated hereby or to the extent such Affiliate is
involved in, or provides advice or assistance to such Person with respect
to, such transactions (provided, in each case that such Affiliate has
--------
agreed in writing to maintain confidentiality as if it were such Financing
Party (as the case may be)); or
(h) to the extent disclosure to any other financial institution or other
Person is appropriate in connection with any proposed or actual (i)
assignment or grant of a participation by any of the Lenders of interests
in the Credit Agreement or any Note to such other financial institution
(who will in turn be required by the Agent to agree in writing to maintain
confidentiality as if it were a Lender originally party to this Agreement)
or (ii) assignment by any Holder of interests in the Trust Agreement to
another Person (who will in turn be required by the transferring Holder to
agree in writing to maintain confidentiality as if it were a Holder
originally party to this Agreement).
12.14. FINANCIAL REPORTING/TAX CHARACTERIZATION.
----------------------------------------
Lessee agrees to obtain advice from its own accountants and tax counsel
regarding the financial reporting treatment and the tax characterization of the
transactions described in the Operative Agreements. Lessee further agrees that
Lessee shall not rely upon any statement of any Financing Party or any of their
respective Affiliates and/or Subsidiaries regarding any such financial reporting
treatment and/or tax characterization.
12.15. SET-OFF.
-------
In addition to any rights now or hereafter granted under applicable Law and
not by way of limitation of any such rights, upon and after the occurrence of
any Event of Default and during the continuance thereof, the Lenders, the
Holders, their respective Affiliates and any assignee or participant of a Lender
or a Holder in accordance with the applicable provisions of the Operative
Agreements are hereby authorized by the Credit Parties at any time or from time
to time, without
59
notice to the Credit Parties or to any other Person, any such notice being
hereby expressly waived, to set-off and to appropriate and to apply any and all
deposits (general or special, time or demand, including without limitation
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Lenders, the
Holders, their respective Affiliates or any assignee or participant of a Lender
or a Holder in accordance with the applicable provisions of the Operative
Agreements to or for the credit or the account of any Credit Party against and
on account of the obligations of any Credit Party under the Operative Agreements
irrespective of whether or not (a) the Lenders or the Holders shall have made
any demand under any Operative Agreement or (b) the Agent shall have declared
any or all of the obligations of any Credit Party under the Operative Agreements
to be due and payable and although such obligations shall be contingent or
unmatured. Notwithstanding the foregoing, neither the Agent nor any other
Financing Party shall exercise, or attempt to exercise, any right of setoff,
banker's lien, or the like, against any deposit account or property of any
Credit Party held by the Agent or any other Financing Party, without the prior
written consent of the Majority Secured Parties, and any Financing Party
violating this provision shall indemnify the Agent and the other Financing
Parties from any and all costs, expenses, liabilities and damages resulting
therefrom. The contractual restriction on the exercise of setoff rights provided
in the foregoing sentence is solely for the benefit of the Agent and the
Financing Parties and may not be enforced by any Credit Party.
12.16. OBLIGATIONS OF THE LENDERS, THE AGENT, THE OWNER TRUSTEE, THE TRUST
-------------------------------------------------------------------
COMPANY AND THE HOLDERS.
-----------------------
Notwithstanding anything contained in this Agreement or in any other Operative
Agreement to the contrary, the Lenders, the Agent, the Owner Trustee, the Trust
Company and the Holders each covenant and agree with the Construction Agent, the
Lessee and the Other Credit Parties that: (a) it will not violate, or take or
omit to take any action that would cause the Construction Agent, the Lessee or
any Credit Party to violate, any provision of any Operative Agreement; and (b)
the Construction Agent, the Lessee or the applicable Credit Party may (to the
extent permitted under applicable law) enforce any or all of the obligations of
the Lenders, the Agent, the Owner Trustee, the Trust Company and the Holders
under any one or more of the Operative Agreements, notwithstanding the fact that
the Construction Agent, the Lessee or such Credit Party is not a party to such
Operative Agreement, to the extent necessary to enable the Construction Agent,
the Lessee or such Credit Party, as applicable, to enforce its rights or perform
its obligations, or both, under the applicable Operative Agreements.
[signature pages follow]
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
CONSTRUCTION AGENT
------------------
AND LESSEE:
-----------
JP FOODSERVICE DISTRIBUTORS, INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President & Secretary
-------------------------------
GUARANTORS:
----------
U.S. FOODSERVICE, a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Executive Vice President & Secretary
--------------------------------------
U.S. FOODSERVICE, INC.,
a Delaware corporation
BEIJING CHEF, INC.,
a Delaware corporation
E & H DISTRIBUTING CO.,
(d/b/a Valley Food Distributors of Nevada),
a Nevada corporation
▇▇▇▇▇▇▇▇'▇ PRIME MEATS & PROVISIONS, INC., a
Nevada corporation
ILLINOIS FRUIT & PRODUCE CORP.,
an Illinois corporation
TRANS-PORTE, INC.,
a Delaware corporation
EL PASADO, INC.,
a Delaware corporation
RITUALS COFFEE COMPANY,
a Delaware corporation
ROSELI PRODUCTS CORPORATION,
a Delaware corporation
▇▇▇▇▇▇ FOOD SERVICE, INC.,
an Ohio corporation
NEVADA BAKING COMPANY, INC.
a Nevada corporation
OUTWEST MEAT COMPANY,
a Nevada corporation
HILLTOP HEARTH BAKERIES, INC.,
a Delaware corporation
CROSS VALLEY FARMS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President & Secretary
--------------------------------------
for each of the foregoing
OWNER TRUSTEE AND
-----------------
LESSOR:
------
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, except as expressly stated herein,
but solely as the Owner Trustee under the USF Real
Estate Trust 1998-1
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Title: Vice President
-------------------------------------------
TRUST COMPANY:
-------------
FIRST SECURITY BANK, NATIONAL ASSOCIATION, in its
individual capacity solely with respect to
Sections 6.1 and 12.16
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Title: Vice President
-------------------------------------------
THE AGENT,
-----------
LENDER AND HOLDER:
-----------------
FIRST UNION NATIONAL BANK, as a Holder, as a
Lender and as the Agent
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
OWNER TRUSTEE AND
-----------------
LESSOR:
------
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, except as expressly stated herein,
but solely as the Owner Trustee under the USF Real
Estate Trust 1998-1
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
TRUST COMPANY:
-------------
FIRST SECURITY BANK, NATIONAL ASSOCIATION, in its
individual capacity solely with respect to
Sections 6.1 and 12.16
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
THE AGENT,
-----------
LENDER AND HOLDER:
-----------------
FIRST UNION NATIONAL BANK, as a Holder, as a
Lender and as the Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Title: Vice President
-------------------------------------------
--------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
--------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any document to
articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits are references to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any document
are solely for convenience of reference and shall not constitute a part of any
such document nor shall they affect the meaning, construction or effect of any
provision thereof.
(d) References to any Person shall include such Person, its successors,
permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented, restated
and/or replaced from time to time in accordance with the applicable provisions
thereof.
(f) Except as otherwise expressly provided, references to any law includes
any amendment or modification to such law and any rules or regulations issued
thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable document
and not to any particular article, section, subsection, paragraph or clause
thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
Appendix A-1
(i) References herein to "attorney's fees", "legal fees", "costs of
counsel" or other such references shall be deemed to include the allocated cost
of in-house counsel.
(j) Each of the parties to the Operative Agreements and their counsel have
reviewed and revised, or requested revisions to, the Operative Agreements, and
the usual rule of construction that any ambiguities are to be resolved against
the drafting party shall be inapplicable in the construing and interpretation of
the Operative Agreements and any amendments or exhibits thereto.
(k) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
----------
have the meaning so ascribed to such term in the applicable Operative Agreement.
(l) Except as specifically provided herein, all accounting terms used
herein which are not expressly defined in the Operative Agreements have the
meanings given to them in accordance with GAAP and all computations made
pursuant to the Operative Agreements shall be made in accordance with GAAP. All
balance sheets and other financial statements delivered pursuant to Section 6.01
of the Lessee Credit Agreement shall be prepared in accordance with GAAP. If
any changes in accounting principles from those used in the preparation of the
most recent financial statements referred to in Section 6.01 of the Lessee
Credit Agreement are hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto) and
are adopted by JPFDI and U.S. Foodservice, Inc. with the agreement of their
respective independent certified public accountants and such changes result or
could result (for any present or future period) in a change in the method of
calculation of any of the financial covenants, standards or terms in or relating
to Article VIII of the Lessee Credit Agreement, the parties hereto agree to
enter into discussions with a view to amending the provisions hereof relating to
such provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating the financial condition of JPFDI and U.S.
Foodservice, Inc. and their Restricted Subsidiaries shall be the same after such
changes as if such changes had not been made, provided that, no change in GAAP
--------
that would affect or could affect (for any present or future period) the method
of calculation of any of said financial covenants, standards or terms shall be
given effect in such calculations until such provisions are amended, in a manner
satisfactory to JPFDI, U.S. Foodservice, Inc., the Lenders and the Holders, to
so reflect such change in GAAP.
II. Definitions
"AAA" shall have the meaning given to such term in Section 12.7(d) of the
Participation Agreement.
"ABR" shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%) equal to the greater of
(a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one
Appendix A-2
percent (0.5%). For purposes hereof: "Prime Lending Rate" shall mean the rate
------------------
announced by the Agent from time to time as its prime lending rate as in effect
from time to time. The Prime Lending Rate is a reference rate and is one of
several interest rate bases used by the Agent and does not necessarily represent
the lowest or most favorable rate offered by the Agent actually charged to any
customer. Any Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate. The Prime Lending Rate shall
change automatically and without notice from time to time as and when the prime
lending rate of the Agent changes. "Federal Funds Effective Rate" shall mean,
----------------------------
for any period, a fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight Federal funds
transactions with members or the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three (3) Federal funds brokers of recognized standing selected by
it. Any change in the ABR due to a change in the Prime Lending Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Lending Rate or the Federal Funds
Effective Rate, respectively.
"ABR Holder Advance" shall mean a Holder Advance bearing a Holder Yield based
on the ABR.
"ABR Loans" shall mean Loans the rate of interest applicable to which is based
upon the ABR.
"Acceleration" shall have the meaning given to such term in Section 6 of the
Credit Agreement.
"Accounts" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Acquired Assets" shall have the meaning assigned to such term in the
definition of "Operating Cash Flow."
"Acquired Subsidiary" shall have the meaning assigned to such term in the
definition of "Operating Cash Flow."
"Acquired Unit Adjustment" shall have the meaning assigned to such term in
the definition of "Operating Cash Flow."
"Acquisition Advance" shall have the meaning given to such term in Section 5.3
of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with an Acquisition
Advance.
Appendix A-3
"Additional Incorporated Terms" shall have the meaning given to such term in
Section 28.1 of the Lease.
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any designated Person, any other
Person (a) directly or indirectly, through one or more intermediaries,
controlling or controlled by or under direct or indirect common control with
such designated Person, (b) which beneficially owns or holds 5% or more of the
shares of any class of Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of such designated Person, or
(c) 5% or more of any class of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by such designated Person; provided, however, that
-------- -------
none of the Lenders, the Holders, the Owner Trustee or the Trust Company shall
be deemed to be an Affiliate of JPFDI or any of its Subsidiaries solely by
reason of ownership of any obligations of JPFDI to such Lender, Holder, Owner
Trustee or Trust Company under any of the Operative Agreements or by reason of
having the benefits of any agreements or covenants of JPFDI and its Subsidiaries
contained in the Operative Agreements. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of Voting Stock (or other equity interest) or by contract or
otherwise.
"After Tax Basis" shall mean, with respect to any payment to be received, the
amount of such payment increased so that, after deduction of the amount of all
taxes required to be paid by the recipient calculated at the then maximum
marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings, calculated at such rates, reasonably expected to be realized as
a result of a payment of the indemnified amount), such increased payment (as so
reduced) is equal to the payment otherwise required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated on or about the
Initial Closing Date between the Construction Agent and the Lessor.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in Section 5.1 of the Agency Agreement.
"Agent" shall mean First Union National Bank, as agent for the Lenders
pursuant to the Credit Agreement, or any successor agent appointed in accordance
with the terms of the Credit Agreement and respecting the Security Documents,
for the Lenders and the Holders, to the extent of their interests.
"Applicable Percentage" shall mean for Eurodollar Loans, the Lender Facility
Fee, Eurodollar Holder Advances and the Holder Facility Fee, the margin
(expressed as a percentage) to be used in determining the Eurodollar Rate and/or
the applicable Facility Fee, as the case may be, and shall, from the Initial
Closing Date until the receipt of the initial Officer's Compliance
Appendix A-4
Certificate, be (a) 0.45%, for the Applicable Percentage for Eurodollar Loans,
(b) 0.175%, for the Lender Facility Fee, (c) 1.200%, for the Eurodollar Holder
Advances and (d) 0.175%, for the Holder Facility Fee, and for each fiscal
quarter ending after the Initial Closing Date shall be determined, subject to
the final paragraph of this definition, by reference to the Total Debt Ratio set
forth in the most recently delivered Officer's Compliance Certificate as
follows:
Applicable
Applicable Percentage Applicable
Percentage for Applicable Percentage for Percentage
Total Debt Eurodollar for the Lender Facility Eurodollar Holder for the
Ratio Loans Fee Advances Holder Facility Fee
-------------------------------------------------------------------------------------------------------------------------------
Less than or equal to 2.5 to 1.0 .175% .075% .925% .075%
-------------------------------------------------------------------------------------------------------------------------------
Greater than 2.5 to 1.0 but less
than or equal to 3.0 to 1.0 .225% .100% .975% .100%
-------------------------------------------------------------------------------------------------------------------------------
Greater than 3.0 to 1.0 but less
than or equal to 3.5 to 1.0 .275% .125% 1.025% .125%
-------------------------------------------------------------------------------------------------------------------------------
Greater than 3.5 to 1.0 but less
than or equal to 4.0 to 1.0 .350% .150% 1.100% .150%
-------------------------------------------------------------------------------------------------------------------------------
Greater than 4.0 to 1.0 but less
than or equal to 4.5 to 1.0 .450% .175% 1.200% .175%
-------------------------------------------------------------------------------------------------------------------------------
Greater than 4.5 to 1.0 .550% .200% 1.300% .200%
===============================================================================================================================
Adjustments, if any, in the Applicable Percentage shall be made by the Agent
on the fifth (5th) Business Day after receipt by the Agent of quarterly
financial statements for USF and its Subsidiaries and the accompanying Officer's
Compliance Certificate setting forth the Total Debt Ratio of USF and its
Consolidated Subsidiaries as of the most recent fiscal quarter end. Subject to
Section 2.8(b) of the Credit Agreement and Section 3.2(b) of the Trust
Agreement, in the event the Lessee fails to deliver, or to cause the delivery
of, such financial statements and certificate within forty-five (45) days after
the end of each fiscal quarter of USF, the Applicable Percentage shall be the
highest Applicable Percentage until five (5) Business Days after receipt by the
Agent of such financial statements and certificates.
"Appraisal" shall mean, with respect to any Property, an appraisal to be
delivered in connection with the Participation Agreement or in accordance with
the terms of the Lease, in each case prepared by a reputable appraiser
reasonably acceptable to the Agent, which in the judgment of counsel to the
Agent, complies with all of the provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, the rules and regulations
adopted pursuant thereto, and all other applicable Legal Requirements.
"Appraisal Procedure" shall have the meaning given such term in Section 22.4
of the Lease.
"Approved State" shall mean each of the following: Maryland and any other
state within the continental United States proposed by the Lessee and consented
to in writing by the Agent.
Appendix A-5
"Appurtenant Rights" shall mean (a) all agreements, easements, rights of way
or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to the Land underlying the Improvements or the Improvements, including without
limitation the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (b) all permits,
licenses and rights, whether or not of record, appurtenant to such Land or the
Improvements.
"Arbitration Rules" shall have the meaning given to such term in Section
12.7(d) of the Participation Agreement.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in the
form attached to the Credit Agreement as EXHIBIT B.
---------
"Available Commitment" shall mean, as to any Lender at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender's Commitment over
(b) the aggregate principal amount of all Loans made by such Lender as of such
date after giving effect to Section 5.2(d) of the Participation Agreement (but
without giving effect to any other repayments or prepayments of any Loans
hereunder).
"Available Holder Commitments" shall mean an amount equal to the excess, if
any, of (a) the aggregate amount of the Holder Commitments over (b) the
aggregate amount of the Holder Advances made since the Initial Closing Date
after giving effect to Section 5.2(d) of the Participation Agreement (but
without giving effect to any other repayments or prepayments of any Holder
Advances).
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled "Bankruptcy,"
as now or hereafter in effect or any successor thereto.
"Basic Rent" shall mean, the sum of (a) the Loan Basic Rent and (b) the Lessor
Basic Rent, calculated as of the applicable date on which Basic Rent is due.
"Benefitted Lender" shall have the meaning specified in Section 9.10(a) of the
Credit Agreement.
"▇▇▇▇ of Sale" shall mean a ▇▇▇▇ of Sale regarding Equipment in form and
substance reasonably satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System of the
United States of America (or any successor).
"Board of Directors" shall mean the board of directors of JPFDI or U.S.
Foodservice, Inc., as the case may be, or a duly authorized committee of
directors lawfully exercising the relevant powers of such board of directors.
Appendix A-6
"Borrower" shall mean the Owner Trustee, not in its individual capacity but as
Borrower under the Credit Agreement.
"Borrowing Date" shall mean any Business Day specified in a notice delivered
pursuant to Section 2.3 of the Credit Agreement as a date on which the Borrower
requests the Lenders to make Loans thereunder.
"Budgeted Total Property Cost" shall mean, at any date of determination with
respect to any Construction Period Property, an amount equal to the aggregate
amount which the Construction Agent in good faith expects to be expended in
order to achieve Completion with respect to such Property.
"Business Day" shall mean a day other than a Saturday, Sunday or other day on
which commercial banks in North Carolina and New York or any other states from
which the Agent, any Lender or any Holder funds or engages in administrative
activities with respect to the transactions under the Operative Agreements are
authorized or required by law to close; provided, however, that when used in
-------- -------
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee which would,
in accordance with GAAP, be required to be classified and accounted for as a
capital lease on the balance sheet of such Person or in the notes thereto, other
than, in the case of any Restricted Subsidiary, any such lease under which
JPFDI, U.S. Foodservice, Inc. or a Predominantly Owned Restricted Subsidiary is
the lessor.
"Capital Lease Obligation" shall mean, as at any date, with respect to any
Capital Lease, the amount of the obligation of the lessee thereunder which
would, in accordance with GAAP, appear on a balance sheet of such lessee or in
the notes thereto in respect of such Capital Lease.
"Capital Stock" shall mean any nonredeemable capital stock of any Credit Party
or any of its Subsidiaries, whether common or preferred.
"Casualty" shall mean any damage or destruction of all or any portion of the
Property as a result of a fire or other casualty.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of each Holder regarding the
Holder Commitment of such Holder issued pursuant to the terms and conditions of
the Trust Agreement.
"Change of Control" shall mean any acquisition subsequent to the Initial
Closing Date by any Person or group of Persons (within the meaning of Section 13
or 14 of the Exchange Act), of
Appedix A-7
(a) beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of a majority of the Voting Stock of USF or (b) all or substantially all of
the properties and assets of USF. For purposes of this definition, "acquisition"
by any Person or Persons of the Voting Stock or properties and assets referred
to in the preceding sentence shall mean the earlier of (i) the actual possession
thereof and (ii) the consummation of any transaction or series of transactions
which, with the passage of time, will give such Person or Persons the actual
possession thereof.
"Chattel Paper" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses, actions,
suits, penalties, claims, demands, costs and expenses (including without
limitation reasonable attorney's fees and expenses) of any nature whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property Closing
Date.
"Closing Date Intangibles" shall mean all goodwill and other intangible assets
that appear on a consolidated balance sheet of U.S. Foodservice, Inc., JPFDI and
their Restricted Subsidiaries prepared in accordance with GAAP as of the Initial
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986 together with rules and
regulations promulgated thereunder, as amended from time to time, or any
successor statute thereto.
"Collateral" shall mean all assets of the Lessor, the Construction Agent and
the Lessee, now owned or hereafter acquired, upon which a Lien is purported to
be created by one or more of the Security Documents.
"Commencement Date" shall have the meaning specified in Section 2.2 of the
Lease.
"Commitment" shall mean, as to any Lender, the obligation of such Lender to
make the portion of the Loans to the Lessor in an aggregate principal amount at
any time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule 1.1 of the Credit Agreement, as such amount may be increased or
------------
reduced from time to time in accordance with the provisions of the Operative
Agreements.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Loans then outstanding constitutes of the aggregate principal amount of all of
the Loans then outstanding), and such Commitment Percentage shall take into
account both the Lender's Tranche A Commitment and the Lender's Tranche B
Commitment.
"Commitment Period" shall mean the period from and including the Initial
Closing Date to and including the Construction Period Termination Date, or such
earlier date as the Commitments shall terminate as provided in the Credit
Agreement or the Holder Commitment shall terminate as provided in the Trust
Agreement.
Appendix A-8
"Company Obligations" shall mean the obligations of JPFDI, in any and all
capacities under and with respect to the Operative Agreements and each Property.
"Completion" shall mean, with respect to a Property, such time as the
acquisition, installation, testing and final completion of the Improvements on
such Property has been achieved in accordance with the Plans and Specifications,
the Agency Agreement and/or the Lease, and in compliance with all Legal
Requirements and Insurance Requirements and a certificate of occupancy has been
issued with respect to such Property by the appropriate governmental entity
(except if non-compliance, individually or in the aggregate, shall not have and
could not reasonably be expected to have a Material Adverse Effect). If the
Lessor purchases a Property that includes existing Improvements that are to be
immediately occupied by the Lessee, the date of Completion for such Property
shall be the Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the earlier of (a)
the date on which Completion for such Property has occurred or (b) the
Construction Period Termination Date.
"Condemnation" shall mean any taking or sale of the use, access, occupancy,
easement rights or title to any Property or any part thereof, wholly or
partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent to,
any Property or alter the pedestrian or vehicular traffic flow to any Property
so as to result in a change in access to such Property, or by or on account of
an eviction by paramount title or any transfer made in lieu of any such
proceeding or action.
"Consolidated Subsidiary" shall mean, as to any Person, any Subsidiary of such
Person which under the rules of GAAP consistently applied should have its
financial results consolidated with those of such Person for purposes of
financial accounting statements.
"Construction Advance" shall mean an advance of funds to pay Property Costs
pursuant to Section 5.4 of the Participation Agreement.
"Construction Agent" shall mean JP Foodservice Distributors, Inc., a Delaware
corporation, as the construction agent under the Agency Agreement.
"Construction Budget" shall mean the cost of acquisition, installation,
testing, constructing and developing any Property as determined by the
Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to Improvements, the
date on which construction of such Improvements commences pursuant to the Agency
Agreement.
Appendix A-9
"Construction Contract" shall mean any contract entered into between the
Construction Agent or the Lessee with a Contractor for the construction of
Improvements or any portion thereof on the Property.
"Construction Loan" shall mean any Loan made in connection with a Construction
Advance.
"Construction Loan Property Cost" shall mean with respect to each Construction
Period Property at the date of determination, an amount equal to (a) the
aggregate principal amount of Construction Loans made on or prior to such date
with respect to the Property minus (b) the aggregate principal amount of
-----
prepayments or repayments of the Loans allocated to reduce the Construction Loan
Property Cost of such Property pursuant to Section 2.6(c) of the Credit
Agreement.
"Construction Period" shall mean, with respect to a Property, the period
commencing on the Construction Commencement Date for such Property and ending on
the Completion Date for such Property.
"Construction Period Property" means, at any date of determination, any
Property as to which the Rent Commencement Date has not occurred on or prior to
such date.
"Construction Period Termination Date" shall mean (a) the earlier of (i) the
date that the Commitments have been terminated in their entirety in accordance
with the terms of Section 2.5(a) of the Credit Agreement, or (ii) the date
forty-two (42) months after the Initial Closing Date or (b) such later date as
shall be agreed to by the Majority Secured Parties.
"Contractor" shall mean each entity with whom the Construction Agent or the
Lessee contracts to construct any Improvements or any portion thereof on the
Property.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Credit Party, are treated as a single
employer under Section 414 of the Code.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of the
Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated on or about the
Initial Closing Date, among the Borrower, the Agent and the Lenders, as
specified therein.
"Credit Agreement Default" shall mean any event or condition which, with the
lapse of time or the giving of notice, or both, would constitute a Credit
Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition defined
as an "Event of Default" in Section 6 of the Credit Agreement.
Appendix A-10
"Credit Documents" shall mean the Participation Agreement, the Credit
Agreement, the Notes and the Security Documents.
"Credit Parties" shall mean the Construction Agent, the Lessee and each
Guarantor.
"Debt" shall mean, as applied to any Person, as of any date of determination
(without duplication):
(a) all obligations of such Person for borrowed money or evidenced by
bonds, debentures, notes, drafts or similar instruments, or upon which
interest payments are customarily made except for all such obligations of
JPFDI, U.S. Foodservice, Inc. or any Restricted Subsidiary to one or more
of USF, U.S. Foodservice, Inc., JPFDI and the other Restricted
Subsidiaries;
(b) all obligations of such Person for all or any part of the deferred
purchase price of property or services (other than trade accounts payable
arising in the ordinary course of business which are not overdue by more
than 45 days or which are being contested in good faith by appropriate
proceedings) or for the cost of property constructed or of improvements;
(c) all obligations secured by any Lien other than a Lien deemed to
exist in connection with any Permitted Receivables Financing (including any
related filings of financing statements) provided that, for purposes of
determining the "Total Debt Ratio" as used herein (including, as used in
the definition of "Applicable Margin"), any obligation incurred by U.S.
Foodservice, Inc., JPFDI or any of their Restricted Subsidiaries pursuant
to any Permitted Receivables Financing shall be considered Debt, and it
being understood and agreed that the Permitted Receivables Financing Amount
in respect of any Permitted Receivables financing shall be deemed to be an
obligation secured by Liens in connection with a Permitted Receivables
Financing on or payable out of the proceeds of production from property
owned or held by such Person even though such Person has not assumed or
become liable for the payment of such obligations;
(d) all Capital Lease Obligations of such Person;
(e) all preferred stock issued by such Person or required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date;
(f) the aggregate amount of the net liability exposure of such Person
under all Hedging Agreements relating to speculative hedge arrangements
(those hedge arrangements which are required to be marked-to-market under
GAAP) as determined under GAAP; and
(g) any Guaranty by such Person of or with respect to obligations of the
character referred to in the foregoing clauses (a) through (f) of another
Person;
Appendix A-11
provided, however, that in determining the Debt of JPFDI, so long as the ▇▇▇▇
-------- -------
▇▇▇ Offset Agreement shall remain in full force and effect and shall be
effective to permit the offset of principal and interest due under the ▇▇▇▇ ▇▇▇
Note against principal and interest due under PYA's Note (or to establish
JPFDI's obligation in respect of the indebtedness evidenced by the ▇▇▇▇ ▇▇▇ Note
from and after a prepayment in full of PYA's Note as the remaining principal
balance of the ▇▇▇▇ ▇▇▇ Note after offset against amounts owing thereon of the
principal of and accrued and unpaid interest to the date of prepayment on the
PYA Note), the Debt evidenced by the ▇▇▇▇ ▇▇▇ Note shall be deemed equal to the
net amounts for which JPFDI is obligated under the ▇▇▇▇ ▇▇▇ Offset Agreement.
"Deed" shall mean a warranty deed regarding the Land and/or Improvements in
form and substance satisfactory to the Agent.
"Default" shall mean the occurrence of any default which upon notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Holder" shall have the meaning given to such term in Section 12.4
of the Participation Agreement.
"Defaulting Lender" shall have the meaning given to such term in Section 12.4
of the Participation Agreement.
"Deficiency Balance" shall have the meaning given to such term in Section
22.1(b) of the Lease.
"Disposed Assets" shall have the meaning assigned to such term in the
definition of "Operating Cash Flow."
"Disposed Subsidiary" shall have the meaning assigned to such term in the
definition of "Operating Cash Flow."
"Disposed Unit Adjustment" shall have the meaning assigned to such term in the
definition of "Operating Cash Flow."
"Disputes" shall have the meaning given to such term in Section 12.7(d) of the
Participation Agreement.
"Documents" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Dollars" and "$" shall mean lawful currency of the United States of America.
"Election Date" shall have the meaning given to such term in Section 20.1 of
the Lease.
"Election Notice" shall have the meaning given to such term in Section 20.1 of
the Lease.
Appendix A-12
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan (within
the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue Service and the Department of Labor
in rules, regulations, releases or bulletins in effect on any Closing Date.
"Environmental Claims" shall mean any event, condition or circumstance that
could prevent continued compliance in all material respects with the
Environmental Permits or any scheduled renewals thereof, or any applicable
Environmental Laws currently in effect, or that could give rise to any liability
on the part of JPFDI, U.S. Foodservice, Inc. or any Restricted Subsidiary or
otherwise form the basis of any claim, action, demand, request, notice, suit,
proceeding, hearing, study or investigation involving JPFDI, U.S. Foodservice,
Inc. or any of their Restricted Subsidiaries, based on or related to (i) a
violation of any applicable Environmental Laws currently in effect or (ii) the
manufacture, generation, refining, processing, distribution, use, sale,
treatment, receipt, storage, disposal, transport, arranging for transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any Hazardous Substance in violation of any applicable
Environmental Laws currently in effect.
"Environmental Law" shall mean any past, present or future Federal, state or
local law, or any regulation, ordinance, code, plan, order, permit, grant,
franchise, concession, restriction or agreement issued, entered, promulgated or
approved thereunder, relating to (a) the environment, human health or safety,
including, without limitation, emissions, discharges, releases or threatened
releases of Hazardous Substances into the environment, or (b) the manufacture,
generation, refining, processing, distribution, use, sale, treatment, receipt,
storage, disposal, transport, arranging for transport, or handling of Hazardous
Substances.
"Environmental Permits" shall mean, collectively, any and all permits,
consents, licenses, approvals and registrations of any nature at any time
required pursuant to or in order to comply with any Environmental Law.
"Environmental Violation" shall mean any activity, occurrence or condition
that violates or threatens (if the threat requires remediation under any
Environmental Law and is not remediated during any grace period allowed under
such Environmental Law) to violate or results in or threatens (if the threat
requires remediation under any Environmental Law and is not remediated during
any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
"Equipment" shall mean equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired using the proceeds of the Loans or the Holder Advances by the
Construction Agent, the Lessee or the Lessor and all improvements and
modifications thereto and replacements thereof, whether or not now owned or
hereafter acquired or now or subsequently attached to, contained in or used or
usable in any way in connection with any operation of any Improvements,
including but without limiting the generality of the foregoing, all equipment
described in the Appraisal including without limitation all heating, electrical,
and mechanical equipment, lighting, switchboards, plumbing, ventilation, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators,
Appendix A-13
elevators, loading and unloading equipment and systems, cleaning systems
(including without limitation window cleaning apparatus), telephones,
communication systems (including without limitation satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire prevention
and extinguishing apparatus and materials, security systems, motors, engines,
machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of
every kind and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to the
applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" shall mean each entity required to be aggregated with any
Credit Party pursuant to the requirements of Section 414(b) or (c) of the Code.
"Eurocurrency Reserve Requirements" shall mean for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed on eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Holder Advance" shall mean a Holder Advance bearing a Holder Yield
based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean for the Interest Period for each Eurodollar Loan
or Eurodollar Holder Advance comprising part of the same borrowing or advance
(including without limitation conversions, extensions and renewals), a per annum
interest rate equal to the per annum rate determined by the Agent on the basis
of the offered rates for deposits in dollars for a period of time corresponding
to such Interest Period (and commencing on the first day of such Interest
Period), reported on Telerate page 3750 as of 11:00 a.m. (London time) two (2)
Business Days before the first day of such Interest Period. In the event no
such offered rates appear on Telerate page 3750, "Eurodollar Rate" shall mean
for the Interest Period for each Eurodollar Loan or Eurodollar Holder Advance
comprising part of the same borrowing or advance (including without limitation
conversions, extensions and renewals), a per annum interest rate equal to the
per annum rate determined by the Agent on the basis of the offered rates for
deposits in dollars for a period of time corresponding to such Interest Period
(and commencing on the first day of such Interest Period), which appear on the
Reuters Screen LIBO
Appendix A-14
Page as of 11:00 a.m. (London time) two (2) Business Days before the first day
of such Interest Period (provided that if at least two (2) such offered rates
--------
appear on the Reuters Screen LIBO Page, the rate in respect of such Interest
Period will be the arithmetic mean of such offered rates). As used herein,
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks) ("RMMRS"). In the event the RMMRS is not then quoting such
-----
offered rates, "Eurodollar Rate" shall mean for the Interest Period for each
Eurodollar Loan or Eurodollar Holder Advance comprising part of the same
borrowing or advance (including without limitation conversions, extensions and
renewals), the average (rounded upward to the nearest one-sixteenth (1/16) of
one percent (1%)) per annum rate of interest determined by the office of the
Agent (each such determination to be conclusive and binding) as of two (2)
Business Days prior to the first day of such Interest Period, as the effective
rate at which deposits in immediately available funds in U.S. dollars are being,
have been, or would be offered or quoted by the Agent to major banks in the
applicable interbank market for Eurodollar deposits at any time during the
Business Day which is the second Business Day immediately preceding the first
day of such Interest Period, for a term comparable to such Interest Period and
in the amount of the requested Eurodollar Loan and/or Eurodollar Holder Advance.
If no such offers or quotes are generally available for such amount, then the
Agent shall be entitled to determine the Eurodollar Rate from another recognized
service or interbank quotation, or by estimating in its reasonable judgment the
per annum rate (as described above) that would be applicable if such quote or
offers were generally available.
"Event of Default" shall mean a Lease Event of Default, an Agency Agreement
Event of Default or a Credit Agreement Event of Default.
"▇▇▇▇▇▇▇ Facility" shall mean the facility owned by JPFDI on the date hereof
in Everett, Massachusetts.
"Excepted Payments" shall mean:
(a) all indemnity payments (including without limitation indemnity
payments made pursuant to Section 11 of the Participation Agreement),
whether made by adjustment to Basic Rent or otherwise, to which the Owner
Trustee, any Holder or any of their respective Affiliates, agents,
officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value) payable
under any Operative Agreement to reimburse the Owner Trustee, any Holder or
any of their respective Affiliates (including without limitation the
reasonable expenses of the Owner Trustee, the Trust Company and the Holders
incurred in connection with any such payment) for performing or complying
with any of the obligations of any Credit Party under and as permitted by
any Operative Agreement;
(c) any amount payable to a Holder by any transferee of such interest of
a Holder as the purchase price of such Holder's interest in the Trust
Estate (or a portion thereof);
Appendix A-15
(d) any insurance proceeds (or payments with respect to risks self-
insured or policy deductibles) under liability policies other than such
proceeds or payments payable to the Agent or any Lender;
(e) any insurance proceeds under policies maintained by the Owner
Trustee or any Holder;
(f) Transaction Expenses or other amounts, fees, disbursements or
expenses paid or payable to or for the benefit of the Owner Trustee or any
Holder;
(g) all right, title and interest of any Holder or the Owner Trustee to
any Property or any portion thereof or any other property to the extent any
of the foregoing has been released from the Liens of the Security Documents
and the Lease pursuant to the terms thereof;
(h) upon termination of the Credit Agreement pursuant to the terms
thereof, all remaining property covered by the Lease or Security Documents;
(i) all payments in respect of the Holder Yield;
(j) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (i) above; and
(k) any rights of either the Owner Trustee or the Trust Company to
demand, collect, ▇▇▇ for or otherwise receive and enforce payment of any of
the foregoing amounts, provided that such rights shall not include the
--------
right to terminate the Lease.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of all
awards, compensation or insurance proceeds payable in connection with a Casualty
or Condemnation over the Termination Value paid by the Lessee pursuant to the
Lease with respect to such Casualty or Condemnation.
"Exculpated Persons" shall mean the Borrower, the Holders, the Lessor, their
officers, directors, shareholders and partners.
"Exempt Payments" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Expiration Date" shall mean the last day of the Term; provided, in no event
--------
shall the Expiration Date be later than the fifth annual anniversary of the
Initial Closing Date, unless, subject to Section 2.2 of the Lease Agreement,
such later date has been expressly agreed to in writing by each of the Lessor,
the Lessee, the Agent, the Lenders and the Holders.
"Facility Fee" shall mean, collectively, the Holder Facility Fee and the
Lender Facility Fee.
Appendix A-16
"Facility Fee Payment Date" shall mean the last Business Day of each March,
June, September and December.
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero (0), that would be paid
in cash in an arms-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, such Property is in the condition and state of
repair required under Section 10.1 of the Lease and each Credit Party is in
compliance with the other requirements of the Operative Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such term in
the definition of ABR.
"Financing Party" shall mean the Lessor, the Owner Trustee, in its trust
capacity, the Agent, the Holders and the Lenders.
"Five Year Credit Agreement" shall mean that certain Five Year Credit
Agreement dated as of December 23, 1997 among JPFDI, U.S. Foodservice, Inc.
(formerly ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.), the lenders that are parties thereto form time
to time and NationsBank, N.A., as Administrative Agent, NationsBanc ▇▇▇▇▇▇▇▇▇▇
Securities LLC (formerly NationsBank ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.) and Chase
Securities, Inc., as Co-Arrangers, The Chase Manhattan Bank, as Syndication
Agent, and Bank of America, NT & SA, as Documentation Agent, as such may
hereafter be amended, modified, supplemented, restated and/or replaced from time
to time.
"Fixtures" shall mean all fixtures relating to the Improvements, including
without limitation all components thereof, located in or on the Improvements,
together with all replacements, modifications, alterations and additions
thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, including without limitation strikes, lockouts, adverse soil
conditions, acts of God, adverse weather conditions, inability to obtain labor
or materials, governmental activities, civil commotion and enemy action; but
excluding any event, cause or condition that results from the acts or omissions
of the Construction Agent or the Construction Agent's financial condition.
"Form 1001" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Form 4224" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"GAAP" shall mean generally accepted accounting principles as from time to
time set forth in the opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and in statements by the
Financial Accounting Standards Board or in such
Appendix A-17
opinions and statements of such other entities as shall be approved by a
significant segment of the accounting profession in the United States of
America.
"Governmental Action" shall mean all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Legal Requirement, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the full
use, occupancy, zoning and operating of the Property.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Ground Lease" shall mean a ground lease (in form and substance reasonably
satisfactory to the Agent) respecting any Property (a) owned by any Credit Party
(or a parent corporation or any Subsidiary of any Credit Party) and leased to
the Lessor where such lease has at least a ninety-nine (99) year term and
payments set at no more than $1.00 per year, or (b) where such lease is subject
to such other terms and conditions as are reasonably satisfactory to the Agent.
"Guarantors" shall mean the various parties to the Participation Agreement
from time to time, as guarantors of the Construction Agent and the Lessee with
respect to the Operative Agreements and the Properties.
"Guaranty" shall mean, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise in any manner directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to (a) purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or (b) maintain
the solvency or any balance sheet or other financial condition of the obligor of
such obligation, or (c) make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or non-
furnishing thereof, in any such case if the purpose or intent of such agreement
is to provide assurance that such obligation will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected against loss in respect thereof. For purposes
of all computations made under the Operative Agreements, the amount of any
Guaranty shall be equal to the amount of the obligation guaranteed or, if not
stated or determined, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
Appendix A-18
"Hard Costs" shall mean all costs and expenses payable for supplies,
materials, labor and profit with respect to the Improvements under any
Construction Contract.
"Hazardous Substance" shall mean and include those substances included within
the definitions of "hazardous substances," "hazardous materials," "toxic
substances" or "solid waste" in the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. (S) 9601 et seq.), as amended
-- ---
by Superfund Amendments and Reauthorization Act of 1986 (Pub. L. (S) ▇▇-▇▇▇ ▇▇▇
Stat. 1613), the Resource Conversation and Recovery Act of 1976 (42 U.S.C. (S)
6901 et seq.) and the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801
-- ---
et seq.) and in the regulations promulgated pursuant to said laws, all as
-- ---
amended; and in any event shall include medical wastes, infectious wastes,
asbestos, paint containing lead, and urea formaldehyde.
"Hedging Agreement" shall mean any agreement entered into by a Person for
protection against future fluctuations in interest rates, foreign exchange
rates, commodities prices, or the like (including, but not limited to, interest
rate and/or currency swap arrangements, interest rate, currency and/or
commodities future or option contracts, and other similar agreements) and which
creates a contingent obligation of such Person to make any payments (other than
payments in respect of any fee or charge for contracting to provide the
protection provided by such agreement) to the holder(s) thereof or
counterparty(ies) thereunder upon the culmination or termination of such
agreement or otherwise.
"Holder Advance" shall mean any advance made by any Holder to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Amount" shall mean as of any date, the aggregate amount of Holder
Advances made by each Holder to the Trust Estate pursuant to Section 2 of the
Participation Agreement and Section 3.1 of the Trust Agreement less any payments
of any Holder Advances received by the Holders pursuant to Section 3.4 of the
Trust Agreement.
"Holder Commitments" shall mean $1,800,000, as such amount may be increased or
reduced from time to time in accordance with the provisions of the Operative
Agreements; provided, if there shall be more than one (1) Holder, the Holder
--------
Commitment of each Holder shall be as set forth in Schedule I to the Trust
----------
Agreement as such Schedule I may be amended and replaced from time to time.
----------
"Holder Construction Property Cost" shall mean, with respect to each
Construction Period Property, at any date of determination, an amount equal to
the outstanding Holder Advances made with respect thereto under the Trust
Agreement.
"Holder Facility Fee" shall have the meaning given to such term in Section 7.4
of the Participation Agreement.
"Holder Overdue Rate" shall mean the lesser of (a) the then current rate of
Holder Yield respecting the particular amount in question plus two percent (2%)
and (b) the highest rate permitted by applicable law.
Appendix A-19
"Holder Property Cost" shall mean with respect to a Property an amount equal
to the outstanding Holder Advances with respect thereto.
"Holder Yield" shall mean with respect to Holder Advances from time to time
either the Eurodollar Rate plus the Applicable Percentage or the ABR as elected
by the Owner Trustee from time to time with respect to such Holder Advances in
accordance with the terms of the Trust Agreement; provided, however, (a) upon
-------- -------
delivery of the notice described in Section 3.7(c) of the Trust Agreement, the
outstanding Holder Advances of each Holder shall bear a yield at the ABR
applicable from time to time from and after the dates and during the periods
specified in Section 3.7(c) of the Trust Agreement, and (b) upon the delivery by
a Holder of the notice described in Section 11.3(f) of the Participation
Agreement, the Holder Advances of such Holder shall bear a yield at the ABR
applicable from time to time after the dates and during the periods specified in
Section 11.3(f) of the Participation Agreement.
"Holders" shall mean First Union National Bank and shall include the other
banks and financial institutions which may be from time to time holders of
Certificates in connection with the USF Real Estate Trust 1998-1.
"Impositions" shall mean any and all liabilities, losses, expenses, costs,
charges and Liens of any kind whatsoever for fees, taxes, levies, imposts,
duties, charges, assessments or withholdings ("Taxes") including but not limited
-----
to (i) real and personal property taxes, including without limitation personal
property taxes on any property covered by the Lease that is classified by
Governmental Authorities as personal property, and real estate or ad valorem
taxes in the nature of property taxes; (ii) sales taxes, use taxes and other
similar taxes (including rent taxes and intangibles taxes); (iii) excise taxes;
(iv) real estate transfer taxes, conveyance taxes, stamp taxes and documentary
recording taxes and fees; (v) taxes that are or are in the nature of franchise,
income, value added, privilege and doing business taxes, license and
registration fees; (vi) assessments on any Property, including without
limitation all assessments for public Improvements or benefits, whether or not
such improvements are commenced or completed within the Term; and (vii) taxes,
Liens, assessments or charges asserted, imposed or assessed by the PBGC or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and in each case all interest, additions to tax and penalties thereon,
which at any time prior to, during or with respect to the Term or in respect of
any period for which the Lessee shall be obligated to pay Supplemental Rent, may
be levied, assessed or imposed by any Governmental Authority upon or with
respect to (a) any Property or any part thereof or interest therein; (b) the
leasing, financing, refinancing, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, sale, transfer of title, return or other disposition of
such Property or any part thereof or interest therein; (c) the Notes, other
indebtedness with respect to any Property, or the Certificates, or any part
thereof or interest therein; (d) the rentals, receipts or earnings arising from
any Property or any part thereof or interest therein; (e) the Operative
Agreements, the performance thereof, or any payment made or accrued pursuant
thereto; (f) the income or other proceeds received with respect to any Property
or any part thereof or interest therein upon the sale or disposition thereof;
(g) any contract (including the Agency Agreement) relating to the construction,
acquisition or delivery of
Appendix A-20
the Improvements or any part thereof or interest therein; (h) the issuance of
the Notes or the Certificates; (i) the Owner Trustee, the Trust or the Trust
Estate; or (j) otherwise in connection with the transactions contemplated by the
Operative Agreements.
"Improvements" shall mean, with respect to the construction, renovations
and/or Modifications on any Land, all buildings, structures, Fixtures, and other
improvements of every kind existing at any time and from time to time on or
under the Land purchased or otherwise acquired using the proceeds of the Loans
or the Holder Advances or which is subject to a Ground Lease, together with any
and all appurtenances to such buildings, structures or improvements, including
without limitation sidewalks, utility pipes, conduits and lines, parking areas
and roadways, and including without limitation all Modifications and other
additions to or changes in the Improvements at any time, including without
limitation (a) any Improvements existing as of the Property Closing Date as such
Improvements may be referenced on the applicable Requisition and (b) any
Improvements made subsequent to such Property Closing Date.
"Incorporated Covenants" shall have the meaning given to such term in Section
28.1 of the Lease.
"Incorporated Representations and Warranties" shall have the meaning given to
such term in Section 28.1 of the Lease.
"Indemnified Person" shall mean the Lessor, the Owner Trustee, in its
individual and its trust capacity, the Trust, the Trust Company, the Agent, the
Holders, the Lenders and their respective successors, assigns, directors,
shareholders, partners, officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the Lessee.
"Initial Closing Date" shall mean __________, 1998.
"Initial Construction Advance" shall mean any initial Advance to pay for: (a)
Property Costs for construction of any Improvements; and (b) the Property Costs
of restoring or repairing any Property which is required to be restored or
repaired in accordance with Section 15.1(e) of the Lease.
"Instruments" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Insurance Requirements" shall mean all terms and conditions of any insurance
policy either required by the Lease to be maintained by the Lessee or required
by the Agency Agreement to be maintained by the Construction Agent, and all
requirements of the issuer of any such policy and, regarding self insurance, any
other requirements of the Lessee.
"Interest Expense" shall mean, as applied to any Person, for any period, the
sum of the following amounts for such Person: (a) the aggregate amount of all
interest accrued (whether or not actually paid) during such period on Debt
(including, without limitation, (i) imputed interest
Appendix A-21
on Capital Lease Obligations and (ii) all imputed interest, whether in the form
of "yield", "discount" or other similar item, that accrues in respect of the
Permitted Receivables Financing Amount of any Permitted Receivables Financing
entered into by such Person (or by any Subsidiary of such Person or any other
Person "controlled" (as such term is defined in the Securities Act) by such
Person), together with any fees payable thereunder, plus (b) amortization of
----
debt discount and expense during such period (excluding deferred financing
amortization), plus (c) all fees and commissions payable in connection with any
----
letters of credit during such period. Unless otherwise specified, any reference
to Interest Expense for any period is intended as a reference to the sum for
such period of said amounts for U.S. Foodservice, Inc., JPFDI and their
Restricted Subsidiaries on a consolidated basis in accordance with GAAP after
eliminating all amounts properly attributable to outside minority interests in
Restricted Subsidiaries.
"Interest Period" shall mean (a) during the Commitment Period and thereafter
as to any Eurodollar Loan or Eurodollar Holder Advance (i) with respect to the
initial Interest Period, the period beginning on the date of the first
Eurodollar Loan and Eurodollar Holder Advance and ending one (1) month, two (2)
months, three (3) months or six (6) months thereafter, as selected by the Lessor
(in the case of a Eurodollar Loan) or the Owner Trustee (in the case of a
Eurodollar Holder Advance) in its applicable notice given with respect thereto
and (ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan or Eurodollar
Holder Advance and ending one (1) month, two (2) months, three (3) months or six
(6) months thereafter, as selected by the Lessor by irrevocable notice to the
Agent (in the case of a Eurodollar Loan) or by the Owner Trustee (in the case of
a Eurodollar Holder Advance) in each case not less than three (3) Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided, however, that all of the foregoing provisions relating to Interest
-------- -------
Periods are subject to the following: (A) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that with respect to any Eurodollar Loan or
Eurodollar Holder Advance, where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Maturity Date or the Expiration Date, as
the case may be, and (C) where an Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall, subject to clause (A)
above, end on the last Business Day of such calendar month.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"JPFDI" means JP Foodservice Distributors, Inc., a Delaware corporation.
"Joinder Agreement" shall mean a joinder agreement, in the form of EXHIBIT J
---------
to the Participation Agreement, executed from time to time between a Restricted
Subsidiary and the Agent.
"Land" shall mean a parcel of real property described on (a) the Requisition
issued by the Construction Agent on the Property Closing Date relating to such
parcel and (b) the schedules to
Appendix A-22
each applicable Lease Supplement executed and delivered in accordance with the
requirements of Section 2.4 of the Lease.
"Law" shall mean any statute, law, ordinance, regulation, rule, directive,
order, writ, injunction or decree of any Tribunal.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated on or about
the Initial Closing Date, between the Lessor and the Lessee, together with any
Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section 17.1 of
the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in the form
of Exhibit A to the Lease, together with all attachments and schedules thereto.
---------
"Legal Requirements" shall mean all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions affecting the Owner Trustee, any Holder, the
Lessor, any Credit Party, the Agent, any Lender or any Property, Land,
Improvement, Equipment or the taxation, demolition, construction, use or
alteration of such Improvements, whether now or hereafter enacted and in force,
including without limitation any that require repairs, modifications or
alterations in or to any Property or in any way limit the use and enjoyment
thereof (including without limitation all building, zoning and fire codes and
the Americans with Disabilities Act of 1990, 42 U.S.C. (S) 12101 et. seq., and
any other similar federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including without limitation all Environmental Laws), and all permits,
certificates of occupancy, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments which are either of record or known to any Credit Party
affecting any Property or the Appurtenant Rights.
"Lender Commitments" shall mean $58,200,000, as such amount may be increased
or reduced from time to time in accordance with the provisions of the Operative
Agreements; provided, if there shall be more than one (1) Lender, the Lender
--------
Commitment of each Lender shall be as set forth in Schedule 1.1 to the Credit
------------
Agreement as such Schedule 1.1 may be amended and replaced from time to time.
------------
"Lender Facility Fee" shall have the meaning given to such term in Section 7.4
of the Participation Agreement.
"Lender Financing Statements" shall mean UCC financing statements and fixture
filings appropriately completed and executed for filing in the applicable
jurisdiction in order to procure a security interest in favor of the Agent in
the Collateral subject to the Security Documents.
Appendix A-23
"Lenders" shall mean First Union National Bank and shall include the other
banks and financial institutions which may be from time to time party to the
Participation Agreement and the Credit Agreement.
"Lessee" shall have the meaning set forth in the Lease.
"Lessee Credit Agreement" shall mean that certain 364-Day Credit Agreement
dated as of December 23, 1997 among JPFDI, U.S. Foodservice, Inc. (formerly
▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.), the lenders that are parties thereto from time to time and
NationsBank, N.A., as Administrative Agent, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities
LLC (formerly NationsBank ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.) and Chase Securities,
Inc., as Co-Arrangers, The Chase Manhattan Bank, as Syndication Agent, and Bank
of America, NT & SA, as Documentation Agent, as such may hereafter be amended,
modified, supplemented, restated and/or replaced from time to time.
"Lessee Credit Agreement Event of Default" shall mean an Event of Default as
defined in Section 10.01 of the Lessee Credit Agreement (other than an Event of
Default resulting from the failure to comply with the second sentence of Section
8.19 of the Lessee Credit Agreement or of the Five Year Credit Agreement).
"Lessor" shall mean the Owner Trustee, not in its individual capacity, but as
the Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the Holder
Advances on any Scheduled Interest Payment Date pursuant to the Trust Agreement
(but not including interest on (a) any such scheduled Holder Yield due on the
Holder Advances prior to the Rent Commencement Date with respect to the Property
to which such Holder Advances relate or (b) overdue amounts under the Trust
Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and fixture
filings appropriately completed and executed for filing in the applicable
jurisdictions in order to protect the Lessor's interest under the Lease to the
extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against the Lessor or the Trust
Company, in its individual capacity, not resulting from the transactions
contemplated by the Operative Agreements, (b) any act or omission of the Lessor
or the Trust Company, in its individual capacity, which is not required by the
Operative Agreements or is in violation of any of the terms of the Operative
Agreements, (c) any claim against the Lessor or the Trust Company, in its
individual capacity, with respect to Taxes or Transaction Expenses against which
the Lessee is not required to indemnify the Lessor or the Trust Company, in its
individual capacity, pursuant to Section 11 of the Participation Agreement or
(d) any claim against the Lessor arising out of any transfer by the Lessor of
all or any portion of the interest of the Lessor in the Properties, the Trust
Estate or the Operative Agreements other than the transfer of title to or
possession of any Properties by the Lessor pursuant to and in accordance with
the Lease, the Credit Agreement, the Security Agreement or
Appendix A-24
the Participation Agreement or pursuant to the exercise of the remedies set
forth in Article XVII of the Lease.
"Lien" shall mean, as to any Person, any mortgage, lien (statutory or other),
pledge, assignment, hypothecation, adverse claim, charge, security interest or
other encumbrance in or on, or any interest or title of any vendor, lessor,
lender or other secured party to or of such Person under any conditional sale,
trust receipt or other title retention agreement or Capital Lease with respect
to, any property or asset of such Person, or the signing or filing of a
financing statement which names such Person as debtor, or the signing of any
security agreement authorizing any other party as the secured party thereunder
to file any financing statement which names such Person as debtor.
"Limited Recourse Amount" shall mean with respect to all the Properties on an
aggregate basis, an amount equal to the sum of the Termination Values with
respect to all the Properties on an aggregate basis on each Payment Date, less
the Maximum Residual Guarantee Amount as of such date with respect to all the
Properties on an aggregate basis.
"Loan Basic Rent" shall mean the scheduled interest due on the Loans on any
Scheduled Interest Payment Date pursuant to the Credit Agreement (but not
including interest on (a) any such Loan due prior to the Rent Commencement Date
with respect to the Property to which such Loan relates or (b) any overdue
amounts under Section 2.8(c) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any date of
determination, an amount equal to (a) the aggregate principal amount of all
Loans (including without limitation all Acquisition Loans and Construction
Loans) made on or prior to such date with respect to such Property minus (b) the
-----
aggregate amount of prepayments or repayments as the case may be of the Loans
allocated to reduce the Loan Property Cost of such Property pursuant to Section
2.6(c) of the Credit Agreement.
"Loans" shall mean the loans extended pursuant to the Credit Agreement and
shall include both the Tranche A Loans and the Tranche B Loans.
"Majority Holders" shall mean at any time, Holders whose Holder Advances
outstanding represent at least fifty-one percent (51%) of (a) the aggregate
Holder Advances outstanding or (b) to the extent there are no Holder Advances
outstanding, the aggregate Holder Commitments.
"Majority Lenders" shall mean at any time, Lenders whose Loans outstanding
represent at least fifty-one percent (51%) of (a) the aggregate Loans
outstanding or (b) to the extent there are no Loans outstanding, the aggregate
of the Lender Commitments.
"Majority Secured Parties" shall mean at any time, Lenders and Holders whose
Loans and Holder Advances outstanding represent at least fifty-one percent (51%)
of (a) the aggregate Advances outstanding or (b) to the extent there are no
Advances outstanding, the sum of the aggregate Holder Commitments plus the
aggregate Lender Commitments.
Appendix A-25
"Margin Certificate" shall have the meaning given to such term in Section
8.3(l) of the Participation Agreement.
"Marketing Period" shall mean, if the Lessee has given a Sale Notice in
accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the Expiration Date.
"Material Adverse Effect" shall, mean a material adverse effect on (a) the
business, condition (financial or otherwise), assets, liabilities or operations
of the Credit Parties (on a consolidated basis), (b) the ability of any Credit
Party to perform its respective obligations under any Operative Agreement to
which it is a party, (c) the validity or enforceability of any Operative
Agreement or the rights and remedies of the Agent, the Lenders, the Holders, or
the Lessor thereunder, (d) the validity, priority or enforceability of any Lien
on any Property created by any of the Operative Agreements, or (e) the value,
utility or useful life of any Property or the use, or ability of the Lessee to
use, any Property for the purpose for which it was intended.
"Maturity Date" shall mean the Expiration Date.
"Maximum Residual Guarantee Amount" shall mean an amount equal to the product
of the aggregate Property Cost for all of Properties times eighty-five percent
(85%).
"Merger Agreement" shall mean the Agreement and Plan of Merger, dated as of
June 30, 1997, as amended as of September 3, 1997 and November 5, 1997, together
with all exhibits and schedules thereto, by and among U.S. Foodservice, ▇▇▇▇▇▇
Acquisition Corp., a wholly owned subsidiary of U.S. Foodservice and U.S.
Foodservice, Inc. (formerly ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.)
"Merger Transaction" shall mean the transaction in which, among other things,
(i) U.S. Foodservice, Inc. (formerly ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.) was merged with and
into ▇▇▇▇▇▇ Acquisition Corp., a wholly owned subsidiary of U.S. Foodservice,
and (ii) each issued and outstanding share of common stock of U.S. Foodservice,
Inc. (formerly ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.), other than shares, if any, owned by U.S.
Foodservice, Inc. (formerly ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.), U.S. Foodservice or ▇▇▇▇▇▇
Acquisition Corp., were converted into the right to receive 0.775 of a share of
common stock of U.S. Foodservice, all upon the terms and conditions set forth in
the Merger Agreement.
"Modifications" shall have the meaning specified in Section 11.1(a) of the
Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any other
instrument executed by the Owner Trustee and the Lessee (or regarding any
Property subject to a Ground Lease, the applicable Affiliate of the Lessee) in
favor of the Agent (for the benefit of the Lenders and the Holders) and
evidencing a Lien on the Property, in form and substance reasonably acceptable
to the Agent.
"Multiemployer Plan" shall mean a plan described as such in Section 3(37) of
ERISA to which any Credit Party or any of its Subsidiaries or ERISA Affiliates
is making or incurring an obligation to make, or has made or incurred an
obligation to make, contributions.
Appendix A-26
"Multiple Employer Plan" shall mean a plan to which any Credit Party or any
ERISA Affiliate, and at least one (1) employer other than a Credit Party or an
ERISA Affiliate, is making or accruing an obligation to make contributions or
has made or accrued an obligation to make contributions.
"Net Receivables" shall mean, on any day, in respect of any Permitted
Receivables Financing, the outstanding balance of accounts receivable sold,
transferred, pledged or otherwise subject to Liens, in each case, to or in favor
of a Receivables Financier in connection with such Permitted Receivables
Financing, excluding any accounts receivable not included in the calculation of
the Receivables Financier's percentage interest in the Transferred Assets (it
being understood that only the percentage interest shall be included in this
calculation) or borrowing base (such excluded accounts receivable may include,
without limiting the foregoing in any manner, any such accounts receivable (x)
not meeting the eligibility criteria under such Permitted Receivables Financing,
(y) exceeding the applicable concentration limits set forth for such Permitted
Receivables Financing, or (z) which are or become defaulted, delinquent,
charged-off or otherwise cease to be creditworthy as set forth in, and as
determined in accordance with, such Permitted Receivables Financing).
"New Facility" shall have the meaning given to such term in Section 28.1 of
the Lease.
"Notes" shall mean those notes issued to the Lenders pursuant to the Credit
Agreement and shall include both the Tranche A Notes and the Tranche B Notes.
"Obligations" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Officer's Certificate" with respect to any person shall mean a certificate
executed on behalf of such person by a Responsible Officer who has made or
caused to be made such examination or investigation as is necessary to enable
such Responsible Officer to express an informed opinion with respect to the
subject matter of such Officer's Certificate.
"Officer's Compliance Certificate" shall have the meaning given to such term
in Section 8.3(l) of the Participation Agreement.
"Operating Cash Flow" shall mean, for any period, (a) the net income (or
deficit) of U.S. Foodservice, Inc., JPFDI and their Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP after eliminating all
non-cash or nonrecurring items (whether cash or non-cash and whether or not
deemed extraordinary in accordance with GAAP) for such period; plus (b) the sum
----
of the following amounts, in each case to the extent deducted in arriving at
such amount determined in accordance with the foregoing subdivision (a):
(i) Interest Expense,
(ii) provisions for taxes imposed on or measured by income or excess
profits, and
Appendix A-27
(iii) provisions for depreciation and amortization,
plus (c) the sum (without duplication) of the following items to the extent not
----
included in the amounts determined pursuant to subdivisions (a) and (b) above
(such sum being herein called the "Acquired Unit Adjustment"):
------------------------
(i) the net income (or net deficit) for such period of each Person
which shall have become a Restricted Subsidiary during such period (an
"Acquired Subsidiary") after eliminating all non-cash or nonrecurring items
--------------------
(whether cash or non-cash and whether or not deemed extraordinary in
accordance with GAAP),
(ii) the net income (or net deficit) derived during such period from
any operating assets acquired by U.S. Foodservice, Inc., JPFDI or a
Restricted Subsidiary during such period ("Acquired Assets"), and
---------------
(iii) the sum (without duplication) of the following items to the
extent deducted in determining net income of any Acquired Subsidiary or
derived from any Acquired Assets for such period: (A) Interest Expense of
such Acquired Subsidiary or associated with such Acquired Assets, (B)
provisions for taxes imposed on or measured by income or excess profits of
such Acquired Subsidiary or associated with such Acquired Assets, and (C)
provisions for depreciation and amortization of such Acquired Subsidiary or
associated with such Acquired Assets;
minus (d) the sum of the following items to the extent included in the amounts
-----
determined pursuant to subdivisions (a), (b) and (c) above (such sum being
herein called the "Disposed Unit Adjustment"):
------------------------
(i) the net income (or net deficit) for such period of each Person
which shall have ceased to be a Restricted Subsidiary during such period (a
"Disposed Subsidiary") after eliminating all non-cash or nonrecurring items
-------------------
(whether cash or non-cash and whether or not deemed extraordinary in
accordance with GAAP),
(ii) the net income (or net deficit) derived during such period from
any assets which were sold or otherwise disposed of by U.S. Foodservice,
Inc., JPFDI or a Restricted Subsidiary during such period ("Disposed
--------
Assets"), and
(iii) the sum (without duplication) of the following items to the
extent deducted in determining net income of any Disposed Subsidiary or
derived from any Disposed Assets for such period: (A) Interest Expense of
such Disposed Subsidiary or associated with such Disposed Assets, (B)
provisions for taxes imposed on or measured by income or excess profits of
such Disposed Subsidiary or associated with such Disposed Assets for such
period, and (C) provisions for depreciation and amortization of such
Disposed Subsidiary or associated with such Disposed Assets;
provided, however, that (1) for purposes of determining Operating Cash Flow for
-------- -------
any period, the Acquired Unit Adjustment and the Disposed Unit Adjustment shall
be determined by JPFDI in
Appendix A-28
accordance with sound financial practice (and on the basis, to the extent
available, of appropriate financial statements and tax returns for such period)
and shall be set forth in a certificate of the principal financial officer of
JPFDI accompanied by calculations in reasonable detail showing the manner of
determination thereof, which certificate shall be furnished to the Agent, each
of the Lenders and each of the Holders not later than the certificate required
to be furnished by JPFDI in respect of such period pursuant to Section 8.3(l) of
the Participation Agreement, and (2) no amount shall in any event be includable
in Operating Cash Flow pursuant to subdivision (c) of this definition for any
period in respect of any Acquired Unit Adjustment unless the amount and
calculation thereof, as set forth in the certificate for such period required by
the foregoing clause (1), shall be reasonably acceptable to the Majority Secured
Parties; and provided further, however, that in determining the net income (or
-------- ------- -------
deficit) of U.S. Foodservice, Inc., JPFDI and their Restricted Subsidiaries
pursuant to the foregoing subdivision (a) for any period during which JPFDI
shall have sold or otherwise disposed of the ▇▇▇▇▇▇▇ Facility, losses from such
sale or other disposition shall be disregarded to the extent the aggregate
amount of all such losses (computed without regard to Closing Date Intangibles
attributable to such facility) does not exceed $3,300,000 on an after tax basis.
"Operative Agreements" shall mean the following: the Participation Agreement,
the Agency Agreement, the Trust Agreement, the Certificates, the Credit
Agreement, the Notes, the Lease, the Lease Supplements (and memoranda of the
Lease and each Lease Supplement in a form reasonably acceptable to the Agent),
the Joinder Agreements, the Security Agreement, the Mortgage Instruments, the
other Security Documents, the Ground Leases, the Deeds and the Bills of Sale and
any and all other agreements, documents and instruments executed in connection
with any of the foregoing.
"Original Executed Counterpart" shall have the meaning given to such term in
Section 5 of EXHIBIT A to the Lease.
---------
"Overdue Interest" shall mean any interest payable pursuant to Section 2.8(b)
of the Credit Agreement.
"Overdue Rate" shall mean (a) with respect to the Loan Basic Rent, and any
other amount owed under or with respect to the Credit Agreement or the Security
Documents, the rate specified in Section 2.8(b) of the Credit Agreement, (b)
with respect to the Lessor Basic Rent, the Holder Yield and any other amount
owed under or with respect to the Trust Agreement, the Holder Overdue Rate, and
(c) with respect to any other amount, a per annum rate 2% greater than the rate
which would otherwise be applicable (or if no rate is applicable, whether in
respect of interest, fees or other amounts, then 2% greater than the ABR).
"Owner Trustee," "Borrower" or "Lessor" shall mean First Security Bank,
National Association, not individually, except as expressly stated in the
various Operative Agreements, but solely as the Owner Trustee under the USF Real
Estate Trust 1998-1, and any successor, replacement and/or additional Owner
Trustee expressly permitted under the Operative Agreements.
Appendix A-29
"Participant" shall have the meaning given to such term in Section 9.7 of the
Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated on or
about the Initial Closing Date, among the Lessee, the Guarantors, the Owner
Trustee, not in its individual capacity except as expressly stated therein, the
Holders, the Lenders and the Agent.
"Payment Date" shall mean any Scheduled Interest Payment Date and any date on
which interest or Holder Yield in connection with a prepayment of principal on
the Loans or of the Holder Advances is due under the Credit Agreement or the
Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"Pension Plan" shall mean a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to title IV of ERISA (other than a Multiemployer
Plan), and to which any Credit Party or any ERISA Affiliate may have any
liability, including without limitation any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five (5) years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Permitted Facility" shall mean a warehouse, office building or other property
of the type and size customarily used and operated by the Lessee, or which the
Lessee intends to use in its ordinary course of business.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the Operative
Agreements as provided in the Operative Agreements;
(b) the rights of any sublessee or assignee under a sublease or an
assignment expressly permitted by the terms of the Lease for no longer than
the duration of the Lease;
(c) Liens (other than Liens created or imposed under ERISA) for Taxes
that either are not yet due or are being contested in accordance with the
provisions of Section 13.1 of the Lease;
(d) statutory Liens of materialmen, mechanics, carriers, warehousemen
and other similar Persons relating to the construction of the Improvements
or in connection with any Modifications or arising in the ordinary course
of business for amounts that either are not yet due or are being diligently
contested in good faith by appropriate proceedings, so long as such
proceedings satisfy the conditions for the continuation of proceedings to
contest Taxes set forth in Section 13.1 of the Lease;
Appendix A-30
(e) Liens of any of the types referred to in clause (d) above that have
been bonded for not less than the full amount in dispute (or as to which
other security arrangements satisfactory to the Lessor and the Agent have
been made), which bonding (or arrangements) shall comply with applicable
Legal Requirements, and shall have effectively stayed any execution or
enforcement of such Liens;
(f) any attachment, judgment or other similar Lien arising in connection
with court proceedings, so long as (i) the execution or other enforcement
of such Lien is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings diligently
conducted and effective to prevent the forfeiture or sale of any property
of U.S. Foodservice, Inc., JPFDI or any Restricted Subsidiary or any
interference with the ordinary use thereof by U.S. Foodservice, Inc., JPFDI
or any Restricted Subsidiary, and (ii) such reserve or other appropriate
provision, if any, in the amount and of the type as shall be required by
GAAP shall be maintained therefor; and
(g) Liens in favor of municipalities to the extent agreed to by the
Lessor.
"Permitted Receivables Financing" shall mean any transaction involving one
or more sales, contributions or other conveyances by U.S. Foodservice, Inc.,
JPFDI and/or any Restricted Subsidiary of any accounts receivable (together with
certain related property relating thereto and the right to collections thereon,
being the "Transferred Assets") to a Subsidiary (including a Subsidiary which is
------------------
a Restricted Subsidiary) or Affiliate of U.S. Foodservice, Inc. or JPFDI (with
respect to any such transaction, the "Receivables Financing SPC"), which
-------------------------
Receivables Financing SPC then either (x) sells (as determined in accordance
with GAAP) such Transferred Assets (or undivided interests therein) to any
Person that is not a Subsidiary or Affiliate of U.S. Foodservice, Inc. or JPFDI
(with respect to any such transaction, the "Receivables Financier"), (y) borrows
---------------------
from such Receivables Financier and secures such borrowings by a pledge of such
Transferred Assets and/or (z) otherwise finances its acquisition of such
Transferred Assets and, in connection therewith, conveys an interest in such
Transferred Assets to the Receivables Financier, provided that (i) such
--------
receivables financing shall not involve any recourse to U.S. Foodservice, Inc.,
JPFDI or any Restricted Subsidiary (other than the Receivables Financing SPC)
for any reason other than (A) repurchases of non-eligible receivables, (B)
indemnifications for losses (including any adjustments for dilutions), other
than credit losses related to the receivables transferred in such financing, and
(C) payment of costs, fees, expenses and indemnities relating to such
receivables financing, (ii) such receivables financing shall not include any
Guaranty by U.S. Foodservice Inc., JPFDI or any Restricted Subsidiary, it being
understood that payment by U.S. Foodservice, Inc., JPFDI or any Restricted
Subsidiary of any amount of the type described in the immediately preceding
clause (i) which is owing by it to the Receivables Financing SPC shall not be
deemed to be a Guaranty notwithstanding that an identical amount may be owing by
the Receivables Financing SPC to the Receivables Financier, (iii) the Agent
shall be reasonably satisfied with the structure of and documentation for any
such transaction and the terms of such transaction, including any applicable
discount at which receivables are sold to the Receivables Financier and any
termination events, shall be (in the good faith understanding of the Agent)
consistent with those prevailing in the market for similar transactions
involving receivables and originators of similar credit quality and a
receivables pool
Appendix A-31
of similar characteristics or shall otherwise be reasonably acceptable to the
Agent, and (iv) the documentation for such transaction shall not be amended or
modified, to permit the acquisition of interests in the Transferred Assets by
the Receivables Financier in excess of the Permitted Receivables Financing Over-
Collateralization Amount, to change or modify any provision of any Subordinated
Intercompany Revolving Note or any provision of any agreement relating to the
calculation of any amount due or to become due in respect thereof, or in any
other manner which, in the reasonable judgment of the Agent, is materially
inconsistent with the terms and provisions hereof (and/or any other amendment
which deals with the requirements for a Permitted Receivables Financing) (other
than, in each case, for the requirement that any such amendment or modification
(or any of the relevant documents affected thereby) satisfy the requirements set
forth in the immediately preceding clause (iii)) without the prior written
approval of the Agent (which approval shall not be unreasonably withheld). Each
of the Pre-Existing Receivables Financings constitutes a Permitted Receivables
Financing.
"Permitted Receivables Financing Amount" shall mean at any time with respect
to any Permitted Receivables Financing, the aggregate balance of all cash
received by the Receivables Financing SPC from the Receivables Financier in
respect of purchase proceeds or principal under such financing minus the
aggregate amount of all payments received by the Receivables Financier and
applied to the repayments of such amounts; it being understood and agreed that
any amounts previously applied as aforesaid which are subsequently required to
be repaid, disgorged or otherwise returned by the Receivables Financier shall be
deemed to have never been received and applied by the Receivables Financier.
"Permitted Receivables Financing Over-Collateralization Amount" shall mean,
with respect to any Permitted Receivables Financing, the excess from time to
time of (x) the outstanding face amount of the Net Receivables subject to the
Receivables Financier's interest in connection with such financing (it being
understood that if such interest is a percentage interest only that percentage
of such Net Receivables shall be included in this calculation) over (y) the
Permitted Receivables Financing Amount of such Permitted Receivables Financing.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Plans and Specifications" shall mean, with respect to Improvements, the plans
and specifications for such Improvements to be constructed or already existing,
as such Plans and Specifications may be amended, modified or supplemented from
time to time in accordance with the terms of the Operative Agreements.
"Predominantly Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary at least 80% of all of the equity interests of each class of which
and at least 80% of the voting interests of which shall at the time be owned by
JPFDI or U.S. Foodservice, Inc. either directly or through one or more other
Predominantly Owned Restricted Subsidiaries.
"Pre-Existing Receivables Financings" shall mean the transactions provided
for in the Receivables Purchase Agreement dated as of May 30, 1996 among JPFDI,
Illinois Fruit &
Appendix A-32
Produce Corp., Sky Bros., Inc., JPFD Funding Company and U.S. Foodservice
(formerly JP Foodservice, Inc.) and the Transfer and Administration Agreement
dated as of May 30, 1996 among Enterprise Funding Corporation, JPFD Funding
Company, JPFDI, NationsBank, N.A. and certain other financial institution
investors, and the transactions contemplated in the ▇▇▇▇▇▇-▇▇▇▇▇▇ Receivables
Master Trust Pooling Agreement dated as of November 15, 1996 (the "▇▇▇▇▇▇-▇▇▇▇▇▇
-------------
Pooling Agreement") among RF Funding, Inc., U.S.F. Distributors, Inc. (formerly
-----------------
US Foodservice, Inc.) and The Chase Manhattan Bank, as supplemented by the
Series 1996-1 Supplement thereto dated as of November 15, 1996, including all
fundings, financings, facilities and purchases of accounts receivable
outstanding under such agreements as of the Initial Closing Date and any
subsequent increases or extensions of such fundings, financings, facilities or
purchases (including, in the case of the ▇▇▇▇▇▇-▇▇▇▇▇▇ Pooling Agreement, the
issuance of additional certificates).
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Property" shall mean, with respect to each Permitted Facility that is (or is
to be) acquired, constructed and/or renovated pursuant to the terms of the
Operative Agreements, the Land and each item of Equipment and the various
Improvements, in each case located on such Land, including without limitation
each Construction Period Property, each Property subject to a Ground Lease and
each Property for which the Term has commenced.
"Property Acquisition Cost" shall mean the cost to the Lessor to purchase a
Property on a Property Closing Date.
"Property Closing Date" shall mean the date on which the Lessor purchases a
Property or, with respect to the first Advance, the date on which the Lessor
seeks reimbursement for Property previously purchased by the Lessor.
"Property Cost" shall mean with respect to a Property the aggregate amount
(and/or the various items and occurrences giving rise to such amounts) of the
Loan Property Cost plus the Holder Property Cost for such Property (as such
amounts shall be increased equally among all Properties respecting the Holder
Advances and the Loans extended from time to time to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in Sections 7.1(a)
and 7.1(b) of the Participation Agreement).
"Purchase Option" shall have the meaning given to such term in Section 20.1 of
the Lease.
"Purchasing Lender" shall have the meaning given to such term in Section
9.8(a) of the Credit Agreement.
"PYA" shall mean PYA/Monarch, Inc., a Delaware corporation.
"PYA's Note" shall mean that certain promissory note of PYA, dated March 10,
1989, in the original principal amount of $110,000,000, and payable to JPFDI,
which bears interest at
Appendix A-33
rates between 10.35% and 10.8% per annum, as such note shall be in effect on the
Initial Closing Date.
"Receivables Financier" shall have the meaning assigned to such term in the
definition of "Permitted Receivables Financing" set forth in this Appendix A.
----------
"Receivables Financing SPC" shall have the meaning assigned to such term in
the definition of "Permitted Receivables Financing" set forth in this Appendix
--------
A.
-
"Register" shall have the meaning given to such term in Section 9.9(a) of the
Credit Agreement.
"Regulation D" shall mean Regulation D of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Release" shall mean any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental Rent, in
each case payable under the Lease.
"Rent Commencement Date" shall mean, regarding each Property, the Completion
Date.
"Reportable Event" shall mean any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean any officer of JPFDI who shall be permitted
to sign an Officers' Certificate (as provided in the definition of that term set
forth in this Section) and any other officer of JPFDI who shall at any time
hereafter perform substantially the same duties as are performed on the date
hereof by and any such officer permitted to sign an Officers' Certificate,
except that when used with respect to the Trust Company or the Owner Trustee,
"Responsible Officer" shall also include the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, the Controller and any Assistant
Controller or any other officer of the Trust Company or the Owner Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
Appendix A-34
"Restricted Subsidiary" shall mean each Subsidiary existing on the date hereof
which is not designated as an Unrestricted Subsidiary on EXHIBIT N to the
---------
Participation Agreement, each other Subsidiary which is not hereafter designated
by the Board of Directors as an Unrestricted Subsidiary, and each Unrestricted
Subsidiary which is hereafter designated by the Board of Directors as a
Restricted Subsidiary; provided, however, that (a) any Restricted Subsidiary may
-------- -------
be redesignated an Unrestricted Subsidiary as and to the extent provided in the
definition of "Unrestricted Subsidiary" set forth in this Appendix A; (b) any
----------
Subsidiary which shall be an Unrestricted Subsidiary at the commencement of any
period of 30 consecutive months and which shall have been redesignated a
Restricted Subsidiary during such period may, following such redesignation, be
further redesignated an Unrestricted Subsidiary during such period but may not,
following such further redesignation, again be redesignated a Restricted
Subsidiary during such period; and (c) notwithstanding any provision hereof to
the contrary, no Person which hereafter becomes a Subsidiary may be designated a
Restricted Subsidiary and no Subsidiary which is designated an Unrestricted
Subsidiary may be redesignated a Restricted Subsidiary unless:
(i) immediately after giving effect to such designation or
redesignation, no Default or Event of Default shall have occurred and be
continuing,
(ii) in the case of any such redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, no property or assets of such
Subsidiary shall at the time of such redesignation be subject to any Liens
which would not have been permitted to be created by such Subsidiary
pursuant to the terms of the Incorporated Covenants, and
(iii) such Subsidiary shall have become, in compliance with
Section 5.8 of the Participation Agreement, a Guarantor under and within
the meaning of the Participation Agreement.
"RSI" shall mean, prior to the effective time of the Merger Transaction,
▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., a Delaware corporation incorporated in 1961, and from and
after the effective time of the Merger Transaction, the successor to such
corporation in the Merger Transaction whose corporate name has changed to
▇▇▇▇▇▇-▇▇▇▇▇▇, Inc. in connection with consummation of the Merger Transaction,
and subsequently has changed to U.S. Foodservice, Inc.
"Sale Date" shall have the meaning given to such term in Section 20.3(a) of
the Lease.
"Sale Notice" shall mean a notice given to the Lessor in connection with the
election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1 of the
Lease.
"Sale Proceeds Shortfall" shall mean the amount by which the proceeds of a
sale described in Section 22.1 of the Lease are less than the Limited Recourse
Amount with respect to the Properties if it has been determined that the Fair
Market Sales Value of the Properties at the expiration of the term of the Lease
has been impaired by greater than ordinary wear and tear during the Term of the
Lease.
Appendix A-35
"▇▇▇▇ ▇▇▇" shall mean ▇▇▇▇ ▇▇▇ Corporation, a Maryland corporation.
"▇▇▇▇ ▇▇▇ Note" shall mean that certain promissory note of JPFDI, dated August
19, 1989, issued in the original principal amount of $112,000,000 and payable to
PYA, which bears interest at the rate of 11% per annum, as such note shall be in
effect on the Initial Closing Date.
"▇▇▇▇ ▇▇▇ Offset Agreement" shall mean the Amended and Restated Note Offset
Agreement, dated as of July 3, 1989, by and between PYA and JPFDI, providing,
among other things, for the settlement of maturities of principal and accrued
interest under the ▇▇▇▇ ▇▇▇ Note, on the one hand, and under PYA's Note, on the
other hand, by offsetting the respective amounts due thereunder.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar Loan or
Eurodollar Holder Advance, the last day of the Interest Period applicable to
such Eurodollar Loan or Eurodollar Holder Advance, (b) as to any ABR Loan or any
ABR Holder Advance, the fifteenth day of each month and (c) as to all Loans and
Holder Advances, the date of any voluntary or involuntary payment, prepayment,
return or redemption, and the Maturity Date or the Expiration Date, as the case
may be.
"Secured Parties" shall have the meaning given to such term in the Security
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement dated on or about the
Initial Closing Date between the Lessor and the Agent, for the benefit of the
Secured Parties.
"Security Documents" shall mean the collective reference to the Security
Agreement, the Mortgage Instruments (to the extent the Lease is construed as a
security instrument), the Lease and all other security documents hereafter
delivered to the Agent granting a lien on any asset or assets of any Person to
secure the obligations and liabilities of the Lessor under the Credit Agreement
and/or under any of the other Credit Documents or to secure any guarantee of any
such obligations and liabilities.
"Soft Costs" shall mean all costs which are ordinarily and reasonably incurred
in relation to the acquisition, development, installation, construction,
improvement and testing of the Properties other than Hard Costs, including
without limitation structuring fees, administrative fees, legal fees, upfront
fees, fees and expenses related to appraisals, title examinations, title
insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, the Lender Facility Fee, the
Holder Facility Fee, fees and expenses of the Owner Trustee payable or
reimbursable under the Operative Agreements and costs and expenses incurred
pursuant to Sections 7.3(a) and 7.3(b) of the Participation Agreement.
Appendix A-36
"Subordinated Intercompany Revolving Note" shall mean, with respect to any
Permitted Receivables Financing, any note issued by a Receivables Financing SPC
in favor of U.S. Foodservice, Inc., JPFDI or any of their Restricted
Subsidiaries in connection therewith.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which more than 50% of the Voting Stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such corporation, partnership or other
entity is at the time, directly or indirectly, owned by, or the management is
otherwise controlled by, such Person and/or one or more of its other
Subsidiaries. Unless otherwise specified, any reference to a Subsidiary is
intended as a reference to a Subsidiary of JPFDI or U.S. Foodservice, Inc.
"Supplemental Amounts" shall have the meaning given to such term in Section
9.18 of the Credit Agreement.
"Supplemental Rent" shall mean all amounts, liabilities and obligations (other
than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor, the
Trust Company, the Holders, the Agent, the Lenders or any other Person under the
Lease or under any of the other Operative Agreements including without
limitation payments of the Termination Value and the Maximum Residual Guarantee
Amount and all indemnification amounts, liabilities and obligations.
"Taxes" shall have the meaning specified in the definition of "Impositions".
"Term" shall have the meaning specified in Section 2.2 of the Lease.
"Termination Date" shall have the meaning specified in Section 16.2(a) of the
Lease.
"Termination Event" shall mean (a) with respect to any Pension Plan, the
occurrence of a Reportable Event or an event described in Section 4062(e) of
ERISA, (b) the withdrawal of any Credit Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan, (c) the distribution of a notice of intent to
terminate a Plan or Multiemployer Plan pursuant to Section 4041(a)(2) or 4041A
of ERISA, (d) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC under Section 4042 of ERISA, (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (f) the complete or partial withdrawal of any Credit
Party or any ERISA Affiliate from a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1 of the
Lease.
"Termination Value" shall mean the sum of (a) either (i) with respect to all
Properties, an amount equal to the aggregate outstanding Property Cost for all
the Properties, in each case as of the last occurring Payment Date, or (ii) with
respect to a particular Property, an amount equal to the Property Cost allocable
to such Property, plus (b) respecting the amounts described in each of the
foregoing subclause (i) or (ii), as applicable, any and all accrued but unpaid
interest on the
Appendix A-37
Loans and any and all accrued but unpaid Holder Yield on the Holder Advances
related to the applicable Property Cost, plus (c) to the extent the same is not
duplicative of the amounts payable under clause (b) above, all other Rent and
other amounts then due and payable or accrued under the Agency Agreement, Lease
and/or under any other Operative Agreement (including without limitation amounts
under Sections 11.1 and 11.2 of the Participation Agreement and all costs and
expenses referred to in clause FIRST of Section 22.2 of the Lease).
-----
"Total Debt" shall mean, as of any date, the aggregate amount of all Debt of
USF and its Restricted Subsidiaries outstanding on such date, determined on a
consolidated basis.
"Total Debt Ratio" shall mean, for U.S. Foodservice, Inc., JPFDI and their
Restricted Subsidiaries as of any date, the number obtained by dividing (a)
Total Debt as of such date by (b) Operating Cash Flow for the period ("Cash Flow
---------
Period") of four consecutive fiscal quarters ended on such date or most recently
------
prior to such date.
"Tranche A Commitments" shall mean the obligation of the Tranche A Lenders to
make the Tranche A Loans to the Lessor in an aggregate principal amount at any
one (1) time outstanding not to exceed the aggregate of the amounts set forth
opposite each Tranche A Lender's name on Schedule 1.1 to the Credit Agreement,
------------
as such amount may be reduced from time to time in accordance with the
provisions of the Operative Agreements; provided, no Tranche A Lender shall be
--------
obligated to make Tranche A Loans in excess of such Tranche A Lender's share of
the Tranche A Commitments as set forth adjacent to such Tranche A Lender's name
on Schedule 1.1 to Credit Agreement.
------------
"Tranche A Lenders" shall mean First Union National Bank and shall include the
several banks and other financial institutions from time to time party to the
Credit Agreement that commit to make the Tranche A Loans.
"Tranche A Loans" shall mean the Loans made pursuant to the Tranche A
Commitments.
"Tranche A Note" shall have the meaning given to such term in Section 2.2 of
the Credit Agreement.
"Tranche B Commitments" shall mean the obligation of the Tranche B Lenders to
make the Tranche B Loans to the Lessor in an aggregate principal amount at any
one (1) time outstanding not to exceed the aggregate of the amounts set forth
opposite each Tranche B Lender's name on Schedule 1.1 to the Credit Agreement,
------------
as such amount may be reduced from time to time in accordance with the
provisions of the Operative Agreements; provided, no Tranche B Lender shall be
--------
obligated to make Tranche B Loans in excess of such Tranche B Lender's share of
the Tranche B Commitments as set forth adjacent to such Tranche B Lender's name
on Schedule 1.1 to Credit Agreement.
------------
"Tranche B Lenders" shall mean First Union National Bank and shall include the
several banks and other financial institutions from time to time party to the
Credit Agreement that commit to make the Tranche B Loans.
Appendix A-38
"Tranche B Loan" shall mean the Loans made pursuant to the Tranche B
Commitments.
"Tranche B Note" shall have the meaning given to such term in Section 2.2 of
the Credit Agreement.
"Transaction Expenses" shall mean all Soft Costs and all other costs and
expenses incurred in connection with the preparation, execution and delivery of
the Operative Agreements and the transactions contemplated by the Operative
Agreements including without limitation all costs and expenses described in
Section 7.1 of the Participation Agreement and the following:
(a) the reasonable fees, out-of-pocket expenses and disbursements of
counsel in negotiating the terms of the Operative Agreements and the other
transaction documents, preparing for the closings under, and rendering
opinions in connection with, such transactions and in rendering other
services customary for counsel representing parties to transactions of the
types involved in the transactions contemplated by the Operative
Agreements;
(b) the reasonable fees, out-of-pocket expenses and disbursements of
accountants for any Credit Party in connection with the transactions
contemplated by the Operative Agreements;
(c) any and all other reasonable fees, charges or other amounts payable
to the Lenders, the Agent, the Holders, the Owner Trustee or any broker
which arises under any of the Operative Agreements;
(d) any other reasonable fees, out-of-pocket expenses, disbursements or
costs of any party to the Operative Agreements or any of the other
transaction documents; and
(e) any and all Taxes and fees incurred in recording or filing any
Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement
with any public office, registry or governmental agency in connection with
the transactions contemplated by the Operative Agreement.
"Transferred Assets" shall have the meaning assigned to such term in the
definition of "Permitted Receivables Financing" set forth in this Appendix A.
----------
"Tribunal" shall mean any state, commonwealth, federal, foreign, territorial,
or other court or government body, subdivision agency, department, commission,
board, bureau or instrumentality of a governmental body.
"Trust" shall mean the USF Real Estate Trust 1998-1.
"Trust Agreement" shall mean the Trust Agreement dated on or about the Initial
Closing Date between the Holders and the Owner Trustee.
Appendix A-39
"Trust Company" shall mean First Security Bank, National Association, in its
individual capacity, and any successor owner trustee under the Trust Agreement
in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the Trust
Agreement.
"Type" shall mean, as to any Loan, whether it is an ABR Loan or a Eurodollar
Loan.
"UCC Financing Statements" shall mean collectively the Lender Financing
Statements and the Lessor Financing Statements.
"Unanimous Vote Matters" shall have the meaning given it in Section 12.4 of
the Participation Agreement.
"Unfunded Amount" shall have the meaning specified in Section 3.2(a) of the
Agency Agreement.
"Unfunded Liability" shall mean, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent valuation date for such Plan, but only
to the extent that such excess represents a potential liability of the Company
or any member of the Controlled Group to the PBGC or such Plan under Title IV of
ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial Code as
in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United States Code.
"Unrestricted Subsidiary" shall mean each Subsidiary designated as an
Unrestricted Subsidiary in EXHIBIT N to the Participation Agreement and each
---------
other Subsidiary which is hereafter designated by the Board of Directors as an
Unrestricted Subsidiary; provided, however, that (a) any Unrestricted Subsidiary
-------- -------
may be redesignated a Restricted Subsidiary as and to the extent provided in the
definition of "Restricted Subsidiary" set forth in this Appendix A; (b) any
----------
Subsidiary which shall be a Restricted Subsidiary at the commencement of any
period of 30 consecutive months and which shall have been redesignated an
Unrestricted Subsidiary during such period may, following such redesignation, be
further redesignated a Restricted Subsidiary during such period but may not,
following such further redesignation, again be redesignated an Unrestricted
Subsidiary during such period; and (c) notwithstanding any provision hereof to
the contrary, no Subsidiary which is a Restricted Subsidiary may be redesignated
an Unrestricted Subsidiary unless
(i) immediately after giving effect to such redesignation, no Default
or Event of Default shall have occurred and be continuing, and
(ii) such Subsidiary does not own (directly or through its Subsidiaries)
any shares of stock or
Appendix A-40
other securities of (or warrants, rights or options to acquire stock or
other securities of) any Restricted Subsidiary or hold any Debt of JPFDI,
U.S. Foodservice Inc. or any Restricted Subsidiary and, at the time of such
redesignation, all Debt and shares of stock of such Subsidiary which are
owned by JPFDI, U.S. Foodservice, Inc. and their Restricted Subsidiaries
could be sold in compliance with the Incorporated Covenants (in which case,
such redesignation shall be deemed a disposition of assets for purposes of
the Incorporated Covenants).
Any Subsidiary of any Person which shall at any time be an Unrestricted
Subsidiary shall itself be an Unrestricted Subsidiary for so long as such Person
shall remain an Unrestricted Subsidiary (and thereafter for so long as such
Subsidiary shall not have been redesignated as a Restricted Subsidiary in
compliance with the definition herein of that term).
"USF" shall mean U.S. Foodservice, a Delaware corporation, and its successors
and permitted assigns.
"USF Real Estate Trust 1998-1" shall mean the grantor trust created pursuant
to the terms and conditions of the Trust Agreement.
"U.S. Person" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Voting Stock" shall mean capital stock of a corporation the holders of which
are ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directors (or persons performing similar functions) of such
corporation.
"Withholdings" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Work" shall mean the furnishing of labor, materials, components, furniture,
furnishings, fixtures, appliances, machinery, equipment, tools, power, water,
fuel, lubricants, supplies, goods and/or services with respect to any Property.
"Year 2000" shall mean the calendar year beginning January 1, 2000 and ending
December 31, 2000.
Appendix A-41
