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EXHIBIT 10.33
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PARTICIPATION AGREEMENT
Dated as of March 9, 2000
among
VERITAS OPERATING CORPORATION
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 VS Trust 2000-1,
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
BANK OF AMERICA, N.A.,
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
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TABLE OF CONTENTS
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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
3.4. Ratable Interests of the Lenders................................................3
SECTION 4. THE CLOSINGS.....................................................................3
4.1. Initial Closing Date............................................................3
4.2. Initial Closing Date; Property Closing Dates; Acquisition Advances;
Construction Advances...........................................................3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION
DATE; THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS....................4
5.1. General.........................................................................4
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.......................................................7
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...........................................13
5.6. The Construction Agent Delivery of Construction Budget Modifications...........14
5.7. Restrictions on Liens..........................................................14
5.8. Payments.......................................................................14
5.9. Unilateral Right to Increase the Holder Commitments and the
Lender Commitments.............................................................14
5.10. Joinder Agreement Requirements................................................15
5.11. Property Cost as of the Rent Commencement Date................................16
SECTION 6. REPRESENTATIONS AND WARRANTIES..................................................16
6.1. Representations and Warranties of the Borrower.................................16
6.2. Representations and Warranties of the Credit Parties...........................18
SECTION 6B. GUARANTY.......................................................................24
6B.1. Guaranty of Payment and Performance...........................................24
6B.2. Obligations Unconditional.....................................................24
6B.3. Modifications.................................................................25
6B.4. Waiver of Rights..............................................................25
6B.5. Reinstatement.................................................................26
6B.6. Remedies......................................................................26
6B.7. Limitation of Guaranty........................................................26
6B.8. Payment of Amounts to the Agent...............................................27
SECTION 7. PAYMENT OF CERTAIN EXPENSES.....................................................28
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7.1. Transaction Expenses...........................................................28
7.2. Brokers' Fees..................................................................30
7.3. Certain Fees and Expenses......................................................30
7.4. Commitment Fee.................................................................30
SECTION 8. OTHER COVENANTS AND AGREEMENTS..................................................31
8.1. Cooperation with the Construction Agent or the Lessee..........................31
8.2. Covenants of the Owner Trustee and the Holders.................................31
8.3. Credit Party Covenants, Consent and Acknowledgment.............................33
8.3A. Affirmative Covenants.........................................................37
8.3B. Negative Covenants............................................................42
8.4. Sharing of Certain Payments....................................................46
8.5. Grant of Easements, etc........................................................47
8.6. Appointment by the Agent, the Lenders, the Holders and the Owner Trustee.......47
8.7. Collection and Allocation of Payments and Other Amounts........................48
8.8. Release of Properties, etc.....................................................51
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT............................................51
9.1. The Construction Agent's and the Lessee's Credit Agreement Rights..............51
9.2. The Construction Agent's and the Lessee's Trust Agreement Rights...............52
SECTION 10. TRANSFER OF INTEREST...........................................................53
10.1. Restrictions on Transfer......................................................53
10.2. Effect of Transfer............................................................53
SECTION 11. INDEMNIFICATION................................................................54
11.1. General Indemnity.............................................................54
11.2. General Tax Indemnity.........................................................57
11.3. Increased Costs, Illegality, etc..............................................61
11.4. Funding/Contribution Indemnity................................................63
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.......64
11.6. Additional Provisions Regarding Environmental Indemnification.................64
11.7. Additional Provisions Regarding Indemnification...............................65
11.8. Indemnifications Provided by the Owner Trustee in Favor of the Other
Indemnified Persons...........................................................65
SECTION 12. MISCELLANEOUS..................................................................66
12.1. Survival of Agreements........................................................66
12.2. Notices.......................................................................66
12.3. Counterparts..................................................................68
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters...............68
12.5. Headings, etc.................................................................69
12.6. Parties in Interest...........................................................70
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE........70
12.8. Severability..................................................................70
12.9. Liability Limited.............................................................71
12.10. Rights of the Credit Parties.................................................72
12.11. Further Assurances...........................................................72
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12.12. Calculations under Operative Agreements......................................73
12.13. Confidentiality..............................................................73
12.14. Financial Reporting/Tax Characterization.....................................73
12.15. Set-off......................................................................73
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SCHEDULES
Schedule 8.3A(a)(iii) - Form of Officer's Compliance Certificate
Schedule 8.3B(a)(ii) - Schedule of Indebtedness
Schedule 8.3B(e) - Schedule of Insignificant Lines of Business
Schedule 8.3B(f) - Schedule of Investments
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(bb)
F - Form of Secretary's Certificate - Section 5.3(cc)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(dd)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(ee)
I - Form of Officer's Certificate - Section 5.5
J - Description of Material Litigation - Section 6.2(d)
Appendix A - Rules of Usage and Definitions
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of March 9, 2000 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Agreement") is by and among VERITAS OPERATING CORPORATION (formerly known
as Veritas Software Corporation), 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 (in
its individual capacity, the "Trust Company"), except as expressly stated
herein, but solely as the Owner Trustee under the VS Trust 2000-1 (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 VS Trust 2000-1 (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 BANK OF AMERICA, N.A., 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 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 Construction
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
Construction 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 Construction Agency Agreement and
the other Operative Agreements. The
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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 VS Trust 2000-1 based on its Holder Commitment in an amount in
immediately available funds such that the aggregate of all Holder Advances at
all times shall be no less than three percent (3%) of the amount of all
outstanding Advances; 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 Advances
shall be permitted such that the aggregate Holder Advances with respect to such
outstanding Advance is less than three percent (3%) of all outstanding Advances,
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. The Holder Advances and the obligations of the Lessor
under the Trust Agreement shall be secured by the Collateral.
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, the Construction 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
the applicable Property, identified by the Construction Agent, in each case
pursuant to a Deed or Xxxx of Sale, 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
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a Lease Supplement relating to such Property and (e) the Basic 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 Construction 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.
3.4. RATABLE INTERESTS OF THE LENDERS.
Each Lender agrees at all times (a) to hold the same ratable portion of
the aggregate Lender Commitment for Tranche A Loans and the aggregate Lender
Commitment for Tranche B Loans and (b) to make advances consistent with such
committed amounts referenced in Section 3.4(a) in accordance with the
requirements of the Operative Agreements.
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE.
All documents and instruments required to be delivered on the Initial
Closing Date shall be delivered at the offices of Xxxxx & Xxx Xxxxx, PLLC, Bank
of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx, or at such other location as may be determined by the Lessor,
the Agent and the Lessee.
4.2. INITIAL CLOSING DATE; PROPERTY CLOSING DATES; 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 (b) each Acquisition Advance pursuant to
Section 5.3 and (c) each Construction Advance pursuant to Section 5.4. No
Requisition shall be required for the Lenders and the Holders to make Advances
pursuant to or in connection with Sections 7.1(a), 7.1(b) and 11.8.
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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 to the Lessor 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) according to the directions of the Construction Agent to
acquire the Properties in accordance with the terms of this Agreement,
the Construction Agency Agreement and the other Operative Agreements,
(ii) to make Advances to the Construction Agent to permit the
acquisition, testing, engineering, installation, development,
construction, modification, design, and renovation, as applicable, of
the Properties (or components thereof) in accordance with the terms of
the Construction Agency Agreement and the other Operative Agreements,
and (iii) to pay Transaction Expenses and other disbursements payable by
the Lessor under Section 11.8.
(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 and subject to Section 5.9, (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.
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 Loan or Holder
Advance) may be requested during any calendar month and no such
designation from the Construction Agent is required for funding of
Transaction Expenses and other disbursements payable by the Lessor
pursuant to or in connection with Section 11.8; provided, further, the
Construction Agent shall deliver to the Agent on the first Business Day
of each month following an Acquisition Advance
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with respect to a Property until the Completion Date with respect to
such Property, a Requisition for any Construction Advance requested with
respect to such Property for the immediately preceding month. Not less
than (i) three (3) Business Days prior to the date that the first
Advance is requested hereunder and (ii) three (3) Business Days prior to
the date on which any subsequent Acquisition Advance (or on the first
Business Day of the month, in the case of a Construction Advance) is to
be made, the Construction Agent shall deliver to the Agent, (A) with
respect to the date that the first Advance is requested hereunder and
each subsequent 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 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, on the 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 plus any additional amount of Transaction Expenses as
referenced in Sections 7.1(a) and 7.1(b) and any additional amount
respecting any indemnity payment as referenced in Section 11.8, unless
any such funding of Transaction Expenses or any indemnity payment is
declined in writing by each Lender and each Holder (such decision to be
in the sole discretion of each Lender and each Holder) ratably between
the Tranche A Lenders and the Tranche B Lenders with the Tranche A
Lenders funding eighty-five and one-half of one percent (85.5%) of the
Requested Funds and the Tranche B Lenders funding eleven and one-half of
one percent (11.5%) of the Requested Funds), up to an aggregate
principal amount equal to the aggregate of the Available Commitments,
(ii) the Holders shall make Holder Advances based on their respective
Holder Commitments in an aggregate amount equal to three percent (3%) of
the balance of the Requested Funds specified in such Requisition plus
any additional amount of Transaction Expenses as referenced in Sections
7.1(a) and 7.1(b) and any additional amount respecting any indemnity
payment as referenced in Section 11.8, unless any such funding of
Transaction Expenses or any indemnity payment is declined in writing by
each Lender and each Holder (such decision to be in the sole discretion
of each Lender and each Holder), up to
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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 including Transaction Expenses within three (3) Business
Days of the receipt by the Lessor of such Advance or (y) be advanced by
the Lessor on the date of such Advance to the Construction Agent or the
Lessee to pay Property Costs, as applicable. Notwithstanding that the
Operative Agreements state that Advances shall be directed to the
Lessor, each Advance shall in fact be directed to the Construction Agent
(for the benefit of the Lessor) and applied by the Construction Agent
(for the benefit of the Lessor) pursuant to the requirements imposed on
the Lessor under the Operative Agreements.
(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 11.8 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 applicable closing date or
payment date or, if such closing date or payment date does not occur
within three (3) Business Days of the date of the Lessor's receipt of
such Advance, shall be applied regarding the applicable Advance to repay
the Lenders and the Holders and, subject to the terms hereof, and of the
Credit Agreement and the Trust Agreement, shall remain available for
future Advances. Any such amounts held by the Lessor (or the 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
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 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).
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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 and (iii) on a Property Closing Date for the purpose of providing funds
to the Lessor necessary to pay the Transaction Expenses and to acquire 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 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 on each such date;
(b) the performance by the parties to this Agreement of the
material obligations 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;
(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), and a copy of the Xxxx of Sale with
respect to the Equipment (if any), respecting such of the foregoing as
are being acquired on each such date with the proceeds of the Loans and
Holder Advances or which have been previously acquired 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 (other than a
Default that would be cured
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upon application of the proceeds of such Advance, provided that such
proceeds are so applied or provision reasonably satisfactory to the
Agent shall have been made such that the proceeds will be so applied)
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, with such endorsements as the Agent deems necessary, in favor
of the Lessor and the Agent from a title insurance company acceptable to
the Agent, but only with such title exceptions thereto as are acceptable
to the Agent;
(h) the Construction Agent shall have delivered to the Agent an
environmental site assessment respecting each such Property prepared by
an independent recognized professional reasonably acceptable to the
Agent and evidencing no pre-existing environmental condition with
respect to which there is more than a remote risk of loss;
(i) the Construction Agent shall have delivered to the Agent a
Survey respecting the Property;
(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 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 acceptable to the Agent
and a separate flood hazard certificate respecting each such Property
prepared by an independent recognized professional acceptable to the
Agent;
(k) the Agent shall be satisfied that the acquisition, ground
leasing and/or holding of each such Property and the execution of the
Mortgage Instrument and the other Security Documents will not materially
and adversely affect the rights of the Lessor, the Agent, the Holders or
the Lenders under or with respect to the Operative Agreements;
(l) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, the various
Transaction Expenses;
(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 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;
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(n) the Lessee shall have delivered to the Agent with respect to
each such Property the Lease (in form suitable for recording) and a
Lease Supplement;
(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) [RESERVED];
(q) [RESERVED];
(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) [RESERVED];
(u) (i) the Agent shall cause 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 reasonably determined by the Agent by a
nationally recognized search company acceptable to the Agent and (ii)
the Construction Agent shall cause 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;
(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 to the satisfaction of
the Agent;
(w) in the opinion of the Agent and its respective 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) since the date of the most recent audited financial
statements (as delivered pursuant to the requirements of the Lessee
Credit Agreement) of the Lessee, there shall
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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;
(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 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 on and
as of the Initial Closing 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 acceptable to
the Agent attaching and certifying as to (1) the resolutions of its
Board of Directors 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) its certificate of incorporation
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 its behalf the Operative
Agreements to which it is or will be a party and (ii) a good standing
certificate (or local equivalent) from the appropriate office of the
respective states where 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;
(bb) 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 acceptable to the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Initial Closing Date, (ii) each Operative Agreement to which the Lessor
is a party is in full force and effect with respect to it 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;
(cc) 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 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
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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;
(dd) as of the Initial Closing Date only, counsel for the Lessor
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;
(ee) 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 acceptable
to the Agent, addressed to the Lessor, the Agent, the Lenders and the
Holders, from Xxxxxxx, Phleger & Xxxxxxxx LLP;
(ff) [RESERVED];
(gg) [RESERVED]; and
(hh) as of the Property Closing Date for any Property subject to
the Purchase Agreement, the Construction Agent shall have caused to be
delivered to the Agent copies of the Contracts, the Permits, the Records
and the Warranties, in each case as defined in Article I of the Purchase
Agreement.
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 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 correctness on the date of such Advance 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;
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(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
and the Available Holder Commitment (after deducting the Unfunded
Amount) will be sufficient to complete the Improvements;
(e) there shall not have occurred and be continuing any Default
or Event of Default under any of the Operative Agreements (other than a
Default that would be cured upon application of the proceeds of such
Advance, provided that such proceeds are so applied or provision
reasonably satisfactory to the Agent shall have been made such that the
proceeds will be so applied) 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;
(g) prior to or in connection with any request for an Advance for
Hard Costs respecting any Property, the Construction Agent shall have
delivered to the Agent copies of the Plans and Specifications and the
final Construction Budget 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 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 to the reasonable satisfaction of the Agent;
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(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;
(l) in the good faith opinion of the Agent and 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;
(m) [Reserved]; and
(n) prior to or in connection with any request for an Advance for
Hard Costs respecting any Property, the Construction Agent shall have
caused an Appraisal regarding such Property to be provided to the Agent
from an appraiser selected by the Agent.
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 acceptable to the Agent
specifying (a) the address for such Property, (b) the Completion Date for such
Property, (c) detailed, itemized documentation supporting the asserted Property
Cost figures and (d) that all representations and warranties of the Construction
Agent and Lessee in each of the Operative Agreements and each certificate
delivered pursuant thereto are true and correct as of the Completion 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: (w) a title insurance endorsement regarding the title
insurance policy delivered in connection with the requirements of Section
5.3(g), but only to the extent such endorsement is necessary to provide for
insurance in an amount at least equal to the maximum total Property Cost and, if
endorsed, the endorsement shall not include a title change or exception
objectionable to the Agent; (x) an as-built survey for such Property, (y) ACCORD
Evidence of Insurance and/or a certified copy of the insurance policies
respecting such Property as required hereunder and under the Lease Agreement,
and (z) if reasonably requested by the Agent, amendments to the Lessor Financing
Statements executed by the appropriate parties. In addition, on the Completion
Date for such Property the Construction Agent covenants and agrees that the
recording fees, documentary stamp taxes or similar amounts required to be paid
in connection with the related Mortgage Instrument shall be 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.
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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. PAYMENTS.
All payments of principal, interest, Holder Advances, Holder Yield and
other amounts to be made by the Construction Agent or the Lessee under this
Agreement or any other Operative Agreements (excluding Excepted Payments which
shall be paid directly to the party to whom such payments are owed) shall be
made to the 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.
5.9. UNILATERAL RIGHT TO INCREASE THE HOLDER COMMITMENTS AND THE
LENDER COMMITMENTS.
Notwithstanding any other provision of any Operative Agreement or any
objection by any Person (including without limitation any objection by any
Credit Party), (a) each Holder, in its sole discretion, may unilaterally elect
to increase its Holder Commitment in order to fund amounts due and owing
pursuant to Sections 7.1(a), 7.1(b) and/or 11.8, and such other amounts payable
by the Lessor during the Construction Period pursuant to the Operative
Agreements, and (b) each Lender, in its sole discretion, may unilaterally elect
to increase its Lender Commitment
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in order to fund amounts due and owing pursuant to Sections 7.1(a), 7.1(b)
and/or 11.8, and such other amounts payable by the Lessor during the
Construction Period pursuant to the Operative Agreements.
5.10. JOINDER AGREEMENT REQUIREMENTS.
Each Material Domestic Subsidiary of each Credit Party formed or
acquired subsequent to the Initial Closing Date shall become a Guarantor and
shall satisfy the following conditions within thirty (30) days after its
formation or acquisition (or, in the case of a Domestic Subsidiary that was not
a Material Domestic Subsidiary at the time of its formation or acquisition,
within thirty (30) days after such Domestic Subsidiary becomes a Material
Domestic Subsidiary of any Credit Party):
(a) such Material Domestic Subsidiary shall execute and deliver
to the Agent a Joinder Agreement in the form attached hereto as Exhibit
K;
(b) such Material Domestic Subsidiary shall have delivered to the
Agent (x) an Officer's Certificate of such Material Domestic Subsidiary
in the form attached hereto as Exhibit C, (y) a certificate of the
Secretary or an Assistant Secretary of such Material Domestic Subsidiary
in the form attached hereto as Exhibit D and (z) good standing
certificates (or local equivalent) from the respective states where such
Material Domestic Subsidiary is incorporated or organized and where the
principal place of business of the Parent or such Material Domestic
Subsidiary is located as to its good standing in each such state;
(c) such Material Domestic Subsidiary shall have delivered to the
Agent an opinion of counsel (reasonably acceptable to the Agent) in the
form attached hereto as Exhibit H-1 or such other form as is reasonably
acceptable to the Agent and such Material Domestic Subsidiary; and
(d) the Agent shall have received such other documents,
certificates and information as the Agent shall have reasonably
requested.
Notwithstanding any provision of this Section 5.10 or any other
Operative Agreement to the contrary, in the event that either (i) the aggregate
total assets (as determined in accordance with GAAP) of all Domestic
Subsidiaries of the Credit Parties (when taken as a whole) that are not Material
Domestic Subsidiaries and are not otherwise Guarantors exceeds $50,000,000, or
(ii) the aggregate annual revenues for the most recently ended fiscal years of
all Domestic Subsidiaries of the Credit Parties (taken as a whole) that are not
Material Domestic Subsidiaries and are not otherwise Guarantors exceeds
$10,000,000, the Credit Parties shall cause additional Domestic Subsidiaries to
become Guarantors and satisfy the conditions set forth in subsections (a)-(d) of
this Section 5.10 such that neither the level of aggregate assets nor the level
of aggregate revenues, as the case may be, attributable to such Domestic
Subsidiaries that are not Material Domestic Subsidiaries and are not otherwise
Guarantors shall no longer exceed the
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aggregate levels of assets and revenues set forth in clauses (i) and (ii) of
this sentence, respectively.
5.11. PROPERTY COST AS OF THE RENT COMMENCEMENT DATE.
Upon receipt of the Officer's Certificate from the Construction Agent
pursuant to Section 5.5, the Agent shall promptly deliver a notice to the Lessee
specifying the amount allocable to the Property Cost respecting the Land, as
identified on any Lease Supplement relating to Land, and the amount allocable to
the Property Cost respecting the Improvements, as identified on any Lease
Supplement relating to Improvements. Such amounts identified by the Agent shall
be conclusive, absent manifest error.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
Effective as of the Initial Closing Date and the date of each Advance,
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 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
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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;
(e) It, either in its individual capacity or as the Owner
Trustee, has not assigned or transferred any of its right, title or
interest in or under the Lease, the Construction Agency Agreement or its
interest in any Property or any portion thereof, except in accordance
with the Operative Agreements;
(f) No Default or Event of Default under the Operative Agreements
attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative Agreements,
the proceeds of the Loans and Holder Advances shall not be applied by
the Owner Trustee, either in its individual capacity or as 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
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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 00 Xxxxx Xxxx Xxxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000;
(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;
(l) Each Property is free and clear of all Lessor Liens
attributable to the Owner Trustee, either in its individual capacity or
as the Owner Trustee; and
(m) The Owner Trustee, in its trust capacity, is not a party to
any documents, instruments or agreements other than the Operative
Agreements executed by the Owner Trustee, in its trust capacity.
6.2. REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES.
Effective as of the Initial Closing Date, the date of each Advance, the
date each Domestic Subsidiary or Parent, as the case may be, 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 Lessee has delivered to the Agent the financial
statements and other reports referred to in Section 8.3A(a)(i) and (ii)
hereof;
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(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 each Credit Party, have been duly authorized by
all necessary corporate action on the part of each 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 the 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) There are no material actions, suits or proceedings pending
or, to our knowledge, 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
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 or
any transaction described in the Operative Agreements or (iii) shall
have or could reasonably be expected to have a Material Adverse Effect;
provided, for purposes of disclosure, the Credit Parties have described
the litigation set forth on Exhibit J;
(e) No Governmental Action by any Governmental Authority or other
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person pursuant to any Legal Requirement,
contract, indenture, instrument or agreement or for any other reason is
required to authorize or is required in connection with (i) the
execution, delivery or performance of any Operative Agreement, (ii) the
legality, validity, binding effect or enforceability of any Operative
Agreement, (iii) the acquisition, ownership, construction, completion,
occupancy, operation, leasing or subleasing of any Property or (iv) any
Advance, in each case, except those which have been obtained and are in
full force and effect;
(f) Upon the execution and delivery of the Lease and each
Lease Supplement to the Lease, (i) the Lessee will have unconditionally
accepted the Property subject to the
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Lease Supplement and 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, in each case which accrue prior to the Rent Commencement Date
with respect to a particular Property;
(h) All information (including without limitation the financial
statements and other reports delivered to the Agent pursuant to Section
8.3A(a)(i) and (ii)) 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
0000 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000;
(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. Each Credit Party is in all material respects in compliance
with its respective 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 will be constructed, renovated,
modified or demolished in accordance with the terms of this Agreement.
Each
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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, 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;
(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 Land or
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) (i) The Security Documents create, as security for the
Obligations (as such term is defined in the Security Agreement),
valid and enforceable security
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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 (A) 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 and (B) from
and after the applicable Property Closing Date, Permitted Liens.
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;
(ii) The Lease Agreement creates, as security for the
obligations of the Lessee under the Lease Agreement, valid and
enforceable security interests in, and Liens on, each Property
leased thereunder, in favor of the Lessor, and such security
interests and Liens are subject to no other Liens other than
Liens that are expressly set forth as title exceptions on the
title commitment issued under Section 5.3(g) with respect to the
applicable Property, to the extent such title commitment has been
approved by the Agent. Upon recordation of the Lease Agreement in
the real estate recording office in the applicable Approved State
identified by the Construction Agent or the Lessee, the Lien
created by the Lease Agreement in the real property described
therein shall be a perfected first priority mortgage Lien on such
real property 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 any Property comprised of personal
property can be perfected by the filing in the filing offices in
the State of California or elsewhere identified by the
Construction Agent or the Lessee upon filing of the Lessor
Financing Statements in such filing offices, a security interest
created by the Lease Agreement shall be perfected first priority
security interests in such personal property in favor of the
Lessor, which rights pursuant to the Lessor Financing Statements
are assigned to the 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
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(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 Material Adverse
Effect. Upon completion of the Improvements for the 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) [Reserved];
(v) Each Credit Party has (i) initiated a review and assessment
of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers, vendors and customers
of each Credit Party and its Subsidiaries) that could be adversely
affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis and (iii) to
date, implemented that plan in accordance with that timetable. Based on
the foregoing, each Credit Party believes that all computer applications
(including those of suppliers, vendors and customers of each Credit
Party and its Subsidiaries) that are material to its or any of its
Subsidiaries' business and operations are able to perform properly
date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant"), except to the extent that a failure
to do so shall not have and could not reasonably be expected to have a
Material Adverse Effect; and
(w) As of September 30, 1999, all of the following had occurred
(in the order designated below):
(i) the merger of Merger Sub with and into the Lessee
occurred (making the Lessee a wholly-owned Subsidiary of the
Parent) in accordance with the terms of the Reorganization
Agreement and applicable law;
(ii) each share of Capital Stock of the Lessee was
converted into one share of Capital Stock of the Parent in
accordance with the terms of the Reorganization Agreement and
applicable law; and
(iii) the Parent acquired all of the Capital Stock of NSMG
and the NSMG Business in accordance with the terms of the
Reorganization Agreement and applicable law.
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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
is 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 Section 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
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. 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
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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. Each Guarantor also expressly waives any and
all benefits under the California Civil Code Sections 2787 to 2855, inclusive.
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) 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)
any of the provisions of 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
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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.
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
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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 ADDITIONAL GUARANTOR WAIVERS.
(a) The provisions of Section 6B of the Participation Agreement
shall remain in full force and effect notwithstanding (i) any release of
any Credit Party from any liability with respect to the Company
Obligations; or (ii) any release or subordination of any real or
personal property now or hereafter held by the Agent as security for the
performance of the Company Obligations;
(b) Each Guarantor expressly waives any and all benefits which
might otherwise be available to it under California Civil Code Sections
2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433;
(c) Each Guarantor hereby waives any and all defenses, including
but not limited to such Guarantor's defense of estoppel discussed in
Union Bank vs. Gradsky (1968) 265 Cal.App.2d 40, based upon a
foreclosure against all or any part of the real property security for
the indebtedness evidenced by the Notes or Holder Certificates pursuant
to the power of sale contained in any Operative Agreement as opposed to
proceeding by way of judicial foreclosure. Such Guarantor waives all
rights and defenses arising out of an election of remedies by the Agent,
even though that election of remedies, such as a nonjudicial foreclosure
with respect to security for a guaranteed obligation, has destroyed such
Guarantor's rights of subrogation and reimbursement by the operation of
Section 580d of the California Code of Civil Procedure or otherwise;
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(d) Each Guarantor hereby waives all rights and defenses that
such Guarantor may have because any of the Company Obligations are
secured by real property. This means, among other things: (1) The Agent
may collect from any Guarantor without first foreclosing on any real or
personal property collateral pledged by any other Person, including
without limitation, Lessee or any of its Subsidiaries; (2) If the Agent
forecloses on any real property collateral pledged by any Guarantor: (A)
the amount of debt may be reduced only by the price for which the
collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price, (B) the Agent may collect from any
Guarantor even if the Agent, by foreclosing on the real property
collateral, has destroyed any right such Guarantor may have to collect
from any other Credit Party. This is an unconditional and irrevocable
waiver of any rights and defenses any Guarantor may have because the
Company Obligations are secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based
upon Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.
(e) In the case of a power of sale foreclosure under any
Operative Agreement, the fair market value of the real property
collateral shall be conclusively deemed to be the amount of the
successful bid at the foreclosure sale. Each Guarantor waives any rights
or benefits it may now or hereafter have to a fair value hearing under
Section 580a of the California Code of Civil Procedure. The Agent shall
have absolutely no obligation to make a bid at any foreclosure sale, but
rather may make no bid or bid any amount which the Agent, in its sole
discretion, deems appropriate.
(f) The Agent acknowledges that the provisions of this Section
6B.9 are intended to constitute a waiver of any rights and defenses any
Guarantor may now or hereafter have as a "guarantor" to the extent any
Operative Agreement executed by such Guarantor is construed to be in
whole or in part a guaranty of the Company Obligations.
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 funds are made
available by the Lenders and the Holders in an amount sufficient to
allow such payment and without regard to whether such amounts are
referenced in any Requisition. On the Initial Closing Date after
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satisfaction of the conditions precedent for such date (excluding the
requirement that a Requisition be delivered), 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) Assuming no Default (other than a Default that would be cured
upon application of the proceeds of such Advance, provided such proceeds
are so applied or provision reasonably satisfactory to the Agent shall
have been made such that such proceeds will be so applied) 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 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 funds are made
available by the Lenders and the Holders in an amount sufficient to
allow such payment and without regard to whether such amounts are
referenced in any Requisition. On each Property Closing Date, on the
date of any Construction Advance or any Completion Date, after
satisfaction of the conditions precedent for such date (excluding the
requirement that a Requisition be delivered), 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).
(c) All fees payable pursuant to the Operative Agreements shall
be calculated on the basis of a year of three hundred sixty (360) days
for the actual days elapsed.
(d) The Lessor shall use commercially reasonable efforts to cause
invoices respecting the Transaction Expenses set forth in this Section
7.1 of legal counsel and other professional service providers retained
by the Lessor to be provided to the Lessee; provided, however, the
failure of the Lessor to cause such invoices to be provided shall in no
way excuse or otherwise affect the payment obligations for such
Transaction Expenses.
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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 $5,000 initial and
$5,000 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 Credit Parties or any third party and (d) all reasonable
costs and expenses incurred by the Construction Agent, the Lessee, 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. COMMITMENT 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 commitment
fee (the "Lender Commitment Fee") equal to the product of the average daily
Available Commitment of each Lender during the applicable portion of the
Commitment Period multiplied by a per annum rate equal to the Applicable
Percentage for the Lender Commitment Fee and (b) the Holders, respectively, a
commitment fee (the "Holder Commitment Fee") equal to the product of the average
daily Available Holder Commitment of each Holder during the applicable portion
of the Commitment Period multiplied by a per annum rate equal to the Applicable
Percentage for the Holder Commitment Fee. Such Commitment Fees shall be
calculated on the basis of a year of three hundred sixty (360) days for the
actual days elapsed and shall be payable quarterly in arrears on each Commitment
Fee Payment Date. If all or a portion of any such Commitment Fee shall not be
paid when due, such overdue amount shall bear interest, payable by the Lessee on
demand, at a rate per annum equal to the ABR (or in the case of overdue amounts
relating to Holder Commitment Fees, the ABR plus 1.00%) plus two percent (2%)
from the date of such non-payment until such amount is paid in full.
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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 the 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 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;
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(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 there shall be no Lease Event of Default that
shall have occurred and be continuing), which consent shall not be
unreasonably withheld or delayed;
(d) The Owner Trustee, in its capacity as the Owner Trustee under
the Trust Agreement, and not in its individual capacity, shall not
contract for, create, incur or assume any Indebtedness, or enter into
any business or other activity or enter into any contracts or
agreements, other than pursuant to or under the Operative Agreements;
(e) The 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 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000,
or if it shall change its name; and
(h) The Owner Trustee shall take or refrain from taking such
actions and grant or refrain from granting such approvals with respect
to the Operative Agreements and/or relating to any Property in each case
as directed in writing by the 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 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.
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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 until such liens are
subject to release in accordance with this Agreement and the other
Operative Agreements. Each Credit Party shall, to the extent reasonably
requested by any of the other parties hereto, cooperate with the other
parties in connection with their covenants herein or in the other
Operative Agreements and shall from time to time duly execute and
deliver any and all such future instruments, documents and financing
statements (and continuation statements related thereto) as any other
party hereto may reasonably request.
(b) The Lessor hereby instructs 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 entitled thereto) 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 entitled thereto) 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.
(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) The Lessee hereby covenants and agrees to cause an Appraisal
or reappraisal (in form and substance 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.
(e) 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 in accordance with the terms and conditions of this Agreement and
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the other Operative Agreements. 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, unused 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.
(f) 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).
(g) The Lessee hereby covenants and agrees that, respecting each
Property, Non-Integral Equipment financed under the Operative Agreements
may constitute up to, but shall not exceed, ten percent (10%) of the
aggregate Advances extended at or prior to such time with respect to
such Property.
(h) The Lessee hereby covenants and agrees that as of Completion
(i) the aggregate Property Cost shall not exceed $40,000,000 and (ii)
each parcel of the Property shall be a Permitted Facility.
(i) 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 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx
00000 or if it shall change its name.
(j) Unless the Agent otherwise agrees in writing, the Lessee
hereby covenants and agrees that the aggregate Property Cost of
Non-Integral Equipment purchased for any reason by the Lessee prior to
the Expiration Date shall not exceed ten percent (10%) of the aggregate
Property Cost for all Properties funded during the Commitment Period.
(k) Beginning with the fiscal quarter of the Lessee that begins
on January 1, 2000 and ends on March 31, 2000, and for each fiscal
quarter of the Lessee thereafter, the Lessee shall furnish to the Agent
a written notice setting forth the Lessee's calculation, in reasonable
detail, of the ratio of Funded Indebtedness to EBITDA as of the last day
of each such period and the level of EBITDA for such fiscal quarter of
the Lessee, such written notice to be provided in the form of the
officer's compliance certificate provided in Schedule 8.3A(a)(iii) and
by the date required pursuant to Section 8.3A(a)(iii).
(l) 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 Construction Agency Agreement.
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(m) 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.
(n) 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 each Credit Party,
unless consent has been obtained from the Majority Secured Parties,
will:
(i) except as permitted by Sections 8.3A and 8.3B,
preserve and maintain its separate legal existence and all
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(n)(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.
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(o) [RESERVED].
(p) Promptly after obtaining any required architectural approvals
by any business park or any other applicable entity with oversight
responsibility for the applicable Improvements, the Construction Agent
shall deliver to the Agent copies of the same.
(q) Each Credit Party will promptly notify the Agent in the event
such Credit Party discovers or determines that any computer application
(including those of any supplier, vendor or customer of such Credit
Party or any of its Subsidiaries) that is material to such Credit
Party's or any of its Subsidiaries' business and operations is not Year
2000 Compliant, except to the extent that such failure shall not have
and could not reasonably be expected to have a Material Adverse Effect.
(r) 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 of the Credit Parties shall include without limitation
arrangement fees, administrative fees, unused fees, breakage costs,
indemnities, trustee fees and transaction expenses incurred by the
parties hereto in connection with the transactions contemplated by the
Operative Agreements.
(s) Each Credit Party hereby covenants and agrees (i) to cause
each Material Domestic Subsidiary of each Credit Party formed or
acquired after the Initial Closing Date to execute a Joinder Agreement
and to observe the terms of Sections 5.10(a)-(d), all within thirty (30)
days of the formation or acquisition of such Material Domestic
Subsidiary (or, in the case of a Domestic Subsidiary that was not a
Material Domestic Subsidiary at the time of its formation or
acquisition, within thirty (30) days after such Domestic Subsidiary
becomes a Material Domestic Subsidiary of any Credit Party), and (ii) to
cause such additional Domestic Subsidiaries of any Credit Party to
execute a Joinder Agreement and observe the terms of Section 5.10(a)-(d)
as required in accordance with Section 5.10.
(t) The Lessee hereby covenants and agrees that it will (i) cause
the Improvements to be constructed by, and use commercially reasonable
efforts to cause the demolition of existing improvements to be performed
by, a Contractor that is a licensed general contractor, and that shall
carry insurance of the types and in the minimum amounts set forth in
Section 14.2(c) of the Lease, under a maximum fixed price contract, and
(ii) cause such Contractor to retain licensed consultants, engineers,
architects and subcontractors, all of whom shall carry insurance of the
types and in the minimum amounts set forth in Section 14.2(c) of the
Lease, in connection with the construction of Improvements and the
demolition of existing improvements in accordance with the terms and
conditions of the Operative Agreements.
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(u) If any credit facility, loan agreement or other financing
arrangement extended to any Credit Party or any Affiliate of any Credit
Party, other than pursuant to the Operative Agreements and other than
Indebtedness permitted under Sections 8.3B(a)(iii) and (vii), is ever
secured by any collateral, the Secured Parties shall share on a
pari-passu basis (based on the respective amounts outstanding under the
Operative Agreements relative to the amounts outstanding under any such
credit facility, loan agreement or other financing arrangement) in all
such collateral.
8.3A. AFFIRMATIVE COVENANTS.
(a) INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the Agent
on behalf of the Lenders:
(i) Annual Financial Statements. As soon as available, and
in any event within 90 days after the close of each fiscal year of the
Lessee, a consolidated and consolidating balance sheet and income
statement of the Credit Parties and their Consolidated Subsidiaries as
of the end of such fiscal year, together with related consolidated and
consolidating statements of operations and retained earnings and of cash
flows for such fiscal year, in each case setting forth in comparative
form consolidated and consolidating figures for the preceding fiscal
year, all such financial information described above to be in reasonable
form and detail and audited by independent certified public accountants
of recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP (except for changes with which
such accountants concur) and shall not be limited as to the scope of the
audit or qualified as to the status of the Credit Parties and their
Consolidated Subsidiaries as a going concern or any other material
qualifications or exceptions.
(ii) Quarterly Financial Statements. As soon as available,
and in any event within 45 days after the close of each fiscal quarter
of the Credit Party (other than the fourth fiscal quarter, in which case
90 days after the end thereof) a consolidated and consolidating balance
sheet and income statement of the Credit Parties and their Consolidated
Subsidiaries as of the end of such fiscal quarter, together with related
consolidated and consolidating statements of operations and retained
earnings and of cash flows for such fiscal quarter, in each case setting
forth in comparative form consolidated and consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
the chief financial officer of the Lessee to the effect that such
quarterly financial statements fairly present in all material respects
the financial condition of the Credit Parties and their Consolidated
Subsidiaries and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
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(iii) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 8.3A(a)(i) and
8.3A(a)(ii) above, a certificate of the chief financial officer of the
Lessee or the Parent, as applicable, substantially in the form of
Schedule 8.3A(a)(iii), (i) demonstrating compliance with the financial
covenants contained in Section 8.3(k) by calculation thereof as of the
end of each such fiscal period and (ii) stating that no Default or Event
of Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Credit
Parties propose to take with respect thereto.
(iv) Annual Business Plan and Budgets. At least 30 days
prior to the end of each fiscal year of the Lessee, beginning with the
fiscal year ending December 31, 1999, an annual budget of the Parent and
its Consolidated Subsidiaries containing, among other things, pro forma
financial statements for the next fiscal year.
(v) Accountant's Certificate. Within 120 days after the
close of each fiscal year of the Lessee, a certificate of the
accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of
their audit, they have become aware of any Default or Event of Default
and, if any such Default or Event of Default exists, specifying the
nature and extent thereof.
(vi) Auditor's Reports. Promptly upon receipt thereof, a
copy of any other report or "management letter" submitted by independent
accountants to the Parent or any of its Consolidated Subsidiaries in
connection with any annual, interim or special audit of the books of
such Person.
(vii) Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as the Parent or any Consolidated Subsidiary shall
send to its shareholders or to a holder of any Indebtedness owed by the
Parent or any Consolidated Subsidiary in its capacity as such a holder
and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(viii) ERISA. Upon the Parent, any of its Consolidated
Subsidiaries or any ERISA Affiliate obtaining knowledge thereof, the
Lessee will give written notice to the Agent promptly (and in any event
within five Business Days) of: (i) any event or condition, including,
but not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against a Credit Party or
any of its Consolidated Subsidiaries or any ERISA Affiliates, or of a
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determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which a Credit Party or any of its
Consolidated Subsidiaries or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect, together with a description
of any such event or condition or a copy of any such notice and a
statement by the chief financial officer of the Lessee briefly setting
forth the details regarding such event, condition, or notice, and the
action, if any, which has been or is being taken or is proposed to be
taken by a Credit Party or any of its Consolidated Subsidiaries with
respect thereto. Promptly upon request, the Lessee shall furnish the
Agent and the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to,
copies of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(ix) Environmental.
(A) Upon the reasonable written request of the Agent, the
Lessee will furnish or cause to be furnished to the Agent, at the
Lessee's expense, a report of an environmental assessment of
reasonable scope, form and depth, (including, where appropriate,
invasive soil or groundwater sampling) by a consultant reasonably
acceptable to the Agent as to the nature and extent of the
presence of any Hazardous Materials on any Real Properties and as
to the compliance by a Credit Party or any of its Consolidated
Subsidiaries with Environmental Laws at such Real Properties. If
the Lessee fails to deliver such an environmental report within
seventy-five (75) days after receipt of such written request then
the Agent may arrange for same, and the Credit Parties hereby
grant to the Agent and their representatives access to the Real
Properties to reasonably undertake such an assessment (including,
where appropriate, invasive soil or groundwater sampling). The
reasonable cost of any assessment arranged for by the Agent
pursuant to this provision will be payable by the Credit Parties
on demand (except that during the Construction Period, such cost
shall be paid by Lessor; provided, however, the Lessor shall pay
such amounts described in this Section 8.3A(a)(ix) only if funds
are made available by the Lenders and the Holders in an amount
sufficient to allow such payment) and added to the obligations
secured by the Security Documents.
(B) The Lessee and its Consolidated Subsidiaries will
conduct and complete all investigations, studies, sampling, and
testing and all remedial, removal, and other actions necessary to
address all Hazardous Materials on, from or affecting any of the
Real Properties to the extent necessary to be in compliance with
all Environmental Laws and with the validly issued orders and
directives of all
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Governmental Authorities with jurisdiction over such Real
Properties to the extent any failure could have a Material
Adverse Effect.
(x) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of a Credit Party and any of its Consolidated
Subsidiaries as the Agent or the Majority Secured Parties may reasonably
request.
(xi) Reports and financial statements required to be
delivered pursuant to subsections (a)(i), (a)(ii) and (a)(vii)(i) of
this Section 8.3A(a) shall be deemed to have been delivered on the date
on which such report is posted on the Securities and Exchange
Commission's website on the internet at the website address xxx.xxx.xxx
or the Free Xxxxx website on the internet at the website
xxx.xxxxxxxxx.xxx and after Lessee has provided written notice to the
Agent, each Lender and each Holder that such report or financial
statement has been so posted; provided that Lessee shall deliver paper
copies of such reports and financial statements to the Agent and any
Lender or Holder that requests Lessee to deliver such paper copies until
written notice to cease delivering paper copies is given by the Agent or
such Lender or Holder; provided further that, notwithstanding the
foregoing, Lessee shall be required to deliver paper copies to each of
the Agent and any Lender or Holder of any other documentation required
pursuant to this Section 8.3A(a). The Agent shall have no obligation to
request the delivery or to maintain copies of the reports referred to in
subsections (a)(i), (a)(ii) and (a)(vii)(i) of this Section 8.3A(a) or
to monitor compliance by Lessee with any such request for delivery and
each Lender or Holder shall be solely responsible for requesting
delivery to it or maintaining copies of such reports and financial
statements.
(b) PRESERVATION OF EXISTENCE AND FRANCHISES.
Each of the Credit Parties will, and will cause each of its
Consolidated Subsidiaries to, do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and
authority, except in connection with any Permitted Acquisition.
(c) BOOKS AND RECORDS.
Each of the Credit Parties will, and will cause each of its
Consolidated Subsidiaries to, keep complete and accurate books and
records of its transactions in accordance with good accounting practices
on the basis of GAAP (including the establishment and maintenance of
appropriate reserves).
(d) COMPLIANCE WITH LAW.
Each of the Credit Parties will, and will cause each of its
Consolidated Subsidiaries to, comply with all laws, rules, regulations
and orders, and all applicable restrictions imposed by all Governmental
Authorities, applicable to it and its Property if noncompliance
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with any such law, rule, regulation, order or restriction could have a
Material Adverse Effect.
(e) PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Subject to Lessee's permitted contest rights under Section 11.2
hereof and Section 13.1 of the Lease, each of the Credit Parties will,
and will cause each of its Consolidated Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien upon any of its properties, and (c) except as
prohibited hereunder, all of its other Indebtedness as it shall become
due; provided, however, that a Credit Party and any of its Consolidated
Subsidiaries shall not be required to pay any such tax, assessment,
charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves
therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) could give rise to an immediate
right to foreclose on a Lien securing such amounts or (ii) could have a
Material Adverse Effect.
(f) MAINTENANCE OF PROPERTY.
Each of the Credit Parties will, and will cause each of its
Consolidated Subsidiaries to, maintain and preserve its properties and
equipment material to the conduct of its business in good repair,
working order and condition, normal wear and tear and casualty and
condemnation excepted, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements
thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
(g) PERFORMANCE OF OBLIGATIONS.
Each of the Credit Parties will, and will cause each of its
Consolidated Subsidiaries to, perform in all material respects all of
its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is
a party or by which it is bound.
(h) FINANCIAL COVENANTS.
(i) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Lessee, shall be less than or equal to:
(A) From the Initial Closing Date to and
including September 30, 2000, 2.50 to 1.0;
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(B) From October 1, 2000 to and including
September 30, 2001, 2.25 to 1.0; and
(C) From October 1, 2001 and thereafter, 2.0 to
1.0.
(ii) EBITDA. EBITDA, for each period set forth below, as shown on
the financial statements of Credit Parties and their Consolidated
Subsidiaries delivered pursuant to Section 8.3(A)(a)(i), shall not be
less than (i) $200,000,000 for each twelve month period ending December
31, 1999, March 31, 2000, June 30, 2000 and September 30, 2000, (ii)
$250,000,000 for each twelve month period ending December 31, 2000,
March 31, 2001, June 30, 2001 and September 30, 2001 (iii) $375,000,000
for each twelve month period ending December 31, 2001, March 31, 2002,
June 30, 2002 and September 30, 2002, and (iv) $500,000,000 for each
twelve month period ending as of December 31, 2002 and each March 31,
June 30, September 30 and December 31 thereafter.
(iii) Quick Ratio. The Quick Ratio, as of the last day of each
fiscal quarter of the Lessee, shall be greater than or equal to 1.50 to
1.0.
8.3B. NEGATIVE COVENANTS.
(a) INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness arising under this Participation
Agreement and the other Operative Agreements;
(ii) Indebtedness of a Credit Party and its Consolidated
Subsidiaries set forth in Schedule 8.3B(a)(ii) (and renewals,
refinancings and extensions thereof on terms and conditions no less
favorable to such Person than such existing Indebtedness);
(iii) purchase money Indebtedness (including obligations
in respect of Capital Leases) hereafter incurred by a Credit Party or
any of its Consolidated Subsidiaries to finance the purchase of fixed
assets provided that (i) the total of all such Indebtedness for all such
Persons taken together (including any such Indebtedness referred to in
subsection (ii) above) shall not exceed (A) during fiscal year 1999 and
2000, an aggregate principal amount of $25,000,000 at any one time
outstanding and (B) at any time subsequent to fiscal year 2000,
$40,000,000 at any one time outstanding; (ii) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed;
and (iii) no such Indebtedness shall be refinanced for a principal
amount in excess of the principal balance outstanding thereon at the
time of such refinancing;
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(iv) other unsecured Indebtedness (exclusive of
Indebtedness permitted under subsection (v) and subsection (vi) of this
Section 8.3B(a)) of the Credit Parties and their Consolidated
Subsidiaries in an aggregate amount not to exceed $300,000,000 on terms
and conditions satisfactory in form and substance to the Majority
Secured Parties; provided, however, the amount of Indebtedness permitted
under this subsection (iv) shall be reduced by an amount equal to the
sum of (a) the aggregate outstanding Loans, plus (b) the aggregate
outstanding Holder Advances, plus (c) accrued and unpaid Interest or
Holder Yield due and owing on such Loans or Holder Advances, plus (d)
any other amounts due and owing by the Lessee or the Construction Agent
to any Person under any Operative Agreement;
(v) the Subordinated Debt;
(vi) Indebtedness of a Credit Party consisting of
unsecured convertible subordinated debentures on terms and conditions
(including, without limitation, the subordination terms) reasonably
acceptable to the Agent, and any renewal, refinancings or extensions
thereof on terms and conditions (including, without limitation, the
subordinations terms) reasonably acceptable to the Agent; and
(vii) Indebtedness arising under the Mountain View Lease
Financing.
(b) LIENS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to contract, create, incur, assume or permit to exist any
Lien with respect to any of its Property, whether now owned or after
acquired, except for Permitted Liens.
(c) NATURE OF BUSINESS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, substantively alter the character or conduct of its
business from that conducted as of the Initial Closing Date or engage in
any business other than the business conducted as of the Initial Closing
Date other than activities in the systems management software business
substantially similar or related to such businesses.
(d) CONSOLIDATION, MERGER, DISSOLUTION, ETC.
No Credit Party will, nor will it permit any Consolidated
Subsidiaries to, enter into any transaction of merger or consolidation
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that, notwithstanding the foregoing provisions of
this Section 8.3B(d), (a) the Lessee may merge or consolidate with any
of its Consolidated Subsidiaries provided that (i) the Lessee shall be
the continuing or surviving corporation, and (ii) after giving effect to
such transaction, no Default or Event of Default arises, (b) any
Consolidated Subsidiary of the Lessee may be merged or consolidated with
or into any other Consolidated Subsidiary of the Lessee provided that
after giving effect to such
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transaction no Default or Event of Default exists and (c) any
Wholly-Owned Subsidiary of the Lessee may dissolve, liquidate or wind up
its affairs at any time provided that such dissolution, liquidation or
winding up, as applicable, could not have a Material Adverse Effect.
(e) ASSET DISPOSITIONS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, sell, lease, transfer or otherwise dispose of any
Property (including, without limitation, pursuant to any sale/leaseback
transaction or securitization transaction) other than (i) the sale of
assets in the ordinary course of business for fair consideration, (ii)
the sale or disposition of assets no longer used or useful in the
conduct of such Person's business and (iii) the sale by NSMG for fair
consideration of those lines of business identified on Schedule 8.3B(e).
(f) INVESTMENTS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, make Investments in or to any Person, except for
Permitted Investments.
(g) RESTRICTED PAYMENTS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, directly or indirectly, declare, order, make or set
apart any sum for or pay any Restricted Payment, except (i) to make
dividends payable solely in the same class of Capital Stock of such
Person so long as no Default or Event of Default exists and is
continuing or would be directly or indirectly caused as a result
thereof, (ii) to make dividends or other distributions payable to the
Lessee (directly or indirectly through Subsidiaries), (iii) prior to the
Reorganization, the repurchase by the Lessee of outstanding shares of
Capital Stock of the Lessee so long as no Default or Event of Default
exists and is continuing or would be directly or indirectly caused as a
result thereof and (iv) after the Reorganization, the repurchase by the
Parent of outstanding shares of Capital Stock of the Parent so long as
no Default or Event of Default exists and is continuing or would be
directly or indirectly caused as a result thereof.
(h) OTHER INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, (i) after the issuance thereof, amend or modify (or
permit the amendment or modification of) any of the terms of any
Indebtedness of a Credit Party or any of its Consolidated Subsidiaries
if such amendment or modification would add or change any terms in a
manner adverse to such Credit Party or any of its Consolidated
Subsidiaries, or shorten the final maturity or average life to maturity
or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto or change any
subordination provision thereof or (ii) make (or give any notice with
respect thereto) any voluntary or optional payment or prepayment or
redemption or acquisition for value of
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(including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of
paying when due), refund, refinance or exchange of any other
Indebtedness of a Credit Party or any of its Consolidated Subsidiaries.
(i) TRANSACTIONS WITH AFFILIATES.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, enter into or permit to exist any transaction or series
of transactions with any officer, director, shareholder, Subsidiary or
Affiliate of such Person other than (a) transactions permitted by
Section 8.3B(d), Section 8.3B(f) or Section 8.3B(g), (b) normal
compensation and reimbursement of expenses of officers and directors,
(c) any employment agreement (including customary benefits thereunder)
that is entered into in the ordinary course of business and (d) other
transactions which are entered into in the ordinary course of such
Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.
(j) FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, (a) change its fiscal year without having first
provided 30 days prior written notice to the Agent, or (b) amend, modify
or change its articles of incorporation (or corporate charter or other
similar organizational document) or bylaws (or other similar document)
in any manner that would reasonably be likely to adversely affect the
rights of the Lenders and Holders without the prior written consent of
the Majority Secured Parties.
(k) LIMITATION ON RESTRICTED ACTIONS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on
the ability of any such Person to (a) pay dividends or make any other
distributions on such Person's Capital Stock or with respect to any
other interest or participation in, or measured by, its profits, (b) pay
any Indebtedness or other obligation owed to a Credit Party or any of
its Consolidated Subsidiaries, (c) make loans or advances to Credit
Party or any of its Consolidated Subsidiaries, (d) sell, lease or
transfer any of its properties or assets to a Credit Party or any of its
Consolidated Subsidiaries, except (in respect of any of the matters
referred to in clauses (a)-(d) above) for such encumbrances or
restrictions existing under or by reason of (i) this Participation
Agreement and the other Operative Agreements or (ii) applicable law.
(l) OWNERSHIP OF SUBSIDIARIES
Notwithstanding any other provisions of this Credit Agreement to
the contrary, the Credit Parties will not, nor will they permit any of
their Consolidated Subsidiaries to, (i)
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permit any Person (other than the Parent, the Lessee or any Wholly-Owned
Subsidiary of the Lessee) to own any Capital Stock of any Subsidiary of
a Credit Party, (ii) permit any Subsidiary of a Credit Party to issue
any shares of preferred Capital Stock or (iii) permit, create, incur,
assume or suffer to exist any Lien on any Capital Stock of any
Subsidiary of a Credit Party.
(m) SALE LEASEBACKS.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capitalized Lease, of any Property
(whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which such Credit Party or any of its Consolidated
Subsidiaries has sold or transferred or is to sell or transfer to a
Person which is not a Credit Party or any of its Consolidated
Subsidiaries or (b) which a Credit Party or any of its Consolidated
Subsidiaries intends to use for substantially the same purpose as any
other Property which has been sold or is to be sold or transferred by
such Credit Party or its Consolidated Subsidiaries to another Person
which is not a Credit Party or any of its Consolidated Subsidiaries in
connection with such lease.
(n) NO FURTHER NEGATIVE PLEDGES.
No Credit Party will, nor will it permit any of its Consolidated
Subsidiaries to, enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for any obligation if
security is given for any other obligation, except pursuant to this
Participation Agreement and the other Operative Agreements.
(o) CAPITAL EXPENDITURES.
The Credit Parties hereby agree that the Credit Parties and their
Consolidated Subsidiaries will not make any Capital Expenditures if any
Default or Event of Default has occurred and is continuing or would be
directly or indirectly caused as a result thereof.
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 such Credit
Party directly to the Agent as more particularly provided in Section 8.7 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.
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8.5. GRANT OF EASEMENTS, ETC.
The Owner Trustee, the Agent, the Lenders and the Holders hereby agree
that, so long as no Event of Default shall have occurred and be continuing, the
Lessee may take the following actions in the name and stead of the Owner Trustee
(but at Lessee's sole cost and expense) in connection with the transactions
contemplated by the Construction 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 entered into
consistent with Lessee's practices with respect to other properties owned by the
Lessee and shall be on commercially reasonable terms so as not to diminish the
fair market value of any Property. The Owner Trustee shall, upon Lessee's
reasonable request, promptly execute and deliver any instrument necessary or
appropriate to confirm such grant, release, dedication or transfer to any Person
permitted under this Section 8.5.
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 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
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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 5.8 and
otherwise in accordance with the terms of this Agreement to pay to (i)
the Agent any and all Rent (excluding Excepted Payments) and any and all
other amounts of any kind or type under any of the Operative Agreements
due and owing or payable 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 (subject in all cases to Section 8.7(c)):
(i) Any such payment or amount identified as or deemed to
be Basic Rent shall be applied and allocated by the Agent first,
ratably to the Lenders and the Holders 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 to the payment of accrued Holder Yield with respect to the
Holder Advances and thereafter the portion of the Holder Advances
which is due on such date; and second, if no Default or Event of
Default has occurred and is continuing, any excess shall be paid
to such Person or Persons as the Lessee may designate; provided,
that if a Default or Event of Default has occurred and is
continuing, such excess (if any) shall instead be held by the
Agent until the earlier of (I) the
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first date thereafter on which no Default or Event of Default
shall be continuing (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 Construction Agency Agreement, then in each case,
the Lessor shall be required to pay such amount received (1) if
no Acceleration has occurred, to prepay the principal balance of
the Loans and the Holder Advances, on a pro rata basis, a portion
of such amount to be distributed to the Lenders and the Holders
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) 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, 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,
third, 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, fourth, to any and all
other amounts owing under the Operative Agreements to the Lenders
under the Tranche B Loans, fifth, to any and all other amounts
owing under the Operative Agreements to the Holders, sixth, to
any and all other amounts owing under the Operative Agreements to
the Lenders under the Tranche A Loans, 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
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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) An amount equal to (A) any such payment identified as
a payment of the Maximum Amount or any 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 and (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 to 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, ratably to the
payment of the principal balance of all Holder Advances plus all
outstanding Holder Yield with respect to such outstanding Holder
Advances, fourth, to the payment of any other amounts owing to
the Lenders hereunder or under any of the other Operative
Agreement, 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).
(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 payment in full of the Loans, the Holder Advances
and all other amounts then due and owing by the Owner Trustee hereunder
or under any Credit
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Document and the payment in full of all other amounts then due and owing
to the Lenders, the Holders, the Agent, the Owner Trustee and the other
Financing Parties pursuant to the Operative Agreements, any moneys
remaining with the Agent shall be returned to the Lessee. 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 or any distribution of money to the Lessee, any
such amounts shall first be applied and allocated to the payment of (i)
any and all sums advanced by the Agent in order to preserve the
Collateral or 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
Construction 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.
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;
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(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;
(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; and
(h) the right to notice of and the opportunity to cure any Credit
Agreement Event of Default within the applicable period set forth in
Section 6 of the Credit Agreement (except that the Lessee shall not have
any additional right to cure any Credit Agreement Event of Default that
is also a Lease Event of Default beyond such cure rights as are
expressly set forth in Section 17 of the Lease).
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 9.1 of the Trust Agreement; provided, however, that no removal
of the Owner Trustee and appointment of a successor Owner Trustee by the
Holders pursuant to Section 9.1 of the
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Trust Agreement shall be made without the prior written consent (not to
be unreasonably withheld or delayed) of the Lessee.
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 A Commitments, Tranche B Loans and Tranche B Commitments (and to the
extent the selling Lender is also a Holder (or an Affiliate of a Holder), each
such participant, assignor or transferee must also obtain the same ratable
interest in and to the Holder Advances, Holder Commitments and the Trust
Estate); provided further, that each Lender that participates, assigns or
transfers all or a portion of its interest hereunder and under the other
Operative Agreements shall deliver to the Agent a copy of each Assignment and
Acceptance (as referenced in Section 9.8 of the Credit Agreement) for purposes
of maintaining the Register. 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, to the extent the selling Holder is also a Lender (or an Affiliate of
a Lender), each such assignee, receiver of a conveyance or other transferee must
also obtain the same ratable interest in and to the Tranche A Loans, Tranche A
Commitments, Tranche B Loans and Tranche B Commitments. 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 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
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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.
Subject to and limited by in all respects by the provisions of Sections
11.6 through 11.8 and 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 itself, as determined by a court of
competent jurisdiction, as opposed to gross negligence or willful misconduct
imputed to such Indemnified Person) in any way relating to or arising or alleged
to arise out of the execution, delivery, performance or enforcement of this
Agreement, the Lease or any other Operative Agreement or on or with respect to
any Property or any component thereof, including without limitation Claims in
any way relating to or arising or alleged to arise out of (a) the financing,
refinancing, purchase, acceptance, rejection, ownership, design, construction,
refurbishment, development, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, occupancy, operation, maintenance repair,
modification, transportation, condition, sale, return, repossession (whether by
summary proceedings or otherwise), or any other disposition of any Property or
any part thereof, including without limitation the acquisition, holding or
disposition of any interest in the Property, lease or agreement comprising a
portion of any thereof; (b) any latent or other defects in any Property or any
portion thereof whether or not discoverable by an Indemnified Person or the
Indemnity Provider; (c) a violation of Environmental Laws, Environmental Claims
or other loss of or damage to any property or the environment relating to the
Property, the Lease, the Construction Agency Agreement or the Indemnity
Provider; (d) the Operative Agreements, or any transaction contemplated thereby;
(e) any breach by the Indemnity Provider of any of its representations or
warranties under the Operative Agreements to which the Indemnity Provider is a
party or failure by the Indemnity Provider to perform or observe any covenant or
agreement to be performed by it under any of the Operative Agreements; (f) the
transactions contemplated hereby or by any
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other Operative Agreement, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA; (g) personal injury, death or property damage,
including without limitation Claims based on strict or absolute liability in
tort; and (h) any fees, expenses and/or other assessments by any business park
or any other applicable entity with oversight responsibility for the applicable
Property.
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; provided, further, that the failure of such Indemnified Person to give
the notices referred to in this sentence shall not diminish the Indemnity
Provider's obligation hereunder except to the extent such failure precludes in
all respects the Indemnity Provider from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the 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.
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
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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.
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
$25,000 (or such lesser amount as may be subsequently agreed between the
Indemnity Provider and the Indemnified Person), (C) the Indemnified Person shall
have reasonably determined that the action to be taken will not result in any
material danger of sale, forfeiture or loss of the Property, or any 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 provided to such Indemnified Person an opinion of independent counsel
selected by the Indemnity Provider and reasonably satisfactory to the
Indemnified Person stating that a reasonable basis exists to contest such Claim
(or, in the case of an appeal of an adverse determination, an opinion of such
counsel to the effect that the position asserted in such appeal will more likely
than not prevail) and (F) no Event of Default shall have occurred and be
continuing. In no event shall an Indemnified Person be required to appeal an
adverse judicial determination to the United States Supreme Court. In addition,
an Indemnified Person shall not be required to contest any Claim in its name (or
that of an Affiliate) if the subject matter thereof shall be of a continuing
nature and shall have previously been decided adversely by a court of competent
jurisdiction pursuant to the contest provisions of this Section 11.1, unless
there shall have been a change in law (or interpretation thereof) and the
Indemnified Person shall have received, at the Indemnity Provider's expense, an
opinion of independent counsel selected by the Indemnity Provider and reasonably
acceptable to the Indemnified Person stating that as a result
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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) Subject to and limited by in all respects the provisions of
Sections 11.6 through 11.8 and Section 3.9(a) of the Trust Agreement,
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) (collectively, the "Excluded Taxes"):
(i) Taxes (other than Taxes that are, or are in the nature
of, sales, use, rental, value added, transfer or property taxes)
that are imposed on a Indemnified Person (other than the Lessor,
the Owner Trustee and the Trust) by the United States federal
government that are based on or measured by the net income
(including without limitation taxes based on capital gains and
minimum taxes) of such Person; provided, that this clause (i)
shall not be interpreted to prevent a payment from being made on
an After Tax Basis if such payment is otherwise required to be so
made;
(ii) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or property
taxes) that are imposed on any Indemnified Person (other than the
Lessor, the Owner Trustee and the Trust) by any state or local
jurisdiction or taxing authority within any state or local
jurisdiction and that are based upon or measured by the net
income (including without limitation taxes based on capital gains
and minimum taxes) of such Person; provided, however, that the
Indemnity Provider shall not have any obligation to indemnify any
Indemnified Person for any California unitary tax obligations of
the Indemnified Person that are not attributable to the payments
received under the Operative Agreements or otherwise attributable
to the transactions contemplated thereby; provided, further, 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
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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 termination,
redelivery or sale and/or to any period prior to such
termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified Person
as a result of the gross negligence or willful misconduct of such
Indemnified Person itself, as determined by a court of competent
jurisdiction (as opposed to gross negligence or willful
misconduct imputed to such Indemnified Person), but not Taxes
imposed as a result of ordinary negligence of such Indemnified
Person;
(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
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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 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 Agreements (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
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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
(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(R) (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,
(ii) such Financing Party will
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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 Indemnity
Provider 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.
(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,
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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 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.
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(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 until the Agent shall notify the
Lessee that such Financing Party has determined that the circumstances
causing such suspension no longer exist.
(g) If, with respect to any Advances consisting of Eurodollar
Loans and Eurodollar Holder Advances requested by the Borrower, the
Agent or the Majority Secured Parties shall have determined in good
faith (which determination shall, save for manifest error, be conclusive
and binding upon the Borrower) that (a) deposits of sufficient amount
and maturity for funding such Advances are not available to the Lenders
or the Holders in the relevant market in the ordinary course of business
or (b) by reason of circumstances affecting the relevant market,
adequate and fair means do not exist for ascertaining the rate of
interest to be applicable to such Advances, then (i) the Agent or the
Majority Secured Parties, as the case may be, shall promptly give notice
thereof to the Borrower, (ii) the notice requesting such Borrowing
shall, unless the Borrower otherwise notifies the Agent, automatically
be amended to request ABR Loans and ABR Holder Advances instead of
Eurodollar Loans and Eurodollar Holder Advances, and (iii) no Lender or
Holder, as the case may be, shall be under any obligation to make
additional Eurodollar Loans and Eurodollar Holder Advances to the
Borrower, unless and until the Agent shall have notified the Borrower
that such Eurodollar Loans and Eurodollar Holder Advances are again
available hereunder.
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 default in connection with the drawing of funds for
any Advance, (b) any default in making any prepayment after a notice thereof has
been given in accordance with the provisions of the Operative Agreements or (c)
the making of a voluntary or involuntary payment of Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be in
an amount equal to the excess, if any, of (x) the amount of interest or Holder
Yield, as the case may be, which would have accrued on the amount so paid, or
not so borrowed, accepted, converted or continued for the period from the date
of such payment or of
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such failure to borrow, accept, convert or continue to the last day of such
Interest Period (or, in the case of a failure to borrow, accept, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable Eurodollar Rate plus the Applicable
Percentage for such Loan or Holder Advance, as the case may be, for such
Interest Period over (y) the amount of interest (as determined by 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 payment
or failure to borrow to the last day of the then applicable Interest Period (or,
in the case of a failure to borrow, the Interest Period that would have
commenced on the date of such failure) and (ii) (in the case of 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.
SUBJECT TO AND LIMITED BY IN ALL RESPECTS THE PROVISIONS OF SECTION 11.6
THROUGH 11.8 AND 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 ATTORNEY'S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH
BENEFICIARY (IRRESPECTIVE OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE
ACTION FOR WHICH INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE
AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY.
11.6. ADDITIONAL PROVISIONS REGARDING ENVIRONMENTAL INDEMNIFICATION.
Each and every Indemnified Person shall at all times have the rights and
benefits, and the Indemnity Provider shall have the obligations, in each case
provided pursuant to the Operative Agreements with respect to environmental
matters, violations of any Environmental Law, any Environmental Claim or other
loss of or damage to any property or the environment relating to
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any Property, the Lease, the Construction Agency Agreement or the Indemnity
Provider (including without limitation the rights and benefits provided pursuant
to Section 11.1(c)).
11.7. ADDITIONAL PROVISIONS REGARDING INDEMNIFICATION.
Notwithstanding the provisions of Sections 11.1, 11.2 and 11.5 (other
than with respect to matters concerning environmental indemnification referenced
in Section 11.6), (a) the Owner Trustee shall be the only beneficiary of the
provisions set forth in Sections 11.1, 11.2 and 11.5 (again, subject to the
immediately preceding parenthetical phrase) with respect to each Property solely
for the period prior to the earlier to occur of the applicable Completion Date
or Construction Period Termination Date for such Property, as applicable, and
(b) such limited rights of indemnification referenced in Section 11.7(a) (to the
extent relating to third-party claims) shall be limited to third-party claims
caused by or resulting from the Indemnity Provider's acts or omissions and/or
all other Persons acting by, through or under the Indemnity Provider. After the
earlier to occur of the applicable Completion Date or Construction Period
Termination Date for such Property, as applicable, each Indemnified Person shall
be a beneficiary of the provisions set forth in Sections 11.1, 11.2 and 11.5.
11.8. INDEMNIFICATIONS PROVIDED BY THE OWNER TRUSTEE IN FAVOR OF THE
OTHER INDEMNIFIED PERSONS.
To the extent the Indemnity Provider is not obligated to indemnify each
Indemnified Person with respect to the various matters described in this Section
11.8, the Owner Trustee shall provide such indemnities (but only to the extent
amounts sufficient to pay such indemnity are funded by the Lenders and the
Holders) in favor of each Indemnified Person in accordance with this Section
11.8 and shall pay all such amounts owed with respect to this Section 11.8 with
amounts advanced by the Lenders and the Holders (a) to the extent, but only to
the extent, amounts are available therefor with respect to the Available
Commitments and the Available Holder Commitments (subject to the rights of the
Lenders and the Holders to increase their respective commitment amounts in
accordance with the provisions of Sections 5.9) and (b) unless each Lender and
each Holder has declined in writing to fund such amount. Notwithstanding any
other provision in any other Operative Agreement to the contrary, all amounts so
advanced shall be deemed added (ratably, based on the ratio of the Property Cost
for each Property individually to the Aggregate Property Cost of all Properties
at such time) to the Property Cost of all Properties then subject to the terms
of the Operative Agreements.
Whether or not any of the transactions contemplated hereby shall be
consummated, the Owner Trustee 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 itself, as determined by a court of competent
jurisdiction, as opposed to gross negligence or willful misconduct imputed to
such Indemnified Person or breach of such Indemnified Person's obligations under
this Agreement, the Lease or any other Operative Agreement) in any
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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 the matters set forth in Sections 11.1(a) through 11.1(h).
The Owner Trustee 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.
Notwithstanding anything to the contrary in this paragraph, the Excluded Taxes
shall be excluded from the indemnity provisions afforded by this paragraph.
THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE OWNER TRUSTEE PURSUANT TO
THIS SECTION 11.8 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY
REFERENCED IN SECTION 12.9.
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, the payment of the Notes and any disposition thereof and shall be and
continue in effect notwithstanding any investigation made by any party and the
fact that any party may waive compliance with any of the other terms, provisions
or conditions of any of the Operative Agreements. Except as otherwise expressly
set forth herein or in other Operative Agreements, the indemnities of the
parties provided for in the Operative Agreements shall survive the expiration or
termination of any thereof.
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
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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, or to any Guarantor,
to such entity at the following address:
VERITAS Operating Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxx X. Xxxxx,
Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the 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:
Bank of America, N.A.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code CA5-705-41-01
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to any Lender, to it at the address set forth for such Lender
in Schedule 2.1 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.
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12.3. COUNTERPARTS.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one (1) and the same
instrument.
12.4. TERMINATIONS, AMENDMENTS, WAIVERS, ETC.; UNANIMOUS VOTE MATTERS.
Each Basic Document may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by, subject to Article VIII of
the Trust Agreement regarding termination of the Trust Agreement, the Majority
Secured Parties, the Agent and each Credit Party (to the extent such Credit
Party is a party to such Basic Document); 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 Basic
Document 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. Each Operative Agreement which is not a Basic Document may
be terminated, amended, supplemented, waived or modified only by an instrument
in writing signed by the parties thereto and (without the consent of any other
Financing Party) the Agent. In addition, the Unanimous Vote Matters shall
require the consent of each Lender and each Holder affected by such matter.
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 such Lender or Holder, reduce any Lender
Commitment Fees or any Holder Commitment Fees payable to such Lender or Holder
(as the case may be) under this Participation Agreement, extend the scheduled
date of payment of any Lender Commitment Fees or any Holder Commitment Fees
payable to such Lender or Holder (as the case may be), fund any Advance
referenced in Section 2.1 of the Construction Agency Agreement in excess of the
then current aggregate sum of the Available Commitments and the Available Holder
Commitments, elect to decline the funding of any Transaction Expense with
respect to Sections 7.1(a) or 7.1(b), elect to decline the funding of any
indemnity payment by the Owner Trustee with respect to Section 11.8 or increase
the amount or extend the expiration date of such Lender's Commitment or the
Holder Commitment of such 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
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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 (which shall also require the consent of the Agent), or (iv)
eliminate the automatic option under Section 5.3(b) of the Construction Agency
Agreement requiring that the Construction Agent pay certain liquidated damages
in exchange for the conveyance of a Property to the Construction Agent, or (v)
permit the extension of the Construction Period beyond the date that is two (2)
years from the Initial Closing Date. 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.
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12.6. PARTIES IN INTEREST.
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
VENUE.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 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 California in
Xxxxx Xxxxx Xxxxxx xx xx xxx Xxxxxx Xxxxxx for the Northern District of
California, 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.
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
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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 to the extent otherwise provided in
Section 6.1 of this Agreement), solely in its capacity as trustee under
the Trust Agreement and not in its individual capacity and that the
Trust Company shall not be liable or accountable under any circumstances
whatsoever in its individual capacity for or on account of any
statements, representations, warranties, covenants or obligations stated
to be those of the Owner Trustee, except for its own gross negligence or
willful misconduct and as otherwise expressly provided herein or in the
other Operative Agreements.
(b) Anything to the contrary contained in this Agreement,
the Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, no Exculpated Person shall be personally liable in any
respect for any liability or obligation arising hereunder or in any
other Operative Agreement including without limitation the payment of
the principal of, or interest on, the Notes, or for monetary damages for
the breach of performance of any of the covenants contained in the
Credit Agreement, the Notes, this Agreement, the Security Agreement or
any of the other Operative Agreements. The 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); 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
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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 Construction 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 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 may be reasonably required in connection
therewith.
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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 manifest
error.
12.13. CONFIDENTIALITY.
Each Financing Party agrees to keep confidential any information
furnished or made available to it by any Credit Party or any of its Subsidiaries
pursuant to this Agreement that is marked confidential; provided that nothing
herein shall prevent any Financing Party from disclosing such information (a) to
any other Financing Party or any Affiliate of any Financing Party, or any
officer, director, employee, agent, or advisor of any Financing Party or
Affiliate of any Financing Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Financing Party other than as a result of a disclosure
by any Financing Party prohibited by this Agreement, (g) in connection with any
litigation to which such Financing Party or any of its Affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any remedy
under this Agreement or any other Operative Agreement, and (i) subject to
provisions substantially similar to those contained in this Section, to any
actual or proposed participant or assignee.
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 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
73
79
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.
[signature pages follow]
74
80
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: VERITAS OPERATING CORPORATION, as the
Construction Agent and as the Lessee
By: /s/ XXX XXXXXXX
------------------------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
GUARANTORS: VERITAS SOFTWARE CORPORATION, as a
Guarantor
By: /s/ XXX XXXXXXX
------------------------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
81
SEAGATE SOFTWARE NETWORK & STORAGE
MANAGEMENT GROUP, INC. as a Guarantor
By: /s/ XXX XXXXXXX
------------------------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
82
OPENVISION INTERNATIONAL, INC., as a
Guarantor
By: /s/ XXX XXXXXXX
------------------------------------
Name: Xxx Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
83
OWNER TRUSTEE
AND LESSOR: FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, except
as expressly stated herein, but
solely as the Owner Trustee under the
VS Trust 2000-1
By: /s/ XXX X. XXXXX
------------------------------------
Name: Xxx X. Xxxxx
Title: Vice President
84
AGENT: BANK OF AMERICA, N.A., as the Agent
By: /s/ XXXXXXX X. XXXXXXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President
85
HOLDERS AND LENDERS: BANK OF AMERICA, N.A., as a Holder and
as a Lender
By: /s/ XXXXXXX X. XXXXXXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President
86
KEYBANK NATIONAL ASSOCIATION, as a
Holder and as a Lender
By: /s/ XXXX X. XXXXX
----------------------------------
Name: Xxxx X. Xxxxx
Title: Assistant Vice President
00
XXXXX XXXX XX XXXXXXXXXX, N.A., as a
Holder and as a Lender
By: /s/ XXXXX XXXXXX
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
88
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as a Holder and as a Lender
By: /s/ XXXX X. XXXXXX
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
89
Schedule 8.3A(a)(iii)
[FORM OF OFFICER'S COMPLIANCE CERTIFICATE]
For the fiscal quarter ended _________________, ______.
I, ______________________, _____________________ of VERITAS OPERATING
CORPORATION (the "Lessee") hereby certify that, to the best of my knowledge and
belief, with respect to that certain Participation Agreement dated as of March
9, 2000 (as amended, modified, restated or supplemented from time to time, the
"Participation Agreement"; all of the defined terms in the Credit Agreement are
incorporated herein by reference) among the Lessee, the Lessor, the Guarantors,
the Lenders, the Holders and Bank of America, N. A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and
have been prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from normal
year-end audit adjustments.
b. Since ___________ (the date of the last similar certification,
or, if none, the Initial Closing Date) no Default or Event of
Default has occurred; and
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 8.3A (h) of
the Participation Agreement, and setting forth the ratio of Funded Indebtedness
to EBITDA and level of EBITDA, pursuant to Section 8.3(k) of the Participation
Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, ______.
VERITAS OPERATING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
90
Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS
91
Schedule 8.3B(a)(ii)
[SCHEDULE OF INDEBTEDNESS]
1. $100,000,000 5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
2. LETTER OF CREDIT FOR $231,000 IN FAVOR OF SSI
3. $465,750,000 1.856% CONVERTIBLE SUBORDINATED NOTES DUE 2006
92
Schedule 8.3B(e)
[SCHEDULE OF INSIGNIFICANT LINES OF BUSINESS]
None
93
Schedule 8.3B(f)
[SCHEDULE OF INVESTMENTS]
None
94
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2, 5.2, 5.3 and 5.4 of the Participation Agreement)
VERITAS OPERATING CORPORATION, a Delaware corporation (the "Company")
hereby certifies as true and correct and delivers the following Requisition to
BANK OF AMERICA, N.A., as the agent for the Lenders (hereinafter defined) and
respecting the Security Documents, as the agent for the Lenders and the Holders
(hereinafter defined), to the extent of their interests (the "Agent"):
Reference is made herein to that certain Participation Agreement dated
as of March 9, 2000 (as amended, modified, extended, supplemented, restated
and/or replaced from time to time, the "Participation Agreement") among the
Company, in its capacity as the Lessee and as the Construction Agent, the
various parties thereto from time to time, as the guarantors (the "Guarantors"),
First Security Bank, National Association, as the Owner Trustee, the various
banks and other lending institutions which are parties thereto from time to
time, as holders (the "Holders"), the various banks and other lending
institutions which are parties thereto from time to time, as lenders (the
"Lenders"), and the Agent. Capitalized terms used herein but not otherwise
defined herein shall have the meanings set forth therefor in the Participation
Agreement.
Check one:
____ INITIAL CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance)
____ PROPERTY CLOSING DATE:_________________
(three (3) Business Days prior notice required for Advance)
____ CONSTRUCTION ADVANCE DATE:_____________
(three (3) Business Days prior notice required for Advance)
1. Transaction Expenses and other fees, expenses and disbursements under
Sections 7.1(a) or 7.1(b) of the Participation Agreement and any and all
other amounts contemplated to be financed under the Participation
Agreement including without limitation any Work, broker's fees, taxes,
recording fees and the like (with supporting invoices or closing
statement attached):
A-1
95
Party to Whom Amount Owed
Amount is Owed (in U.S. Dollars)
-------------- -----------------
-------------- -----------------
-------------- -----------------
-------------- -----------------
-------------- -----------------
-------------- -----------------
2. Description of Land (which shall be a legal description of the Land in
connection with an Advance to pay Property Acquisition Costs): See
attached Schedule 1
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
5. Description of Work: See attached Schedule 4
6. Aggregate Loans and Holder Advances requested since the Initial Closing
Date with respect to each Property for which Advances are requested
under this Requisition (listed on a Property by Property basis),
including without limitation all amounts requested under this
Requisition: [IDENTIFY ON A PROPERTY BY PROPERTY BASIS]
$______________ [Property]
In connection with this Requisition, the Company hereby requests that
the Lenders make Loans to the Lessor in the amount of $______________ and that
the Holders make Holder Advances to the Lessor in the amount of
$________________. The Company hereby certifies (i) that the foregoing amounts
requested do not exceed the total aggregate of the Available Commitments plus
the Available Holder Commitments and (ii) each of the provisions of the
Participation Agreement applicable to the Loans and Holder Advances requested
hereunder have been complied with as of the date of this Requisition.
The Company requests the Loans be allocated as follows:
$______________ ABR Loans
$______________ Eurodollar Loans
The Company requests the Holder Advances be allocated as follows:
$______________ ABR Holder Advances
$______________ Eurodollar Holder Advances
A-2
96
The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of __________, ______.
VERITAS OPERATING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
A-3
97
Schedule 1
Description of Land
(Legal Description and Street Address)
A-4
98
Schedule 2
Description of Improvements
A-5
99
Schedule 3
Description of Equipment
================================================================================
General Description Make Model Serial Number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
A-6
100
Schedule 4
Work
Work Performed for which the Advance is requested:
--------------------------------------------------------------
--------------------------------------------------------------
A-7
101
EXHIBIT B
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(j) of the
Participation Agreement)
------------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of VERITAS Operating
Corporation
Dear Sirs:
We have acted as special counsel to VERITAS Operating Corporation, a Delaware
corporation (the "Lessee"), and the various parties thereto from time to time,
as guarantors (individually, a "Guarantor" and collectively, the "Guarantors";
individually, the Lessee and each Guarantor may be referred to herein as a
"Credit Party" or collectively, as the "Credit Parties"), in connection with
certain transactions contemplated by the Participation Agreement dated as of
March 9, 2000 (the "Participation Agreement"), among the Lessee, the Guarantors,
First Security Bank, National Association, as the Owner Trustee (the "Owner
Trustee"), the various banks and other lending institutions which are parties
thereto from time to time, as holders (the "Holders"), the various banks and
other lending institutions which are parties thereto from time to time, as
lenders (the "Lenders") and Bank of America, N.A., 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 (the "Agent"). This opinion is
delivered pursuant to Section 5.3(j) of the Participation Agreement. All
capitalized terms used herein, and not otherwise defined herein, shall have the
meanings assigned thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of [IDENTIFY THE APPLICABLE OPERATIVE AGREEMENTS,
INCLUDING EACH MORTGAGE INSTRUMENT, RELATED UCC FIXTURE FILINGS, ADDITIONAL UCCS
(HEREINAFTER DEFINED), DEEDS AND MEMORANDA OF LEASE] and such other corporate
documents and records of the Credit Parties, certificates of public officials
and representatives of the Credit Parties as to certain factual matters, and
such other instruments and documents which we have deemed necessary or advisable
to examine for the purpose of this opinion. With respect to such examination, we
have assumed (i) the statements of fact made in all such certificates, documents
and instruments are true, accurate and complete; (ii) except as to the Credit
Parties, the due authorization, execution and delivery of the Operative
Agreements by the parties thereto; (iii) the genuineness of all signatures
(except as to the Credit Parties), the authenticity and completeness of all
documents, certificates, instruments, records and corporate records submitted to
us as originals and the conformity to the original instruments of all documents
submitted to us as copies, and the
B-1
102
authenticity and completeness of the originals of such copies; (iv) except as to
the Credit Parties, that all parties have all requisite corporate power and
authority to execute, deliver and perform the Operative Agreements; and (v)
except as to the Credit Parties, the enforceability of the Mortgage Instrument,
the Memorandum of Lease and the UCC financing statements against all parties
thereto.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Mortgage Instrument and Memorandum of Lease are enforceable in
accordance with their respective terms, except as limited by laws generally
affecting the enforcement of creditors' rights, which laws will not materially
prevent the realization of the benefits intended by such documents.
(b) Each form of Mortgage Instrument and UCC fixture filing relating
thereto, attached hereto as Schedules 1 and 2, respectively, is in proper form
for filing and recording with the offices of [IDENTIFY THE RECORDING OFFICES OF
THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of each Mortgage Instrument and UCC fixture filing in [IDENTIFY THE
RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE
LOCATED], the Agent will have a valid, perfected lien and security interest in
that portion of the Collateral described in such Mortgage Instrument or UCC
fixture filing to the extent such Collateral is comprised of real property
and/or fixtures.
(c) The forms of UCC financing statements relating to the Security
Documents, attached hereto as Schedule 3 (the "Additional UCCs"), are in proper
form for filing and recording with the offices of [IDENTIFY (i) THE RECORDING
OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED
AND (ii) THE SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of the Additional UCCs in [IDENTIFY (i) THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED AND (ii) THE
SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED], the Agent will have
a valid, perfected lien and security interest in that portion of the Collateral
which can be perfected by filing UCC-1 financing statements under Article 9 of
the UCC.
(d) Each form of Deed and Memorandum of Lease is in appropriate form for
filing and recording with the [IDENTIFY THE RECORDING OFFICES OF THE RESPECTIVE
COUNTY CLERKS FOR THE COUNTIES WHERE THE PROPERTIES ARE TO BE LOCATED].
(e) Each Memorandum of Lease, when filed and recorded with the [IDENTIFY
THE RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS FOR THE COUNTIES WHERE THE
PROPERTIES ARE TO BE LOCATED], will have been filed and recorded in all public
offices in the State of [__________] in which filing or recording is necessary
to provide constructive notice of the Lease to third Persons and to establish of
record the interest of the Lessor thereunder as to the Properties described in
each such Memorandum of Lease.
B-2
103
(f) Title to the Properties located in the State of [___________] may be
held in the name of the Owner Trustee as follows: First Security Bank, National
Association, not individually, but solely as the Owner Trustee under the VS
Trust 2000-1.
(g) The execution and delivery by First Security Bank, National
Association, individually or as the Owner Trustee, as the case may be, of the
Operative Agreements to which it is a party and compliance by First Security
Bank, National Association, individually or as the Owner Trustee, with all of
the provisions thereof do not and will not contravene any law, rule or
regulation of [IDENTIFY THE STATE].
(h) By reason of their participation in the transaction contemplated
under the Operative Agreements, none of the Agent, the Lenders, the Holders or
the Owner Trustee has to (a) qualify as a foreign corporation in [IDENTIFY THE
STATE], (b) file any application or any designation for service of process in
[IDENTIFY THE STATE] or (c) pay any franchise, income, sales, excise, stamp or
other taxes of any kind to [IDENTIFY THE STATE].
(i) The provisions in the Operative Agreements concerning Rent,
interest, fees, prepayment premiums and other similar charges do not violate the
usury laws or other similar laws regulating the use or forbearance of money of
[IDENTIFY THE STATE].
(j) If the transactions contemplated by the Operative Agreements are
characterized as a lease transaction by a court of competent jurisdiction, the
Lease and the applicable Lease Supplement shall demise to the Lessee a valid
leasehold interest in the Properties described in such Lease Supplement.
(k) If the transactions contemplated by the Operative Agreements are
characterized as a loan transaction by a court of competent jurisdiction, the
combination of the Mortgage Instruments, the Deeds, the Lease and the applicable
Lease Supplements (and the other Operative Agreements incorporated therein by
reference) are sufficient to create a valid, perfected lien or security interest
in the Properties therein described, enforceable as a mortgage in [IDENTIFY THE
STATE].
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the State of [___________] and the federal laws of
the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
B-3
104
This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Guarantors, the Owner Trustee, the Holders, the Lenders, the Agent and their
respective successors and assigns and may not be relied upon by any other person
other than such parties and their respective successors and assigns without the
express written consent of the undersigned. The opinions expressed herein are as
of the date hereof and we make no undertaking to amend or supplement such
opinions if facts come to our attention or changes in the current law of the
jurisdictions mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
B-4
105
Distribution List
Bank of America, N.A., as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
VERITAS Operating Corporation, as the Construction Agent and the Lessee
The various parties to the Participation Agreement from time to time, as the
Guarantors
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the VS Trust 2000-1
B-5
106
Schedule 1
Form of Mortgage Instrument
B-6
107
Schedule 2
Forms of UCC Fixture Filings
B-7
108
Schedule 3
Forms of UCC Financing Statements
B-8
109
EXHIBIT C
VERITAS OPERATING CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
VERITAS OPERATING CORPORATION, a Delaware corporation (the "Company"),
DOES HEREBY CERTIFY as follows:
1. 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 on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing
under any Operative Agreement.
3. Each Operative Agreement to which any Credit Party is a party is
in full force and effect with respect to it.
4. The Company has duly performed and complied with all covenants,
agreements and conditions contained in the Participation
Agreement (hereinafter defined) or in any Operative Agreement
required to be performed or complied with by it on or prior to
the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of March 9, 2000 among the Company, as the Lessee and as the
Construction Agent, the various parties thereto from time to time, as guarantors
(the "Guarantors"), First Security Bank, National Association, as the Owner
Trustee, the various banks and other lending institutions which are parties
thereto from time to time, as holders (the "Holders"), the various banks and
other lending institutions which are parties thereto from time to time, as
lenders (the "Lenders") and Bank of America, N.A., 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 (the "Agent").
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this _____ day of __________, ______.
VERITAS OPERATING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
C-1
110
EXHIBIT D
[NAME OF CREDIT PARTY]
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(aa) of the Participation Agreement)
[NAME OF CREDIT PARTY], a Delaware corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. Attached hereto as Schedule 1 is a true, correct and complete
copy of the resolutions of the Board of Directors of the Company
duly adopted by the Board of Directors of the Company on
__________. Such resolutions have not been amended, modified or
rescinded since their date of adoption and remain in full force
and effect as of the date hereof.
2. Attached hereto as Schedule 2 is a true, correct and complete
copy of the Articles of Incorporation of the Company on file in
the Office of the Secretary of State of __________. Such Articles
of Incorporation have not been amended, modified or rescinded
since their date of adoption and remain in full force and effect
as of the date hereof.
3. Attached hereto as Schedule 3 is a true, correct and complete
copy of the Bylaws of the Company. Such Bylaws have not been
amended, modified or rescinded since their date of adoption and
remain in full force and effect as of the date hereof.
4. The persons named below now hold the offices set forth opposite
their names, and the signatures opposite their names and titles
are their true and correct signatures.
Name Office Signature
---- ------ ---------
------------------- ----------------------- ----------------------
------------------- ----------------------- ----------------------
D-1
111
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate
to be duly executed and delivered as of this _____ day of ___________, ______.
[NAME OF CREDIT PARTY]
By: ____________________________________
Name: __________________________________
Title: _________________________________
X-0
000
Xxxxxxxx 1
Board Resolutions
D-3
113
Schedule 2
Articles of Incorporation
X-0
000
Xxxxxxxx 0
Xxxxxx
X-0
115
EXHIBIT E
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(bb) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (except with respect to paragraph 1 below, to the
extent any such representations and warranties are made in its individual
capacity) but solely as the owner trustee under the VS Trust 2000-1 (the "Owner
Trustee"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Owner Trustee
contained in the Operative Agreements to which it is a party is
true and correct on and as of the date hereof.
2. Each Operative Agreement to which the Owner Trustee is a party is
in full force and effect with respect to it.
3. The Owner Trustee has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any Operative
Agreement required to be performed or complied with by it on or
prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of March 9, 2000 (the "Participation Agreement") among
VERITAS Operating Corporation, as the Lessee and as the Construction Agent, the
various parties thereto from time to time, as guarantors (the "Guarantors"), the
Owner Trustee, the various banks and other lending institutions which are
parties thereto from time to time, as holders (the "Holders"), the various banks
and other lending institutions which are parties thereto from time to time, as
lenders (the "Lenders") and Bank of America, N.A., 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 (the "Agent").
E-1
116
IN WITNESS WHEREOF, the Owner Trustee has caused this Officer's
Certificate to be duly executed and delivered as of this _____ day of
__________, ______.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually,
except as expressly stated herein,
but solely as the Owner Trustee
under the VS Trust 2000-1
By: ____________________________________
Name: __________________________________
Title: _________________________________
X-0
000
XXXXXXX X
FIRST SECURITY BANK, NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(cc) of the Participation Agreement)
CERTIFICATE OF ASSISTANT SECRETARY
I, ______________________, duly elected and qualified Assistant
Secretary of the Board of Directors of First Security Bank, National Association
(the "Association"), hereby certify as follows:
1. The Association is a National Banking Association duly organized,
validly existing and in good standing under the laws of the United States. With
respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as amended, 12
U.S.C. 1, et seq., the Comptroller of the Currency charters and
exercises regulatory and supervisory authority over all National
Banking Associations;
B. On December 9, 1881, the First National Bank of Ogden, Utah was
chartered as a National Banking Association under the laws of the
United States and under Charter No. 2597;
C. On October 2, 1922, in connection with a consolidation of The
First National Bank of Ogden, Ogden, Utah, and The Utah National
Bank of Ogden, Ogden, Utah, the title was changed to "The First &
Utah National Bank of Ogden"; on January 18, 1923, The First &
Utah National Bank of Ogden changed its title to "First Utah
National Bank of Ogden"; on January 19, 1926, the title was
changed to "First National Bank of Ogden"; on February 24, 1934,
the title was changed to "First Security Bank of Utah, National
Association"; on June 21, 1996, the title was changed to "First
Security Bank, National Association"; and
D. First Security Bank, National Association, Ogden, Utah, continues
to hold a valid certificate to do business as a National Banking
Association.
2. The Association's Articles of Association, as amended, are in
full force and effect, and a true, correct and complete copy is attached hereto
as Schedule A and incorporated herein by reference. Said Articles were last
amended October 20, 1975, as required by law on notice at a duly called special
meeting of the shareholders of the Association.
F-1
118
3. The Association's By-Laws, as amended, are in full force and
effect; and a true, correct and complete copy is attached hereto as Schedule B
and incorporated herein by reference. Said By-Laws, still in full force and
effect, were adopted September 17, 1942, by resolution, after proper notice of
consideration and adoption of By-Laws was given to each and every shareholder,
at a regularly called meeting of the Board of Directors with a quorum present.
4. Pursuant to the authority vested in it by an Act of Congress
approved December 23, 1913 and known as the Federal Reserve Act, as amended, the
Federal Reserve Board (now the Board of Governors of the Federal Reserve System)
has granted to the Association now known as "First Security Bank, National
Association" of Ogden, Utah, the right to act, when not in contravention of
State or local law, as trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee of estates of
lunatics, or in any other fiduciary capacity in which State banks, trust
companies or other corporations which come into competition with National Banks
are permitted to act under the laws of the State of Utah; and under the
provisions of applicable law, the authority so granted remains in full force and
effect.
5. Pursuant to authority vested by Act of Congress (12 X.X.X. 00x
xxx 00 X.X.X. 000, as amended) the Comptroller of the Currency has issued
Regulation 9, as amended, dealing, in part, with the Fiduciary Powers of
National Banks, said regulation providing in subparagraph 9.7 (a) (1-2):
(1) The board of directors is responsible for the proper exercise of
fiduciary powers by the Bank. All matters pertinent thereto,
including the determination of policies, the investment and
disposition of property held in fiduciary capacity, and the
direction and review of the actions of all officers, employees,
and committees utilized by the Bank in the exercise of its
fiduciary powers, are the responsibility of the board. In
discharging this responsibility, the board of directors may
assign, by action duly entered in the minutes, the administration
of such of the Bank's fiduciary powers as it may consider proper
to assign to such director(s), officer(s), employee(s) or
committee(s) as it may designate.
(2) No fiduciary account shall be accepted without the prior
approval of the board, or of the director(s), officer(s), or
committee(s) to whom the board may have designated the
performance of that responsibility. . . .
6. A Resolution relating to Exercise of Fiduciary Powers was adopted
by the Board of Directors at a meeting held July 26, 1994 at which time there
was a quorum present; said resolution is still in full force and effect and has
not been rescinded. Said resolution is attached hereto as Schedule C and
incorporated herein by reference.
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7. A Resolution relating to the Designation of Officers and
Employees to Exercise Fiduciary Powers was adopted by the Trust Policy Committee
at a meeting held February 7, 1996 at which time a quorum was present; said
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Schedule D and is incorporated herein by
reference.
8. Attached hereto as Schedule E and incorporated herein by
reference, is a listing of facsimile signatures of persons authorized (herein
"Authorized Signatory or Signatories") on behalf of the Association and its
Trust Group to act in exercise of its fiduciary powers subject to the
resolutions in Paragraphs 6 and 7, above.
9. The principal office of the First Security Bank, National
Association, Trust Group and of its departments, except for the St. Xxxxxx,
Utah, Ogden, Utah, and Provo, Utah, branch offices, is located at 00 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 and all records relating to fiduciary
accounts are located at such principal office of the Trust Group or in storage
facilities within Salt Lake County, Utah, except for those of the Ogden, Utah,
St. Xxxxxx, Utah, and Provo, Utah, branch offices, which are located at said
office.
10. Each Authorized Signatory (i) is a duly elected or appointed,
duly qualified officer or employee of the Association; (ii) holds the office or
job title set forth below his or her name on the date hereof; (iii) and the
facsimile signature appearing opposite the name of each such officer or employee
is a true replica of his or her signature.
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the Association this __________ day of _________________, ______.
(SEAL)
----------------------------------------
R. Xxxxx Xxxxxxxxx
Senior Vice President
Assistant Secretary
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Schedule A
Articles of Association
F-5
122
Schedule B
Bylaws
F-6
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Schedule C
Resolution Relating to
Exercise of Fiduciary Powers
F-7
124
Schedule D
Resolution Relating to the
Designation of Officers and Employees
To Exercise Fiduciary Powers
F-8
125
Schedule E
Authorized Signatory or Signatories
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126
EXHIBIT G
[Outside Counsel Opinion for the Owner Trustee]
(Pursuant to Section 5.3(dd) of the
Participation Agreement)
-----------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Trust Agreement dated as of March 9, 2000
Dear Sirs:
We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity ("FSB")
and in its capacity as trustee (the "Owner Trustee") under the Trust Agreement
dated as of March 9, 2000 (the "Trust Agreement") by and among it and the
various banks and other lending institutions which are parties thereto from time
to time, as holders (the "Holders"), in connection with the execution and
delivery by the Owner Trustee of the Operative Agreements to which it is a
party. Except as otherwise defined herein, the terms used herein shall have the
meanings set forth in Appendix A to the Participation Agreement dated as of
March 9, 2000 (the "Participation Agreement") by and among VERITAS Operating
Corporation (the "Lessee"), the various parties thereto from time to time, as
guarantors (the "Guarantors"), First Security Bank, National Association, as the
Owner Trustee, the Holders, the various banks and other lending institutions
which are parties thereto from time to time, as lenders (the "Lenders") and Bank
of America, N.A., 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 (the "Agent").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records and other instruments
as we have deemed necessary or advisable for the purpose of rendering this
opinion.
Based upon the foregoing, we are of the opinion that:
1. FSB is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America and
each of FSB and the Owner Trustee has under the laws of the State of Utah and
federal banking law the power and authority to enter into and perform its
obligations under the Trust Agreement and each other Operative Agreement to
which it is a party.
2. The Owner Trustee is the duly appointed trustee under the Trust
Agreement.
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3. The Trust Agreement has been duly authorized, executed and
delivered by one (1) of the officers of FSB and, assuming due authorization,
execution and delivery by the Holders, is a legal, valid and binding obligation
of the Owner Trustee (and to the extent set forth therein, against FSB),
enforceable against the Owner Trustee (and to the extent set forth therein,
against FSB) in accordance with its terms, and the Trust Agreement creates under
the laws of the State of Utah for the Holders the beneficial interest in the
Trust Estate it purports to create and is a valid trust under the laws of the
State of Utah.
4. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by FSB, and, assuming due authorization,
execution and delivery by the other parties thereto, are legal, valid and
binding obligations of FSB, enforceable against FSB in accordance with their
respective terms.
5. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by the Owner Trustee, and, assuming due
authorization, execution and delivery by the other parties thereto, are legal,
valid and binding obligations of the Owner Trustee, enforceable against the
Owner Trustee in accordance with their respective terms. The Notes and
Certificates have been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and the Certificates
are entitled to the benefits and security afforded by the Trust Agreement in
accordance with its terms and the terms of the Trust Agreement.
6. The execution and delivery by each of FSB and the Owner Trustee
of the Trust Agreement and the Operative Agreements to which it is a party, and
compliance by FSB or the Owner Trustee, as the case may be, with all of the
provisions thereof do not and will not contravene any Laws applicable to or
binding on FSB, or as the Owner Trustee, or contravene the provisions of, or
constitute a default under, its charter documents or by-laws or, to our
knowledge after due inquiry, any indenture, mortgage contract or other agreement
or instrument to which FSB or Owner Trustee is a party or by which it or any of
its property may be bound or affected.
7. The execution and delivery of the Operative Agreements by each of
FSB and the Owner Trustee and the performance by each of FSB and the Owner
Trustee of their respective obligations thereunder does not require on or prior
to the date hereof the consent or approval of, the giving of notice to, the
registration or filing with, or the taking of any action in respect of any
Governmental Authority or any court.
8. Assuming that the trust created by the Trust Agreement is treated
as a grantor trust for federal income tax purposes within the contemplation of
Section 671 through 678 of the Internal Revenue Code of 1986, there are no fees,
taxes, or other charges (except taxes imposed on fees payable to the Owner
Trustee) payable to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance by the Owner Trustee, the
Agent, the Lenders, the Lessee or the Holders, as the case may be, of the
Operative Agreements or in connection with the acquisition of any Property by
the Owner Trustee or in connection with the making by any Holder of its
investment in the Trust or its acquisition of the beneficial
G-2
128
interest in the Trust Estate or in connection with the issuance and acquisition
of the Certificates, or the Notes, and neither the Owner Trustee, the Trust
Estate nor the trust created by the Trust Agreement will be subject to any fee,
tax or other governmental charge (except taxes on fees payable to the Owner
Trustee) under the laws of the State of Utah or any political subdivision
thereof on, based on or measured by, directly or indirectly, the gross receipts,
net income or value of the Trust Estate, by reason of the creation or continued
existence of the trust under the terms of the Trust Agreement pursuant to the
laws of the State of Utah or the Owner Trustee's performance of its duties under
the Trust Agreement.
9. There is no fee, tax or other governmental charge under the laws
of the State of Utah or any political subdivision thereof in existence on the
date hereof on, based on or measured by any payments under the Certificates,
Notes or the beneficial interest in the Trust Estate, by reason of the creation
of the trust under the Trust Agreement pursuant to the laws of the State of Utah
or the Owner Trustee's performance of its duties under the Trust Agreement
within the State of Utah.
10. Upon the filing of the financing statement on form UCC-1 with the
Utah Division of Corporations and Commercial Code, the Agent's security interest
in the Trust Estate, for the benefit of the Lenders and the Holders, will be
perfected, to the extent that such perfection is governed by Article 9 of the
Uniform Commercial Code as in effect in the State of Utah (the "Utah UCC").
Your attention is directed to the Utah UCC, which provides, in part,
that a filed financing statement which does not state a maturity date or which
states a maturity date of more than five (5) years is effective only for a
period of five (5) years from the date of filing, unless within six (6) months
prior to the expiration of said period a continuation statement is filed in the
same office or offices in which the original statement was filed. The
continuation statement must be signed by the secured party, identify the
original statement by file number and state that the original statement is still
effective. Upon the timely filing of a continuation statement, the effectiveness
of the original financing statement is continued for five (5) years after the
last date to which the original statement was effective. Succeeding continuation
statements may be filed in the same manner to continue the effectiveness of the
original statement.
The foregoing opinions are subject to the following assumptions, exceptions and
qualifications:
A. We are attorneys admitted to practice in the State of Utah and in
rendering the foregoing opinions we have not passed upon, or purported to pass
upon, the laws of any jurisdictions other than the State of Utah and the federal
banking law governing the banking and trust powers of FSB. In addition, without
limiting the foregoing we express no opinion with respect to (i) federal
securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) Title 49 of the United States Code Annotated (previously
the Federal Aviation Act of 1958), as amended, (iii) the Federal Communications
Act of 1934, as amended, or (iv) state securities or blue sky laws. Insofar as
the foregoing opinions relate to the legality, validity, binding effect and
enforceability of the documents involved in these transactions, which by their
terms are governed
G-3
129
by the laws of a state other than Utah, we have assumed that the laws of such
state (as to which we express no opinion), are in all material aspects identical
to the laws of the State of Utah.
B. The opinions set forth in paragraphs 3, 4, and 5 above are
subject to the qualification that enforceability of the Trust Agreement and the
other Operative Agreements to which FSB and the Owner Trustee are parties, in
accordance with their respective terms, may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws affecting
enforcement of creditors' rights generally, and (ii) general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
C. As to the documents involved in these transactions, we have
assumed that each is a legal, valid and binding obligation of each party
thereto, other than FSB or the Owner Trustee, and is enforceable against each
such party in accordance with their respective terms.
D. We have assumed that all signatures, other than those of the
Owner Trustee or FSB, on documents and instruments involved in these
transactions are genuine, that all documents and instruments submitted to us as
originals are authentic, and that all documents and instruments submitted to us
as copies conform with the originals, which facts we have not independently
verified.
E. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment or property involved in these transactions.
F. We have made no investigation of, and we express no opinion
concerning, the nature of the title to any part of the equipment or property
involved in these transactions or the priority of any mortgage or security
interest.
G. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section 406
of the Employee Retirement Income Security Act of 1974.
H. In addition to any other limitation by operation of law upon the
scope, meaning, or purpose of this opinion, the opinions expressed herein speak
only as of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) and make no undertaking to amend or supplement
such opinions if facts come to our attention or changes in the current law of
the jurisdictions mentioned herein occur which could affect such opinions the
legal analysis, a legal conclusion or any information confirmation herein.
I. This opinion is for the sole benefit of the Lessee, the
Construction Agent, the Guarantors, the Owner Trustee, the Holders, the Lenders,
the Agent and their respective successors and assigns in matters directly
related to the Participation Agreement or the transaction contemplated
thereunder and may not be relied upon by any other person other than such
parties and their respective successors and assigns without the express written
consent of
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130
the undersigned. The opinions expressed in this letter are limited to the matter
set forth in this letter, and no other opinions should be inferred beyond the
matters expressly stated.
Very truly yours,
RAY, XXXXXXX & XXXXXXX
M. Xxxx Xxxxxx
G-5
131
Distribution List
Bank of America, N.A., as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
VERITAS Operating Corporation, as the Construction Agent and the Lessee
The various parties to the Participation Agreement from time to time, as the
Guarantors.
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the VS Trust 2000-1.
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132
EXHIBIT H
[In-House and Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(ee) of the Participation Agreement)
[Form of In-House Counsel Opinion for the Lessee]
____________, 2000
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of VERITAS Operating
Corporation
Ladies and Gentlemen:
I have acted as general counsel to VERITAS Operating Corporation, a
Delaware corporation (the "Lessee") in connection with certain transactions
contemplated by the Participation Agreement dated as of March 9, 2000 (the
"Participation Agreement"), among the Lessee, the various parties thereto from
time to time as guarantors (the "Guarantors"), First Security Bank, National
Association, as the Owner Trustee (the "Owner Trustee"), the various banks and
other lending institutions which are parties thereto from time to time, as
holders (the "Holders"), the various banks and other lending institutions which
are parties thereto from time to time, as lenders (the "Lenders") and Bank of
America, N.A., 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 (the "Agent"). This opinion is delivered pursuant to Section 5.3(ee)
of the Participation Agreement. All capitalized terms used herein, and not
otherwise defined herein, shall have the meanings assigned thereto in Appendix A
to the Participation Agreement.
In connection with the foregoing, I have examined originals, or copies certified
to my satisfaction, of such corporate documents and records of the Lessee,
certificates of public officials and representatives of the Lessee as to certain
factual matters, and such other instruments and documents which I have deemed
necessary or advisable to examine for the purpose of this opinion. With respect
to such examination, I have assumed (i) the statements of fact made in all such
certificates, documents and instruments are true, accurate and complete; (ii)
the genuineness of all signatures (other than the signatures of persons signing
on behalf of the Lessee) and (iii) the authenticity and completeness of all
documents, certificates, instruments, records and corporate records submitted to
us as originals and the conformity to the original instruments of all documents
submitted to us as copies, and the authenticity and completeness of the
originals of such copies.
Based on the foregoing, and having due regard for such legal
considerations as I deem relevant, and subject to the limitations and
assumptions set forth herein, I am of the opinion that:
H-1
133
1. Lessee has the corporate power and authority to conduct its
business as presently conducted.
2. Lessee (i) is not subject to, or is exempt from, regulation under
(A) the Federal Power Act, the Public Utility Holding Company Act of 1935 or
other federal or state laws and regulations applicable to public utilities, (B)
any federal or state laws and regulations applicable to banks, finance companies
and other financial institutions, or (C) any other federal or state laws and
regulations limiting Lessee's ability to borrow money; and (ii) is not an
investment company or a company controlled by an investment company, within the
meaning of the Investment Company Act of 1940.
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the State of California and the federal laws of
the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
This opinion is for the sole benefit of the addressees and their respective
successors and assigns and may not be relied upon by any other person other than
such parties and their respective successors and assigns without the express
written consent of the undersigned. The opinions expressed herein are as of the
date hereof and I make no undertaking to amend or supplement such opinions if
facts come to my attention or changes in the current law of the jurisdictions
mentioned herein occur which could affect such opinions.
Very truly yours,
Xxx Xxxxx
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134
Distribution List
First Security Bank, National Association, individually, and as the Lessor, the
Borrower and the Owner Trustee
Bank of America, N.A., as the Agent, a Lender and a Holder
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135
[XXXXXXX, PHLEGER & XXXXXXXX LETTERHEAD]
____________, 2000
To Each of the Parties Listed
on Schedule A Attached Hereto
Re: VERITAS Operating Corporation Synthetic Lease Financing
Ladies and Gentlemen:
We have acted as special counsel to VERITAS Operating
Corporation, a Delaware corporation ("LESSEE"), in connection with the execution
and delivery of the documents listed below, each dated the date hereof unless
otherwise specified below, related to the funding on the date hereof of a
synthetic lease (off-balance sheet) financing in the total funded amount of
$40,000,000 for the acquisition of certain land and improvements and the
development of corporate facilities to be located in Roseville, Minnesota (the
"Transaction").
For purposes of this opinion, we have examined the following
documents:
1. Master Lease Agreement by and between First Security Bank, National
Association, a national banking association, not in its individual
capacity, but solely as Trustee of the VS Trust 2000-1 ("LESSOR"), and
Lessee (the "LEASE");
2. Participation Agreement by and among the Lessee, Lessor, the holders of
Certificates issued with respect to the VS Trust 2000-1 (the "HOLDERS"),
the lenders party thereto ("LENDERS"), and Bank of America, N.A., as
agent for the Lenders and the Holders ("AGENT") (the "PARTICIPATION
AGREEMENT");
3. Construction Agency Agreement between Lessor and Lessee;
4. Trust Agreement between the Holders and Lessor;
5. Credit Agreement between the Lenders, Lessor and Agent;
6. The Tranche A Notes and the Tranche B Notes;
7. Security Agreement between Lessor and Agent, as accepted and agreed to
by Lessee;
136
To Each of the Parties ____________, 2000
Listed on Schedule A Page 2
Attached Hereto
8. (a) a UCC-1 financing statement to be filed with the California
Secretary of State executed by VERITAS Operating Corporation
("VERITAS"), as debtor, in favor of Agent, as secured party relating to
the Collateral encumbered by such a security interest as arises under
the Security Agreement (collectively, the "LESSEE SECURITY AGREEMENT
FINANCING STATEMENTS");
(b) a UCC-1 financing statement to be filed with the California
Secretary of State executed by Lessor, as debtor, in favor of Agent, as
secured party relating to the Collateral encumbered by such a security
interest as arises under the Security Agreement ( the "LESSOR SECURITY
AGREEMENT FINANCING STATEMENT") (the Lessee Security Agreement Financing
Statements and the Lessor Security Agreement Financing Statement are
collectively referred to herein as the "SECURITY AGREEMENT FINANCING
STATEMENTS"); and
(c) a UCC-1 financing statement to be filed with the California
Secretary of State executed by Veritas, as debtor, in favor of Lessor,
as secured party, relating to the Collateral encumbered by such a
security interest as arises under the Lease (collectively, the "LEASE
FINANCING STATEMENTS") (collectively with (a) and (b), the "FINANCING
STATEMENTS" with each a "FINANCING STATEMENT").
The documents listed above as documents 2-6 are collectively
referred to herein as the "LOAN DOCUMENTS" and the documents listed above as
documents 7-8 are collectively referred to herein as the "SECURITY DOCUMENTS."
Together, the Lease, the Loan Documents and the Security Documents are
collectively referred to herein as the "OPERATIVE DOCUMENTS." This opinion is
being delivered to you pursuant to Section 5.3(ee) of the Participation
Agreement. The Agent, Lenders and Holders are sometimes collectively referred to
herein as the "LENDER PARTIES." Unless otherwise defined herein, capitalized
terms used and not defined herein shall have the meanings given to them in
Appendix A of the Participation Agreement.
For purposes of this opinion, we have examined the following
documents:
1. Executed copies of the Operative Documents;
2. An executed copy of the Certificate of Lessee ("CERTIFICATE OF
LESSEE"), executed by Xxx X. Xxxxx, the Secretary of Lessee, for the benefit of
the undersigned, dated ____________, 2000 a copy of which is attached hereto as
Exhibit A;
3. A copy of the Certificate of Incorporation of Lessee,
certified by the Delaware Secretary of State on ____________, 2000 and further
certified as current by the Secretary of Lessee on ____________, 2000 ("LESSEE
CERTIFICATE OF INCORPORATION");
137
To Each of the Parties ____________, 2000
Listed on Schedule A Page 3
Attached Hereto
4. A copy of the Bylaws of Lessee, certified as current by the
Secretary of Lessee on ____________, 2000 ("LESSEE BYLAWS");
5. A Certificate of Good Standing for Lessee, issued on
____________, 2000 by the Secretary of State of the State of Delaware;
6. A Certificate of Good Standing (Foreign Corporation) for
Lessee, issued on ____________, 2000 by the Secretary of State of the State of
California; and
7. A copy of the Unanimous Written Consent by the Board of
Directors of the Lessee, on ______________, certified by the Secretary of Lessee
on ____________, 2000.
The documents listed above as documents 3, 4 and 7 are
collectively referred to herein as the "CONSTITUENT DOCUMENTS."
We represent Lessee only with respect to specific matters and our
relationship with Lessee is such that we have no detailed or continuing
familiarity with any of its day-to-day operations, business or financial
affairs. Although attorneys in our firm have been involved in the governmental
approval process for the Property, we have made no independent review of that
process, nor have we made any physical inspection of the Property, nor have we
undertaken independent investigation respecting any fire or public health laws
or compliance with the regulations of any insurance company. Our opinion is
based exclusively upon a review of the Operative Documents, the Constituent
Documents, the Certificate of Lessee and the Certificates of the Secretaries of
State referred to above, (and for purposes of our opinion in Paragraph 3 below,
any Material Agreements identified in the Certificate of Lessee). In addition,
we have relied upon the representations and warranties of Lessee set forth in
the Certificate of Lessee with respect to the factual determinations underlying
the legal conclusions set forth herein.
Whenever any opinion expressed herein with respect to the
existence or absence of facts is qualified by the phrase "to our current actual
knowledge," such knowledge is limited solely to (i) the representations of
Lessee set forth in the Certificate of Lessee and the Operative Documents, (ii)
an examination of documents in those of our files solely related to the
Transaction and (iii) the actual knowledge of those attorneys in our firm who
have substantively represented Lessee with respect to the Transaction (but not
including any constructive or imputed notice of any information) or who have had
an active involvement in the preparation of this opinion ("PRIMARY LAWYER
GROUP"). We have not attempted to verify independently the representations of
Lessee; and we have not conducted any investigation, nor do we intend to
undertake for purposes of this opinion any investigation, of any facts that may
be ascertained by the examination of all of the other files or attorneys of our
firm or any court files or third parties.
138
To Each of the Parties ____________, 2000
Listed on Schedule A Page 4
Attached Hereto
In our examination and review we have assumed the genuineness of
all signatures other than the officers of Lessee, the legal capacity of natural
persons, the authenticity of the documents submitted to us as originals, the
conformity to the original documents of all documents submitted to us as
certified, facsimile or photostatic copies, and the authenticity of the
originals of such copies.
The law covered by the opinions expressed herein is limited to
the federal law of the United States and the General Corporation Law of the
State of Delaware, the laws of the State of New York and the laws of the State
of California, in each case as expressly provided below. We express no opinion
with respect to the effect or applicability of the laws of any other
jurisdiction.
For purposes of our opinions expressed in Paragraph 1 below, with
respect to due incorporation, valid existence and good standing of Lessee, we
are relying solely on our review and examination of the certificates received
from the Secretary of State of the State of Delaware, and the Secretary of State
of the State of California, without further investigation of the corporate
records of Lessee. Our opinions expressed in Paragraphs 1 and 2 below relate
solely to the laws of the State of California, the General Corporation Law of
the State of Delaware, and applicable federal laws of the United States, and we
express no opinion in Paragraphs 1 and 2 below with respect to the effect or
applicability of the laws of any other jurisdiction.
Our opinions expressed in clauses (ii) and (iii) of Paragraph 3
below are limited to laws and regulations normally applicable to transactions of
the type contemplated in the Operative Documents and do not extend to licenses,
permits and approvals necessary for the development of the Property or the
conduct of Lessee's business.
Our opinions expressed in Paragraphs 4(a) and 8(a) below relate
solely to the laws of the State of New York (and, in the case of Paragraph 8(a)
insofar as matters of California law are relevant to the opinions relating to
perfection expressed therein, the laws of the State of California), and we
express no opinion in Paragraphs 4(a) and 8(a) below with respect to the effect
or applicability of the laws of any other jurisdiction. Such opinion is limited
to laws and regulations normally applicable to transactions of the type
contemplated in the Operative Documents and do not extend to licenses, permits
and approvals necessary for the conduct of Lessee's business. We have made no
investigation of New York law with respect to the creation of any leasehold
estate, with respect to the creation, perfection or priority of any real estate
lien or security interest in real property, or with respect to the exercise of
any remedies relating to any leasehold estate, real estate lien or security
interest in real property, nor have we consulted with counsel admitted to
practice law in the State of New York regarding such matters, and we express no
opinion herein relating to New York law with respect to any such matters.
139
To Each of the Parties ____________, 2000
Listed on Schedule A Page 5
Attached Hereto
Our opinions expressed in Paragraphs 4(b), 6, 7, 8(b), 9 and 10
below relate solely to the laws of the State of California (except for the
opinions expressed in Paragraph 11 below which also relate to the federal laws
of the United States), and we express no opinion in Paragraphs 4(b), 6, 7, 8(b),
9 and 10 below with respect to the effect or applicability of the laws of any
other jurisdiction (except as expressly set forth in this sentence). Such
opinions are limited to laws and regulations normally applicable to transactions
involving California real property interests as contemplated in the Operative
Documents. We invite your attention to the fact that the Operative Documents
state that they are governed by the law of the State of New York. We have not,
for purposes of our opinions expressed in Paragraphs 4(b), 6, 7, 8(b), 9 and 10
examined the question of, and express no opinion as to, what law would govern
the interpretation, characterization or enforcement of the Operative Documents,
and our opinions with regard to the Operative Documents in Paragraphs 4(b), 6,
7, 8(b), 9 and 10 respectively, are based on the assumption that the internal
law of the State of California would govern the provisions thereof, and in
addition, in the case of Paragraphs 6 and 7, upon the assumptions set forth
therein, respectively.
Insofar as our opinion expressed in Paragraph 10 below concerns
the law of the State of California limiting the rates of interest legally
chargeable or collectible, we have relied upon our understanding that each of
the Lender Parties (as defined below) is a subsidiary of a bank holding company
or is a bank organized under the laws of the United States or any State thereof
and, as a result thereof, is exempt from the restrictions of Section 1 of
Article XV of the Constitution of the State of California relating to rates of
interest upon the loan of money. We further assume in this regard that all
Advances have been and will be made by each of the Lender Parties for its own
account and without intent to circumvent otherwise applicable interest rate
limitations under California law and that there is no present express or implied
agreement or plan to sell participations or any other interest in the Operative
Documents to any Person other than a Person that also qualifies for an exemption
from the interest rate limitations of California law.
In addition and without limiting the previous six paragraphs, we
express no opinion herein with respect to the effect of any pension, employee
benefit or tax laws, or any zoning or similar land use law, any state or federal
antitrust law, state or federal securities laws. Further, we express no opinion
as to compliance or noncompliance by Lessor, Agent, Holders or Lenders with any
federal, state or other law (i) requiring any of Lessor, Agent, Holders or
Lenders to be licensed as a bank, finance company or other type of financial
institution, (ii) pertaining to matters regulating the assets held by the
Lenders on the basis of portfolio requirements or Lessor's, Agent's, Holders' or
Lenders' capitalization, such as loan limits and capital adequacy requirements,
and (iii) otherwise applicable to Lessor, Agent, Holders or Lenders and relating
to their legal or regulatory status or the nature of their business.
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In rendering this opinion, with your permission and without
independent investigation (unless otherwise noted), we are making and relying on
the following assumptions:
A. THERE ARE NO DOCUMENTS OR AGREEMENTS THAT WOULD MODIFY OR CONFLICT WITH
THE OPERATIVE DOCUMENTS, BETWEEN OR AMONG ANY OF THE PARTIES THERETO AND/OR ANY
OTHER PERSON OR ENTITY ("Person");
B. EACH OF LESSOR, AGENT, EACH HOLDER AND EACH LENDER IS DULY ORGANIZED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS RESPECTIVE
JURISDICTION OF FORMATION AND ANY OTHER RELEVANT JURISDICTION, AND HAS ALL
REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS NOW CONDUCTED, TO
ENTER INTO THE OPERATIVE DOCUMENTS TO WHICH IT IS A PARTY AND TO CARRY OUT THE
TERMS AND TO EXERCISE THE REMEDIES OF THE OPERATIVE DOCUMENTS TO WHICH IT IS A
PARTY;
C. ALL OF THE OPERATIVE DOCUMENTS TO WHICH THEY ARE PARTIES, RESPECTIVELY,
HAVE BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY LESSOR, AGENT, EACH HOLDER
AND EACH LENDER, AND ALL THE OPERATIVE DOCUMENTS TO WHICH THEY ARE PARTIES,
RESPECTIVELY, ARE LEGAL, VALID, BINDING AND ENFORCEABLE AS TO LESSOR (EXCEPT FOR
PURPOSES OF OUR OPINIONS IN PARAGRAPHS 4 AND 8 BELOW AS SET FORTH IN SUCH
OPINIONS), AGENT, EACH HOLDER AND EACH LENDER; AND
X. XXXXXX, AGENT, EACH HOLDER AND EACH LENDER HAS FILED ANY REQUIRED
CALIFORNIA AND NEW YORK STATE FRANCHISE, INCOME OR SIMILAR TAX RETURNS AND HAS
PAID ANY REQUIRED CALIFORNIA AND NEW YORK STATE FRANCHISE, INCOME OR SIMILAR
TAXES.
Based upon the foregoing and our reliance thereon and having regard for
legal considerations which we deem relevant, we are of the opinion that:
1. Lessee is a duly incorporated and validly existing
corporation in good standing under the laws of the State of Delaware, is in good
standing as a foreign corporation in the State of California and has the
corporate power and authority to enter into and perform its obligations under
the Operative Documents to which it is or is to be a party and each other
agreement, instrument and document to be executed and delivered by it in
connection with the transactions contemplated by the Operative Documents.
2. Lessee has taken all necessary corporate action to
authorize the execution, delivery and performance of the Operative Documents to
which it is a party and has duly executed and delivered each Operative Document
to which it is a party.
3. The execution and delivery by Lessee of the Operative
Documents to which it is a party and compliance by Lessee with the material
provisions thereto, do not and will not (i) violate or conflict with the Lessee
Certificate of Incorporation or the Lessee Bylaws, (ii) to our current actual
knowledge, conflict with, or require any consents, authorizations,
registrations, declarations or filings (except as may relate to the perfection
of liens or security interests) by Lessee under, the laws of any state having
applicability to Lessee, as presently in
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effect and interpreted, or any order of any Governmental Authority applicable to
or binding on Lessee, (iii) conflict with, or require any consents,
authorizations, registrations, declarations or filings (except as may relate to
the perfection of liens or security interests) by Lessee, or any stockholders,
or any trustee or holder of indebtedness, of the Lessee (except for such
approvals and consents which have been already obtained), under the laws of the
State of California or, to our current actual knowledge, the State of New York
having applicability to Lessee, in each case as presently in effect and
interpreted, (iv) to our current actual knowledge, conflict with or constitute a
violation of any court orders, writs, judgments or decrees of any court, or any
arbitrator or governmental agency or authority, (v) constitute a material breach
of any Material Agreement (as defined in the Certificate of Lessee) to which
Lessee is a party or by which Lessee is bound or, to our current actual
knowledge, any other agreement or instrument to which Lessee is a party or by
which Lessee or any of its properties may be bound or affected, or (vi) result
in the creation of any Lien (other than Permitted Liens and Lessor Liens) upon
the Property under the express terms of the Lessee Certificate of Incorporation,
the Lessee Bylaws or, to our current actual knowledge, any other agreement or
instrument to which Lessee is a party or by which any of its properties may be
bound or affected.
4. (a) Under the laws of the State of New York, the
Operative Documents (other than the Lease) to which Lessee and/or Lessor is a
party constitute the legal, valid and binding obligation of Lessee, enforceable
against Lessee and Lessor in accordance with their terms.
(b) Under the laws of the State of California, the
Operative Documents (other than the Lease) to which Lessee and/or Lessor is a
party constitute the legal, valid and binding obligation of Lessee, enforceable
against Lessee and Lessor in accordance with their terms.
5. We have no current actual knowledge of any pending or
threatened actions, suits, litigation or other proceedings against Lessee or the
Property before any court, arbitrator or Governmental Authority that question or
challenge the legality, validity or enforceability of the Operative Documents or
the Transaction, that concern the Property or the Lessee's interest therein or
which, if determined adversely to Lessee, would be likely to have a Material
Adverse Effect (as defined in the Certificate of Lessee) on Lessee.
6. Assuming that the Transaction, insofar as the Lease is
concerned, is recharacterized by a court of competent jurisdiction as a loan
from Lessor to Lessee, (i) the Lease constitutes a legally valid and binding
obligation of Lessee, enforceable against Lessee in accordance with its terms,
and (ii) Lessee's obligations to make the payments characterized as "Basic Rent"
and "Supplemental Rent" under the Lease will entitle Lessor to pursue its rights
and remedies under the Loan Documents against the Collateral covered thereby
upon a material
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breach of such obligations (provided, however, we express no
opinion as to the nature or characterization of such payments as "Basic Rent" or
"Supplemental Rent" or otherwise).
7. Assuming that the Transaction, insofar as the Lease is
concerned, is characterized by a court of competent jurisdiction as an operating
lease between Lessor and Lessee, (i) the Lease constitutes a legally valid and
binding obligation of Lessee, enforceable against Lessee in accordance with its
terms, (ii) the Lease and the applicable Lease Supplement are in a form
sufficient to demise to Lessee a valid leasehold interest in the Property
described in such Lease Supplement and (iii) the Lessee's obligations to make
the payments characterized as "Basic Rent" and "Supplemental Rent" under the
Lease are enforceable; provided, however, we express no opinion as to the nature
or characterization of such payments as "Basic Rent" or "Supplemental Rent" or
otherwise; and further provided that we express no opinion as to the
enforceability of the Lease remedies obligating Lessee to pay the Termination
Value or any other amount in excess of accrued and unpaid "Basic Rent,"
including, but not limited to, the availability to Lessor of any rights or
remedies under the Lease with respect to payments of "Supplemental Rent", where
a court of competent jurisdiction has not recharacterized the Transaction,
insofar as the Lease is concerned, as a loan from Lessor to Lessee.
8. (a)(i) Under the laws of the State of New York, the
Security Agreement creates in favor of the Agent, for the benefit of the secured
parties named therein, a security interest in the Collateral described therein
to which Article 9 of the New York Uniform Commercial Code ("NYUCC") is
applicable (the "ARTICLE 9 COLLATERAL"). The Security Agreement Financing
Statements are in appropriate form for filing with the California Secretary of
State. Upon the filing of the Security Agreement Financing Statements with the
California Secretary of State, the Agent, as secured party, will have a
perfected security interest in that portion of the Article 9 Collateral in which
a security interest is perfected by the filing of a financing statement with the
California Secretary of State under the NYUCC and Division 9 of the California
Uniform Commercial Code (the "CUCC"). Upon proper filing of the Security
Agreement Financing Statements pursuant to the filing system established under
applicable California law, no other action is necessary under the NYUCC to
perfect such security interests in the Article 9 Collateral.
(ii) Under the laws of the State of New York, the security
interests in the Collateral described in the Lease Financing Statements will be
perfected upon the proper filing of the Lease Financing Statements covering such
Collateral with the California Secretary of State. Upon proper filing of the
Lease Financing Statements pursuant to the filing system established under
applicable California law, no other action is necessary under the NYUCC to
perfect the security interests in the Collateral described in the Lease
Financing Statements.
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(b)(i) Under the laws of the State of California, the Security
Agreement creates in favor of the Agent, for the benefit of the secured parties
named therein, a security interest in the Article 9 Collateral. The Security
Agreement Financing Statements are in appropriate form for filing with the
California Secretary of State. Upon the filing of the Security Agreement
Financing Statements with the California Secretary of State, the Agent, as
secured party, will have a perfected security interest in that portion of the
Article 9 Collateral in which a security interest is perfected by the filing of
a financing statement with the California Secretary of State under Division 9 of
the CUCC. Upon proper filing of the Security Agreement Financing Statements
pursuant to the filing system established under applicable California law, no
other action is necessary under the CUCC to perfect such security interests in
the Article 9 Collateral.
(ii) Under the laws of the State of California, the security
interests in the Collateral described in the Lease Financing Statements will be
perfected upon the proper filing of the Lease Financing Statements covering such
Collateral with the California Secretary of State. Upon proper filing of the
Lease Financing Statements pursuant to the filing system established under
applicable California law, no other action is necessary under the CUCC to
perfect the security interests in the Collateral described in the Lease
Financing Statements.
9. No Governmental Action by, and no notice to or filing
with, any Governmental Authority is required for the acquisition of the Property
by Lessee or, to our current actual knowledge, Lessor.
10. The Transaction and, particularly, Lessee's obligations to
make payments of "Basic Rent" and "Supplemental Rent" will not violate the usury
laws of the State of California.
The opinions expressed herein with respect to the laws of the
State of New York are subject to and limited by the following qualifications,
assumptions, limitations and exceptions:
(a) THE ENFORCEABILITY OF LESSEE'S AND LESSOR'S OBLIGATIONS UNDER THE
OPERATIVE DOCUMENTS MAY BE SUBJECT TO OR LIMITED BY (i) BANKRUPTCY, INSOLVENCY,
REORGANIZATION, ARRANGEMENT, MORATORIUM, FRAUDULENT TRANSFER AND OTHER SIMILAR
LAWS AFFECTING THE RIGHTS OF CREDITORS GENERALLY; AND (ii) GENERAL EQUITABLE
PRINCIPLES (WHETHER RELIEF IS SOUGHT IN A PROCEEDING AT LAW OR IN EQUITY),
INCLUDING, WITHOUT LIMITATION, CONCEPTS OF MATERIALITY, REASONABLENESS, GOOD
FAITH, AND FAIR DEALING.
(b) WE EXPRESS NO OPINION AS TO PROVISIONS OF THE OPERATIVE DOCUMENTS
PURPORTING TO ESTABLISH AN EVIDENTIARY STANDARD OR TO AUTHORIZE CONCLUSIVE
DETERMINATIONS BY THE AGENT, LENDERS, HOLDERS OR LESSOR (COLLECTIVELY, "Lender
Parties") OR ANY OTHER PERSON OR ALLOWING THE LENDER PARTIES OR ANY OTHER PERSON
TO MAKE DETERMINATIONS IN ITS SOLE DISCRETION.
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(c) WE ALSO EXPRESS NO OPINION AS TO:
(i) THE ENFORCEABILITY OF PROVISIONS OF THE OPERATIVE DOCUMENTS PURSUANT TO
WHICH LESSEE OR LESSOR AGREES TO MAKE PAYMENTS WITHOUT SET-OFF, DEFENSE OR
COUNTERCLAIM;
(ii) THE ENFORCEABILITY OF PROVISIONS RELATING TO INDEMNIFICATION,
CONTRIBUTION OR EXCULPATION, TO THE EXTENT ANY SUCH PROVISION IS CONTRARY TO
PUBLIC POLICY OR PROHIBITED BY LAW (INCLUDING, WITHOUT LIMITATION, FEDERAL AND
STATE SECURITIES LAWS);
(iii) ANY PROVISION PROVIDING FOR THE EXCLUSIVE JURISDICTION OF A PARTICULAR
COURT OR PURPORTING TO WAIVE RIGHTS TO TRIAL BY JURY, SERVICE OF PROCESS OR
OBJECTIONS TO THE LAYING OF VENUE OR TO FORUM ON THE BASIS OF FORUM NON
CONVENIENS, IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR PERTAINING TO
THE OPERATIVE DOCUMENTS;
(iv) PROVISIONS CONTAINED IN THE OPERATIVE DOCUMENTS PURPORTING TO WAIVE
EITHER ILLEGALITY AS A DEFENSE TO THE PERFORMANCE OF CONTRACT OBLIGATIONS OR ANY
OTHER DEFENSE TO SUCH PERFORMANCE WHICH CANNOT, AS A MATTER OF LAW, BE
EFFECTIVELY WAIVED;
(v) ANY PROVISION OF THE OPERATIVE DOCUMENTS INSOFAR AS IT PROVIDES THAT ANY
PERSON PURCHASING A PARTICIPATION FROM ANY LENDER PARTY OR OTHER PERSON MAY
EXERCISE SET-OFF OR SIMILAR RIGHTS WITH RESPECT TO SUCH PARTICIPATION OR THAT
ANY LENDER PARTY OR OTHER PERSON MAY EXERCISE SET-OFF OR SIMILAR RIGHTS OTHER
THAN IN ACCORDANCE WITH APPLICABLE LAW;
(vi) ANY PROVISION OF THE OPERATIVE DOCUMENTS PERMITTING MODIFICATION THEREOF
ONLY BY MEANS OF AN AGREEMENT IN WRITING SIGNED BY THE PARTIES THERETO;
(vii) ANY PROVISION OF THE OPERATIVE DOCUMENTS REQUIRING PAYMENT OF ATTORNEYS'
FEES, EXCEPT TO THE EXTENT A COURT DETERMINES SUCH FEES TO BE REASONABLE;
(viii) THE EFFECT OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK WHICH LIMITS THE RATES OF INTEREST LEGALLY CHARGEABLE OR COLLECTIBLE;
(ix) ANY PROVISIONS PURPORTING TO EXCLUDE CONFLICT OF LAW
PRINCIPLES UNDER NEW YORK LAW OR OTHERWISE SELECT THE LAWS OF NEW YORK TO GOVERN
ANY OF THE OPERATIVE DOCUMENTS OR ANY SECURITY INTEREST;
(x) ANY PROVISION PURPORTING TO WAIVE ANY RIGHT TO CLAIM PUNITIVE DAMAGES;
(xi) ANY PROVISION PROVIDING FOR ARBITRATION OF DISPUTES; AND
(xii) ANY COLLATERAL WHICH IS AN ACCESSION TO, OR COMMINGLED OR PROCESSED
WITH, OTHER GOODS TO THE EXTENT THAT THE SECURITY INTEREST OF THE LENDER PARTIES
IS LIMITED BY SECTION 9-314 OR 9-315 OF THE NYUCC OR SECTION 9314 OR 9315 OF THE
CUCC.
(d) THE ENFORCEABILITY OF ANY PROVISIONS OF THE OPERATIVE DOCUMENTS WHICH
ARE DEEMED TO CONSTITUTE A SUBORDINATION OF THE RIGHTS OF LESSEE OR LESSOR MAY
BE LIMITED BY EXONERATION AND OTHER DEFENSES SIMILAR TO THOSE THAT MAY BE
ASSERTED BY ANY GUARANTOR.
(e) THE ENFORCEABILITY OF CERTAIN REMEDIAL AND OTHER PROVISIONS OF THE
SECURITY DOCUMENTS, INCLUDING, WITHOUT LIMITATION, CERTAIN OF THE WAIVERS
THEREIN, MAY BE LIMITED BY APPLICABLE STATE AND FEDERAL LAWS (INCLUDING JUDICIAL
DECISIONS), BUT SUCH LAWS DO NOT, IN OUR OPINION (SUBJECT TO THE LIMITATIONS,
QUALIFICATIONS AND ASSUMPTIONS EXPRESSED HEREIN), RENDER ANY SECURITY DOCUMENT,
TAKEN AS A WHOLE, INVALID OR UNENFORCEABLE, AND EACH OF THE
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SECURITY DOCUMENTS, TAKEN AS A WHOLE, CONTAINS ADEQUATE PROVISIONS FOR THE
PRACTICAL REALIZATION BY THE LENDER PARTIES OF THE MATERIAL RIGHTS AND BENEFITS
AFFORDED THEREBY.
(f) THE EFFECTIVENESS OF ANY FINANCING STATEMENT WILL LAPSE FIVE YEARS FROM
THE DATE THE SAME IS FILED UNLESS A CONTINUATION STATEMENT IS FILED WITHIN SIX
MONTHS PRIOR TO THE EXPIRATION OF THAT FIVE YEAR PERIOD.
(g) UNDER THE NYUCC AND CUCC EVENTS OCCURRING SUBSEQUENT TO THE DATE HEREOF
MAY AFFECT ANY SECURITY INTEREST SUBJECT TO THE NYUCC AND CUCC. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, TO THE EXTENT PROVIDED BY ARTICLE 9 OF THE
NYUCC AND DIVISION 9 OF THE CUCC, ADDITIONAL FILINGS WITH RESPECT TO THE
COLLATERAL MAY BE NECESSARY TO CONTINUE PERFECTION OF ALL OR CERTAIN OF THE
COLLATERAL IF (i) LESSEE OR LESSOR CHANGES ITS NAME (OR ANY OF THE FINANCING
STATEMENTS OTHERWISE BECOMES SERIOUSLY MISLEADING), (ii) ANY ITEM OF COLLATERAL
LOCATED IN CALIFORNIA IS REMOVED FROM THAT STATE OR (iii) LESSEE OR LESSOR
CHANGES THE JURISDICTION IN WHICH ITS CHIEF EXECUTIVE OFFICE IS LOCATED TO A
JURISDICTION OTHER THAN CALIFORNIA.
(h) TO THE EXTENT THAT ANY OF THE COLLATERAL CONSISTS OF OR CONSTITUTES
"PROCEEDS" (AS SUCH TERM IS DEFINED IN SECTION 9-306 OF THE NYUCC), THE SECURITY
INTEREST THEREIN IS LIMITED AND CONDITIONED AS SET FORTH IN SUCH SECTION.
(i) THE OPINIONS EXPRESSED HEREIN WITH RESPECT TO THE CREATION, ATTACHMENT
OR PERFECTION OF ANY SECURITY INTEREST: (i) ARE LIMITED TO THE OPINIONS
EXPRESSED IN PARAGRAPHS 8(a)(i) AND (ii) ABOVE AND TO THE COLLATERAL
SPECIFICALLY DESCRIBED IN THE SECURITY AGREEMENT WHICH IS GOVERNED BY RELEVANT
PROVISIONS AS CURRENTLY IN EFFECT OF ARTICLE 9 OF THE NYUCC (FOR PURPOSES OF
THIS PARAGRAPH ONLY, THE "Covered Collateral"); (ii) DO NOT APPLY TO COLLATERAL
REQUIRING PERFECTION PROCEDURES OTHER THAN THE FILING OF A FINANCING STATEMENT
IN THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE; AND (iii) BY REASON OF THE
OPERATION OF SECTION 9-103 OF THE NYUCC, ARE LIMITED AS TO OUR PERFECTION
OPINIONS IN PARAGRAPHS 8(a)(i) AND (ii) (INSOFAR AS SUCH OPINION GOVERNS GOODS
AND SUCH OTHER ITEMS OF THE COVERED COLLATERAL DESCRIBED IN SECTION 9-103(1)(a)
OF THE NYUCC) TO GOODS AND SUCH OTHER ITEMS LOCATED IN THE STATE OF CALIFORNIA.
WE EXPRESS NO OPINION WITH RESPECT TO THE PRIORITY OF ANY SECURITY INTEREST. WE
HAVE ASSUMED FOR PURPOSES OF THE OPINIONS IN PARAGRAPHS 8(a)(i) AND (ii) ABOVE
THAT THE LESSEE AND LESSOR ARE LOCATED IN CALIFORNIA FOR PURPOSES OF SECTION
9-103(3)(b) AND SECTION 9-103(6)(f) OF THE NYUCC. WE HAVE ALSO ASSUMED FOR
PURPOSES OF SUCH OPINIONS THAT LESSEE AND LESSOR HAVE RIGHTS IN THE COVERED
COLLATERAL WITHIN THE MEANING OF THE NYUCC AND THE CUCC, THAT ALL REQUIRED
CONSENTS OF THIRD PARTIES TO THE GRANT OF SECURITY INTERESTS IN THE COVERED
COLLATERAL HAVE BEEN OBTAINED AND THAT THE LENDER PARTIES (EXCEPT FOR LESSOR
WITH RESPECT TO THE ATTACHMENT AND/OR AND PERFECTION OF LESSOR'S SECURITY
INTERESTS) HAVE GIVEN "VALUE" WITHIN THE MEANING OF THE NYUCC AND THE CUCC. WE
HAVE ASSUMED FOR THE PURPOSES OF OUR OPINIONS IN PARAGRAPH 8(a)(ii) THAT THE
SECURITY INTERESTS (TO WHICH THE LEASE FINANCING STATEMENTS PERTAIN) IN THE
COLLATERAL DESCRIBED IN THE LEASE FINANCING STATEMENTS IN FAVOR OF THE LESSOR
HAVE ATTACHED FOR PURPOSES OF THE NYUCC AND THE CUCC.
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(j) WE ALSO EXPRESS NO OPINION AS TO THE TITLE OF LESSEE OR LESSOR TO ANY
COLLATERAL OR THE CLASSIFICATION OF THE COLLATERAL.
(k) WE EXPRESS NO OPINION (i) WITH RESPECT TO ANY COLLATERAL OF A TYPE
DESCRIBED IN SECTION 9-401(1)(a) OR (b) OF THE NYUCC OR SECTION 9401(1)(a) OR
(b) OF THE CUCC OR REPRESENTED BY ANY CERTIFICATE OF TITLE AND (ii) AS TO THE
ACCURACY OR COMPLETENESS OF ANY DESCRIPTION OF THE COLLATERAL (INCLUDING THE
SCOPE OF THE TERM "GENERAL INTANGIBLES") OR THE CHARACTERIZATION OF ANY
COLLATERAL AS REAL PROPERTY, PERSONAL PROPERTY, EQUIPMENT OR FIXTURES.
The opinions expressed herein with respect to the laws of the
State of California are subject to and limited by the following qualifications,
assumptions, limitations and exceptions:
(a) OUR OPINIONS ARE SUBJECT TO THE EFFECT OF THE LIMITATIONS IMPOSED BY THE
CUCC RELATING TO OR AFFECTING THE RIGHTS AND REMEDIES AVAILABLE TO SECURED
CREDITORS.
(l) OUR OPINIONS ARE SUBJECT TO THE EFFECT OF JUDICIAL DECISIONS WHICH MAY
PERMIT THE INTRODUCTION OF EXTRINSIC EVIDENCE TO INTERPRET THE TERMS OF WRITTEN
CONTRACTS.
(m) THE LEGALITY, VALIDITY, BINDING NATURE AND ENFORCEABILITY OF OBLIGATIONS
OF LESSEE OR LESSOR UNDER THE OPERATIVE DOCUMENTS MAY BE SUBJECT TO OR LIMITED
BY (1) BANKRUPTCY, INSOLVENCY, REORGANIZATION, ARRANGEMENT, MORATORIUM,
FRAUDULENT TRANSFER AND OTHER SIMILAR LAWS AFFECTING THE RIGHTS OF LANDLORDS AND
OF CREDITORS; (2) GENERAL PRINCIPLES OF EQUITY (WHETHER RELIEF IS SOUGHT IN A
PROCEEDING AT LAW OR IN EQUITY), INCLUDING, WITHOUT LIMITATION, CONCEPTS OF
MATERIALITY, REASONABLENESS, GOOD FAITH AND FAIR DEALING AND THE DISCRETION OF
ANY COURT OF COMPETENT JURISDICTION IN AWARDING SPECIFIC PERFORMANCE OR
INJUNCTIVE RELIEF AND OTHER EQUITABLE REMEDIES; AND (3), WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, IN THE EVENT THAT A COURT APPLIES CALIFORNIA LAW
WHEN INTERPRETING ANY OPERATIVE DOCUMENT, THE EFFECT OF CALIFORNIA COURT
DECISIONS AND STATUTES WHICH INDICATE THAT PROVISIONS OF ANY OPERATIVE DOCUMENT
WHICH PERMIT ANY LENDER PARTY OR ANY OTHER PERSON TO TAKE ACTION OR MAKE
DETERMINATIONS MAY BE SUBJECT TO A REQUIREMENT THAT SUCH ACTION BE TAKEN OR SUCH
DETERMINATIONS BE MADE ON A REASONABLE BASIS IN GOOD FAITH OR THAT IT BE SHOWN
THAT SUCH ACTION IS REASONABLY NECESSARY FOR THE PROTECTION OF SUCH LENDER PARTY
OR SUCH OTHER PERSON.
(n) WITH RESPECT TO OUR OPINION ABOVE CONCERNING ENFORCEMENT OF THE
ASSIGNMENT OF RENTS SET FORTH IN ANY OF THE OPERATIVE DOCUMENTS, WE NOTE THE
LIMITATIONS AND REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT THEREOF SET FORTH
IN SECTION 2938 OF THE CALIFORNIA CIVIL CODE ("CC").
(o) WITH RESPECT TO THE OPINIONS SET FORTH ABOVE, WE NOTE THAT IF ANY OF THE
OBLIGATIONS OF LESSEE UNDER THE LEASE OR ANY OPERATIVE DOCUMENT RELATING THERETO
ARE DETERMINED BY A COURT APPLYING CALIFORNIA LAW TO BE OBLIGATIONS THAT ARE
SECURED BY A DEED OF TRUST OR
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MORTGAGE ON THE REAL PROPERTY COVERED THEREBY OF WHICH IS LOCATED IN THE STATE
OF CALIFORNIA, SUCH OBLIGATIONS MAY BE AFFECTED BY THE CALIFORNIA
ANTIDEFICIENCY, ONE-ACTION AND RELATED LAWS, AND LAWS RELATING TO DEFAULT CURE
RIGHTS, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:
(i) SECTION 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE ("CCP") PROVIDES
THAT ANY ACTION TO RECOVER ON A DEBT OR OTHER RIGHT SECURED BY A MORTGAGE OR A
DEED OF TRUST ON REAL PROPERTY MUST COMPLY WITH THE REQUIREMENTS OF THAT
SECTION, WHICH REQUIREMENTS RELATE TO AND SPECIFY THE PROCEDURES FOR THE SALE OF
ENCUMBERED PROPERTY, THE APPLICATION OF PROCEEDS, THE RENDITION IN CERTAIN CASES
OF A DEFICIENCY JUDGMENT AND OTHER RELATED MATTERS. IN SUCH AN ACTION OR
PROCEEDING, THE DEBTOR MAY REQUIRE THE CREDITOR TO EXHAUST ALL OF ITS SECURITY
BEFORE A PERSONAL JUDGMENT MAY BE OBTAINED AGAINST THE DEBTOR FOR A DEFICIENCY,
AND FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 726 (INCLUDING AN ATTEMPT
TO EXERCISE A RIGHT TO SET OFF WITH RESPECT TO ANY FUNDS OF THE DEBTOR THAT MAY
BE DEPOSITED WITH THE CREDITOR FROM TIME TO TIME) MAY RESULT IN THE CREDITOR'S
LOSS OF ITS LIEN ON REAL PROPERTY COLLATERAL;
(ii) SECTION 580B OF THE CCP PROVIDES THAT NO DEFICIENCY JUDGMENT SHALL BE
RENDERED UPON A PURCHASE MONEY OBLIGATION IN FAVOR OF THE VENDOR ARISING FROM
THE SALE OF REAL PROPERTY WHERE SUCH PURCHASE MONEY OBLIGATION IS SECURED BY A
LIEN ON THE REAL PROPERTY PURCHASED FROM THE VENDOR OR IN FAVOR OF A LENDER
WHERE THE PROCEEDS OF THE LOAN ARE USED TO PURCHASE A ONE-TO-FOUR FAMILY
DWELLING OCCUPIED ENTIRELY OR IN PART BY THE BORROWER AND WHERE SUCH LOAN IS
SECURED BY A LIEN ON SUCH DWELLING;
(iii) SECTIONS 580A AND 580D OF THE CCP, RESPECTIVELY, WHICH (i) LIMIT ANY
DEFICIENCY AFTER JUDICIAL FORECLOSURE TO THE EXCESS OF THE DEBT OVER THE FAIR
MARKET VALUE OF THE FORECLOSED PROPERTY AT THE TIME OF SALE, AND (ii) PREVENT A
DEFICIENCY JUDGMENT AFTER A NONJUDICIAL OR TRUSTEE'S FORECLOSURE SALE PURSUANT
TO A POWER OF SALE;
(iv) SECTION 2924C OF THE CC PROVIDES FOR CERTAIN DEFAULT CURE RIGHTS
FOLLOWING ACCELERATION OF THE MATURITY OF AN OBLIGATION SECURED BY A DEED OF
TRUST OR MORTGAGE ON REAL PROPERTY, WHICH MAY BE EXERCISED AT ANY TIME WITHIN
THE REINSTATEMENT PERIOD DESCRIBED IN SUCH SECTION;
(v) SECTION 726.5 OF THE CCP AUTHORIZES, UNDER CERTAIN CIRCUMSTANCES, A REAL
ESTATE-SECURED COMMERCIAL LENDER TO WAIVE ITS LIEN AGAINST A PARCEL OF
"ENVIRONMENTALLY IMPAIRED" SECURITY (AS THEREIN DEFINED) AND XXX THE BORROWER
WITHOUT FORECLOSING ON THE REAL PROPERTY COLLATERAL FOR THE LOAN;
(vi) SECTION 9501 OF THE CUCC PRESCRIBES THE RIGHTS AND REMEDIES OF SECURED
CREDITORS WITH BOTH REAL AND PERSONAL PROPERTY SECURITY;
(vii) CCP SECTIONS 729.010 THROUGH 729.090 PROVIDE FOR CERTAIN REDEMPTION AND
OTHER RIGHTS FOLLOWING ANY JUDICIAL FORECLOSURE SALE;
(viii) SECTION 736 OF THE CCP PERMITS A LENDER, UNDER CERTAIN CIRCUMSTANCES, TO
XXX FOR BREACH OF CONTRACT RELATING TO ANY "ENVIRONMENTAL PROVISIONS" (AS
THEREIN DEFINED) CONCERNING REAL
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PROPERTY SECURITY WITHOUT FORECLOSING ON THE REAL PROPERTY SECURITY OR IN AN
ACTION BROUGHT FOLLOWING FORECLOSURE, WHETHER JUDICIAL OR NON-JUDICIAL; AND
(ix) CC SECTIONS 2924, 2924B AND 2924C REQUIRE THAT CERTAIN PROCEDURES BE
FOLLOWED BY THE HOLDER OF A DEED OF TRUST OR MORTGAGE WITH POWER OF SALE BEFORE
EXERCISING ANY POWER OF SALE THEREUNDER.
(p) THE ENFORCEABILITY OF ANY "ENVIRONMENTAL PROVISION" OF THE OPERATIVE
DOCUMENTS IS ALSO LIMITED BY, AND ALSO SUBJECT TO COMPLIANCE BY THE
BENEFICIARIES THEREUNDER WITH, STATUTORY OR OTHER LEGAL REQUIREMENTS, INCLUDING,
WITHOUT LIMITATION, CCP SECTIONS 564, 726.5 AND 736 AND CC SECTION 2929.5. AS
USED ABOVE, THE TERM "ENVIRONMENTAL PROVISION" HAS THE MEANING SET FORTH IN CCP
SECTION 736(f)(2).
(q) THE EFFECTIVENESS OF THE FINANCING STATEMENTS WILL LAPSE FIVE YEARS FROM
THE DATE THE SAME IS FILED UNLESS A CONTINUATION STATEMENT IS FILED WITHIN SIX
MONTHS PRIOR TO THE EXPIRATION OF THAT FIVE YEAR PERIOD.
(r) TO THE EXTENT PROVIDED BY DIVISION 9 OF THE CUCC, ADDITIONAL FILINGS
WITH RESPECT TO THE COLLATERAL MAY ALSO BE NECESSARY TO CONTINUE PERFECTION OF
THE SECURITY INTEREST IN ALL OR CERTAIN OF THE COLLATERAL IF LESSEE OR LESSOR
CHANGES ITS NAME (OR ANY FINANCING STATEMENT OTHERWISE BECOMES SERIOUSLY
MISLEADING), IF ANY ITEM OF COLLATERAL THAT IS LOCATED IN CALIFORNIA IS REMOVED
FROM THAT STATE OR IF LESSEE OR LESSOR CHANGES THE JURISDICTION IN WHICH ITS
CHIEF EXECUTIVE OFFICE IS LOCATED TO A JURISDICTION OTHER THAN CALIFORNIA.
(s) TO THE EXTENT THAT ANY OF THE COLLATERAL CONSISTS OF OR CONSTITUTES
"PROCEEDS" (AS SUCH TERM IS DEFINED IN SECTION 9306 OF THE CUCC), THE SECURITY
INTEREST THEREIN IS LIMITED AND CONDITIONED AS SET FORTH IN SUCH SECTION 9306.
(t) THE OPINIONS EXPRESSED HEREIN WITH RESPECT TO THE CREATION, ATTACHMENT
OR PERFECTION OF ANY SECURITY INTEREST: (i) ARE LIMITED TO THE OPINIONS
EXPRESSED IN PARAGRAPHS 8(b)(i) AND (ii) ABOVE AND TO THE COLLATERAL
SPECIFICALLY DESCRIBED IN THE SECURITY AGREEMENT WHICH IS GOVERNED BY RELEVANT
PROVISIONS AS CURRENTLY IN EFFECT OF DIVISION 9 OF THE CUCC (FOR PURPOSES OF
THIS PARAGRAPH ONLY, THE "Covered Collateral"); (ii) DO NOT APPLY TO COLLATERAL
REQUIRING PERFECTION PROCEDURES OTHER THAN THE FILING OF A FINANCING STATEMENT
IN THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE; AND (iii) BY REASON OF THE
OPERATION OF SECTION 9103 OF THE CUCC, ARE LIMITED AS TO OUR PERFECTION OPINIONS
IN PARAGRAPHS 8(a)(i) AND (ii) (INSOFAR AS SUCH OPINION GOVERNS GOODS AND SUCH
OTHER ITEMS OF THE COVERED COLLATERAL DESCRIBED IN SECTION 9103(1)(a) OF THE
CUCC) TO GOODS AND SUCH OTHER ITEMS LOCATED IN THE STATE OF CALIFORNIA. WE
EXPRESS NO OPINION WITH RESPECT TO THE PRIORITY OF ANY SECURITY INTEREST. WE
HAVE ASSUMED FOR PURPOSES OF THE OPINIONS IN PARAGRAPHS 8(b)(i) AND (ii) ABOVE
THAT LESSEE AND LESSOR ARE EACH LOCATED IN CALIFORNIA FOR PURPOSES OF SECTION
9103(3)(b) AND SECTION 9103(6)(f) OF THE CUCC. WE HAVE ALSO ASSUMED FOR PURPOSES
OF SUCH OPINIONS THAT LESSEE AND LESSOR EACH HAVE RIGHTS IN THE COVERED
COLLATERAL WITHIN THE MEANING OF THE CUCC, THAT ALL REQUIRED CONSENTS OF THIRD
PARTIES TO THE GRANT OF SECURITY INTERESTS IN THE COVERED COLLATERAL HAVE BEEN
OBTAINED AND THAT THE LENDER PARTIES (EXCEPT FOR LESSOR WITH RESPECT TO THE
149
To Each of the Parties ____________, 2000
Listed on Schedule A Page 15
Attached Hereto
ATTACHMENT AND/OR AND PERFECTION OF LESSOR'S SECURITY INTERESTS) HAVE GIVEN
"VALUE" WITHIN THE MEANING OF THE CUCC. WE HAVE ASSUMED FOR THE PURPOSES OF OUR
OPINIONS IN PARAGRAPH 8(b)(ii) THAT THE SECURITY INTERESTS (TO WHICH THE LEASE
FINANCING STATEMENTS PERTAIN) IN THE COLLATERAL DESCRIBED IN THE LEASE FINANCING
STATEMENTS IN FAVOR OF THE LESSOR HAVE ATTACHED FOR PURPOSES OF THE CUCC.
(u) WE ALSO EXPRESS NO OPINION (i) AS TO THE TITLE OF THE LESSEE OR LESSOR
TO ANY COLLATERAL OR (ii) AS TO WHETHER THE LEASE CONSTITUTES A SECURITY
INTEREST OR CREATES A SECURITY INTEREST WITHIN THE MEANING OF THE CUCC.
(v) WE EXPRESS NO OPINION (i) WITH RESPECT TO ANY COLLATERAL OF A TYPE
DESCRIBED IN SECTION 9401(1)(a) OR (b) OF THE CUCC OR REPRESENTED BY ANY
CERTIFICATE OF TITLE, (ii) AS TO THE ACCURACY OR COMPLETENESS OF ANY DESCRIPTION
OF THE PROPERTY OR ANY OTHER PROPERTY OR COLLATERAL (INCLUDING THE SCOPE OF THE
TERM "GENERAL INTANGIBLES"), OR THE CHARACTERIZATION OF ANY COLLATERAL AS REAL
PROPERTY, PERSONAL PROPERTY, EQUIPMENT OR FIXTURES AND (iii) AS TO ANY
COLLATERAL WHICH IS AN ACCESSION TO, OR COMMINGLED OR PROCESSED WITH, OTHER
GOODS TO THE EXTENT THAT THE SECURITY INTEREST OF THE LENDER PARTIES IS LIMITED
BY SECTION 9314 OR 9315 OF THE CUCC.
(w) THE RIGHTS OF LENDER PARTIES IN RESPECT OF FIXTURES MAY BE LIMITED BY CC
SECTIONS 1013, 1013.5 AND 1019 AND CUCC SECTION 9313 WHICH CONCERN FIXTURES AND
THEIR REMOVAL EXCEPT TO THE EXTENT THAT APPROPRIATE AGREEMENTS ARE OBTAINED FROM
OWNERS AND ENCUMBRANCERS OF, AND OTHERS CLAIMING AN INTEREST IN, THE REAL
PROPERTY ON WHICH SUCH FIXTURES ARE LOCATED.
(x) WE EXPRESS NO OPINION AS TO WHETHER ANY DIVISIONS OF REAL PROPERTY OR
ANY INTERESTS THEREIN CONTEMPLATED BY THE OPERATIVE DOCUMENTS COMPLY WITH THE
SUBDIVISION MAP ACT (AS DEFINED IN SECTION 66410 OF THE CALIFORNIA GOVERNMENT
CODE) OR ANY CITY, COUNTY OR OTHER LOCAL RULES, ORDINANCES OR REGULATIONS
PROMULGATED BY AUTHORITY THEREOF OR IN CONNECTION THEREWITH.
(y) WE EXPRESS NO OPINION AS TO THE TITLE OF THE LESSEE OR THE LESSOR TO THE
PROPERTY OR ANY IMPROVEMENTS PURSUANT TO THE LEASE.
(z) WE FURTHER ADVISE YOU THAT IF A COURT OF COMPETENT JURISDICTION APPLIES
THE LAWS OF THE STATE OF CALIFORNIA TO A LEASE OF REAL PROPERTY LOCATED IN THE
STATE OF CALIFORNIA, THE OBLIGATIONS OF LESSEE UNDER THE LEASE MAY ALSO BE
AFFECTED UNDER CALIFORNIA LAW BY THE PROVISIONS OF CC SECTIONS 1932 AND 1933
(RELATING, INTER ALIA, TO TERMINATION OF A LEASE UPON CASUALTY TO THE LEASEHOLD
ESTATE) OR BY SECTION 1265.130 OF THE CCP (RELATING TO TERMINATION OF A LEASE
UPON A TAKING OF THE LEASEHOLD ESTATE FOR PUBLIC USE IN CERTAIN CIRCUMSTANCES).
(aa) WE EXPRESS NO OPINION AS TO THE VALIDITY, BINDING NATURE OR
ENFORCEABILITY OF ANY PROVISIONS OF THE OPERATIVE DOCUMENTS THAT:
(i) PURPORT TO WAIVE REGULATORY, CONSTITUTIONAL, STATUTORY OR COMMON LAW
RIGHTS, INCLUDING THE RIGHT TO RECEIVE NOTICE OR TO BE ALLOWED TO CURE,
REINSTATE OR REDEEM IN THE EVENT OF DEFAULT, OR THAT EXPRESSLY OR BY IMPLICATION
WAIVE BROADLY OR VAGUELY STATED RIGHTS,
150
To Each of the Parties ____________, 2000
Listed on Schedule A Page 16
Attached Hereto
UNKNOWN FUTURE RIGHTS AND DEFENSES TO OBLIGATIONS, IN EACH CASE TO THE EXTENT
SUCH RIGHTS OR DEFENSES ARE NOT WAIVABLE UNDER APPLICABLE LAW;
(ii) PURPORT TO REQUIRE THE LESSEE OR LESSOR TO MAKE PAYMENTS WITHOUT
SET-OFF, DEFENSE OR COUNTERCLAIM;
(iii) SPECIFY THE MANNER OF FORECLOSURE OR EXERCISE OF REMEDIES IN RESPECT OF
DEPOSIT ACCOUNTS INSOFAR AS THE CUCC DOES NOT ADDRESS THE SAME;
(iv) PURPORT TO REQUIRE THE AWARD OR PAYMENT OF ATTORNEYS' FEES, EXPENSES OR
COSTS IN ANY ACTION WHERE ANY PERSON IS NOT THE PREVAILING PARTY, OR THE IMPACT
OF CC SECTION 1717 ET SEQ. ON ANY SUCH PROVISIONS;
(v) PROVIDE THAT RIGHTS OR REMEDIES ARE NOT EXCLUSIVE, THAT EVERY RIGHT OR
REMEDY IS CUMULATIVE AND MAY BE EXERCISED IN ADDITION TO OR WITH ANY OTHER RIGHT
OR REMEDY, THAT THE ELECTION OF SOME PARTICULAR REMEDY OR REMEDIES DOES NOT
PRECLUDE RECOURSE TO ONE OR ANOTHER REMEDY OR THAT FAILURE TO EXERCISE OR DELAY
IN EXERCISING RIGHTS OR REMEDIES WILL NOT OPERATE AS A WAIVER OF ANY SUCH RIGHT
OR REMEDY;
(vi) PROHIBIT WAIVER OF ANY TERMS OR PROVISIONS OF THE OPERATIVE DOCUMENTS
OTHER THAN IN WRITING OR PROHIBIT ORAL MODIFICATIONS THEREOF OR MODIFICATION BY
COURSE OF DEALING TO THE EXTENT SUCH PROVISIONS ARE INCONSISTENT WITH APPLICABLE
LAW;
(vii) ADDRESS ARBITRATION OF DISPUTES;
(viii) PURPORT TO WAIVE STATUTES OF LIMITATION;
(ix) AUTHORIZE LESSOR OR ANY OTHER PERSON TO SET OFF AND APPLY ANY DEPOSITS
AT ANY TIME HELD, AND ANY OTHER INDEBTEDNESS AT ANY TIME OWING, BY LESSEE OR
LESSOR TO OR FOR THE ACCOUNT OF LESSOR;
(x) PURPORT TO LIMIT THE STANDARDS IMPOSED UPON ANY PERSON FOR THE CARE OF
THE COLLATERAL IN SUCH PERSON'S POSSESSION;
(xi) PURPORT TO EXCLUDE CONFLICT OF LAW PRINCIPLES UNDER CALIFORNIA LAW OR
OTHERWISE SELECT THE LAWS OF NEW YORK TO GOVERN ANY OF THE OPERATIVE DOCUMENTS
OR ANY SECURITY INTEREST IN REAL PROPERTY LOCATED IN THE STATE OF CALIFORNIA;
(xii) REQUIRE THE LESSEE OR LESSOR TO PROVIDE HAZARD INSURANCE COVERAGE
AGAINST RISKS IN AN AMOUNT EXCEEDING THE REPLACEMENT VALUE OF ANY IMPROVEMENTS
TO REAL PROPERTY;
(xiii) IMPOSE REQUIREMENTS RESPECTING IMPOUND ACCOUNTS IN CONFLICT WITH
APPLICABLE LAW;
(xiv) PROVIDE FOR THE APPLICATION OF INSURANCE OR CONDEMNATION PROCEEDS TO
REDUCE INDEBTEDNESS;
(xv) PURPORT TO ASSIGN RENTS, ISSUES AND PROFITS ABSOLUTELY AND NOT AS
SECURITY;
(xvi) INDEMNIFY ANY PERSON AGAINST, OR REQUIRE CONTRIBUTIONS TOWARD, THAT
PERSON'S LIABILITY FOR ITS OWN WRONGFUL OR NEGLIGENT ACTS OR WHERE SUCH
INDEMNIFICATION OR CONTRIBUTION IS CONTRARY TO PUBLIC POLICY OR PROHIBITED BY
LAW;
(xvii) PROVIDE FOR PENALTIES, LIQUIDATED DAMAGES, ACCELERATION OF FUTURE
AMOUNTS DUE (OTHER THAN PRINCIPAL) WITHOUT APPROPRIATE DISCOUNT TO PRESENT
VALUE, LATE CHARGES, PREPAYMENT CHARGES AND INCREASED INTEREST RATES UPON
DEFAULT;
151
To Each of the Parties ____________, 2000
Listed on Schedule A Page 17
Attached Hereto
(xviii) PROVIDE THAT TIME IS OF THE ESSENCE;
(xix) PROVIDE FOR THE CONFESSION OF JUDGMENT;
(xx) ATTEMPT TO CHANGE OR WAIVE RULES OF EVIDENCE OR FIX THE METHOD OR
QUANTUM OF PROOF TO BE APPLIED IN LITIGATION OR SIMILAR PROCEEDINGS;
(xxi) PROVIDE FOR THE EXCLUSIVE JURISDICTION OF A PARTICULAR COURT OR PURPORT
TO WAIVE RIGHTS TO TRIAL BY JURY, SERVICE OF PROCESS OR OBJECTIONS TO THE LAYING
OF VENUE OR TO FORUM ON THE BASIS OF FORUM NON CONVENIENS, IN CONNECTION WITH
ANY LITIGATION ARISING OUT OF OR PERTAINING TO THE OPERATIVE DOCUMENTS;
(xxii) APPOINT ANY LENDER PARTY AS LESSEE'S OR LESSOR'S AGENT OR
ATTORNEY-IN-FACT; OR
(xxiii) ANY PROVISION PURPORTING TO WAIVE ANY RIGHT TO CLAIM PUNITIVE DAMAGES.
(bb) THE ENFORCEABILITY OF ANY PROVISIONS OF THE OPERATIVE DOCUMENTS WHICH
ARE DEEMED TO CONSTITUTE A SUBORDINATION OF THE RIGHTS OF LESSEE OR LESSOR MAY
BE LIMITED BY EXONERATION AND OTHER DEFENSES SIMILAR TO THOSE THAT MAY BE
ASSERTED BY ANY GUARANTOR.
(cc) WITH RESPECT TO THE PROVISIONS OF THE OPERATIVE DOCUMENTS RELATING TO
THE APPLICATION OF CONDEMNATION PROCEEDS, YOU SHOULD BE AWARE THAT CCP SECTION
1265.225 PROVIDES THAT WHERE THERE IS A PARTIAL TAKING OF PROPERTY ENCUMBERED BY
A LIEN, THE LIENHOLDER MAY SHARE IN THE AWARD ONLY TO THE EXTENT DETERMINED BY
THE COURT TO BE NECESSARY TO PREVENT IMPAIRMENT OF THE SECURITY, AND THE LIEN
SHALL CONTINUE UPON THE PART OF THE PROPERTY NOT TAKEN AS SECURITY FOR THE
UNPAID PORTION OF THE INDEBTEDNESS. HOWEVER, THE LIENHOLDER AND THE PROPERTY
OWNER MAY AT ANY TIME AFTER COMMENCEMENT OF THE CONDEMNATION PROCEEDING AGREE
THAT SOME OR ALL OF THE AWARD SHALL BE APPORTIONED TO THE LIENHOLDER ON THE
INDEBTEDNESS.
(dd) NOTWITHSTANDING OUR OPINIONS ABOVE, WE EXPRESS NO OPINION AS TO THE
ENFORCEABILITY OF THE POWER OF SALE (AND THE RELATED REMEDIES OF LESSOR
CONSISTENT WITH THE CHARACTERIZATION OF THE TRANSACTION AS A LOAN) IN THE LEASE,
WHERE A COURT OF COMPETENT JURISDICTION HAS NOT RECHARACTERIZED THE TRANSACTION,
INSOFAR AS THE LEASE IS CONCERNED, AS A LOAN FROM LESSOR TO LESSEE.
(ee) WE WISH TO POINT OUT THAT THE LENDERS, AS HOLDERS OF THE TRANCHE A NOTES
AND TRANCHE B NOTES, MAY BE REQUIRED TO PROVE THE OUTSTANDING AMOUNT THEREOF. WE
FURTHER WISH TO POINT OUT THAT UNDER SECTION 18104 OF THE CALIFORNIA PROBATE
CODE, THE HOLDERS MAY BE REQUIRED TO PROVE THEIR INTERESTS AS BENEFICIARIES
UNDER THE VS TRUST 2000-1.
Without qualification of the opinions rendered above, we express
no opinion as to (i) whether the Lease or any of the other Operative Documents
will be construed to create the legal relationships they purport to create for
purposes of determining the rights and obligations of the parties thereto; (ii)
whether the legal relationships purported to be created by the Lease or any of
the other Operative Documents will be binding and conclusive with respect to the
rights of persons who are not parties thereto; or (iii) whether the legal
relationships purported to be created
152
To Each of the Parties ____________, 2000
Listed on Schedule A Page 18
Attached Hereto
by the Lease or any of the other Operative Documents will be respected for tax,
accounting, financial or other regulatory purposes.
The opinions expressed herein are solely for your benefit and for
the benefit of your successors and assigns in connection with the Transaction,
and such opinions may not be relied on in any manner or for any purpose by any
other Person. In addition, this opinion is rendered as of the date hereof and
speaks only to the addresses set forth on Schedule A, and it shall not be deemed
to have been updated to any date upon which any such other Person may rely
hereon. Further, we do not undertake to advise you or such other Person of
matters which occur subsequent to the date hereof and which affect the opinions
expressed herein.
Very truly yours,
XXXXXXX, XXXXXXX & XXXXXXXX LLP
153
SCHEDULE A
BANK OF AMERICA, N.A., as the Agent, a Lender and a Holder
The various banks and other lending institutions parties to the Participation
Agreement from time to time, as additional Lenders
The various banks and other lending institutions parties to the Participation
Agreement from time to time, as Holders
FIRST SECURITY BANK, NATIONAL ASSOCIATION, individually and as Borrower, Lessor
and Owner Trustee
Together with such parties' successors and assigns
154
EXHIBIT A
CERTIFICATE OF LESSEE
THIS CERTIFICATE OF LESSEE ("Certificate") is made as of
____________, 2000, by VERITAS Operating Corporation, a Delaware corporation
("Lessee"). This Certificate is made for the benefit of Xxxxxxx, Phleger &
Xxxxxxxx LLP ("BPH") in connection with BPH's opinion (the "Opinion") delivered
to these parties listed in Schedule A attached to the Opinion. Capitalized terms
not defined herein are used herein as defined in the Opinion.
After due inquiry and investigation, the undersigned hereby
represents to and for the benefit of BPH as follows:
1. I am an officer of Lessee (specifically, the Secretary of
Lessee), and I am familiar with the day-to-day operations of Lessee.
2. Lessee is party to no Material Agreements as of the date
hereof (other than the Operative Documents, except as set forth on Schedule 1
hereto. "Material Agreement" means an agreement of Lessee involving borrowed
money in an amount (whether or not funded) in excess of $5,000,000, where Lessee
is a borrower or guarantor of the amount.
3. The Lessee Constituent Documents remain in full force and
effect and have not been altered or amended in any respect.
4. The Operative Documents do not and will not conflict with
any Material Agreement or other indenture, mortgage, deed of trust, contract, or
other material agreement or other instrument to which Lessee is a party or by
which Lessee is bound.
5. Except as set forth on Schedule 2 hereto, the
representations and warranties of Lessee contained in the Operative Documents to
which it is a party are true and correct on and as of the date hereof as though
made on and as of such date.
6. The Operative Documents do not and will not result in the
creation or imposition of any lien on any material asset of Lessee (other than
liens permitted under the Operative Documents).
7. The Operative Documents do not and will not violate or
contravene any judgment, decree, injunction or order of any federal, New York or
California court or other tribunal, or any arbitrator or governmental agency or
authority having jurisdiction over Lessee or the Property of Lessee and by which
Lessee is bound.
8. There are no proceedings pending, threatened or
contemplated for the dissolution, merger, consolidation or liquidation of Lessee
or for the sale of all or substantially all of the assets of Lessee.
9. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Lessee or the
properties of Lessee before any
155
court, board of arbitration, governmental agency or authority which (i)
challenge or question the validity or enforceability of the Operative Documents
or the rights and remedies of the Lessor with respect to Lessee or the Property
under the Operative Documents, or (ii) which, if determined adversely to Lessee,
would be reasonably likely to have a Material Adverse Effect (as such term is
defined in Appendix A to the Participation Agreement).
10. All tax returns and payments due and owing with respect to
Lessee have been filed with or paid to the proper authorities in the State of
California.
11. The chief executive office of Lessee is located at 0000
Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx.
12. Lessee neither engages or holds itself out as being
engaged primarily, nor proposes to engage primarily, in the business of
investing, reinvesting or trading in securities.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
as Secretary of Lessee (and solely in such capacity) as of the day and year
first above written.
________________________________________
Name: __________________________________
Title: _________________________________
156
SCHEDULE 1
Material Agreements
$100,000,000 5 1/4% Convertible Subordinated Notes Due November 1, 2004.
157
EXHIBIT H-1
[Outside Counsel Opinion for the Additional Credit Parties]
(Pursuant to Section 5.10(c) of the Participation Agreement)
------------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of VERITAS Operating
Corporation
Dear Sirs:
We have acted as special counsel to _________________, a ______________
corporation (the "Joinder Party") in connection with certain transactions
contemplated by the Participation Agreement dated as of March 9, 2000 (the
"Participation Agreement"), among VERITAS Operating Corporation, a Delaware
corporation (the "Lessee"), the various parties thereto from time to time, as
guarantors (the "Guarantors"), First Security Bank, National Association, as the
Owner Trustee (the "Owner Trustee"), the various banks and other lending
institutions which are parties thereto from time to time, as holders (the
"Holders"), the various banks and other lending institutions which are parties
thereto from time to time, as lenders (the "Lenders") and Bank of America, N.A.,
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 (the "Agent").
This opinion is delivered pursuant to Section 5.10(c) of the Participation
Agreement. All capitalized terms used herein, and not otherwise defined herein,
shall have the meanings assigned thereto in Appendix A to the Participation
Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of the Operative Agreements (including without
limitation that certain Joinder Agreement dated as of __________, _____ (the
"Joinder Agreement"), between the Joinder Party and the Agent, and such other
corporate, partnership or limited liability company documents and records of the
Joinder Party, certificates of public officials and representatives of the
Joinder Party as to certain factual matters, and such other instruments and
documents which we have deemed necessary or advisable to examine for the purpose
of this opinion. With respect to such examination, we have assumed (i) the
statements of fact made in all such certificates, documents and instruments are
true, accurate and complete; (ii) the due authorization, execution and delivery
of the Operative Agreements by the parties thereto other than the Joinder Party;
(iii) the genuineness of all signatures (other than the signatures of persons
signing on behalf of the Joinder Party), the authenticity and completeness of
all documents, certificates, instruments, records and corporate records
submitted to us as originals and the conformity to the original
H-1-1
158
instruments of all documents submitted to us as copies, and the authenticity and
completeness of the originals of such copies; (iv) that all parties other than
the Joinder Party have all requisite corporate power and authority to execute,
deliver and perform the Operative Agreements; and (v) the enforceability of the
Operative Agreements against all parties thereto other than the Joinder Party.
We have further assumed that the laws of the States of [STATE OF LAWYER'S
ADMISSION] and New York are substantively identical.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Joinder Party is a corporation, duly incorporated, validly
existing and in good standing under the laws of ___________________ and has the
power and authority to conduct its business as presently conducted and to
execute, deliver and perform its obligations under the Operative Agreements to
which it is a party. The Joinder Party is duly qualified to do business in all
jurisdictions in which its failure to so qualify would materially impair its
ability to perform its obligations under the Operative Agreements to which it is
a party or its financial position or its business as now and now proposed to be
conducted.
(b) The execution, delivery and performance by the Joinder Party of
the Operative Agreements to which it is a party have been duly authorized by all
necessary corporate action on the part of the Joinder Party and the Operative
Agreements to which the Joinder Party is a party have been duly executed and
delivered by the Joinder Party.
(c) The Operative Agreements to which the Joinder Party is a party
constitute valid and binding obligations of the Joinder Party enforceable
against the Joinder Party in accordance with the terms thereof, subject to
bankruptcy, insolvency, liquidation, reorganization, fraudulent conveyance, and
similar laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
(d) The execution and delivery by the Joinder Party of the Operative
Agreements to which it is a party and compliance by the Joinder Party with all
of the provisions thereof do not and will not (i) contravene the provisions of,
or result in any breach of or constitute any default under, or result in the
creation of any Lien (other than Permitted Liens and Lessor Liens) upon any of
its property under, its Articles of Incorporation and By-Laws or any indenture,
mortgage, chattel mortgage, deed of trust, lease, conditional sales contract,
bank loan or credit agreement or other agreement or instrument to which the
Joinder Party is a party or by which it or any of its property may be bound or
affected, or (ii) contravene any Laws or any order of any Governmental Authority
applicable to or binding on the Joinder Party.
(e) No Governmental Action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery or
performance by the Joinder Party of any of the Operative Agreements to which it
is a party or for the acquisition, ownership, construction and completion of the
Properties, except for those which have been obtained.
X-0-0
000
(x) Except as set forth on Schedule 1 hereto, there are no actions,
suits or proceedings pending or to our knowledge, threatened against the in any
court or before any Governmental Authority, that concern the Properties or the
Joinder Party's interest therein or that question the validity or enforceability
of any Operative Agreement to which the Joinder Party is a party or the overall
transaction described in the Operative Agreements to which the Joinder Party is
a party.
(g) Neither the nature of the Properties, nor any relationship
between the Joinder Party and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Operative
Agreements to which the Joinder Party is a party is such as to require any
approval of stockholders of, or approval or consent of any trustee or holders of
indebtedness of, the Joinder Party, except for such approvals and consents which
have been duly obtained and are in full force and effect.
(h) Except with respect to (i) perfection and the effect of
perfection or nonperfection of the security interest in the Collateral, and (ii)
usury law, in any action or proceeding arising out of or related to any of the
Operative Agreements in any court of the State of California or in any federal
court sitting in the State of California, such court would recognize and give
effect to the New York choice of law provisions of the Operative Agreements.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters stated herein. This opinion is
based on and is limited to the laws of the States of [__________], and the
federal laws of the United States of America. Insofar as the foregoing opinion
relates to matters of law other than the foregoing, no opinion is hereby given.
This opinion is for the sole benefit of the Joinder Party, the Lessee, the
Construction Agent, the Guarantors, the Owner Trustee, the Holders, the Lenders,
the Agent and their respective successors and assigns and may not be relied upon
by any other person other than such parties and their respective successors and
assigns without the express written consent of the undersigned. The opinions
expressed herein are as of the date hereof and we make no undertaking to amend
or supplement such opinions if facts come to our attention or changes in the
current law of the jurisdictions mentioned herein occur which could affect such
opinions.
Very truly yours,
[JOINDER PARTY'S OUTSIDE COUNSEL]
H-1-3
160
Distribution List
Bank of America, N.A., as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
VERITAS Operating Corporation, as the Construction Agent and the Lessee
The various parties to the Participation Agreement from time to time as
Guarantors
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the VS Trust 2000-1
____________________________, as the Joinder Party
H-1-4
161
Schedule 1
(Litigation)
H-1-5
162
EXHIBIT I
VERITAS OPERATING CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.5 of the Participation Agreement)
VERITAS OPERATING CORPORATION, a Delaware corporation (the "Company")
DOES HEREBY CERTIFY as follows:
1. The address for the subject Property is ________________________________
________________________________.
2. The Completion Date for the construction of Improvements at the Property
occurred on ______________.
3. Attached hereto as Schedule 1 is the detailed, itemized documentation
supporting the asserted Property Cost figures.
4. All representations and warranties of the Company in each Operative
Agreement and in each certificate delivered pursuant thereto (including
without limitation the Incorporated Representations and Warranties) are
true and correct as of the Completion Date.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of March 9, 2000 among the Company, as the Lessee and as the
Construction Agent, the various parties thereto from time to time, as guarantors
(the "Guarantors"), First Security Bank, National Association, as the Owner
Trustee, the various banks and other lending institutions which are parties
thereto from time to time, as holders (the "Holders"), the various banks and
other lending institutions which are parties thereto from time to time, as
lenders (the "Lenders"), Bank of America, N.A., 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.
[The remainder of this page has been intentionally left blank.]
I-1
163
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to
be duly executed and delivered as of this ____ day of ______________, ______.
VERITAS OPERATING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
I-2
164
Schedule I
(Itemized Documentation in Support of Asserted Property Cost)
I-3
165
EXHIBIT J
[Description of Material Litigation]
(Pursuant to Section 6.2(d) of the Participation Agreement)
The following are matters in which one or more Credit Parties is currently
involved and for which such Credit Party could face liability:
1. On-Line Backup Systems Ltd.
On-Line Backup Systems Ltd. ("On-Line"), a former customer of TeleBackup
Systems, Inc. ("TeleBackup"), a wholly-owned subsidiary of Lessee, filed
a claim against TeleBackup in the Court of Queen's Bench of Alberta,
Judicial Centre of Calgary, on November 23, 1999, alleging breach of
contract, unjust enrichment, misrepresentation and negligence arising
from the purchase by On-Line of certain hardware and software sold by
TeleBackup. TeleBackup filed a statement of defense on January 21, 2000
to deny these allegations, to assert certain contractual defenses and to
claim that the alleged failure of the software arose directly as a
result of On-Line's error in handling the system.
2. Electronic Systems of Richmond.
VERITAS Software Corporation is currently in settlement negotiations
with Electronic Systems of Richmond ("ESR"). ESR alleges that VERITAS
Software Corporation hired certain former employees of ESR in violation
of noncompetition agreements that those employees had with ESR.
J-1
166
EXHIBIT K
[Form of Joinder Agreement]
(Pursuant to Section 5.10(a) of the Participation Agreement)
THIS JOINDER AGREEMENT (as amended, modified, supplemented, restated
and/or replaced from time to time, the "Agreement"), dated as of _____________,
______, is by and between ___________________, a ___________ (the "Company"),
and Bank of America, N.A., 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 (the "Agent"). Capitalized terms not otherwise defined herein
shall have the meanings set forth therefor in the Participation Agreement dated
as of March 9, 2000 (as amended, modified, supplemented, restated and/or
replaced from time to time, the "Participation Agreement") among VERITAS
Operating Corporation, as the Construction agent and the Lessee, the various
parties thereto from time to time, as the Guarantors, First Security Bank,
National Association, as the Owner Trustee under the VS Trust 2000-1, the
various banks and other lending institutions which are parties thereto from time
to time, as the Lenders, the various banks and other lending institutions which
are parties thereto from time to time, as the Holders, and the Agent.
The Company is either a Domestic Subsidiary or the Parent, and,
consequently, the Credit Parties are required by Section 8.3(s) of the
Participation Agreement to cause the Company to become a "Guarantor".
Accordingly, the Company hereby agrees as follows with the Agent, for
the benefit of the Financing Parties:
1. The Company hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Company will be deemed to be a party to the
Participation Agreement and a "Guarantor" for all purposes of the Participation
Agreement and all other Operative Agreements, and shall have all of the
obligations of a Guarantor under the Operative Agreements as if the Company had
executed the Participation Agreement. The Company hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in the Operative Agreements.
Without limiting the generality of the foregoing terms of this paragraph 1, the
Company hereby (i) jointly and severally together with the other Guarantors,
guarantees to each Financing Party, as provided in Sections 6B.1 through 6B.8 of
the Participation Agreement, 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) strictly in accordance with the terms
thereof.
2. THE COMPANY HEREBY EXPRESSLY ACKNOWLEDGES AND AGREES TO THE
PROVISIONS OF SECTION 12.7 OF THE PARTICIPATION AGREEMENT, INCLUDING WITHOUT
LIMITATION THOSE PROVISIONS REGARDING GOVERNING LAW, SUBMISSION TO JURISDICTION,
WAIVER OF
K-1
167
JURY TRIAL AND VENUE. THIS PROVISION HAS BEEN SPECIFICALLY REVIEWED BY THE
COMPANY.
3. The chief executive office and principal place of business of the
Company are located at the location(s) set forth on Schedule 1 attached hereto.
4. All notices and other communications to be delivered to the
Company shall be directed to [___________] at its address set forth in Section
12.2 of the Participation Agreement or such other address as may be specified,
in accordance with the terms of the Participation Agreement, by [___________]
from time to time.
5. The Company hereby waives acceptance by the Financing Parties of
the guaranty by the Company under Sections 6B.1 through 6B.8 of the
Participation Agreement upon the execution of this Agreement by the Company.
6. This Agreement may be executed in multiple counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
7. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State oF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its authorized officers, and the Agent, for the benefit of the
Financing Parties, has caused the same to be accepted by its authorized officer,
as of the day and year first above written.
[COMPANY]
By: ____________________________________
Name: __________________________________
Title: _________________________________
Acknowledged and accepted:
BANK OF AMERICA, N.A.,
as the Agent
By: ____________________________________
Name: __________________________________
Title: _________________________________
K-2
168
Schedule 1
[Chief Executive Office and
Principal Place of Business of the Company]
K-3
169
--------------------------------------------------------------------------------
Appendix A
Rules of Usage, Accounting Terms and Definitions
--------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any
document to articles, sections, paragraphs, clauses, annexes, appendices,
schedules or exhibits are references to articles, sections, paragraphs, clauses,
annexes, appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any
document are solely for convenience of reference and shall not constitute a part
of any such document nor shall they affect the meaning, construction or effect
of any provision thereof.
(d) References to any Person shall include such Person, its
successors, permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any
agreement means such agreement as amended, modified, extended, supplemented,
restated and/or replaced from time to time in accordance with the applicable
provisions thereof.
(f) Except as otherwise expressly provided, references to any law
includes any amendment or modification to such law and any rules or regulations
issued thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable document
and not to any particular article, section, subsection, paragraph or clause
thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be
Appendix A-1
170
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those specifically
mentioned.
(i) References herein to "attorney's fees", "legal fees", "costs of
counsel" or other such references shall be deemed to include the allocated cost
of in-house counsel.
(j) Each of the parties to the Operative Agreements and their counsel
have reviewed and revised, or requested revisions to, the Operative Agreements,
and the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction and
interpretation of the Operative Agreements and any amendments or exhibits
thereto.
(k) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
have the meaning so ascribed to such term in the applicable Operative Agreement.
II. Accounting Terms
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Agreement and the other Operative Agreements shall (except as otherwise
expressly provided herein or therein) be made by application of GAAP applied on
a basis consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 8.3A(a) (or, prior to the delivery of the first
financial statements pursuant to Section 8.3A(a), consistent with the financial
statements as at December 31, 1999); provided, however, if (a) the Credit
Parties shall reasonably object to determining such compliance on such basis at
the time of delivery of such financial statements due to any change in GAAP or
the rules promulgated with respect thereto or (b) the Agent or the Majority
Secured Parties shall so object in writing within 60 days after delivery of such
financial statements, then such calculations shall be made on a basis consistent
with the most recent financial statements delivered by the Credit Parties to the
Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made under the financial covenants set forth in
Section 8.3A(h) so long as the Lessee shall have provided the Agent with a Pro
Forma Compliance Certificate with respect to any Permitted Acquisition, income
statement items (whether positive or negative) attributable to the Property
acquired in such Permitted Acquisition and any Indebtedness incurred by the
applicable Credit Parties in order to consummate such Permitted Acquisition
shall be included to the extent relating to any period applicable in such
calculations occurring after the date of such Permitted Acquisition (and,
notwithstanding the foregoing, during the first four fiscal quarters following
the date of such Permitted Acquisition, such Permitted Acquisition and any
Indebtedness incurred by the applicable Credit Parties in order to consummate
such Permitted
Appendix A-2
171
Acquisition (A) shall be deemed to have occurred on the first day of the four
fiscal quarter period immediately preceding the date of such Permitted
Acquisition and (B) if such Indebtedness has a floating or formula rate, then
the implied rate of interest for such Indebtedness for the applicable period
shall be determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination.
III. Definitions
"ABR" shall mean, for any day, a rate per annum equal to the greater of
(a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.5%). For
purposes hereof: "Prime Lending Rate" shall mean the rate which the Agent
announces 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 does not necessarily
represent the lowest or best rate 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.
"ACCORD Evidence of Insurance" shall mean an ACCORD Evidence of
Insurance or other similar evidence of insurance reasonably acceptable to the
Agent.
"Accounts" shall have the meaning given to such term in Section 1 of the
Security Agreement.
Appendix A-3
172
"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.
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the then
maximum marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agent" shall mean Bank of America, N.A., 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.
Appendix A-4
173
"Applicable Percentage" shall mean for Eurodollar Loans, Eurodollar
Holder Advances and Commitment Fees, the appropriate applicable percentages
corresponding to the Pricing Level in effect as of the most recent Calculation
Date as shown below:
===============================================================================================
Applicable
Applicable Percentage for Applicable
Ratio of Funded Percentage for Eurodollar Percentage for
Pricing Indebtedness Eurodollar Holder Commitment
Level To EBITDA Loans Advances Fee
-----------------------------------------------------------------------------------------------
I Funded Indebtedness/ 1.00% 2.00% .25%
EBITDA = .75
-----------------------------------------------------------------------------------------------
II Funded Indebtedness/EBITDA > 1.25% 2.25% .30%
.75 but = 1.25
-----------------------------------------------------------------------------------------------
III Funded Indebtedness/EBITDA > 1.50% 2.50% .375%
1.25 but = 2.00
-----------------------------------------------------------------------------------------------
IV Funded Indebtedness/EBITDA > 1.75% 2.75% .45%
2.00
===============================================================================================
The Applicable Percentage for Eurodollar Loans, Eurodollar Holder
Advances and the Commitment Fees shall, in each case, be determined and adjusted
on the date (the "Calculation Date") by which the compliance certificate is
required to be delivered to the Agent in accordance with the provisions of
Section 8.3A(a)(iii) of the Participation Agreement; provided, however, that (i)
the Applicable Percentage from the Initial Closing Date shall be based on
Pricing Level III (as shown above) and shall remain at Pricing Level III until
the next occurring Calculation Date and, thereafter, the Pricing Level shall be
determined as shown above, and (ii) if the Lessee fails to provide the annual
and quarterly compliance certificates required pursuant to Sections 8.3A(a)(iii)
of the Participation Agreement to the Agent on or before such Calculation Date,
the Applicable Percentage, in each case, from such Calculation Date shall be
based on Pricing Level IV until such time that such compliance certificates are
provided whereupon the Pricing Level shall be determined as specified herein.
Each Applicable Percentage shall be effective from one Calculation Date until
the next Calculation Date. Any adjustment in the Applicable Percentage shall be
applicable to all existing Eurodollar Loans and Eurodollar Holder Advances as
well as any new Eurodollar Loans and Eurodollar Holder Advances made or issued.
"Appraisal" shall mean, with respect to any Property or the Properties,
taken as a whole, 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
Appendix A-5
174
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: Minnesota and any
other state within the continental United States proposed by the Lessee and
consented to in writing by the Agent.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights of
way or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to the Land underlying the Improvements or the Improvements, including without
limitation the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (b) all permits,
licenses and rights, whether or not of record, appurtenant to such Land or the
Improvements.
"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 Documents" shall mean the following: the Participation Agreement,
the Construction Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease and the Security Agreement.
"Basic Rent" shall mean, the sum of (a) the Loan Basic Rent and (b) the
Lessor Basic Rent, calculated as of the applicable date on which Basic Rent is
due.
"Basic Term" shall have the meaning specified in Section 2.2 of the
Lease.
"Basic Term Commencement Date" shall have the meaning specified in
Section 2.2 of the Lease.
Appendix A-6
175
"Basic Term Expiration Date" shall have the meaning specified in Section
2.2 of the Lease.
"Benefited Lender" shall have the meaning specified in Section 9.10(a)
of the Credit Agreement.
"Xxxx of Sale" shall mean a Xxxx of Sale regarding Equipment in form and
substance satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower" shall mean the Owner Trustee, not in its individual capacity
but as Borrower under the Credit Agreement.
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Credit Agreement as a date on which the
Lessor requests the Lenders to make Loans hereunder.
"Budgeted Total Property Cost" shall mean, at any date of determination
with respect to any Construction Period Property, an amount equal to the
aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in North Carolina 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.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Capital Expenditures" shall mean all expenditures of the Credit Parties
and their Consolidated Subsidiaries which, in accordance with GAAP, would be
classified as capital expenditures, including, without limitation, Capitalized
Leases.
"Capital Stock" shall mean any nonredeemable capital stock of any Credit
Party or any of its Subsidiaries, whether common or preferred.
"Cash Equivalents" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the
Appendix A-7
176
full faith and credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time and demand deposits and
certificates of deposit of (i) any Lender, (ii) any domestic commercial bank
having capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or fixed
rate notes issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic corporation rated
A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements with a bank or trust company (including
any of the Lenders) or recognized securities dealer having capital and surplus
in excess of $500,000,000 for direct obligations issued by or fully guaranteed
by the United States of America in which the Lessee shall have a perfected first
priority security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with GAAP
as current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"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. Section 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 in favor of each Holder.
"Change of Control" shall mean the occurrence of any of the following
events: (a) prior to the Reorganization, a "person" or a "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act) shall
have acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of,
control over, 30% or more of the outstanding voting stock of the Lessee, (b)
after the Reorganization, (i) the Parent shall fail to own directly 100% of the
outstanding Capital Stock of the Lessee, (ii) a "person" or a "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act)
(other than SSI) shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of, control over, 30% or more of the outstanding voting
stock of the Parent or (iii) SSI shall have acquired beneficial ownership,
directly or indirectly, of, or shall have acquired by contract or otherwise, or
shall have
Appendix A-8
177
entered into a contract or arrangement that, upon consummation, will result in
its acquisition of, control over, 45% or more of the outstanding voting stock of
the Parent or (c) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted either the board or
the board of directors of the Lessee or the Parent, as the case may be, together
with any new members of such board or board of directors (i) whose elections by
such board or board of directors or whose nomination for election by the
stockholders of the Lessee or the stockholders of the Parent, as the case may
be, was approved by a vote of a majority of the members of such board or board
of directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the directors of the
Lessee or of the Parent, as the case may be, then in office. Notwithstanding the
foregoing in subsection (c), the three new board members appointed to the board
of directors of the Parent in connection with the Reorganization shall be an
acceptable change to the board of directors of the Parent. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13(d)-3 of the
Securities and Exchange Commission under the Securities Act of 1934.
"Chattel Paper" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986 together with rules
and regulations promulgated thereunder, as amended from time to time, or any
successor statute thereto.
"Collateral" shall mean all assets of the Lessor, the Construction Agent
and the Lessee, now owned or hereafter acquired, upon which a Lien is purported
to be created by one or more of the Security Documents.
"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 2.1 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 Fee" shall mean, collectively, the Holder Commitment Fee and
the Lender Commitment Fee.
"Commitment Fee Payment Date" shall mean the last Business Day of each
March, June, September and December and the last Business Day of the Commitment
Period, or such earlier date as the Commitments shall terminate as provided in
the Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
Appendix A-9
178
"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.
"Company Obligations" shall mean the obligations of VSC, in any and all
capacities under and with respect to the Operative Agreements and each Property.
"Completion" shall mean, with respect to the Properties, such time as
the acquisition, installation, testing and final completion of the Improvements
has been substantially achieved in accordance with the Plans and Specifications,
the Construction Agency Agreement and/or the Lease and in compliance with all
Legal Requirements and Insurance Requirements (except if non-compliance,
individually or in the aggregate, shall not have and could not reasonably be
expected to have a Material Adverse Effect), a certificate of occupancy has been
issued by the appropriate governmental entity and the Lessee shall have the
obligation under the Lease to pay Rent as of such date. If the Lessor purchases
a Property that includes existing Improvements that are to be immediately
occupied by the Lessee without any improvements financed pursuant to the
Operative Agreements, the date of Completion for such Property shall be the
Property Closing Date.
"Completion Date" shall mean, with respect to the Properties, the
earlier of (a) the date on which Completion for the Properties 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.
Appendix A-10
179
"Construction Advance" shall mean an advance of funds to pay Property
Costs pursuant to Section 5.4 of the Participation Agreement.
"Construction Agency Agreement" shall mean the Construction Agency
Agreement, dated on or about the Initial Closing Date between the Construction
Agent and the Lessor.
"Construction Agency Agreement Event of Default" shall mean an "Event of
Default" as defined in Section 5.1 of the Construction Agency Agreement.
"Construction Agent" shall mean VERITAS Operating Corporation, a
Delaware corporation, as the construction agent under the Construction Agency
Agreement.
"Construction Agent Options" shall have the meaning given to such term
in Section 2.1 of the Construction Agency Agreement.
"Construction Budget" shall mean the cost of acquisition, installation,
testing, constructing and developing the Properties 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 Construction Agency Agreement.
"Construction Contract" shall mean any contract entered into between the
Construction Agent or the Lessee with a Contractor for the construction of
Improvements or any portion thereof on the Property.
"Construction Loan" shall mean any Loan made in connection with a
Construction Advance.
"Construction Loan Property Cost" shall mean with respect to the
Construction Period Properties 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 Properties minus (b) the aggregate principal
amount of prepayments or repayments of the Loans allocated to reduce the
Construction Loan Property Cost of such Properties pursuant to Section 2.6(c) of
the Credit Agreement.
"Construction Period" shall mean, with respect to the Properties, the
period commencing on the Construction Commencement Date and ending on the
Completion Date.
"Construction Period Property" means, at any date of determination, the
Properties as to which the Rent Commencement Date has not occurred on or prior
to such date.
"Construction Period Termination Date" shall mean, subject to the
extension of such date by the Lenders and the Holders, in their sole and
absolute discretion, in accordance with the
Appendix A-11
180
provisions set forth in Sections 2.l and 2.6(c) of the Construction Agency
Agreement, (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 eighteen (18) months after the Initial
Closing Date or (b) such later date as may 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.
"Contributed Companies" shall mean NSMG, Seagate Software Limited, a
corporation formed under the laws of the United Kingdom, Seagate Software GmbH,
a corporation formed under the laws of Germany, Seagate Software International
Holdings Ltd., a limited liability company organized under the laws of the
Cayman Islands and Seagate Software Storage Management Group, Inc., a Delaware
corporation.
"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 Lessor, 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.
"Credit Documents" shall mean the Participation Agreement, the
Construction Agency Agreement, the Credit Agreement, the Notes and the Security
Documents.
"Credit Parties" shall mean the Construction Agent, the Lessee and each
Guarantor.
"Deed" shall mean a warranty deed regarding the Land and/or Improvements
in form and substance satisfactory to the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Holder" shall have the meaning given to such term in Section
12.4 of the Participation Agreement.
Appendix A-12
181
"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 in Section 22.1(b) of
the Lease Agreement.
"Documents" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"EBITDA" shall mean, for any period, with respect to the Credit Parties
and their Consolidated Subsidiaries on a consolidated basis, without
duplication, the sum of (a) Net Income for such period plus (b) an amount which,
in the determination of Net Income for such period has been deducted for (i)
Interest Expense for such period, (ii) total Federal, state, foreign or other
income taxes for such period, as determined in accordance with GAAP, (iii) all
depreciation and amortization for such period, as determined in accordance with
GAAP, and (iv) during any period within four years of the closing of any
Permitted Acquisition or the Reorganization, all non-cash restructuring charges
for such period taken in connection with such Permitted Acquisition or the
Reorganization (excluding any non-cash charges that require an accrual or
reserve for cash charges for any future period) minus (c) an amount equal to any
software development expenses occurring during such period which have been
classified as a capital expenditure.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Eligible Assignee" shall mean (i) a Lender or a Holder, as the case may
be; (ii) an Affiliate of a Lender or a Holder, as the case may be; and (iii) any
other Person approved by the Agent and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in accordance with the
Operative Agreements, the Lessee or the Construction Agent, such approval not to
be unreasonably withheld or delayed by the Lessee or the Construction Agent and
such approval to be deemed given by the Lessee or the Construction Agent if no
objection is received by the assigning Lender or Holder and the Agent from the
Lessee or the Construction Agent within two Business Days after notice of such
proposed assignment has been provided by the assigning Lender or Holder to the
Lessee or the Construction Agent; provided, however, that neither the Lessee or
the Construction Agent nor an Affiliate of the Lessee or the Construction Agent
shall qualify as an Eligible Assignee.
"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
Appendix A-13
182
Service and the Department of Labor in rules, regulations, releases or bulletins
in effect on any Closing Date.
"Environmental Claims" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or
other response action in connection with a Hazardous Substance, Environmental
Law, or other order of a Tribunal or (d) from any actual or alleged damage,
injury, threat, or harm to health, safety, natural resources, or the
environment.
"Environmental Laws" shall mean any current or future legal requirement
of any Governmental Authority pertaining to (a) the protection of health,
safety, and the indoor or outdoor environment, (b) the conservation, management,
or use of natural resources and wildlife, (c) the protection or use of surface
water and groundwater or (d) the management, manufacture, possession, presence,
use, generation, transportation, treatment, storage, disposal, release,
threatened release, abatement, removal, remediation or handling of, or exposure
to, any hazardous or toxic substance or material or (e) pollution (including any
release to land surface water and groundwater) and includes, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
USC 9601 et seq., Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 USC 6901 et seq., Federal Water Pollution Control Act, as amended by
the Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as
amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601
et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil
Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and Community
Right-to-Know Act of 1986, 42 USC 11001 et seq., National Environmental Policy
Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act of 1974, as amended,
42 USC 300(f) et seq., any analogous implementing or successor law, and any
amendment, rule, regulation, order, or directive issued thereunder.
"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
Appendix A-14
183
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,
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 an entity, whether or not incorporated,
which is under common control with any Credit Party or any of its Consolidated
Subsidiaries within the meaning of Section 4001(a)(14) of ERISA, or is a member
of a group which includes any Credit Party or any of its Consolidated
Subsidiaries and which is treated as a single employer under Sections 414(b),
(c), (m), or (o) of the Code.
"Eurocurrency Reserve Requirements" shall mean for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed on eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Holder Advance" shall mean a Holder Advance bearing a Holder
Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan or Eurodollar Holder
Advance comprising part of the same borrowing or advance (including without
limitation conversions, extensions and renewals), for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London
Appendix A-15
184
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Eurodollar Loan or
Eurodollar Holder Advance for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%). 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 by estimating in its reasonable judgment the per
annum rate (as described above) that would be applicable if such quote or offers
were generally available.
"Event of Default" shall mean a Lease Event of Default, a Construction
Agency Agreement Event of Default or a Credit Agreement Event of Default.
"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-16
185
(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, xxx for or otherwise receive and enforce payment of any of the
foregoing amounts, provided that such rights shall not include the right to
terminate the Lease.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of all
awards, compensation or insurance proceeds payable in connection with a Casualty
or Condemnation over the Termination Value paid by the Lessee pursuant to the
Lease with respect to such Casualty or Condemnation.
"Excluded Taxes" shall have the meaning given to such term in Section
11.2(b) of the Participation Agreement.
"Exculpated Persons" shall mean the Trust Company (except with respect
to the representations and warranties and the other obligations of the Trust
Company pursuant to the Operative Agreements expressly undertaken in its
individual capacity, including without limitation the representations and
warranties of the Trust Company pursuant to Section 6.1 of the Participation
Agreement, the obligations of the Trust Company pursuant to Section 8.2 of the
Participation Agreement and the obligations of the Trust Company pursuant to the
Trust Agreement), the Holders (except with respect to the obligations of the
Holders pursuant to the Participation Agreement and the Trust Agreement
expressly undertaken in their respective individual capacities), their officers,
directors, shareholders and partners.
Appendix A-17
186
"Exempt Payments" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Expiration Date" shall mean either (a) the Basic Term Expiration Date
or (b) the last day of the applicable Renewal Term; provided, in no event shall
the Expiration Date be later than the annual anniversary of the Initial Closing
Date occurring in the year 2007, unless such later date has been expressly
agreed to in writing by each of the Lessor, the Lessee, the Agent, the Lenders
and the Holders.
"Fair Market Sales Value" shall mean, with respect to the Properties,
taken as a whole, 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 Properties.
Fair Market Sales Value shall be determined based on the assumption that, except
for purposes of Section 17 of the Lease, such Properties are 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 Parties" shall mean the Lessor, the Owner Trustee, in its
trust capacity, the Agent, the Holders and the Lenders.
"Fixtures" shall mean all fixtures relating to the Improvements,
including without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including without
limitation strikes or lockouts (but only when the Construction Agent is legally
prevented from securing replacement labor or materials as a result thereof),
adverse soil conditions, acts of God, adverse weather conditions, inability to
obtain labor or materials after all possible efforts have been expended by the
Construction Agent, governmental activities, civil commotion and enemy action;
but excluding any event, cause or condition that results from 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.
"Funded Indebtedness" shall mean, with respect to the Lessee and its
Consolidated Subsidiaries determined in accordance with GAAP on a consolidated
basis, without duplication, (a) all obligations for borrowed money of the Lessee
or any of its Consolidated Subsidiaries, (b) all
Appendix A-18
187
obligations of the Lessee or any of its Consolidated Subsidiaries evidenced by
bonds, debentures, notes or similar instruments, or upon which interest payments
are customarily made, (c) all purchase money Indebtedness of the Lessee or any
of its Consolidated Subsidiaries, including without limitation the principal
portion of all obligations under Capitalized Leases, (d) the maximum amount of
all standby letters of credit issued or bankers' acceptance facilities created
for the account of the Lessee or any of its Consolidated Subsidiaries and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(e) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product to which the Lessee or any of its Consolidated Subsidiaries is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP, (f)
all Indebtedness of another Person of the type referred to in clause (a) - (e)
above secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any lien on, or payable out of
the proceeds of production from, property owned or acquired by the Lessee or any
of its Consolidated Subsidiaries, whether or not the obligations secured thereby
have been assumed, (g) all Guaranty Obligations of the Lessee or any of its
Consolidated Subsidiaries with respect to Indebtedness of the type referred to
in clauses (a) - (e) above of another Person and (h) Indebtedness of the type
referred to in clauses (a) - (e) above of any partnership or incorporated joint
venture in which the Lessee or any of its Consolidated Subsidiaries is legally
obligated or has a reasonable expectation of being liable with respect thereto.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the accounting principles board of the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"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.
"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 Obligations" shall mean, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary course of
business of negotiable instruments
Appendix A-19
188
for deposit or collection) guaranteeing any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Indebtedness or
other obligation or any property constituting security therefor, (b) to advance
or provide funds or other support for the payment or purchase of such
Indebtedness or obligation or to maintain working capital, solvency or other
balance sheet condition of such other Person (including, without limitation,
maintenance agreements, comfort letters, take or pay arrangements, put
agreements or similar agreements or arrangements) for the benefit of the holder
of Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner of such
Indebtedness or (d) to otherwise assure or hold harmless the owner of such
Indebtedness or obligation against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"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 Materials" shall mean any substance, material or waste
defined in or regulated under any Environmental Laws.
"Hazardous Substance" shall mean any of the following: (a) any petroleum
or petroleum product, explosives, radioactive materials, asbestos, formaldehyde,
polychlorinated biphenyls, lead and radon gas; (b) any substance, material,
product, derivative, compound or mixture, mineral, chemical, waste, gas, medical
waste, or pollutant, in each case whether naturally occurring, man-made or the
by-product of any process, that is toxic, harmful or hazardous to the
environment or human health or safety as determined in accordance with any
Environmental Law; or (c) any substance, material, product, derivative, compound
or mixture, mineral, chemical, waste, gas, medical waste or pollutant that would
support the assertion of any claim under any Environmental Law, whether or not
defined as hazardous as such under any Environmental Law.
"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 $1,200,000, 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) 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.
Appendix A-20
189
"Holder Construction Property Cost" shall mean, with respect to the
Construction Period Properties, taken as a whole, at any date of determination,
an amount equal to the outstanding Holder Advances made with respect thereto
under the Trust Agreement.
"Holder Overdue Rate" shall mean the lesser of (a) the then current rate
of Holder Yield respecting the particular amount in question plus two percent
(2%) and (b) the highest rate permitted by applicable law.
"Holder Property Cost" shall mean with respect to the Properties an
amount equal to the outstanding Holder Advances with respect thereto.
"Holder Commitment Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"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 Bank of America, N.A. and shall include the other
banks and financial institutions which may be from time to time holders of
Certificates in connection with the VS Trust 2000-1.
"Hotel Site Option Agreement" shall mean that certain Option Agreement
dated on or about the Initial Closing Date among Xxxx Companies US, Inc., Xxxx
XX, LLC and VSC.
"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
Appendix A-21
190
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
Construction Agency Agreement) relating to the construction, acquisition or
delivery of the Improvements or any part thereof or interest therein; (h) the
issuance of the Notes or the Certificates; (i) the Owner Trustee, the Trust or
the Trust Estate; or (j) otherwise in connection with the transactions
contemplated by the Operative Agreements.
"Improvements" shall mean, with respect to the construction, renovations
and/or Modifications on any Land, all buildings, structures, Fixtures, and other
improvements of every 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, 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.
"Indebtedness" of a Person shall mean, without duplication, such
Person's:
(a) obligations for borrowed money;
(b) obligations representing the deferred purchase price of
Property (whether real, personal, tangible, intangible or mixed) or
services (other than accounts payable arising in the ordinary course of
such Person's business payable on terms customary in the trade);
(c) obligations, whether or not assumed, secured by liens or
payable out of the proceeds or production from property now or hereafter
owned or acquired by such Person;
(d) obligations which are evidenced by notes, acceptances or
other instruments;
Appendix A-22
191
(e) Capitalized Lease obligations;
(f) net liabilities under interest rate swap, exchange or cap
agreements; and
(g) contingent obligations.
(h) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest
payments are customarily made;
(i) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person (obligations of a Person under an
Operating Lease shall not be considered Indebtedness);
(j) the maximum amount of all standby letters of credit issued
or bankers' acceptances facilities created for account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed);
(k) all preferred Capital Stock issued by such Person and
which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration; and
(l) the principal portion of all obligations of such Person
under any synthetic, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product of such Person where
such transaction is considered borrowed money indebtedness for tax but
is classified as an operating lease in accordance with GAAP.
"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 March 9, 2000.
"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.
Appendix A-23
192
"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 Construction 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 for any period, with respect to the Credit
Parties and their Consolidated Subsidiaries on a consolidated basis, all
interest expense, including the interest component under Capitalized Leases, as
determined in accordance with GAAP.
"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 where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (B) no Interest Period shall extend beyond the Maturity Date or the
Expiration Date, as the case may be, (C) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month, (D) there shall not be more than four (4)
Interest Periods outstanding at any one (1) time.
"Investment" means (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of assets,
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of any Person or (b) any deposit with,
or advance, loan or other extension of credit to, any Person (other than
deposits made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution to or
investment in any Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, together with the rules and regulations promulgated thereunder.
Appendix A-24
193
"Joinder Agreement" shall mean a joinder agreement, in the form of
Exhibit K to the Participation Agreement, executed from time to time between the
Parent or a Domestic Subsidiary of any Credit Party 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 each applicable Lease
Supplement executed and delivered in accordance with the requirements of Section
2.4 of the Lease.
"Land Cost" shall mean one hundred percent (100%) of the cost of the
Land for all, but not less than all, the Properties.
"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 Master Lease Agreement dated
on or about the Initial Closing Date, between the Lessor and the Lessee,
together with any Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in the
form of Exhibit A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all foreign, federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, 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. Section 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 $38,800,000, 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) Lender, the
Lender Commitment of each Lender
Appendix A-25
194
shall be as set forth in Schedule 2.1 to the Credit Agreement as such Schedule
2.1 may be amended and replaced from time to time.
"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.
"Lender Commitment Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Lenders" shall mean Bank of America, N.A. 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.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as the Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (a) any such scheduled Holder Yield due
on the Holder Advances prior to the Rent Commencement Date with respect to the
Property to which such Holder Advances relate or (b) overdue amounts under the
Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or disposition
of title arising as a result of (a) any claim against the Lessor or the Trust
Company, in its individual capacity, not resulting from the transactions
contemplated by the Operative Agreements, (b) any act or omission of the Lessor
or the Trust Company, in its individual capacity, which is not required by the
Operative Agreements or is in violation of any of the terms of the Operative
Agreements, (c) any claim against the Lessor or the Trust Company, in its
individual capacity, with respect to Taxes or Transaction Expenses against which
the Lessee is not required to indemnify the Lessor or the Trust Company, in its
individual capacity, pursuant to Section 11 of the Participation Agreement or
(d) any claim against the Lessor arising out of any transfer by the Lessor of
all or any portion of the interest of the Lessor in the Properties, the Trust
Estate or the Operative Agreements other than the transfer of title to or
possession of any Properties by the Lessor pursuant to and in accordance with
the Lease, the Credit Agreement, the Security Agreement or the Participation
Agreement or pursuant to the exercise of the remedies set forth in Article XVII
of the Lease.
Appendix A-26
195
"Leverage Ratio" shall mean, as of the end of each fiscal quarter of the
Lessee, with respect to the Credit Parties and their Consolidated Subsidiaries
on a consolidated basis, the ratio of (a) Funded Indebtedness on such date to
(b) EBITDA for the twelve month period ending on such date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including, without
limitation, any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, and any lease in the nature thereof.
"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(b) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to the Properties, taken
as a whole, at any date of determination, an amount equal to (a) the aggregate
principal amount all Loans (including without limitation all Acquisition Loans
and Construction Loans) made on or prior to such date with respect to such
Properties 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
Properties 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; provided, however, any amendment to Section
8.3A(h)(iii) shall require the consent of Lenders and Holders whose Loans and
Holder Advances outstanding represent at least sixty-six and two-thirds percent
Appendix A-27
196
(66 2/3%) of (x) the aggregate Advances outstanding or (y) to the extent there
are no Advances outstanding, the sum of the aggregate Holder Commitments plus
the aggregate Lender Commitments.
"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 any event, circumstance,
occurrence, fact, condition or change materially adversely affecting (a) the
acquisition, construction, equipping, financing, operation, maintenance,
leasing, ownership, use or regulatory status of any Property, (b) the business,
assets, properties, financial condition, operations, prospects or rights or
interests of the Credit Parties, on a consolidated basis, which individually or
in the aggregate has caused directly or indirectly Net Income for any fiscal
quarter (plus, within four years of the closing of the Reorganization, to the
extent deducted in the determination of Net Income for such fiscal quarter (x)
non-cash charges taken in such fiscal quarter in connection with the
Reorganization and (y) the write-down of goodwill taken in such fiscal quarter
in connection with the Reorganization) to be less than zero, (c) 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, (d) the validity or
enforceability of any Operative Agreements or the rights and remedies of the
Agent, the Lenders, the Holders or the Lessor thereunder or (e) the validity,
priority or enforceability of any Lien on any Property created by any of the
Operative Agreements.
"Material Default" shall mean any Default under Sections 17.1(a), (b),
(g), (h), (i), (j) or (l)(i) of the Lease.
"Material Domestic Subsidiary" shall mean any Domestic Subsidiary which
has either (i) for the fiscal year of such Domestic Subsidiary most recently
ended, total annual revenues of at least $1,000,000 or (ii) total assets of at
least $5,000,000; provided, that (a) the aggregate total assets (as determined
in accordance with GAAP) at any time of all Domestic Subsidiaries of the Credit
Parties (taken as a whole) that are excluded from this definition of "Material
Domestic Subsidiary" and are not otherwise Guarantors shall not exceed
$50,000,000 and (b) the aggregate annual revenues for the most recently ended
fiscal years of all Domestic Subsidiaries of the Credit Parties (taken as a
whole) that are excluded from this definition of "Material Domestic Subsidiary"
and are not otherwise Guarantors shall not exceed $10,000,000.
"Maturity Date" shall mean the Expiration Date.
"Maximum Amount" shall mean (a) the Land Cost, plus (b) the product of
eighty-nine and nine tenths percent (89.9%) multiplied by the following: (the
aggregate Termination Value for all, but not less than all, the Properties,
minus the Land Cost, minus all structuring fees payable in connection with the
transactions evidenced by the Operative Agreements to Banc of America Securities
LLC, Bank of America, N.A. and/or any Affiliates of either of the foregoing,
minus accrued, unpaid Holder Yield respecting any and all Construction Period
Properties) minus (c) the accreted value (calculated at a rate of six percent
(6.00%) per annum) of any
Appendix A-28
197
payments previously made by the Construction Agent or the Lessee regarding any
and all Construction Period Properties and not reimbursed.
"Maximum Residual Guarantee Amount" shall mean (i) with respect to the
Property constituting the Land, an amount equal to the Land Cost and (ii) with
respect to the Property constituting the Improvements on the Land, the product
of the aggregate Property Cost for all of the Properties (exclusive of the Land
Cost) times eighty-five and one-half of one percent (85.5%), in each case as set
forth in the applicable Lease Supplement.
"Merger Sub" shall mean the newly formed, wholly owned subsidiary of the
Parent formed in connection with the Reorganization.
"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/or 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.
"Mountain View Lease Event of Default" shall mean a "Lease Event of
Default" as such term is defined in Section 17.1 of that certain Master Lease
Agreement dated as of April 23, 1999 between First Security Bank, National
Association, not individually, but solely as the Owner Trustee under the VS
Trust 1999-1, as lessor, and VSC, as lessee.
"Mountain View Lease Financing" shall mean the transactions contemplated
by the Mountain View Participation Agreement and the other Operative Agreements,
as such term is defined in the Mountain View Participation Agreement.
"Mountain View Participation Agreement" shall mean that certain
Participation Agreement dated as of April 23, 1999 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time) among VSC,
the various parties thereto from time to time, as guarantors, First Security
Bank, National Association, as Owner Trustee under the VS Trust 1999-1, the
various banks and other lending institutions parties thereto from time to time,
as lenders, the various banks and other lending institutions parties thereto
from time to time, as holders of certificates issued with respect to the VS
Trust 1999-1, and Bank of America, N.A., as agent.
"Multiemployer Plan" shall mean a Plan covered by Title IV of ERISA
which is a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of
ERISA.
"Multiple Employer Plan" shall mean a Plan covered by Title IV of ERISA,
other than a Multiemployer Plan, which any Credit Party or any of its
Subsidiaries or any ERISA Affiliate and at least one employer other than a
Credit Party or any of its Subsidiaries or any ERISA Affiliate are contributing
sponsors.
Appendix A-29
198
"Net Income" shall mean for any period, the net income after taxes for
such period of the Credit Parties and their Consolidated Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"New Facility" shall have the meaning given to such term in Section 28.1
of the Lease.
"Non-Integral Equipment" shall mean Equipment which (a) is personal
property that is readily removable without causing material damage to the
applicable Property and (b) is not integral or necessary, respecting the
applicable Property, for compliance with Section 8.3 of the Lease or otherwise
to the structure thereof, the mechanical operation thereof, the electrical
systems thereof or otherwise with respect to any aspect of the physical plant
thereof.
"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.
"NSMG" shall mean Seagate Software Network & Storage Management Group,
Inc., a Delaware corporation.
"NSMG Business" shall mean the business of the network software
management group of SSI as set forth in the Reorganization Agreement.
"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.
"Operating Lease" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any Property (whether real, personal or mixed) which is not a
Capitalized Lease other than any such lease in which that Person is the lessor.
"Operative Agreements" shall mean the following: the Participation
Agreement, the Construction Agency Agreement, the Trust Agreement, the
Certificates, the Credit Agreement, the Notes, the Lease, the Lease Supplements,
the Joinder Agreements, the Security Agreement, the Mortgage Instruments, the
other Security Documents, the Deeds and Bills of Sale, the Purchase Agreement,
the Hotel Site Option Agreement, the Veritas SNDA 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.
Appendix A-30
199
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Credit Agreement.
"Overdue Rate" shall mean (a) with respect to the Loan Basic Rent, and
any other amount owed under or with respect to the Credit Agreement or the
Security Documents, the rate specified in Section 2.8(b) of the Credit
Agreement, (b) with respect to the Lessor Basic Rent, the Holder Yield and any
other amount owed under or with respect to the Trust Agreement, the Holder
Overdue Rate, and (c) with respect to any other amount, the amount referred to
in clause (y) of Section 2.8(b) of the Credit Agreement.
"Owner Trustee," "Borrower" or "Lessor" shall mean First Security Bank,
National Association, not individually, except as expressly stated in the
various Operative Agreements, but solely as the Owner Trustee under the VS Trust
2000-1, and any successor, replacement and/or additional Owner Trustee expressly
permitted under the Operative Agreements.
"Parcel Sale Requirements" shall have the meaning given to such term in
Section 20.1 of the Lease.
"Parent" shall mean Veritas Software Corporation (formerly known as
Veritas Holding Corporation), a Delaware corporation.
"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 and 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 Acquisition" shall mean a statutory merger, the acquisition
of all of the Capital Stock of another Person or all or substantially all of the
assets of another Person, provided that each of the following conditions are
satisfied: (a) prior to such acquisition, the Lessee shall deliver to the
Appendix A-31
200
Agent and the Majority Secured Parties a Pro Forma Compliance Certificate
demonstrating that after giving effect to such acquisition on a pro forma basis,
as if such acquisition had occurred on the first day of the twelve month period
ending on the last day of the Lessee's most recently completed fiscal year, the
Credit Parties would have been in compliance with all the financial covenants
set forth in Section 8.3A(h) of the Participation Agreement, (b) the acquisition
is consummated pursuant to a negotiated acquisition agreement and involves the
purchase of a business similar to the business of the Lessee as of the Initial
Closing Date, (c) after giving effect to the acquisition, the representations
and warranties set forth in Section 6 hereof shall be true and correct in all
material respects on and as of the date of such acquisition with the same effect
as though made on and as of such date and (d) no Default or Event of Default
exists and is continuing or would result from such acquisition.
"Permitted Facility" shall mean any parcel of real property, together
with any improvements located or to be constructed thereon, identified by the
Construction Agent and reasonably acceptable to the Agent.
"Permitted Investments" shall mean Investments which are (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made by the
Lessee or any of its Consolidated Subsidiaries in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
(iii) Investments consisting of Capital Stock, obligations, securities or other
property received by the Lessee or any of its Consolidated Subsidiaries in
settlement of accounts receivable (created in the ordinary course of business)
from bankrupt obligors; (iv) Investments existing as of the Closing Date and set
forth in Schedule 8.3B(f); (v) advances or loans to directors, officers,
employees, agents, customers or suppliers that do not exceed $5,000,000 in the
aggregate at any one time outstanding for the Lessee and its Consolidated
Subsidiaries; (vi) Permitted Acquisitions; (vii) Investments in any other
Person, other than Permitted Acquisitions, provided that, in the event any
particular Investment exceeds $20,000,000, such Investment shall only be
permitted if each of the following conditions are satisfied: (a) after giving
effect to the Investment, the representations and warranties set forth in
Section 6.2 of the Participation Agreement shall be true and correct in all
material respects on and as of the date of such Investment with the same effect
as though made on and as such date, (b) no Default or Event of Default would
result from such Investment and (c) the Lessee shall have provided the Agent
with satisfactory evidence demonstrating that after giving effect to any such
Investment on a pro forma basis, as if such transaction had occurred on the last
day of the Lessee's most recently completed fiscal quarter, the Credit Parties
and their Subsidiaries would have been in compliance with all the financial
covenants set forth in Section 8.3A(h) of the Participation Agreement; and
(viii) such other Investments as are reasonably acceptable to the Agent.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
Appendix A-32
201
(b) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease for no
longer than the duration of the Lease;
(c) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 13.1 of the
Lease;
(d) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
thirty (30) days past due or are being diligently contested in good
faith by appropriate proceedings, so long as such proceedings satisfy
the conditions for the continuation of proceedings to contest Taxes set
forth in Section 13.1 of the Lease;
(e) Liens of any of the types referred to in clause (d) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor and
the Agent have been made), which bonding (or arrangements) shall comply
with applicable Legal Requirements, and shall have effectively stayed
any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for the
continuation of proceedings to contest Taxes set forth in Section 13.1
of the Lease;
(g) Liens in favor of municipalities to the extent agreed to
by the Lessor or permitted under Section 8.5 of the Participation
Agreement;
(h) Liens and other matters set forth as exceptions on the
title commitment issued under Section 5.3(g) with respect to a
particular Property, to the extent such title commitment has been
approved by the Agent; and
(i) Such other additional matters as may be approved in
writing by Lessor.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Plan" shall mean any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which the Lessee or any
of its Consolidated Subsidiaries or any ERISA Affiliate is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" within the meaning of Section 3(5) of ERISA.
Appendix A-33
202
"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.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Pro Forma Compliance Certificate" shall mean a certificate of the chief
financial officer of the Lessee delivered to the Agent in connection with any
Permitted Acquisition and containing reasonably detailed calculations, upon
giving effect to the applicable transaction on a pro forma basis, of the
financial covenants set forth in Section 8.3A(h).
"Property" shall mean the Land and/or each item of Equipment and the
various Improvements in each case as more particularly described on any
applicable Lease Supplement, including without limitation each Construction
Period Property and each Property for which the Basic Term has commenced;
provided, however, subject to the following sentence, the Land and/or each item
of Equipment and the various Improvements so described in such Lease Supplements
shall, in the aggregate, constitute the real and personal property more
particularly described on Exhibit B to the Lease. For purposes of Sections 8.3A
and 8.3B of the Participation Agreement only, the term "Property" shall mean any
interest in any kind of property or asset, whatever real, personal or mixed, or
tangible or intangible.
"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 the Properties 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 and indemnity payments pursuant to Section 11.8, in each case of the
Participation Agreement).
"Purchase Agreement" shall mean that certain Purchase Agreement dated as
of November 17, 1999 among Xxxx Companies US, Inc., a Minnesota corporation, and
Xxxx XX, LLC, a Minnesota limited liability company, together as seller, and
Parent, as purchaser.
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
Appendix A-34
203
"Purchasing Lender" shall have the meaning given to such term in Section
9.8(a) of the Credit Agreement.
"Quick Ratio" shall mean, with respect to the Credit Parties and their
Consolidated Subsidiaries on a consolidated basis as of the last day of any
fiscal quarter, the ratio of (a) the sum of (i) cash and Cash Equivalents on
such date plus (ii) the aggregate book value of all accounts receivable on such
date to (b) the sum of (i) current liabilities on such date, as determined in
accordance with GAAP plus (ii) Operating Lease commitments on such date, as
determined in accordance with GAAP plus (iii) the principal balance outstanding
of the Indebtedness permitted under Section 8.3B(a)(iv) on such date.
"Real Properties" shall mean the real properties that the Lessee or any
Consolidated Subsidiary may own or lease (as lessee or sublessee) from third
parties from time to time.
"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 of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Release" shall mean any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
"Renewal Term" shall have the meaning specified in Section 2.2 of the
Lease.
"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.
"Reorganization" shall mean that certain plan of reorganization
described in Section 1 of the Reorganization Agreement whereby (i) the Lessee
will become a Wholly Owned Subsidiary of the Parent and each share of Capital
Stock of the Lessee will be converted into one share of Capital Stock of the
Parent and (ii) each of the Contributed Companies shall have become a
Wholly-Owned Subsidiary of the Parent.
"Reorganization Agreement" shall mean that certain Agreement and Plan of
Reorganization dated as of October 5, 1998 by and among VERITAS Operating
Corporation (formerly known as Veritas Software Corporation and including for
all purposes Veritas Surviving Corporation), the Parent, Seagate Technology,
Inc., SSI and Seagate Software Network & Storage Management Group, Inc.
"Reportable Event" shall have the meaning specified in ERISA.
Appendix A-35
204
"Reportable Event" shall mean a "reportable event" as defined in Section
4043 of ERISA with respect to which the notice requirements to the PBGC have not
been waived.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chairman or Vice Chairman of the Executive Committee of
the Board of Directors, the President, any Senior Vice President or Executive
Vice President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer, except that when used with respect to the
Trust Company or the Owner Trustee, "Responsible Officer" shall also include the
Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer,
the Controller and any Assistant Controller or any other officer of the Trust
Company or the Owner Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Lessee or any of its Consolidated Subsidiaries, now or
hereafter outstanding (including without limitation any payment in connection
with any dissolution, merger, consolidation or disposition involving the Lessee
or any of its Consolidated Subsidiaries), or to the holders, in their capacity
as such, of any shares of any class of Capital Stock of the Lessee or any of its
Consolidated Subsidiaries, now or hereafter outstanding, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of the
Lessee or any of its Consolidated Subsidiaries, now or hereafter outstanding and
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Lessee or any of its Consolidated Subsidiaries, now or hereafter
outstanding.
"Revenues" shall have the meaning given to such term in Section 17.11 of
the Lease.
"Sale Date" shall have the meaning given to such term in Section 22.1(a)
of the Lease.
"Sale Notice" shall mean a notice given to the Lessor in connection with
the election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1
of the Lease.
Appendix A-36
205
"Sale Proceeds Shortfall" shall mean the amount by which the proceeds of
a sale described in Section 22.1 of the Lease are less than the Limited Recourse
Amount with respect to the Properties if it has been determined that the Fair
Market Sales Value of the Properties at the expiration of the term of the Lease
has been impaired by greater than ordinary wear and tear during the Term of the
Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan or Eurodollar Holder Advance, the last day of the Interest Period
applicable to such Eurodollar Loan or Eurodollar Holder Advance, (except that
with respect to any Eurodollar Loan having an Interest Period of six (6) months
or any Eurodollar Holder Advance with Holder Yield calculated on the basis of
the six (6) month Eurodollar Rate, the term "Scheduled Interest Payment Date"
shall mean each applicable three (3) month anniversary date of such Eurodollar
Loan or Eurodollar Holder Advance) (b) as to any ABR Loan or any ABR Holder
Advance, the fifteenth day of each month, unless such day is not a Business Day
and in such case on the next occurring Business Day and (c) as to all Loans and
Holder Advances, the date of any voluntary or involuntary payment, prepayment,
return or redemption, and the Maturity Date or the Expiration Date, as the case
may be.
"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, and accepted and agreed to by the Lessee.
"Security Documents" shall mean the collective reference to the Security
Agreement, the Mortgage Instruments, (to the extent the Lease is construed as a
security instrument) the Lease, the UCC Financing Statements and all other
security documents hereafter delivered to the 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 Unused Fee, the
Holder Unused 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.
"SSI" shall mean Seagate Software, Inc., a Delaware corporation.
Appendix A-37
206
"Subordinated Debt" shall mean the $100,000,000 5_% Convertible
Subordinated Notes due November 1, 2004 issued by the Lessee pursuant to that
certain Indenture dated on or about October 1, 1997 between the Lessee and State
Street Bank and Trust Company of California, N.A., as trustee.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person, or by one (1)
or more Subsidiaries, or by such Person and one (1) or more Subsidiaries.
"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.
"Survey" shall mean, collectively, that certain survey prepared by
Westwood Professional Services, Inc. for Xxxx Companies US., Inc. dated October
18, 1999 and that certain survey prepared by Westwood Professional Services,
Inc. for Xxxx Companies US., Inc. dated December 8, 1999.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Term" shall mean the Basic Term and each Renewal Term, if any.
"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.
Appendix A-38
207
"Termination Notice" shall have the meaning specified in Section 16.1 of
the Lease.
"Termination Value" shall mean the sum of (a) any of (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, or (iii) with respect to any portion of any Property
for which Lessee has provided a notice of its desire to purchase such portion of
such Property pursuant to Section 20.1 of the Lease, an amount equal to the pro
rata portion of the Property Cost for such Property allocable to such portion of
such Property plus (b) respecting the amounts described in each of the foregoing
subclause (i), (ii) or (iii), as applicable, any and all accrued but unpaid
interest on the Loans and any and all Holder Yield on the Holder Advances
related to the applicable Property Cost, plus (c) to the extent the same is not
duplicative of the amounts payable under clause (b) above, all other Rent and
other amounts then due and payable or accrued under the Construction 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).
"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 2.1 to the
Credit Agreement, as such amount may be increased or 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 2.1 to Credit Agreement.
"Tranche A Lenders" shall mean Bank of America, N.A. 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
Commitment.
"Tranche A Note" shall have the meaning given to it 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 2.1 to the
Credit Agreement, as such amount may be increased or 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 2.1 to Credit Agreement.
Appendix A-39
208
"Tranche B Lenders" shall mean Bank of America, N.A. 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.
"Tranche B Loan" shall mean the Loans made pursuant to the Tranche B
Commitment.
"Tranche B Note" shall have the meaning given to it 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
transaction 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 fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of
the other transaction documents; and
(e) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement
with any public office, registry or governmental agency in connection
with the transactions contemplated by the Operative Agreement.
"Tribunal" shall mean any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision agency, department,
commission, board, bureau or instrumentality of a governmental body.
"Trust" shall mean the VS Trust 2000-1.
"Trust Agreement" shall mean the Trust Agreement dated on or about the
Initial Closing Date between the Holders and the Owner Trustee.
Appendix A-40
209
"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 of the
Construction Agency Agreement.
"Unfunded Liability" shall mean, with respect to any Plan, at any time,
the amount (if any) by which (a) the present value of all benefits under such
Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of the Company or any member of the Controlled Group to the PBGC or such Plan
under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United States
Code.
"U.S. 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.
"Veritas SNDA" shall mean that certain Subordination, Non-Disturbance
and Attornment Agreement dated on or about the Initial Closing Date among the
Agent, the Owner Trustee and the Lessee.
"VSC" shall mean VERITAS Operating Corporation (formerly known as
Veritas Software Corporation), a Delaware corporation, and its successors and
permitted assigns.
"VS Trust 2000-1" shall mean the grantor trust created pursuant to the
terms and conditions of the Trust Agreement.
Appendix A-41
210
"Wholly Owned Subsidiary" of any Person shall mean any Subsidiary 100%
of whose voting stock or other equity interests is at the time owned by such
Person directly or indirectly through other Wholly Owned Subsidiaries.
"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 Compliant" shall have the meaning specified in Section 6.2(v)
of the Participation Agreement.
"Year 2000 Problem" shall mean the risk that computer applications used
by any Credit Party or any of its Subsidiaries or any supplier, vendor or
customer of any Credit Party or any of its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999.
Appendix A-42