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Exhibit 10.1
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PARTICIPATION AGREEMENT
Dated as of April 26, 2000
among
MARCHFIRST, INC.,
Lessee, Construction Agent and Guarantor
MARCHFIRST, INC. HEADQUARTERS TRUST NO. 2000-1
WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly provided herein, but solely as Owner Trustee under the
Trust Agreement dated as of the date hereof, between Owner Trustee and Lessor
THE PERSONS NAMED ON SCHEDULE I HERETO,
as Certificate Holders
BANK ONE, NA,
and the various financial institutions
party to the Loan Agreement from time to time as
the Tranche A and Tranche B Lenders
and
BANK ONE, NA,
Agent
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Synthetic Lease Financing of Headquarters
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Participation Agreement
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Table of Contents
Page
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SECTION 1. DEFINITIONS; INTERPRETATION.......................................2
SECTION 2. DOCUMENTATION DATE; ACQUISITION DATE..............................3
(a) Documentation Date....................................................3
(b) Site Acquisition Date.................................................3
SECTION 3. FUNDING OF ADVANCES...............................................4
(a) Certificate Holders' Commitment.......................................4
(b) Lenders' Commitment...................................................4
(c) Procedures for Advances...............................................4
(d) Allocation of Advances................................................6
SECTION 4. YIELD; INTEREST; COMMITMENT FEES..................................6
(a) Yield.................................................................6
(b) Interest on Loans.....................................................7
(c) Prepayments of Loans and Equity Amounts...............................7
(d) Nonuse Fee; Other Fees................................................7
(e) Interest and Yield Protection.........................................8
(f) Notice of Yield and Interest.........................................10
(g) Collateralized Margin................................................10
SECTION 5. CERTAIN INTENTIONS OF THE PARTIES; DISTRIBUTIONS.................11
(a) Nature of Transaction................................................11
(b) Amounts Due Under Master Lease.......................................12
(c) Agreement to Pay Amounts Due With Respect to Tranche A Loans.........12
(d) Distribution.........................................................12
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
PARTICIPANTS................................................................17
(a) Representations and Warranties.......................................17
(b) Additional Representations and Warranties............................17
(c) Covenants of the Participants........................................18
(d) Covenants of the Agent...............................................18
(e) Covenants of the Certificate Holders.................................19
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
WILMINGTON TRUST COMPANY AND OWNER TRUSTEE..................................19
Participation Agreement
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(a) Wilmington Trust Company Representations and Warranties..............19
(b) Wilmington Trust Company Agreements..................................20
(c) Owner Trustee and Trust Representations and Warranties...............21
(d) Owner Trustee and Trust Agreements...................................23
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE,
CONSTRUCTION AGENT AND GUARANTOR............................................23
(a) General Representations and Warranties...............................23
(b) Site Acquisition Date Representations and Warranties.................29
(c) Funding Date Representations and Warranties..........................30
(d) Agreements...........................................................34
SECTION 9. CONDITIONS PRECEDENT TO DOCUMENTATION DATE, SITE
ACQUISITION DATES AND ADVANCES..............................................40
(a) Conditions Precedent to the Documentation Date.......................41
(b) Conditions Precedent to each Advance.................................42
(c) Further Conditions to each Site Acquisition Date.....................44
(d) Conditions to Initial Construction Advance...........................47
SECTION 10. COMPLETION DATE CONDITIONS......................................48
(a) Completion Date......................................................48
(b) Reappraisal Upon Completion..........................................48
SECTION 11. TRANSFERS OF LENDERS INTERESTS..................................49
(a) Permitted Assignments................................................49
(b) Effect; Effective Date...............................................49
(c) Rights of Transferees................................................49
(d) Withholding Taxes; Disclosure of Information; Pledge Under
Regulation A.........................................................50
SECTION 12. TRANSFERS OF CERTIFICATE HOLDERS INTEREST.......................50
(a) Assignments..........................................................50
(b) Rights of Transferees................................................51
(c) Withholding Taxes; Disclosure of Information; Pledge Under
Regulation A.........................................................51
SECTION 13. GENERAL TAX INDEMNITY...........................................52
(a) Tax Indemnitee Defined...............................................52
(b) Taxes Indemnified....................................................52
(c) Taxes Excluded.......................................................53
(d) Payments to the Lessee...............................................56
(e) Procedures...........................................................57
(f) Contest..............................................................57
(g) Reports..............................................................59
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(h) Non-Parties..........................................................59
(i) Survival.............................................................59
(j) Construction Period..................................................59
SECTION 14. GENERAL INDEMNITY...............................................60
(a) Indemnification......................................................60
(b) Survival.............................................................62
(c) Certain Exceptions...................................................62
(d) Claims Procedure.....................................................63
(e) Subrogation..........................................................63
(f) Insured Claims.......................................................64
(g) Waiver of Certain Claims.............................................64
(h) Consent..............................................................64
(i) Construction Period..................................................64
SECTION 15. TRANSACTION EXPENSES............................................64
(a) Transaction Expenses.................................................65
(b) Brokers' Fees and Stamp Taxes........................................65
(c) Loan Agreement and Related Obligations...............................65
SECTION 16. CONSENT TO JURISDICTION.........................................65
SECTION 17. LIMITATIONS OF LIABILITY OF OWNER TRUSTEE.......................66
SECTION 18. LIMITATION OF LIABILITY OF CERTIFICATE HOLDERS..................66
SECTION 19. NOTICES.........................................................67
SECTION 20. SURVIVAL OF REPRESENTATIONS; BINDING EFFECT.....................67
SECTION 21. THE AGENT.......................................................67
(a) Appointment; Nature of Relationship..................................67
(b) Powers...............................................................68
(c) General Immunity.....................................................68
(d) No Responsibility for Recitals, etc..................................68
(e) Action on Instructions of Participants...............................68
(f) Employment of Agents and Counsel.....................................69
(g) Reliance on Documents; Counsel.......................................69
(h) Agent's Reimbursement and Indemnification............................69
(i) Notice of Default....................................................69
(j) Rights as a Participant..............................................70
Participation Agreement
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(k) Participant Credit Decision..........................................70
(l) Successor Agent......................................................70
(m) Agent's Fee..........................................................71
(n) Delegation to Affiliates.............................................71
(p) Collateral Releases..................................................71
SECTION 22. MISCELLANEOUS...................................................71
(a) Counterpart Execution................................................71
(b) Governing Law........................................................71
(c) Amendments, Supplements, Waivers.....................................71
(d) Headings.............................................................72
(e) Business Day.........................................................72
(f) Reproduction of Documents............................................73
(g) Opinions.............................................................73
(h) Survival of Agreements...............................................73
(i) Enforcement..........................................................73
(j) Preservation of Rights...............................................73
(k) Entire Agreement.....................................................74
APPENDIX, SCHEDULES AND EXHIBITS
APPENDIX A Definitions and Interpretation
APPENDIX B Pricing Schedule
SCHEDULE 1 Commitments of Participants
SCHEDULE 2 Payment Instructions
SCHEDULE 8(a)(8) Taxes
SCHEDULE 8(a)(22) Subsidiaries
SCHEDULE 8(a)(24) Liens
SCHEDULE 8(d)(9) Existing Investments
SCHEDULE 9(d)(1) Construction Milestones
EXHIBIT A Form of Trust Agreement
EXHIBIT B Form of Master Lease
EXHIBIT C Form of Annual No Default Certificate
EXHIBIT D-1 Form of Opinion of Internal Counsel of the Lessee
EXHIBIT D-2 Form of Opinion of Special Counsel to the Lessee
EXHIBIT E Form of Opinion of Special Counsel to Wilmington Trust
Company and Owner Trustee
EXHIBIT F Form of Completion Certificate
EXHIBIT G Form of Lender Mortgage
EXHIBIT H Form of Funding Request
EXHIBIT I Form of Construction Certificate
EXHIBIT J-1 Form of Assignment Agreement (Lender)
EXHIBIT J-2 Form of Assignment Agreement (Certificate Holders)
EXHIBIT K Form of Compliance Certificate
Participation Agreement
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EXHIBIT L Redevelopment Agreement and Recognition and Consent
Agreement
EXHIBIT M Investment in Blue Vector
Participation Agreement
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Participation Agreement") dated as of
April 26, 2000 is entered into by and among MARCHFIRST, INC., a Delaware
corporation, as Lessee, Construction Agent and Guarantor (together with its
permitted successors and assigns, in its capacity as Lessee, the "Lessee", in
its capacity as Construction Agent, the "Construction Agent", and in its
capacity as Guarantor, the "Guarantor"); WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity except as expressly provided
herein, but solely as trustee under the Trust Agreement (in such capacity,
together with its successors and permitted assigns under the Trust Agreement the
"Owner Trustee"); MARCHFIRST, INC. HEADQUARTERS TRUST NO. 2000-1, a Delaware
business trust (the "Lessor"); the Persons named on Schedule 1 hereto (together
with their respective permitted successors, assigns and transferees), as owners
of the beneficial interest in the Lessor ("Certificate Holders"); BANK ONE, NA
(with its principal office in Chicago, Illinois) and various financial
institutions party to the Loan Agreement from time to time as the Tranche A and
Tranche B Lenders thereunder (together with each of their permitted successors
and assigns, the "Lenders"); and BANK ONE, NA, in its capacity as Agent
(together with its successors and assigns in such capacity from time to time,
the "Agent") for the Lenders;
W I T N E S S E T H:
WHEREAS, (i) First Chicago Leasing Corporation ("FCLC"), as tenant, and
Lessee, as landlord, have previously entered into that certain Ground Lease
dated as of December 22, 1999 (the "Existing Ground Lease") relating to the
Parking Facility Site, and (ii) FCLC, as lessor, and Lessee, as lessee, have
previously entered into that certain Lease dated as of December 22, 1999 (the
"Existing Lease") relating to the Parking Facility Site, (iii) FCLC and Lessee
have previously entered into that certain Construction Agency Agreement dated as
of December 22, 1999 (the "Existing Construction Agency Agreement") relating to
the Parking Facility Site, and (iv) FCLC and Lessee have previously entered into
that certain Master Agreement dated as of December 22, 1999 (the "Existing
Master Agreement") relating to the foregoing agreements;
WHEREAS, pursuant to the terms and provisions of the Trust Agreement
(which is substantially in the form of Exhibit A hereto), the Certificate
Holders have authorized the Owner Trustee to take certain actions with respect
to the transactions contemplated hereby for the purpose of providing financing
for (i) the acquisition of a ground leasehold interest in the Parking Facility
Site by assignment from FCLC, (ii) the acquisition of a ground leasehold
interest in the Fulton Center Site under such terms and conditions as may be
agreed upon between Lessee and the Participants (the Parking Facility Site and
Fulton Center Site each, a "Land Interest"), and (iii) the acquisition or
construction of certain facilities currently located or to be constructed on the
Land Interests ground leased by the Lessor for the Lessee including the
acquisition of certain equipment (the "Equipment") currently located or to be
located on and used in connection with certain Land Interests acquired or ground
leased by the Lessor for the Lessee (collectively, with respect to each Land
Interest, "Improvements") ;
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WHEREAS, each Land Interest, upon becoming subject to a Lease Supplement,
together with any improvements located thereon and any Improvements thereafter
constructed thereon is called a "Site" and all thereof are collectively called
the "Sites";
WHEREAS, (i) Lessee shall ground lease the Land Interests relating to the
Sites and any improvements then located thereon to the Lessor, (ii) Lessee, as
Construction Agent, shall construct the Improvements on some or all of the Land
Interests and shall apply Advances from Lessor to pay the costs thereof and to
pay for Equipment, and (iii) Lessee shall lease the Sites from Lessor for the
Basic Term pursuant to the Master Lease (which is substantially in the form of
Exhibit B hereto) dated as of even date herewith;
WHEREAS, the Certificate Holders are willing personally to provide a
portion of the funding of the costs of acquisition of the Sites and the
Improvements;
WHEREAS, the Lessor wishes to obtain, and the Lenders are willing to
provide, financing of the remaining portion of the funding of the costs of
acquisition of the Sites and the Improvements;
WHEREAS, the Lessee contemplates leasing from the Lessor the Sites,
including the Improvements constructed thereon by the Lessee in its capacity as
Construction Agent; and
WHEREAS, to secure such financing, the Lenders will have, to the extent
provided in the Operative Documents, the benefit of a Lien from the Lessor on
the Lessor's right, title and interest in the Sites and on substantially all of
the Lessor's rights against the Lessee under the Master Lease and Lease
Supplements and against the Construction Agent under the Construction Agency
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION.
Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in Appendix A hereto for
all purposes hereof; and the rules of interpretation set forth in Appendix A
hereto shall apply to this Participation Agreement.
Anything to the contrary herein notwithstanding, (i) the Lessee is the
owner of the fee interest in the Land which is subject to the Ground Lease, the
Master Lease and the other Operative Documents and (ii) neither the Ground Lease
nor the Master Lease nor any other of the Operative Documents is intended to
transfer any rights in the fee interest in the said land (or any rights of the
Ground Lessor under the Ground Lease)to Lessor (as tenant under the Ground
Lease, lessor under the Master Lease or otherwise), except for the lease of said
land to Lessor, as tenant under the Ground Lease, or to Agent or any Participant
(whether pursuant to the Mortgage, or otherwise), and (iii) except as and to the
extent expressly set forth in Section 6(d)(2)(ix), 6(d)(3) and Section 6(g) of
the Master Lease and Sections 24 and 25 of the Ground Lease, neither the Ground
Lease, the Master Lease nor any of the other Operative Documents is
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intended to create any obligation to transfer any right in the fee interest in
said land (or any rights of the Ground Lessor under the Ground Lease) to any
such Person.
SECTION 2. DOCUMENTATION DATE; ACQUISITION DATE.
(a) Documentation Date. The Documentation Date (the "Documentation Date")
shall occur (and the Master Agreement shall be amended and restated by this
Participation Agreement) on the earliest date on which the following conditions
precedent shall have been satisfied:
(i) Participation Agreement. This Participation Agreement shall have
been duly authorized, executed and delivered by the parties hereto.
(ii) Ground Lease. The Ground Lease shall have been duly authorized,
executed and delivered by the parties thereto, effecting an amendment and
restatement of the Existing Ground Lease.
(iii) Master Lease. The Master Lease shall have been duly
authorized, executed and delivered by the parties thereto, effecting an
amendment and restatement of the Existing Lease.
(iv) Construction Agency Agreement; Construction Documents
Assignment. The Construction Agency Agreement and the Construction Documents
Assignment shall have been duly authorized, executed and delivered by the
parties thereto, effecting an amendment and restatement of the Existing
Construction Agency Agreement.
(v) Construction Agency Agreement Assignment. The Construction
Agency Agreement Assignment shall have been duly authorized, executed and
delivered by the Lessor, as assignor, in favor of the Agent, and consented to
and acknowledged by the Construction Agent.
(vi) Loan Agreement. The Loan Agreement shall have been duly
authorized, executed and delivered by the parties thereto.
(vii) Assignment of Leases and Rents. The Master Assignment of
Leases and Rents shall have been duly authorized, executed and delivered by the
Lessor, as assignor, in favor of the Agent, and consented to and acknowledged by
the Lessee.
(viii) Fees. The Lessee shall have paid in full all fees then due
and payable pursuant to the Fee Letter.
(ix) Structural Guaranty; Other Operative Documents. The Structural
Guaranty and the other Operative Documents to be delivered in connection with
the Documentation Date shall have been duly authorized, executed and delivered
by the parties thereto.
(b) Site Acquisition Date. For each Land Interest, the closing date with
respect to the acquisition of the ground leasehold interest therein (each, a
"Site Acquisition Date") shall
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occur on the earliest date on or after the Documentation Date on which all the
conditions precedent thereto set forth in Section 9 with respect to the
acquisition thereof shall have been satisfied or waived by the applicable
parties as set forth therein.
SECTION 3. FUNDING OF ADVANCES.
(a) Certificate Holders' Commitment. (i) Subject to the conditions and
terms hereof, the Certificate Holders shall cause the Lessor to take the
following actions with respect to the Property at the written request of the
Lessee from time to time during the Construction Period:
(1) the Lessor shall ground lease the Sites from the Lessee
(using funds provided by the Participants) under the Ground Lease;
(2) the Lessor shall make Advances (out of funds provided by
the Participants) to the Construction Agent for the purpose of the
renovation and construction of Improvements thereon; and
(3) the Lessor shall lease the Sites to the Lessee under the
Master Lease and the Lease Supplement.
Notwithstanding any other provision hereof, the Lessor shall not be obligated to
make any Advance with respect to any Site if, after giving effect thereto, the
aggregate outstanding amounts of the Tranche A Loans, Tranche B Loans and the
Equity Amount allocable to such Site would exceed the Commitments of the Tranche
A Lenders, the Tranche B Lenders and the Certificate Holders, respectively, for
such Site.
(ii) Subject to the conditions and terms hereof, the Certificate
Holders shall personally make available at the request of the Lessee from
time to time during the Construction Period with respect to the Sites, on
each Funding Date an amount (each an "Equity Amount") in immediately
available funds equal to the Certificate Holders' Commitment Percentage of
the amount of the Advance being funded on such Funding Date.
Notwithstanding any other provision hereof, the Certificate Holders shall
not be obligated to make available any Equity Amount if, after giving
effect to the proposed Equity Amount, the outstanding aggregate amount of
Equity Amounts would exceed the Certificate Holders' Commitment.
(b) Lenders' Commitment. Subject to the conditions and terms hereof, the
Lenders severally shall make Loans with respect to the Sites to the Lessor at
the request of the Lessee from time to time during the Construction Period, on
each Funding Date in an amount in immediately available funds equal to each such
Lender's Commitment Percentage of the amount of the Advance being funded on such
Funding Date. Notwithstanding any other provision hereof, no Lender shall be
obligated to make any Loan if, after giving effect to the proposed Loan, the
outstanding aggregate amount of such Lender's Loans would exceed such Lender's
Commitment.
(c) Procedures for Advances. (i) (i) With respect to each funding of an
Advance, the Lessee shall give the Lessor and the Agent prior written notice not
later than 11:00 a.m., Chicago
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time, three (3) Business Days (unless waived) prior to the proposed Funding Date
pursuant to an irrevocable Funding Request substantially in the form of Exhibit
H (a "Funding Request"), specifying: the proposed Funding Date and the amount of
Advance requested. Any Participant may require a duly completed compliance
certificate in substantially the form of Exhibit K as a condition to making an
Advance. With respect to each Funding Request for a Site Acquisition Date, in
addition to the foregoing, the Lessee hereby directs the Lessor to ground lease
the Site and the Lessee shall also specify the Estimated Improvement Costs for
the Site. Each funding shall be in an amount equal to $1,000,000 or an integral
multiple of $100,000 in excess thereof. Lessee shall be allowed a maximum of
three (3) separate LIBO Rate tranches. The proceeds of each funding will be used
to reimburse the Construction Agent for paid Site Costs and to pay accrued and
unpaid interest and Yield and Transaction Expenses; and the Funding Date
therefor shall be a date on or before the applicable Scheduled Payment Date;
provided, however, that if the Lessee fails to duly and timely submit a Funding
Request which provides for the payment of accrued and unpaid interest and Yield
and Transaction Expenses on the applicable Scheduled Payment Date, the Lessee
hereby irrevocably authorizes and directs the Agent (at its option) to cause the
Participants to fund to the Participants such amounts as may be necessary to pay
in full all accrued and unpaid interest and Yield and Transaction Expenses then
due and payable during the Construction Period for such Site and for the one (1)
calendar month thereafter. Fundings for Site Costs (other than interest and
Yield) for any Site shall be made during the Construction Period for such Site.
(ii) Upon satisfaction or waiver of the conditions precedent to such
Advance set forth in Section 9, in the case of an Advance for the acquisition of
a ground leasehold interest in a Land Interest, the Lessor, as directed by the
Certificate Holders acting at the request of the Lessee, shall pay all Land
Acquisition Costs and pay Transaction Expenses in connection with such
acquisition, and in the case of other Advances, the Lessee, as Construction
Agent, shall pay or retain as payment or reimbursement of Site Costs or
Transaction Expenses the funds provided by the Certificate Holders and the
Lenders for such Advance. The transfer by any Participant of its portion of an
Advance shall evidence such Participant's satisfaction that the conditions
precedent to such Advance have been met or waived. Except as set forth above and
as the parties may otherwise agree in writing, Advances shall be made solely to
provide the Construction Agent with funds with which to pay or reimburse itself
for Site Costs or Transaction Expenses, as the case may be.
(iii) All remittances made by the Participants for the funding of
any Advance shall be made on the applicable Funding Date in immediately
available Federal funds by wire transfer to the accounts specified in the
applicable Funding Request. Subject to the prior satisfaction of all of the
applicable conditions set forth in Section 9, the Participants will use
reasonable efforts to fund the applicable Advance prior to 1:00 p.m., Chicago
time, on such Funding Date.
(iv) In no event will (i) the total Property Cost at any time exceed
$93,000,000.00, in the aggregate for the Property under construction or
completed and still subject to the Master Lease, nor (ii) the Site Cost
allocable to the Parking Facility Site exceed $23,000,000.00, nor (iii) the Site
Cost allocable to the Fulton Center Site exceed $70,000,000.00.
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(d) Allocation of Advances. All Advances shall be allocated between the
Sites in accordance with the Funding Request. Advance amounts which do not
specifically relate to any one Site may be allocated and reallocated by the
Lessee from time to time among the Sites in accordance with their respective
Construction Budgets. Amounts due from Lessee, including Supplemental Rent,
shall be allocated to the specific Site to which such amounts relate; provided,
however, that if any amount does not specifically relate to any particular Site,
such amount shall be allocated among the Sites pro rata in accordance with the
Commitment for each of such Sites. Allocations of payments will be made based
upon the source of such payment as described in Section 5(d). Specifically,
without limitation, the Lessee shall maintain a ledger of the allocation of the
following amounts between the Sites from time to time until expiration or
termination of the Master Lease, based upon the Advances allocable to each of
the Sites and allocation of payments under Section 5(d):
Available Loan Commitments
Available Equity Commitments
Basic Rent
Equity Balance
Equity Basic Rent
Equity Amount
Lease Balance
Lender Basic Rent
Loan Balance
Participant Balance
SECTION 4. YIELD; INTEREST; COMMITMENT FEES.
(a) Yield.
(i) The amount of the Equity Amounts outstanding from time to time
shall accrue yield ("Yield") at the Yield Rate, calculated using the actual
number of days elapsed and, when the Yield Rate is determined by reference to
the LIBO Rate (Reserve Adjusted) or the Alternate Base Rate not based upon the
Prime Rate, a 360-day year basis and, when the Yield Rate is determined by
reference to the Alternate Base Rate based upon the Prime Rate, a 365- (or, if
applicable, 366-) day year basis. If all or any portion of the Equity Amounts,
any Yield payable thereon or any other amount payable to any Certificate
Holders, Lessor or Owner Trustee hereunder shall not be paid when due (whether
at stated maturity, acceleration thereof or otherwise), such overdue amount
shall bear interest at a rate per annum which is equal to the Overdue Rate.
(ii) The Lessee shall, pursuant to the Assignment of Leases and
Rents, deposit in the Account the Equity Basic Rent (determined on the basis of
accrued Yield due in accordance with clause (i) above) and all other amounts due
with respect to the Equity Amounts payable by the Lessee under the Master Lease
from time to time.
(iii) During the Construction Period for each Site, Yield with
respect to such Site shall accrue on outstanding Equity Amounts and shall be
funded monthly by the Certificate
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Holders and the Lenders pursuant to Section 3(a) and (b). During the Basic Term,
such Yield shall be paid as a component of Basic Rent.
(b) Interest on Loans. (i) The amount of each Loan shall accrue interest
at the applicable rate set forth in the Loan Agreement, calculated using the
actual number of days elapsed and, when the interest on the Loans is determined
by reference to the LIBO Rate (Reserve Adjusted) or the Alternate Base Rate not
based upon the Prime Rate, a 360-day year basis and, when such interest is
determined by reference to the Alternate Base Rate based upon the Prime Rate, a
365- (or, if applicable, 366-) day year basis. If all or any portion of the
Loans, any interest payable thereon or any other amount payable to any Lender,
or the Agent hereunder shall not be paid when due (whether at stated maturity,
acceleration thereof or otherwise), such overdue amount shall bear interest at a
rate per annum which is equal to the Overdue Rate.
(ii) The Lessee shall, pursuant to the Assignment of Leases and
Rents, deposit in the Account the Lender Basic Rent (determined on the basis of
amounts due in accordance with clause (i) above) and all other amounts due with
respect to the Loans payable by the Lessee under the Master Lease from time to
time.
(iii) During the Construction Period for each Site interest with
respect to such Site shall accrue on outstanding Loans and shall be funded
monthly by the Certificate Holders and the Lenders pursuant to Section 3(a) and
(b). During the Basic Term, such interest shall be paid as a component of Basic
Rent.
(c) Prepayments of Loans and Equity Amounts. In the event that the Lessee
pays the Property Balance to the Lessor in connection with the Lessee's purchase
of the Property in accordance with Sections 6, 11 or 16 of the Master Lease, the
Lessor will prepay the entire outstanding principal amount of the Loans and
Equity Amounts. Each of the Lenders and the Lessor hereby acknowledges that its
Loans or Equity Amounts, as the case may be, may be so prepaid without any
prepayment premium other than Break Costs and other amounts pursuant to Section
4(e)(iii).
(d) Nonuse Fee; Other Fees. The Lessee agrees to pay the fees set forth in
this Section 4(d). During the Construction Period fees may, subject to the
conditions hereof (including without limitation the last sentence of Section
3(a)(i)), be paid or reimbursed with the proceeds of an Advance.
(i) Nonuse Fee. The Lessee agrees to pay to each Tranche A Lender,
each Tranche B Lender and each Certificate Holder for the Construction Period
(including any portion of such Construction Period when any Participant's
Commitment is suspended by reason of the Lessee's inability to satisfy any
condition of Section 9), a nonuse fee (collectively, the "Nonuse Fee") at a per
annum rate equal to the Applicable Nonuse Fee Percentage on such Participant's
Commitment Percentage of the sum of the Available Commitments. The Nonuse Fee
shall be payable by the Lessee in arrears with respect to each three-month
period (or portion thereof, for the first and last such periods) following the
Documentation Date on the first day of each January, April, July and October
(provided, however, that if such day is not a Business Day, such payment shall
be due on the immediately preceding Business Day in the full amount due on such
first day), commencing July 1, 2000 through and including the first day
immediately following
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the expiration of the Construction Period, and shall be determined on the basis
of the daily average Available Commitments during each such three-month period.
The Nonuse Fee shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such Nonuse Fee is payable over a year of 360 days.
(ii) Other Fees. The Lessee agrees to pay (w) to the Arranger for
the account of the initial Certificate Holders and Lenders an upfront fee in the
amount set forth in the Fee Letter, payable on the Documentation Date, (x) to
the Agent, for its own account, the Annual Administration Fees, payable on the
Documentation Date and thereafter annually in arrears, (y) to the Arranger, for
its own account, the fees set out in the Fee Letter, and (z) to the Agent, for
the account of the Owner Trustee, the Owner Trustee's Expenses.
(e) Interest and Yield Protection.
(i) Alternate Rate of Interest. If prior to the commencement of any
Interest Period for an Advance with interest or Yield determined by reference to
the LIBO Rate (Reserve Adjusted):
(1) the Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period; or
(2) the Agent is advised by any Participant or Participants
that because of a change in circumstances affecting the eurocurrency
market generally the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly
reflect the cost to such Participants (or Participant) of making or
maintaining their Loans or Equity Amounts (or its Loan or Equity
Amount) for such Interest Period;
then the Agent shall give notice thereof to the Lessee and the Participants by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Lessee and the Participants that the circumstances giving rise to
such notice no longer exist, (i) any Funding Request that requests the
conversion or continuation of an Advance with interest determined by reference
to the LIBO Rate (Reserve Adjusted) shall be ineffective, (ii) if any Funding
Request requests an Advance with interest determined by reference to the LIBO
Rate (Reserve Adjusted), such Advance shall be made as an Alternate Base Rate
Advance and (iii) any Funding Request by the Lessee for an Advance with interest
determined by reference to the LIBO Rate (Reserve Adjusted) shall be
ineffective; provided, however, that if the circumstances giving rise to such
notice do not affect all the Participants, then requests by the Lessee for an
Advance with interest determined by reference to the LIBO Rate (Reserve
Adjusted) may be made to Participants that are not affected thereby.
(ii) Increased Costs.
(1) If any Change in Law shall:
Participation Agreement 8
<PAGE>
(a) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposit with or for the account of, or credit extended by, any
Participant (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or
(b) impose on any Participant or the London interbank
market any other condition affecting this Participation
Agreement or Advances made by such Participant under this
Participation Agreement
and the result of any of the foregoing shall be to increase the cost
to such Participant of making, funding or maintaining any such Loan
or Equity Amount (or of maintaining its obligation to make any such
Loan or Equity Amount) or to reduce the amount of any sum received
or receivable by such Participant hereunder (whether of principal,
interest, Equity Amount, Yield or otherwise), then the Lessee will
pay to such Participant such additional amount or amounts as will
compensate such Participant for such additional costs incurred or
reduction suffered.
(2) If any Participant determines that any Change in Law
regarding capital requirements has or would have the effect of
reducing the rate of return on such Participant's capital or on the
capital of such Participant's holding company, if any, as a
consequence of this Agreement or the Loans or Equity Amounts made,
funded or created by, such Participant, to a level below that which
such Participant or such Participant's holding company could have
achieved but for such Change in Law (taking into consideration such
Participant's policies and the policies of such Participant's
holding company with respect to capital adequacy), then from time to
time the Lessee will pay to such Participant such additional amount
or amounts as will compensate such Participant or such Participant's
holding company for any such reduction suffered.
(3) A certificate of a Participant setting forth the amount or
amounts necessary to compensate such Participant or its holding
company, as the case may be, as specified in paragraph (1) or (2) of
this Subsection shall be delivered to the Lessee and shall be
conclusive absent manifest error. The Lessee shall pay such
Participant the amount shown as due on any such certificate within
10 days after receipt thereof.
(iii) Break Funding Payments. In the event of (1) the payment of any
principal of any Loan or Equity Amount other than on the last day of an Interest
Period applicable thereto (including as result of an Event of Default), (2) the
conversion of any Loan or Equity Amount other than on the last day of the
Interest Period applicable thereto, (3) the failure to borrow, convert, continue
or prepay any Loan or Equity Amount on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice is permitted to be
revocable and is revoked in accordance herewith), or (4) the assignment of any
Loan or Equity Amount other than on the last day of the Interest Period
applicable thereto as a result of a request by Lessee then, in any such event,
the Lessee shall compensate each Participant for the loss, costs and expense
attributable to such event, including, without limitation, Break Costs and any
costs associated
Participation Agreement 9
<PAGE>
with the termination by any Participant of any foreign currency exchange
arrangements. The loss to any Participant attributable to any such event shall
be deemed to include an amount determined by such Participant to be equal to the
excess, if any, of (i) the amount of interest that such Participant would pay
for a deposit equal to the principal amount of such Loan or Equity Amount for
the period from the date of such payment, conversion, failure or assignment to
the last day of the then current Interest Period for such Loan or Equity Amount
(or, in the case of a failure to borrow, convert or continue, the duration of
the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate for such Interest Period, over (ii) the amount of interest
that such Participant would earn on such principal amount for such period if
such Participant were to invest such principal amount for such period at the
interest rate that would be bid by such Participant (or an Affiliate of such
Participant) for dollar deposits from other banks in an eurodollar market at the
commencement of such period. A certificate of any Participant setting forth any
amount or amounts that such Participant is entitled to receive pursuant to this
Subsection shall be delivered to the Lessee and shall be conclusive absent
manifest error. The Lessee shall pay such Participant the amount shown as due on
any such certificate within 10 days after receipt thereof.
(iv) If it becomes illegal for any Participant to continue its
participation in the transaction contemplated by the Operative Documents (the
"Overall Transaction"), the Participant shall give notice promptly to the Agent,
Owner Trustee, each other Participant and the Lessee (including in such notice
reasonable details as to the basis of such illegality). Each Participant agrees
for the benefit of the Lessee and (in the case of a Lender) the Certificate
Holders, if so required by the Lessee, to consult in good faith with the Lessee
and such other parties and to use its reasonable best efforts to avoid such
illegality (including by assigning its rights hereunder and under the other
Operative Documents to an Affiliate or branch of the Participant, and providing
that such Affiliate or branch shall assume its obligations hereunder and
thereunder); provided, however, that such Participant shall not in this
connection be obligated to take any action which would be materially prejudicial
to the operations of the Participant; provided further, however, that the
portion of the Loan or Equity Amount held by such Participant shall be prepaid
on or prior to the date (the "Illegality Prepayment Date") which is the earlier
of the 180th day subsequent to the giving by such Participant of such notice and
the date upon which the Participant is obligated under Applicable Law to
terminate its participation in the Overall Transaction if such illegality has
not been avoided or the portion of the Loan or Equity Amount held by such
Participant has not been prepaid prior to the Illegality Prepayment Date.
(f) Notice of Yield and Interest. The Agent shall deliver to the Lessee
from time to time written notice of the amount of Basic Rent and the due date
therefor (i) promptly after the commencement of each Interest Period
constituting an Odd LIBOR Period or a one-month LIBOR period, and (ii) promptly
after determination of interest and Yield determined by reference to the
Alternate Base Rate.
(g) Collateralized Margin. The Lessee shall be entitled to have the
applicable margin for interest accruing on the Property Balance reduced to the
Collateralized Applicable Margin so long as (i) Lessee shall have pledged to the
Agent Eligible Collateral as security for Lessee's obligations under the
Operative Documents, and (ii) such Eligible Collateral shall be
Participation Agreement 10
<PAGE>
subject to the Pledge Agreement and held by not more than three (3) Securities
Intermediaries (Lessee having a right to change or substitute same) reasonably
acceptable to the Agent pursuant to a Control Agreement. Upon not less than
seven (7) Business Days' notice to the Agent, so long as no Default has occurred
and is continuing, and no Event of Loss, Casualty or Condemnation has occurred,
Lessee may elect to change the composition of the Eligible Collateral and cause
substitute Eligible Collateral to become subject to the Pledge Agreement and
held by a Securities Intermediary pursuant to a Control Agreement. So long as
the minimum Eligible Collateral remains on deposit in the securities accounts
established under the Control Agreements, and so long as no Default has occurred
and is continuing, and no Event of Loss, Casualty or Condemnation has occurred,
the Agent shall permit Lessee to withdraw from such securities account any
accretions (including interest and dividends) to the property held therein.
The Lessee may elect to switch between the Collateralized Applicable
Margin and the uncollateralized Applicable Margin not more than once in any
Fiscal Quarter. Each determination of an interest rate or yield rate by the
Agent pursuant to any provision of the Operative Documents shall be conclusive
and binding on the Lessor and each Participant in the absence of manifest error.
The Agent shall, at the request of the Lessor, deliver to the Lessor a statement
showing the quotations used by the Agent in determining any interest rate or
yield rate pursuant to the Operative Documents.
SECTION 5. CERTAIN INTENTIONS OF THE PARTIES; DISTRIBUTIONS.
(a) Nature of Transaction. The parties hereto intend that (1) for
financial accounting purposes with respect to the Lessee, the Lessor will be
treated as the owner or ground lessee and the lessor of the Property, including
the Equipment, and the Lessee will be treated as the lessee of the Property,
including the Equipment, and (2) for all other purposes, including Federal and
all state and local income tax purposes, state real estate law, bankruptcy and
Environmental Law purposes, (x) the Master Lease will be treated as a financing
arrangement, (y) the Participants will be deemed lenders making loans to the
Lessee in an amount equal to the sum of the Equity Amounts and the outstanding
principal amount of the Loans, which loans are secured by the Property, and (z)
the Lessee will be treated as the owner of the Property and will be entitled to
all tax benefits ordinarily available to an owner of property like the Property
for such tax purposes. Nevertheless, the Lessee acknowledges and agrees that
neither the Lessor nor any of the Participants has made any representations or
warranties to the Lessee concerning the tax, accounting or legal characteristics
of the Operative Documents and that the Lessee has obtained and relied upon such
tax, accounting and legal advice concerning the Operative Documents as it deems
appropriate.
(i) Specifically, without limiting the generality of clause (i), the
parties hereto intend and agree that in the event of any insolvency or
receivership proceedings or a petition under the United States bankruptcy laws
or any other applicable insolvency laws or statute of the United States of
America or any State or Commonwealth thereof affecting the Lessee, the Lessor or
the Participants or any collection actions, the transactions evidenced by the
Operative Documents are loans made to the Lessee by the Participants in each
case as unrelated third party lenders.
Participation Agreement 11
<PAGE>
(b) Amounts Due Under Master Lease. Anything else herein or elsewhere to
the contrary notwithstanding, it is the intention of the Lessee, the Certificate
Holders, the Owner Trustee, the Lessor and the Lenders that: (1) the amount and
timing of installments of Basic Rent due and payable from time to time from the
Lessee under the Master Lease shall be equal to the aggregate payments due and
payable as interest on the Loans and Yield on the Equity Amounts on each Payment
Date; (2) if the Lessee becomes obligated or otherwise elects to purchase the
Property under the Master Lease, the Loans, the Equity Amounts, all interest,
Yield and Commitment Fees thereon and all other obligations of the Lessee owing
to the Lessor, the Certificate Holders, the Owner Trustee and the Lenders shall
be paid in full by the Lessee; and if the Lessee becomes obligated to purchase
any Site under Section 11 of the Master Lease, or if the Lessee elects to
purchase any Sites under Section 6(e) of the Master Lease, the applicable
portions of the Loans and the Equity Amounts, all interest, Yield and Commitment
Fees thereon and all other obligations of the Lessee owing to the Lessor, the
Certificate Holders, the Owner Trustee and the Lenders related to such Site or
Sites, as applicable, shall be paid in full by the Lessee in accordance with the
Master Lease; (3) if the Lessee properly elects the Sale Option with respect to
the Property, the Lessee shall only be required to pay to the Certificate
Holders the proceeds of the sale of the Property, the Applicable Percentage
Amount with respect to the Property and any amounts due pursuant to Sections 13
and 14 hereof and Section 6(d) and Section 6(i) of the Master Lease (which
aggregate amounts may be less than the Property Balance), together with any
accrued Basic Rent and Supplemental Rent then due and owing; and (4) upon an
Event of Default resulting in an acceleration of the Lessee's obligation to
purchase the Property under the Master Lease, the amounts then due and payable
by the Lessee under the Master Lease shall include all amounts necessary to pay
in full the Property Balance, plus all other amounts then due from the Lessee to
the Participants under the Operative Documents.
(c) Agreement to Pay Amounts Due With Respect to Tranche A Loans. In
furtherance of the intent of the parties as set forth in Sections 5(a) and 5(b)
above and as set forth in Section 20(u) of the Master Lease, the Lessee hereby
absolutely, unconditionally and irrevocably (1) agrees to pay in full when due
(after giving effect to any applicable notice and grace period), whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, all amounts owing by the Lessor to the Lenders with respect to the
Tranche A Loans and the portion of the Notes evidencing such Tranche A Loans
(including all such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and (2) indemnifies
and holds harmless the Lessor, the Agent and each Tranche A Lender for any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Lessor, the Agent or such Tranche A Lender in enforcing any rights under this
Section 5(c).
(d) Distribution.
(i) Subject to Section 5(d)(vii)(4), each payment of Basic Rent (and
any payment of interest on overdue installments of Basic Rent) received by the
Agent shall be distributed by the Agent to the Participants, pro rata in
accordance with, and for application to, the Tranche A Lender Basic Rent,
Tranche B Lender Basic Rent and Equity Basic Rent then due, as well as any
overdue interest due to each such Participant (to the extent permitted by
Applicable Law).
Participation Agreement 12
<PAGE>
(ii) Subject to Section 5(d)(vii)(4), any payment received by the
Lessor or the Agent as a result of:
(1) the purchase of the Property in connection with the
Lessee's exercise of its option under Section 6(e) of the Master
Lease, or
(2) the Lessee's compliance with its obligation to purchase
(or cause its designee to purchase) the Property in accordance with
Sections 6(b), 6(e), 6(f) and 6(i) of the Master Lease, or
(3) the payment of the Property Balance or portion thereof in
accordance with Section 6(e) or Section 11 of the Master Lease, and
any proceeds from any partial prepayments pursuant to Section 6(e)
of the Master Lease, or
(4) the Lessee failing to fulfill one or more of the
conditions to the exercise of the Sale Option pursuant to Section
6(d) of the Master Lease and the Lessor's receipt of the Property
Balance from the Lessee pursuant to Section 6(d)(3) of the Master
Lease,
shall be promptly remitted by the Lessor to the Agent (if received by the
Lessor) and in each case, shall be distributed by the Agent to pay in full the
Participant Balance of each Participant.
(iii) The payment by the Lessee of the Applicable Percentage Amount
and all Supplemental Rent due in accordance with Section 6(d)(3) of the Master
Lease upon the Lessee's exercise of the Sale Option and the payment by the
Lessee of the Construction Failure Payment in accordance with Section 6(h) of
the Master Lease shall be promptly remitted by the Lessor (if received by the
Lessor) to the Agent, and shall be distributed by the Agent in the following
amounts and order of priority:
first, so much of such payments or amounts as shall constitute
Supplemental Rent, to the Persons entitled thereto in accordance
with Section 5(d)(v); and
second, to the Tranche A Lenders for application to pay in
full the Tranche A Loan Balance of each Tranche A Lender, and in the
case where the amount so distributed shall be insufficient to pay in
full as aforesaid, then pro rata among the Tranche A Lenders without
priority of one Tranche A Lender over the other in the proportion
that each such Participant's Tranche A Loan Balance bears to the
aggregate Tranche A Loan Balances of all Tranche A Lenders, and
third, to the Tranche B Lenders for application to pay in full
the Tranche B Loan Balance of each Tranche B Lender, and in the case
where the amount so distributed shall be insufficient to pay in full
as aforesaid, then pro rata among the Tranche B Lenders without
priority of one Tranche B Lender over the other in the proportion
that each such Participant's Tranche B Loan Balance bears to the
aggregate Tranche B Loan Balances of all Tranche B Lenders, and
Participation Agreement 13
<PAGE>
fourth, to the Certificate Holders, personally, for
application to pay in full the Equity Balance.
(iv) Any payments received as proceeds from the sale of the Property
sold pursuant to the Lessee's exercise of the Sale Option pursuant to Section
6(c) of the Master Lease shall be promptly remitted by the Lessor (if received
by the Lessor) to the Agent, and shall be distributed by the Agent in the funds
so received in the following order of priority:
first, to the Tranche B Lenders for application to pay in full
the Tranche B Loan Balance of each Tranche B Lender, and in the case
where the amount so distributed shall be insufficient to pay in full
as aforesaid, then pro rata among the Tranche B Lenders without
priority of one Tranche B Lender over the other in the proportion
that each such Participant's Tranche B Loan Balance bears to the
aggregate Tranche B Loan Balances of all Tranche B Lenders, and
second, to the Tranche A Lenders for application to pay in
full the Tranche A Loan Balance of each Tranche A Lender, and in the
case where the amount so distributed shall be insufficient to pay in
full as aforesaid, then pro rata among the Tranche A Lenders without
priority of one Tranche A Lender over the other in the proportion
that each such Participant's Tranche A Loan Balance bears to the
aggregate Tranche A Loan Balances of all Tranche A Lenders, and
third, to the Certificate Holders, personally, for application
to pay in full the Equity Balance, and
fourth, the balance, if any, shall be promptly distributed to,
or as directed by, the Lessee.
(v) All payments of Supplemental Rent received by the Lessor shall
promptly be remitted to the Agent. All payments of Supplemental Rent received by
the Agent (excluding any amounts payable pursuant to the preceding provisions of
this Section 5(d), other than clause "first" of Section 5(d)(iii)) shall be
distributed promptly by the Agent upon receipt thereof to the Persons entitled
thereto pursuant to the Operative Documents.
(vi) Notwithstanding any other provision of this Section 5(d), any
Excepted Payment received at any time by the Lessor or the Agent shall be
promptly remitted by the Lessor (if received by the Lessor) to the Agent, and
shall be distributed by the Agent to the Person entitled to receive such
Excepted Payment pursuant to the Operative Documents.
(vii) (1) Except as otherwise provided in clause (vii)(2), all
amounts received by the Lessor or the Agent in connection with any sale of all
or any part of the Property after the occurrence of a Lease Event of Default
shall be promptly remitted by the Lessor (if received by the Lessor) to the
Agent, and shall be distributed by the Agent in the following order of priority:
first, so much of such payments or amounts as shall be
required to pay the then existing or prior Participants, the Lessor
and Wilmington Trust Company the amounts payable to them pursuant to
any expense reimbursement or indemnification provisions of the
Operative Documents shall be distributed to
Participation Agreement 14
<PAGE>
each such Person without priority of one over the other in
accordance with the amount of such payment or payments payable to
each such Person;
second, to the Tranche B Lenders for application to pay in
full the Tranche B Loan Balance of each Tranche B Lender, and in the
case where the amounts so distributed shall be insufficient to pay
in full as aforesaid, then pro rata among the Tranche B Lenders
without priority of one Tranche B Lender over the other in the
proportion that each such Participant's Tranche B Loan Balance bears
to the aggregate Tranche B Loan Balances of all Tranche B Lenders;
third, to the Tranche A Lenders for application to pay in full
the Tranche A Loan Balance of each Tranche A Lender, and in the case
where the amounts so distributed shall be insufficient to pay in
full as aforesaid, then pro rata among the Tranche A Lenders without
priority of one Tranche A Lender over the other in the proportion
that each such Participant's Tranche A Loan Balance bears to the
aggregate Tranche A Loan Balances of all Tranche A Lenders;
fourth, to the Certificate Holders for application to pay in
full the Equity Balance; and
fifth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as
directed by, the Lessee.
(2) All payments received and amounts realized by the Lessor
or the Agent in connection with any Casualty or Condemnation after
the occurrence of a Lease Event of Default shall be promptly
remitted by the Lessor (if received by the Lessor) to the Agent and
shall be distributed by the Agent in accordance with Section
5(d)(ix).
(3) All payments received and amounts realized (other than
payments or amounts described in clause (I) or (ii) above) by the
Lessor or the Agent after the occurrence of a Lease Event of Default
shall be promptly remitted by the Lessor (if received by the Lessor)
to the Agent and shall be distributed by the Agent in the following
order of priority:
first, so much of such payments or amounts as shall be
required to pay the then existing or prior Participants, the Lessor
and Wilmington Trust Company the amounts payable to them pursuant to
any expense reimbursement or indemnification provisions of the
Operative Documents shall be distributed to each such Participant
without priority of one over the other in accordance with the amount
of such payment or payments payable to each such Person;
second, to the Participants, the Lessor and Wilmington Trust
Company, pro rata in accordance with, and for application to, the
Participant Balance of each Participant; and
third, after payment in full of the Participant Balances and
all other amounts due and owing, the balance, if any, of such
payment or amounts
Participation Agreement 15
<PAGE>
remaining thereafter shall be promptly distributed to, or as
directed by, the Lessee.
(4) During the occurrence and continuance of a Lease Event of
Default, all amounts (other than Excepted Payments) received or
realized by the Lessor or the Agent shall be promptly remitted by
the Lessor (if received by the Lessor) to the Agent and all such
amounts otherwise distributable by the Agent pursuant to Sections
5(d)(i), 5(d)(ii) and 5(d)(ix) shall be distributed by the Agent as
provided for in clauses (1), (2) and (3) above.
(viii) (1) Subject to Sections 5(d)(viii)(2) and 5(d)(viii)(3), any
payment received by the Lessor or the Agent for which no provision as to the
application thereof is made in the Operative Documents or elsewhere in this
Section 5(d), including without limitation amounts received pursuant to Section
6(i) of the Master Lease, shall be promptly remitted by the Lessor (if received
by the Lessor) to the Agent and shall be distributed by the Agent pro rata among
the Participants, without priority of one over the other, in the proportion that
the Participant Balance of each bears to the aggregate of all the Participant
Balances.
(2) Except as otherwise provided in Sections 5(d)(i), 5(d)(ii)
and 5(d)(vii), all payments received and amounts realized by the
Lessor or the Agent under the Master Lease or otherwise with respect
to the Property, or any proceeds thereof to the extent received or
realized at any time after an indefeasible payment in full of the
Participant Balances of all of the Participants and any other
amounts due and owing to the Participants, the Lessor or Wilmington
Trust Company, shall be promptly remitted by the Lessor (if received
by the Lessor) to the Agent and shall be distributed forthwith by
the Agent in the order of priority set forth in Section
5(d)(vii)(3), except that such payment shall be distributed omitting
clause "second" of such Section 5(d)(vii)(3).
(3) Any payment received by the Lessor or the Agent for which
provision as to the application thereof is made in an Operative
Document but not elsewhere in this Section 5(d) shall be promptly
remitted by the Lessor (if received by the Lessor) to the Agent and
shall be distributed forthwith by the Agent to the Person and for
the purpose for which such payment was made in accordance with the
terms of such Operative Document.
(ix) Subject to Section 5(d)(vii)(4), any amounts payable to the
Lessor or the Agent as a result of a Casualty or Condemnation pursuant to
Section 11 of the Master Lease shall be promptly remitted by the Lessor (if
received by the Lessor) to the Agent and shall be distributed by the Agent as
follows:
(1) all amounts that are to be applied to the purchase price
of the Property in accordance with Section 11 and Section 6 of the
Master Lease shall be distributed by the Agent in accordance with
Section 5(d)(ii).
Participation Agreement 16
<PAGE>
(2) all amounts payable to the Lessee for the repair of damage
caused by such Casualty or Condemnation in accordance with Section
11(b) and (e) of the Master Lease shall be distributed to, or as
directed by, the Lessee.
(x) To the extent any payment made to any Participant is
insufficient to pay in full the Participant Balance of such Participant, then
each such payment shall first be applied to accrued interest or Yield and then
to principal or the Equity Amounts, as applicable.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PARTICIPANTS.
(a) Representations and Warranties. Each Participant hereby represents and
warrants as to itself to the other Participants and the Lessee that:
(i) Status; Due Organization. It (i) is either a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware, or a commercial bank, branch or agency of a foreign bank or other
similar financial institution, or an Affiliate thereof and (ii) has all
requisite power and authority to enter into, and perform its obligations under,
each of the Operative Documents to which it is or will become a party.
(ii) Due Authorization; Enforceability. Each of the Operative
Documents to which it is or will become a party has been duly authorized by all
appropriate corporate action, and has been or will be executed and delivered by
it, and, assuming due authorization, execution and delivery by the other parties
thereto, constitutes or will constitute upon the due execution thereof the
Participant's legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other 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).
(iii) ERISA. It is not and will not be making its Loans or funding
Equity amounts hereunder, and is not performing its obligations under the
Operative Documents with the assets of any "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA or "plan" (as
defined in Section 4975(e)(1) of the code).
(iv) Brokers' Fees. It has not authorized or employed any Person to
act as agent, broker, finder, financial advisor or otherwise in connection with
the transactions contemplated by the Operative Documents other than the Agent
and its Affiliates and Lund Financial.
(b) Additional Representations and Warranties. Each Certificate Holder
additionally represents, warrants and agrees:
(i) Acquisition for Investment. It is acquiring its interest in the
Trust Estate, including the trust certificates, for its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, but subject, nevertheless, to any requirement of law that
the disposition of its property shall at all times be within its control.
Participation Agreement 17
<PAGE>
(ii) No Offering. Neither such Certificate Holder nor anyone acting
on its behalf has offered, directly or indirectly, any interest in the Trust
Estate, including the trust certificates, for sale to, or solicited any offer to
acquire any of the same from, anyone (it being understood that neither the
Lessee nor any other Person has been authorized to act on behalf of any
Certificate Holder in connection with any such offer or solicitation).
(iii) Lessor Liens. The Sites are free of Lessor Liens attributable
to such Certificate Holder.
(iv) Net Worth. Such Certificate Holder has a net worth of at least
four (4) times the Certificate Holder's Commitment;
(v) Investment Company. Such Certificate Holder is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(vi) Lessor Liens. It will not directly or indirectly create, incur,
assume or suffer to exist any Lessor Liens attributable to it on the Trust
Estate. It will, at its own cost and expense, promptly take such action as may
be necessary to discharge fully all such Lessor Liens on the Trust Estate, other
than Lessor Liens being contested by a Permitted Contest. It shall make
restitution to the Trust Estate for any diminution in the value of the Trust
Estate as a result of its failure to discharge any such Lessor Liens. It shall
promptly, and in no event later than thirty days after its Certificate Holder
Officer shall have obtained actual knowledge of the attachment of any Lessor
Lien for which it is responsible, notify the Lessee and the Owner Trustee of the
attachment of such Lessor Lien and the particulars thereof. The term
"Certificate Holder Officer" shall mean an officer of each Certificate Holder
having responsibility for the administration of such Certificate Holder's
interest in the Operative Documents.
(c) Covenants of the Participants. Each of the Participants hereby agrees
as follows so long as this Participation Agreement is in effect:
(1) No Creation of Lessor Liens. It will not create, incur,
assume or suffer to exist any Lessor Lien attributable to such
Participant upon the Master Lease or any of the Sites (other than as
contemplated by any of the Operative Documents); and
(2) Removal of Lessor Liens. It will remove any Lessor Lien
created or incurred by it and remove any Lessor Lien attributable to
it assumed or suffered to exist by it upon the Master Lease or any
of the Sites (other than the Lender Mortgage and such other Liens as
are contemplated by any of the Operative Documents); provided,
however, that any action taken pursuant to this clause (2) shall not
limit the Lessee's rights or remedies under any of the Operative
Documents.
(d) Covenants of the Agent. The Agent hereby agrees that so long as this
Participation Agreement is in effect:
Participation Agreement 18
<PAGE>
(1) upon repayment in full of all Loans, the Agent shall
execute and deliver to the Lessee a release of the Lender Mortgage,
releases of the Construction Agency Agreement Assignment and
Assignment of Leases and Rents, and releases of all other Liens
created by the Operative Documents, and termination statements for
any UCC Financing Statements relating to the Sites which are then of
record naming the Agent as secured party or assignee thereof; and
(2) from time to time, the Agent will allocate all Advances to
the applicable Site or Sites, with Site Costs related to a specific
Site being allocated to such Site, and Site Costs not related to a
specific Site (such as Transaction Expenses related to the
Documentation Date) being allocated and reallocated by the Agent
among the Sites from time to time consistently with the allocation
thereof by the Lessee pursuant to Section 3(d).
(e) Covenants of the Certificate Holders. Each Certificate Holder hereby
agrees that so long as this Participation Agreement is in effect until
expiration or earlier termination of the Master Lease, it will not, and will not
cause or direct the Owner Trustee to, terminate the Trust Agreement without the
prior written consent of the Lessee.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF WILMINGTON TRUST
COMPANY AND OWNER TRUSTEE.
(a) Wilmington Trust Company Representations and Warranties. Wilmington
Trust Company hereby represents and warrants in its individual capacity that:
(1) Due Organization. Wilmington Trust Company (i) is a
Delaware banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, and (ii) has
the power and authority to enter into and perform its obligations
under the Trust Agreement and to serve as trustee thereunder.
(2) Trust Agreement; Participation Agreement. Each of the
Trust Agreement and this Participation Agreement (insofar as
Wilmington Trust Company is a party thereto and hereto) has been
duly executed and delivered by Wilmington Trust Company and,
assuming due authorization, execution and delivery by the other
parties thereto, the Trust Agreement and this Participation
Agreement constitute Wilmington Trust Company's legal, valid and
binding obligations, enforceable against it in accordance with their
respective terms, except as enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other
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).
(3) Due Authorization. Each Operative Document to which
Wilmington Trust Company is or will become a party has been duly
authorized, and has been or will be duly executed and delivered by
Wilmington Trust Company.
Participation Agreement 19
<PAGE>
(4) No Violation. Assuming due authorization, execution and
delivery of the Trust Agreement by the Certificate Holders, the
execution and delivery by either the Owner Trustee or Wilmington
Trust Company, of each Operative Document to which the Owner Trustee
or Wilmington Trust Company, as the case may be, is or will become a
party, are not, and the performance by the Owner Trustee or
Wilmington Trust Company, as the case may be, of their obligations
under each, is not, and will not be, inconsistent with the Organic
Documents of Wilmington Trust Company and, taking into account the
responsibilities of the Owner Trustee, do not and will not
contravene the provisions of Applicable Law of the United States or
Delaware (including any rules and regulations of governmental
agencies and authorities thereto and therein and any judgment or
order applicable to Wilmington Trust Company) governing the banking
and trust powers of Wilmington Trust Company or result in any
violation of or conflict with or constitute a default under, or
subject the Trust Estate or any of the Sites to any Lien of, any
indenture, mortgage or other agreement or instrument to which
Wilmington Trust Company is a party or by which Wilmington Trust
Company or its properties are bound, or, taking into account the
responsibilities of the Owner Trustee, require the consent or
approval of, the giving of notice to, the registration with or the
taking of any action in respect of or by, any Federal or state
agency, authority or Person governing the banking and trust powers
of Wilmington Trust Company or any other local Governmental
Authority of the State of Delaware, except such as have been
obtained, given or accomplished.
(5) No Litigation. There is no action, suit, investigation or
proceeding by or before any court, arbitrator, administrative agency
or other Governmental Authority pending or, to the knowledge of
Wilmington Trust Company, threatened against or affecting Wilmington
Trust Company or any of its properties which (i) involves any of the
transactions contemplated hereunder or by any of the Operative
Documents or (ii) affects its ability to perform its respective
obligations under the Operative Documents to which it is or will
become a party.
(6) Lessor Liens. There are no Lessor Liens arising by,
through or under Wilmington Trust Company, other than relating to or
in connection with the Operative Documents.
(7) Securities. Wilmington Trust Company has not offered
directly or indirectly any interests in the Trust Estate or any part
thereof, including the trust certificates, for issue or sale to, or
solicited any offer to acquire any of the same from, anyone, other
than as contemplated in the Operative Documents.
(b) Wilmington Trust Company Agreements. Wilmington Trust Company hereby
agrees that:
(1) Lessor Liens. Wilmington Trust Company will not directly
or indirectly create, incur, assume or suffer to exist any Lessor
Liens attributable to it on the Trust Estate not resulting from or
related to the transactions
Participation Agreement 20
<PAGE>
contemplated by the Operative Documents.. Wilmington Trust Company
will, at its own cost and expense, promptly take such action as may
be necessary to discharge duly all such Lessor Liens on any part of
the Trust Estate attributable to Wilmington Trust Company other than
Lessor Liens being contested by a Permitted Contest. Wilmington
Trust Company shall make restitution to the Trust Estate for any
diminution in the value of the Trust Estate as a result of its
failure to discharge any such Lessor Liens attributable to
Wilmington Trust Company. It shall promptly, and in no event later
than thirty (30) days after an Owner Trustee Officer shall have
obtained actual knowledge of the attachment of any such Lessor Lien
for which it is responsible, notify the Lessee and the Certificate
Holders of the attachment of such Lien and the particulars thereof.
The term "Owner Trustee Officer" shall mean an officer of the Owner
Trustee having responsibility for the administration of Wilmington
Trust Company's and the Owner Trustee's interest in the Operative
Documents.
(2) No Issuance. Wilmington Trust Company agrees that neither
Wilmington Trust Company nor anyone acting on its behalf has offered
or will offer any interests in the Trust Estate or any part thereof
(including the trust certificates) or any securities similar thereto
for issue or sale to, or has solicited or will solicit any offer to
acquire any of the same from, anyone so as to bring the issuance and
sale of the interests in the Trust Estate (including the trust
certificates) within the provisions of Section 5 of the Securities
Act or any similar provisions under any applicable state "blue sky"
or similar state securities laws.
(c) Owner Trustee and Trust Representations and Warranties. The Owner
Trustee and the Trust hereby represent and warrant on the date hereof that:
(1) Due Organization. Assuming the due authorization,
execution and delivery of the Trust Agreement by the Certificate
Holders, the Owner Trustee has the power and authority under the
Trust Agreement to enter into and perform its obligations under each
Operative Document to which the Owner Trustee is or will become a
party
(2) Due Authorization; Enforceability. Assuming due
authorization, execution and delivery of the Trust Agreement by the
Participants and Wilmington Trust Company, each Operative Document
(other than the Trust Agreement) to which the Trust or the Owner
Trustee is or will become a party constitutes or will constitute
upon the due execution thereof a legal, valid and binding obligation
of the Owner Trustee and the Trust, enforceable against the Owner
Trustee and the Trust, in accordance with its terms, except as
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other 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).
Participation Agreement 21
<PAGE>
(3) No Liens. On each Site Acquisition Date, the Sites to be
leased on such Site Acquisition Date shall be free and clear of
Lessor Liens arising by, through or under the Owner Trustee (other
than Permitted Liens).
(4) Chief Executive Office. The principal place of business
and chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code) of Owner Trustee and the Trust is located
at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890.
(5) Due Organization. The Trust has been duly formed and is
validly existing and in good standing as a statutory business trust
under the laws of the State of Delaware, and has the power and
authority to enter into and perform its obligations under each of
the Operative Documents, including this Participation Agreement, the
Master Lease and the Lease Supplements to which it is or is to
become a party.
(6) Assignment. It has not assigned or transferred any of its
right, title or interest in or under the Master Lease or the
Construction Agency Agreement except in accordance with the
Operative Documents.
(7) Use of Proceeds. The proceeds of the Loans and the Equity
Amounts shall be applied by the Trust in its capacity as the Lessor
solely in accordance with the provisions of the Operative Documents.
(8) Securities Act. Neither the Trust in its capacity as the
Lessor nor any Person authorized by the Trust to act on its behalf
has offered or sold any interest in the Notes or Equity Amounts, or
in any similar security relating to the Sites, or in any security
the offering of which for the purposes of the Securities Act would
be deemed to be part of the same offering as the offering of the
aforementioned securities to, or solicited any offer to acquire any
of the same from, any Person other than, in the case of the Notes,
the Lenders, and neither the Trust in its capacity as the Lessor nor
any Person authorized by the Trust to act on its behalf will take
any action which would subject the issuance or sale of any interest
in the Notes or Equity Amounts to the provisions of Section 5 of the
Securities Act.
(9) Federal Reserve Regulations. The Trust is not engaged
principally in, and does not have as one 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 F.R.S. Board), and no part of the proceeds of
the Loans or the Equity Amounts 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 Regulation
T, U or X of the F.R.S. Board. Terms for which meanings are provided
in F.R.S. Board Regulation T, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this clause
(9) with such meanings.
Participation Agreement 22
<PAGE>
(10) Investment Company Act. The Trust is not an "investment
company" or a company controlled by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(d) Owner Trustee and Trust Agreements. Owner Trustee and the Trust agree
that:
(1) Lessor Liens. The Owner Trustee and the Trust will not
directly or indirectly create, incur, assume or suffer to exist any
Lessor Liens arising by, through or under it on the Trust Estate.
The Owner Trustee shall, at the cost and expense of the Trust
Estate, promptly take such action as may be necessary to discharge
duly all Lessor Liens attributable to it on any part of the Trust
Estate, other than Lessor Liens being contested by a Permitted
Contest. The Owner Trustee shall make restitution to the Trust
Estate for any diminution in the value of the Trust Estate as a
result of its failure to discharge any Lessor Liens attributable to
it.
(2) Notices. In the event any claim with respect to any
liabilities is filed against the Owner Trustee or the Trust, the
Owner Trustee shall promptly notify the Certificate Holders and the
Lessee thereof.
(3) Title. On the Documentation Date and each Site Acquisition
Date the Trust will take whatever interest in the Trust Estate and
whatever rights to and interests in the Master Lease and the Lease
Supplements as were granted or conveyed to it, free and clear of any
Lessor Liens attributable to it.
(4) Business of Owner Trustee and Trust. The business of the
Owner Trustee and the Trust is and will continue to be restricted
(until the expiration or earlier termination of the Master Lease
with respect to a Site) to the holding of the Sites and the leasing
of such pursuant to the Operative Documents and it will not engage,
and it has not engaged, in any other business transaction except for
administration of the Trust Estate (including any assignment for
security of the Master Lease and any Sites) and for matters
reasonably incidental to any of the foregoing.
(5) Trust Agreement. The Owner Trustee agrees that (unless a
Lease Event of Default shall have occurred and be continuing) until
expiration or earlier termination of the Master Lease, it will not
terminate the Trust Agreement without the prior written consent of
the Lessee.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE, CONSTRUCTION
AGENT AND GUARANTOR.
(a) General Representations and Warranties. The Lessee hereby represents
and warrants to each of the other parties hereto that:
(1) Due Organization. The Lessee and each of its Subsidiaries
(i) is a corporation or other entity duly organized and validly
existing in good standing
Participation Agreement 23
<PAGE>
under the laws of the jurisdiction of its organization, (ii) has all
requisite corporate or other power and authority and legal right to
own, hold under lease and operate its properties and to carry on its
business as now conducted and as presently proposed to be conducted
and to enter into, and perform its obligations under, each of the
Operative Documents to which it is or will become a party, and (iii)
has duly qualified and is authorized to do business and is in good
standing as a foreign corporation in the State of Illinois (in the
case of the Lessee) and in each jurisdiction in which its business
is conducted.
(2) Due Authorization; Enforceability. Each of the Operative
Documents to which it is or will become a party has been or will be,
when executed and delivered, duly authorized by all appropriate
corporate action, and has been or will be executed and delivered by
the Lessee and, assuming due authorization, execution and delivery
by the other parties thereto, constitutes or will constitute upon
the due execution thereof the Lessee's legal, valid and binding
obligation, enforceable against it in accordance with its terms,
except as enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other 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).
(3) No Violation. The execution and delivery by the Lessee of
each of the Operative Documents to which it is or will become a
party are not, and the performance by the Lessee of its obligations
under each will not be, inconsistent with its Organic Documents, do
not and will not contravene any Applicable Law in any material
respect and do not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage or other
material contract or other instrument to which the Lessee is a party
or by which it or its property is bound or require the consent or
approval of, the giving of notice to, the registration with or the
taking of any action in respect of or by, any Governmental Authority
or other Person, except such as have been obtained, given or
accomplished.
(4) Governmental Actions. The Lessee has made or will make all
filings, recordings and registrations required by any Governmental
Authority in connection with, and has obtained or will obtain, all
Governmental Actions necessary or appropriate for the performance by
the Lessee of the transactions contemplated hereby and by the other
Operative Documents which are then or theretofore required by
Applicable Law; the Lessee will make all filings, recordings and
registrations required by any Governmental Authority in connection
with, and will obtain, all material Governmental Actions necessary
or appropriate for the performance by the Lessee of the transactions
contemplated hereby and by the other Operative Documents not later
than the dates required by Applicable Law.
(5) No Litigation. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the
knowledge of any of their
Participation Agreement 24
<PAGE>
officers, threatened against or affecting the Lessee or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making
of any Funding hereunder. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be
expected to have a Material Adverse Effect, the Lessee has no
material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 8(a)(18).
(6) Performance. Neither the Lessee nor any Subsidiary is in
violation of any Applicable Law the violation of which is reasonably
likely materially and adversely to affect the transactions
contemplated by this Participation Agreement and the other Operative
Documents or which would materially adversely affect Lessee's
ability to perform its obligations under each of the Operative
Documents or which otherwise could reasonably be expected to have a
Material Adverse Effect.
(7) No Adverse Contracts or Applicable Law. Neither the Lessee
nor any Subsidiary is a party to, or bound by, any contract or
agreement or instrument, or subject to any charter or other
corporate restriction or any Applicable Laws which materially and
adversely affects the transactions contemplated by this
Participation Agreement or the Operative Documents or which would
materially adversely affect its ability to perform its obligations
under each of the Operative Documents. Neither the Lessee nor any
Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect. No
obligation (including any guarantee or other contingent obligation)
of the Lessee or of any Subsidiary or Affiliate of Lessee in respect
of any Material Indebtedness now or hereafter outstanding is or has
become due by its terms whether by acceleration or otherwise and has
not been paid, extended or refunded.
(8) Taxes. The Lessee and its Subsidiaries have filed all
United States federal income tax returns and all other material tax
returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by
the Lessee or any of its Subsidiaries, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves
have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists. The United States income
tax returns of the Lessee and its Subsidiaries have been audited by
the Internal Revenue Service through the fiscal year ended December
31, 1996. No tax liens have been filed and no claims are being
asserted with respect to any such taxes as of the Documentation Date
except as set forth in Schedule 8(a)(8). The charges, accruals and
reserves on the books of the Lessee and its Subsidiaries in respect
of any taxes or other governmental charges are adequate.
Participation Agreement 25
<PAGE>
(9) Investment Company Act. The Lessee is not an "investment
company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as
amended.
(10) Disclosure. Neither the financial statements referred to
in Section 8(a)(18) nor any written statement furnished by or on
behalf of Lessee in connection with the negotiation of the Master
Lease or any other Operative Document contains any untrue statement
of a material fact or omits a material fact necessary to make the
statements contained therein or herein not misleading. There is no
fact known to Lessee that has not been disclosed in writing to the
other parties hereto that materially and adversely affects the
ability of Lessee to perform its obligations under the Operative
Documents.
(11) Holding Company. Lessee is not subject to regulation as a
"holding company", an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
(12) Prohibited Transactions. The execution and delivery by
the Lessee of the Operative Documents to which it is or will become
a party, will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Code. The representation by
the Lessee in this paragraph is made in reliance upon and subject to
the accuracy of the representations of the Participants in Section
6(a)(vi) hereof as to the source of funds for the Participant's
Loans or Equity Amounts, as applicable.
(13) Patents and Trademarks. The Lessee owns or possesses or
has the right to use all the patents, patent rights, trademarks,
service marks, trade names, copyrights, licenses and similar rights
necessary for the performance of its obligations under the Operative
Documents, without any conflict known to it with the actual or
asserted rights of others which materially and adversely affect the
Lessee's ability to perform its obligations under the Operative
Documents to which it is or will become a party. It is understood
and agreed by the parties hereto that no interest in any trademark,
trade name, copyright or service mark of the Lessee or an Affiliate
thereof is being conveyed or transferred to the Owner Trustee or any
other Person pursuant to any Operative Document.
(14) Regulatory Jurisdiction. None of the Participants or
Owner Trustee or Wilmington Trust Company will become, (i) solely by
reason of entering into this Participation Agreement or the other
Operative Documents or (except with respect to the exercise by any
Person of any control over a Site upon the occurrence of a Lease
Event of Default or the expiration or other termination of the
Master Lease) the consummation of any of the transactions
contemplated hereby or thereby, subject to regulation by any
Governmental Authority which regulates or otherwise has jurisdiction
over any facilities for the retail distribution of petroleum
products; or (ii) except for regulation the applicability of which
depends on the existence of facts in addition to the ownership of
the Sites upon
Participation Agreement 26
<PAGE>
the exercise of remedies under the Master Lease or upon the
expiration of the Master Lease, subject to ongoing regulation of its
operations by any Governmental Authority.
(15) Private Offering. Neither the Lessee nor any Person
authorized to act on Lessee's behalf has offered, either directly or
indirectly, the Notes or any interest in the Trust Estate (including
the trust certificates) for sale to, or solicited offers to buy any
thereof from or otherwise approached or negotiated with respect
thereto with any prospective purchaser, other than the Participants.
The Lessee has not authorized or employed any Person to act as
agent, broker, finder, financial advisor or otherwise in connection
with the offering of interests in the Notes or the Trust Estate
(including the trust certificates).
(16) No Defaults. No Lease Default or Lease Event of Default
has occurred and is continuing.
(17) Fees. Neither the Lessee nor any Person authorized or
employed by the Lessee as agent or otherwise has taken any action
the effect of which would be to cause the Certificate Holders, the
Trust Estate, or the Owner Trustee to be liable for any brokers',
finders', agents', or advisors' fees or commissions or costs of any
nature or kind claimed by or on behalf of brokers, finders, agents
or advisors in respect of the transactions contemplated by the
Operative Documents.
(18) Financial Statements; No Material Adverse Change. The
September 30, 1999 consolidated financial statements of the Lessee
and its Subsidiaries heretofore delivered to the Participants were
prepared in accordance with generally accepted accounting principles
in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the
Lessee and its Subsidiaries at such date and the consolidated of
their operations for the period then ended.
Since the period ending September 30, 1999, there has
been no change in the business, property, condition (financial or
otherwise) or results of operations of the Lessee and its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
(19) Chief Executive Office. The principal place of business
and chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code) of Lessee is located at 311 South Wacker
Drive, Chicago, Illinois 60606.
(20) Use of Loans and Proceeds. No part of any Advance will be
used directly or indirectly for the purpose of purchasing or
carrying, or for payment in full or in part of indebtedness that was
incurred for the purposes of purchasing or carrying, any margin
stock as such term is defined in Regulation U of the F.R.S. Board.
Participation Agreement 27
<PAGE>
(21) Regulations T, U and X. No proceeds of any of the
Advances will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation T, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation T, U or X or
any regulations substituted therefor, as from time to time in
effect, are used in clauses (20) and (21) with such meanings. Margin
stock (as defined in Regulation U) constitutes less than 25% of the
value of those assets of the Lessee and its Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction
hereunder.
(22) Subsidiaries. Schedule 8(a)(22) contains an accurate list
of all Subsidiaries of the Lessee as of the date of this Agreement,
setting forth their respective jurisdictions of organization and the
percentage of their respective capital stock or other ownership
interests owned by the Lessee or other Subsidiaries. All of the
issued and outstanding shares of capital stock or other ownership
interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly
authorized and issued and are fully paid and nonassessable.
(23) ERISA. The Lessee is not an entity deemed to hold "plan
assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of an
employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan (within the meaning of
Section 4975 of the Code). The Unfunded Liabilities of all Single
Employer Plans do not in the aggregate exceed $5,000,000. Each Plan
complies in all material respects with all Applicable Law, no
Reportable Event has occurred with respect to any Plan, neither the
Lessee nor any other member of the Controlled Group has withdrawn
from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
(24) Except as set forth on Schedule 8(a)(24), on the date of
this Participation Agreement, the Lessee and its Subsidiaries will
have good title, free of all Liens other than those permitted by
Section 8(d)(19), to all of the property and assets reflected in the
Lessee's most recent consolidated financial statements provided to
the Agent as owned by the Lessee and is Subsidiaries.
(25) In the ordinary course of its business, the officers of
the Lessee consider the effect of Environmental Laws on the business
of the Lessee and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to
the Lessee due to Environmental Laws. On the basis of this
consideration, the Lessee has concluded that Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect.
Neither the Lessee nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any
of the requirements of applicable Environmental Laws or are the
subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to
have a Material Adverse Effect.
Participation Agreement 28
<PAGE>
(b) Site Acquisition Date Representations and Warranties. As of each Site
Acquisition Date, the Lessee hereby represents and warrants to each of the other
parties hereto that:
(1) Representations and Warranties. The representations and
warranties of the Lessee in the Operative Documents and in Section
8(a) hereof are true and accurate on and as of such Site Acquisition
Date, as though made on and as of such Site Acquisition Date (or, if
stated to relate to an earlier date, shall have been true and
accurate as of such earlier date). No Event of Default has occurred
and is continuing and no Default of which the Lessee has knowledge
and that has not been previously disclosed to the Participants has
occurred and is continuing under the Master Lease or the
Construction Agency Agreement or, to the knowledge of the Lessee,
any other Operative Document. No Default or Event of Default under
the Master Lease or the Construction Agency Agreement or, to the
knowledge of the Lessee, any other Operative Document, will occur as
a result of, or after giving effect to, the acquisition of the Land
Interest on such date.
(2) Due Authorization; Enforceability. Each of the Operative
Documents to which it is or will become a party with respect to such
Site Acquisition Date has been or will be, when executed and
delivered, duly authorized by all appropriate corporate action, and
has been or will be executed and delivered by the Lessee and,
assuming due authorization, execution and delivery by the other
parties thereto, constitutes or will constitute upon the due
execution thereof the Lessee's legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other 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).
(3) No Violation. The execution and delivery by the Lessee of
each of the Operative Documents to which it is or will become a
party with respect to such Site Acquisition Date are not, and the
performance by the Lessee of its obligations under each will not be,
inconsistent with its Organic Documents, do not and will not
contravene any Applicable Law, and do not and will not contravene
any provision of, or constitute a default under, any indenture,
mortgage or other material contract or other instrument to which the
Lessee is a party or by which it or its property is bound or require
the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by,
any Governmental Authority or other Person, except such as have been
obtained, given or accomplished.
(4) Governmental Actions. The Lessee has made or will make all
filings, recordings and registrations required by any Governmental
Authority in connection with, and has obtained or will obtain, all
Governmental Actions necessary or appropriate for the construction
and commercial operation and use of the applicable Site and the
performance by the Lessee of the transactions
Participation Agreement 29
<PAGE>
contemplated hereby and by the other Operative Documents which are
then or theretofore required by Applicable Law; the Lessee will make
all filings, recordings and registrations required by any
Governmental Authority in connection with, and will obtain, all
material Governmental Actions necessary or appropriate for the
construction and commercial operation and use of the applicable Site
and the performance by the Lessee of the transactions contemplated
hereby and by the other Operative Documents not later than the dates
required by Applicable Law.
(5) No Litigation. There are no pending or, to the best
knowledge of the Lessee, threatened actions or proceedings by or
before any court or administrative agency or other Governmental
Authority to which the Lessee is or may become a party or the
applicable Site is or may become subject which (i) involves any of
the transactions contemplated hereunder or by any of the Operative
Documents or (ii) if determined adversely to it, would reasonably be
likely to materially adversely affect the Lessee's ability to
perform its obligations under each of the Operative Documents to
which the Lessee is or will become a party.
(6) Performance. Neither the Lessee nor the applicable Site is
in violation of any Applicable Law the violation of which is
reasonably likely materially and adversely to affect such Site or
the transactions contemplated by this Participation Agreement and
the other Operative Documents or which would materially adversely
affect Lessee's ability to perform its obligations under each of the
Operative Documents.
(7) No Adverse Contracts or Applicable Law. The Lessee is not
a party to, or bound by, any contract or agreement or instrument, or
subject to any charter or other corporate restriction or any
Applicable Laws which materially and adversely affects the
applicable Site or the transactions contemplated by this
Participation Agreement or the Operative Documents or which would
materially adversely affect its ability to perform its obligations
under each of the Operative Documents.
(8) Patents and Trademarks. The Lessee owns or possesses or
has the right to use all the patents, patent rights, trademarks,
service marks, trade names, copyrights, licenses and similar rights
necessary for the use and operation of the applicable Site under the
Operative Documents, without any conflict known to it with the
actual or asserted rights of others which materially and adversely
affect the Lessee's ability to perform its obligations under the
Operative Documents to which it is or will become a party. It is
understood and agreed by the parties hereto that no interest in any
trademark, trade name, copyright or service mark of the Lessee or an
Affiliate thereof is being conveyed or transferred to the Owner
Trustee or any other Person pursuant to any Operative Document.
(c) Funding Date Representations and Warranties. As of each Funding Date
and each applicable Site Acquisition Date, on which an Advance is made and with
respect to each Site, the Lessee represents and warrants that:
Participation Agreement 30
<PAGE>
(1) Representations and Warranties. The representations and
warranties of the Lessee in the Operative Documents and in Section
8(a) and Section 8(b) hereof are true and accurate on and as of such
Funding Date, as though made on and as of such Funding Date (or, if
stated to relate to an earlier date, shall have been true and
accurate as of such earlier date). No Event of Default has occurred
and is continuing and no Default of which the Lessee has knowledge
and that has not been previously disclosed to the Participants has
occurred and is continuing under the Master Lease or the
Construction Agency Agreement or, to the knowledge of the Lessee,
any other Operative Document. No Default or Event of Default under
the Master Lease or the Construction Agency Agreement or, to the
knowledge of the Lessee, any other Operative Document, will occur as
a result of, or after giving effect to, the Advance requested by the
Funding Request on such date.
(2) Enforceability. The related Lease Supplement has been duly
executed and delivered by the Lessee, and, assuming due
authorization, execution and delivery thereof by the Lessor,
constitutes the Lessee's legal, valid and binding obligation,
enforceable against Lessee in accordance with its terms, except as
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other 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).
(3) No Support Agreements. The ownership and use of such Site
by the Trust, the Owner Trustee or the Certificate Holders does not
require the execution by, or assignment to, any such party of any
easement, utility, maintenance or other support agreements.
(4) Applicable Laws. Such Site and the commercial operation
thereof for its intended purposes and use thereof are and will be in
compliance with all Applicable Laws, including, without limitation,
zoning, planning, building, occupational safety and health laws and
Environmental Laws of any Governmental Authority having jurisdiction
over such Site, the Trust, the Owner Trustee, the Lessor or the
Lessee and all Permitted Exceptions affecting such Site, other than
such non-compliance that would not, individually or in the
aggregate, (i) have a Material Adverse Effect, or (ii) impose any
material penalty on, or result in the imposition of any criminal
liability on, any Indemnified Person. All requirements thereof
necessary for the use, occupancy and operation of such Site which
are then or theretofore required by Applicable Laws or applicable
Permitted Exceptions have been satisfied in all material respects.
(5) No Taxes. No sales, use, transfer, documentation, real
estate or similar taxes, fees or other charges are payable on the
Site Acquisition Date for each Site under the laws of any State or
any governmental subdivision thereof in which a Site is located in
connection with (A) the entering into, or performance under, or
enforcement of any Operative Document with respect thereto or (B)
the lease to the Lessee of the Sites, except such taxes, fees and
other charges as have been
Participation Agreement 31
<PAGE>
paid or will be paid by the Lessee when due or are included in
Property Cost or Transaction Expenses.
(6) No Events of Loss. Except as disclosed in writing to the
Certificate Holders in accordance with the Operative Documents, no
Event of Loss with respect to the Property has occurred and no event
or condition has occurred which would, with the passage of time or
the giving of notice, or both, constitute an Event of Loss with
respect to the Property.
(7) Advance. The amount of the Advance requested represents
amounts owed by the Lessee or Construction Agent in respect of Land
Acquisition Costs, Property Improvement Costs or Transaction
Expenses, as the case may be, incurred prior to the date of such
Advance and for which the Lessee has not previously been reimbursed
by an Advance or represent amounts with respect to Commitment Fees.
The conditions precedent to such Advance and the related Equity
Amount and Loans set forth in Section 9 have been satisfied or
waived by the Participants.
(8) Site. The Site has vehicular and pedestrian access to and
from open, publicly dedicated streets. The Site has available
through publicly available right-of-ways or valid easements from
third parties all services of public utilities necessary for use and
operation of the Site for its current use. The Site is free from
material physical defects. No fire or other casualty has occurred
which has had a Material Adverse Effect on the Site and with respect
to which the Site has not been repaired or restored.
(9) Sites Complete, Description of and Title to Sites. On the
Site Acquisition Date for each Site, all material approvals of any
Governmental Authority necessary for the commercial operation of
such Site will have been received and be in full force and effect.
On each Site Acquisition Date, after giving effect to the
transactions contemplated hereby, the Trust will have good and
marketable title to the Improvements and a ground leasehold interest
in each Land Interest related to such Site Acquisition Date, subject
to no Title Defects, free and clear of all Liens, except Permitted
Liens. As of the date of execution thereof, the description set
forth in each Lease Supplement will be a true, complete and accurate
description of the property leased thereunder; and each Site shall
be located wholly within the boundaries of its respective property,
without any encroachments onto or therefrom.
(10) Compliance With Environmental Protection Requirements. On
the Site Acquisition Date for each Site (except as disclosed in the
Environmental Audits delivered by Lessee to the Certificate Holders,
Lessor and the Lenders for each Site) and during the Lease Term,
each and every Site is in compliance in all material respects with
all Environmental Laws which are applicable to the Sites including,
without limitation, Environmental Laws pertaining to design and
performance standards and quality criteria for air, water and
reclamation, and the use, storage, disposal and transportation of
Hazardous Substances.
Participation Agreement 32
<PAGE>
(11) Information Provided to Appraiser. With respect to each
Site, all information and materials which have been provided by the
Lessee to the Appraiser of such Site in connection with the
Appraisal of such Site are true and accurate in all material
respects on the date as of which such information and materials are
dated or certified and are not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which
such information was provided.
(12) Environmental Laws. Except as described in the
Environmental Audit delivered by the Lessee to the Certificate
Holders, the Lessor and the Lenders, to the best of the Lessee's
knowledge:
(i) there are no pending or threatened claims,
complaints, notices or requests for information relating to
the Sites received by the Lessee with respect to any alleged
violation of any Environmental Law, which may reasonably be
expected to have a Material Adverse Effect on the financial
condition, operations, assets, business or properties of the
Lessee or which may reasonably be expected to have a Material
Adverse Effect on the Site, and
(ii) there are no pending or threatened complaints,
notices or inquiries to the Lessee relating to the Site
regarding potential liability of the Lessee under any
Environmental Law, which may reasonably be expected to have a
Material Adverse Effect on the financial condition,
operations, assets, business or properties of the Lessee.
(13) Property. The contemplated use of the Sites by the Lessee
and its agents, assignees, employees, lessees, licensees and tenants
will comply in all material respects with all Requirements of Law
(including, without limitation, all zoning and land use laws and
Environmental Laws) and Insurance Requirements.
(14) Plans and Specifications. Upon Completion of the
Construction with respect to a Site, all water, sewer, electric,
gas, telephone and drainage facilities, all other utilities required
to adequately service such Improvements for its intended use and
means of access between such Improvements and public highways for
pedestrians and motor vehicles will be available pursuant to
adequate permits (including any that may be required under
applicable Environmental Laws). There is no action, suit or
proceeding (including any proceeding in condemnation or eminent
domain or under any Environmental Law) pending or, to the best
knowledge of the Lessee, threatened with respect to the Lessee, its
respective Affiliates or the Site which adversely affects the title
to, or materially and adversely affects the use, operation or value
of, the Site. All utilities serving the Site, or proposed to serve
the Site in accordance with the Plans and Specifications, are or
will be located in, and vehicular access to the Improvements on the
Site is provided by, either public rights-of-way abutting the
Property or Appurtenant Rights. With respect to the Site, all
material licenses, approvals, authorizations, consents, permits
(including, without limitation,
Participation Agreement 33
<PAGE>
building, demolition and environmental permits, licenses, approvals,
authorizations and consents), easements and rights-of-way, including
dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or
from the Property during the construction of the applicable
Improvements thereon, and (y) construction of such Improvements in
accordance with the related Plans and Specifications and the
Construction Agency Agreement have either been obtained from the
appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be, or will be obtained from the
appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be, prior to the time required by
such Governmental Authority or private party.
(15) Insurance. The Lessee has obtained insurance coverage
covering each Site which meets the requirements of Section 12 of the
Master Lease, and such coverage is in full force and effect. The
Lessee carries insurance with reputable insurers in respect of the
Sites and its Material Assets, in such manner, in such amounts and
against such risks as is customarily maintained by the Lessee or its
Affiliates that own or operate similar properties.
(16) Flood Hazard Areas. Except as otherwise identified on the
survey delivered pursuant to Section 9(c)(15), no portion of any of
the Sites is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency. If any of the Sites 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 Site in accordance with the National Flood Insurance Act of
1968, as amended (in which event, the provisions of Section 12 of
the Master Lease shall be applicable to such flood insurance).
(17) Lease Supplement. With respect to a Site, upon the
execution and delivery of the Lease Supplement, the Lessee will have
unconditionally accepted such Site (provided, however, that nothing
contained herein shall be deemed a waiver by the Lessee of any right
of action against Persons other than the Lessor and the Lenders with
respect to title to and condition of the Site on the applicable Site
Acquisition Date), and no right of offset will exist with respect to
any Rent or other sums payable under the Master Lease.
(d) Agreements. The Lessee hereby agrees that:
(1) Information. During the Lease Term, the Lessee shall
furnish to the Agent, the Participants and the Owner Trustee:
(i) immediately upon a Responsible Employee of the
Lessee becoming aware of the existence of a Lease Default, or
Lease Event of Default, written notice specifying the nature
of such Lease Default or Lease Event of Default and what
action the Lessee is taking or proposes to take with respect
thereto;
Participation Agreement 34
<PAGE>
(ii) as soon as they are available but not later than
120 days after the close of each Fiscal Year of the Lessee, an
audited balance sheet and the related statements of income and
cash flows of the Lessee and its Subsidiaries at the end of
such Fiscal Year, accompanied by an opinion of a firm of
independent certified public accountants of recognized
national standing stating that such financial statements
present fairly in all material respects the financial
condition of the companies being reported upon and have been
prepared in accordance with GAAP and that the audit by such
accountants in connection with such financial statements has
been made in accordance with generally accepted auditing
standards;
(iii) as soon as they are available but not later than
45 days after the close of each of the first three quarters of
each Fiscal Year of the Lessee, unaudited consolidated and
consolidating balance sheets and related statements of income
and cash flows of the Lessee and its Subsidiaries, showing the
Lessee's financial condition, on a consolidated and
consolidating basis, at and as of the end of such year-to-date
period, all certified by one of the Lessee's chief financial
officers, principal accounting officer, Treasurer or Assistant
Treasurer (each a "Financial Officer") as fairly presenting
its financial condition and results of operations on a
consolidated and consolidating basis and, with respect to the
consolidated statements, in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments;
(iv) together with the financial statements delivered
pursuant to clauses (ii) and (iii) above, a certificate
substantially in the form of Exhibit K attached hereto from
the Lessee's Financial Officer showing a calculation of the
financial covenants set forth in Section 9(d)(8); and
(v) promptly upon their becoming available, one copy of
each financial statement, report, or proxy statement sent by
the Lessee to its shareholders generally, and of each regular
or periodic report filed by the Lessee with any securities
exchange or with the Securities and Exchange Commission or any
successor agency.
(2) Property Costs. The Lessee, as Construction Agent, will
maintain a record of the Property Cost for each Site, and shall
certify the same periodically to the Lessor, the Agent and the
Participants from time to time upon request.
(3) Real Estate Transfer Tax. The Lessee shall, within one
hundred eighty (180) days after the date hereof, take such action as
may be necessary to cause the Cook County Assessor to issue a
permanent tax identification number which affects only the Property,
all of the Property and no other real property, including, without
limitation, a petition for division of property. Lessee shall pay,
prior to the date the same becomes due and payable, all Taxes
assessed, billed or imposed with respect to the Property and all
additional real property which may be assessed, billed or taxed
together with any portion of the Property. The
Participation Agreement 35
<PAGE>
payment of such Taxes is hereby acknowledged and agreed to be
included within the scope and intent of the General Tax Indemnity
set forth in Section 13 of this Participation Agreement.
(4) Officer's Certificate. During the Lease Term with respect
to each Site, within one hundred twenty (120) days after the close
of each Fiscal Year of the Lessee, the Lessee shall deliver to the
Certificate Holders, the Agent and the Owner Trustee a certificate
in the form of Exhibit C hereto of a Responsible Employee of the
Lessee stating that such Responsible Employee has reviewed the
required insurance coverages, the relevant terms of the Master Lease
and the other Operative Documents and has made, or caused to be
made, under such Responsible Employee's supervision, a review of the
transactions and conditions of the Lessee from the beginning of the
fiscal period stated in such request to the date of the certificate
and that such review has not disclosed the existence during such
period of any condition or event which constitutes a Lease Default
or Lease Event of Default or, if any such condition exists,
specifying the nature and period of existence and what action the
Lessee has taken or proposes to take with respect thereto.
(5) Defense of Title. The Lessee will, at all times, at its
own cost and expense, warrant and defend the ground leasehold
interest of the Trust or the Owner Trustee, as the case may be, to
the Sites.
(6) Title Defect. The Lessee will not, directly, or
indirectly, create, incur, assume or suffer to exist any Title
Defect.
(7) Non-Discrimination. The Lessee will operate and otherwise
deal with the Sites using the Lessee's same general business
practices as are applicable generally to its owned and leased
properties which are similar to such Sites.
(8) Financial Covenants.
(i) Fixed Charge Coverage Ratio. Lessee will not permit
the ratio, determined as of the end of each of its Fiscal
Quarters, of (A) Consolidated EBITDA plus Consolidated Rentals
to (B) the sum of (x) Consolidated Interest Expense plus (y)
Consolidated Rentals, all calculated for the Lessee and its
Subsidiaries on a consolidated basis, for the four Fiscal
Quarter period then ending to be less than 3.0 to 1.0.
(ii) Leverage Ratio. The Lessee will not permit the
ratio, determined as of the end of each of its Fiscal
Quarters, of (A) Consolidated Funded Indebtedness to (B)
Consolidated EBITDA plus Consolidated Rentals for the four
Fiscal Quarter period then ending to be greater than 3.0 to
1.0.
(iii) Minimum Tangible Net Worth. The Lessee will at all
times maintain Consolidated Tangible Net Worth of not less
than the sum of (A) $500,000,000 plus (B) 50% of Consolidated
Net Income earned in
Participation Agreement 36
<PAGE>
each Fiscal Quarter beginning with the quarter ending June 30,
2000 (without deduction for losses) plus (C) 100% of the net
cash proceeds of any additional paid-in capital or other
equity investment or proceeds from the issuance and sale of
any common or preferred stock.
(iv) Minimum Current Ratio. The Lessee will (a) at all
times between June 30, 2000 and December 30, 2001, inclusive,
maintain a Current Ratio greater than 2.00, (b) at all times
between December 31, 2001 and December 30, 2002, inclusive,
maintain a Current Ratio greater than 2.25, and (c) at all
times from and after December 31, 2002 maintain a Current
Ratio greater than 2.50. "Current Ratio" shall mean current
assets divided by current liabilities as defined by GAAP.
(9) Change In Control. Without the prior written consent of
the Agent and the Required Participants (which consent shall not be
unreasonably withheld):
(i) Lessee will not permit or suffer to occur any Change
In Control.
(ii) The Lessee will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other
Person, except that a Subsidiary may merge into the Lessee or
a Wholly Owned Subsidiary.
(iii) The Lessee will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its
property to any other Person, including any right, title or
interest in any of the Operative Documents, except:
(A) Sales of inventory in the ordinary course of
business; or
(B) Leases, sales or other dispositions of its
property that, together with all other property of the
Lessee and its Subsidiaries previously leased, sold or
disposed of (other than inventory in the ordinary course
of business) as permitted by this Section during the
twelve month period ending with the month in which any
such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the property of the
Lessee and its Subsidiaries; or
(C) Lessee may transfer the Land and Lessee's
interests under the Operative Documents to a Wholly
Owned Subsidiary of Lessee so long as (1) such Wholly
Owned Subsidiary is solvent and (2) marchFIRST, Inc.
remains liable for all obligations of the Lessee under
the Operative Documents.
(iv) The Lessee will not, nor will it permit any
Subsidiary to, make or suffer to exist any Investments
(including without limitation,
Participation Agreement 37
<PAGE>
loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to become or remain
a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(A) Permitted Investments; or
(B) Existing Investments in Subsidiaries and
other Investments in existence on the date
hereof and described in Schedule 8(d)(9); or
(C) New cash Investments in any Person
(including any newly created Subsidiary) an
aggregate annual amount (tested as of the
date such Investment is made) not to exceed
$100,000,000 (exclusive of Lessee's
Investment in Blue Vector, Inc. as detailed
in Exhibit M attached hereto)); or
(D) Acquisitions through the payment of cash in
the aggregate amount (tested at the time of
an Acquisition) for all such Acquisitions of
not more than $100,000,000.
Subject to limitations of Applicable Law, Lessee agrees to give the Agent
and the Participants reasonable advance notice of (i) any proposed event
which would require the consent of the Agent and the Required Participants
under this Section 8(d)(9), (ii) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 30% or more of the outstanding shares
of voting stock of the Lessee or (iii) Acquisitions through the issuance
or delivery of the stock (or other equity or debt instrument) of Lessee or
any Affiliate of Lessee in the amount (tested at the time of an
Acquisition) of $300,000,000 or more.
(10) ERISA. The Lessee will not, in the future, cause directly
or indirectly any employee benefit plan (other than a governmental
plan) with respect to which the Lessee or one of its Affiliates is a
party in interest, all within the meaning of ERISA, to become a
party to any of the Operative Documents or to have any interest in
any of the transactions contemplated thereby, directly or
indirectly. As used in this Section, the terms "employee benefit
plan" and "party in interest" shall have the meanings assigned to
them in ERISA.
(11) No Issuance. The Lessee agrees that neither the Lessee
nor anyone acting on its behalf will offer any interests in the
Trust Estate (including the trust certificates) or any part thereof
or any securities similar thereto for issue or sale to, or solicit
any offer to acquire any of the same from, anyone so as to bring the
issuance and sale of the interests in the Trust Estate (including
the trust certificates) within the provisions of Section 5 of the
Securities Act or any similar provisions under any applicable state
"blue sky" or similar state securities laws.
Participation Agreement 38
<PAGE>
(12) Ground Leases; Permitted Exceptions. The Lessee agrees to
duly and timely perform in all material respects all obligations
under the Permitted Exceptions and all obligations of the ground
lessee under each Ground Lease (including, without limitation, the
payment of all ground rent due thereunder from time to time) and to
comply with all provisions of such Permitted Exceptions and Ground
Leases; provided, however, that if the Lessee duly exercises the
Sale Option with respect to any Site and duly consummates the sale
of such Site, the foregoing covenant shall not be applicable to any
obligation first accrued after the consummation of such sale.
(13) Lessee's Covenant to Notify of Relocation. Lessee
covenants and agrees to give the Owner Trustee and the Certificate
Holders at least 30 days' prior written notice of any relocation of
its chief executive office, principal place of business or the place
where its records concerning the Sites is located.
(14) Corporate Franchises. Lessee covenants and agrees that it
will at all times maintain its corporate existence and all material
franchises and qualifications in good standing, provided, however,
that the foregoing shall not limit or modify Lessee's rights or
obligations under Section 6(c)(9), and at all times comply in all
respects with any Applicable Law, rule, regulation, order or decree
applicable to Lessee or its operations or properties the failure to
comply with which, in each case or in the aggregate, would have a
Material Adverse Effect upon Lessee.
(15) Completion and Operation. Lessee covenants and agrees
that each Site shall be operated for the use intended by the Lessee
upon the Lessor's acquisition of such Site and all related
Improvements shall be completed on or before the end of the
Construction Period applicable to such Site. Lessee shall deliver to
the Certificate Holders and the Owner Trustee, on or before the
Outside Completion Date applicable to such Site, a certificate of a
Responsible Employee of the Lessee stating that such Site is
operating for the use intended by the Lessee upon the Lessor's
acquisition of such Site and all Construction has been completed on
or before such date.
(16) Compliance With Environmental Protection Requirements;
Access to Environmental Audits. During the Lease Term, the Lessee
will cause each and every Site to be in compliance in all material
respects with all Environmental Laws which are applicable to the
Sites including, without limitation, Environmental Laws pertaining
to design and performance standards and quality criteria for air,
water and reclamation, and the use, storage, disposal and
transportation of Hazardous Substances. During the Lease Term, the
Lessee shall furnish to the Agent, the Participants and the Owner
Trustee, upon request, the Environmental Audits related to the Sites
and, to the extent not so furnished or if the requesting party shall
determine (in its reasonable judgment) that additional Environmental
Audits shall be necessary, the Lessee (at its cost) shall obtain
from environmental consultants acceptable to the requesting party
and furnish such additional Environmental Audits (including Phase
Two Environmental Audits) as
Participation Agreement 39
<PAGE>
any of the Agent, the Participants and the Owner Trustee shall
request, which Environmental Audits shall be in form and substance
acceptable to the Agent, the Participants and the Owner Trustee.
(17) Development.
(i) Lessee covenants and agrees that it shall not
(unless Lessee's needs for parking cannot be fully satisfied
by the Parking Facility Site and the Parking Facility Site is
otherwise fully occupied by Lessee) directly or indirectly
purchase, use, provide, lease, rent, construct, subsidize or
in any other manner make use of, any parking facilities or
services for or in connection with or in any way related to
the marchFIRST, Inc. Campus and the parking needs of its
employees, guests, visitors and invitees, other than the
Parking Facility Site. This covenant shall be placed of record
in a document duly recorded with the Cook County Recorder of
Deeds as a covenant running with the land, burdening the
marchFIRST, Inc. Campus and benefiting the Parking Facility
Site.
(ii) The TIF Documents Recognition and Consent Agreement
and any amendment to the Alley Vacation Ordinance shall be
subject to the prior approval of Lessor, such approval not to
be unreasonably withheld. The form of the Redevelopment
Agreement and Recognition and Consent Agreement (when taken
together, but not individually), attached hereto as Exhibit L,
are hereby approved by Lessor.
(18) Credit Agreement Covenants. The Lessee shall comply with
and be bound by the covenants contained in the Credit Agreement,
which provisions, together with the related definitions, as in
effect on the date hereof, are hereby incorporated by reference
(mutatis mutandis) for the benefit of the Lessor, the Agent and the
Participants and shall continue regardless of the termination of the
Credit Agreement or any amendment of, or any consent to any
deviation from or other modification of, the Credit Agreement;
provided that references in the Credit Agreement to (i) any "Lender"
or "Agent" or words of like import shall be deemed to be references
to the Participants and the Agent under this Agreement, (ii)
"Default" shall be deemed to be references to a Default, and (iii)
any "Loan Document" shall be deemed to be references to the
Operative Documents.
(19) Liens. The Lessee will not, nor will it permit any Lessee
Subsidiary to, create, incur, or suffer to exist any Lien in, of or
on the property (other than the Property) of the Lessee or any of
its Subsidiaries except Liens which, when considered in the
aggregate, may reasonably be expected to have a Material Adverse
Effect on Lessee.
SECTION 9. CONDITIONS PRECEDENT TO DOCUMENTATION DATE, SITE ACQUISITION DATES
AND ADVANCES.
Participation Agreement 40
<PAGE>
(a) Conditions Precedent to the Documentation Date. The obligations of the
Lessor, the Participants and the Agent to enter into the Operative Documents on
the Documentation Date, are subject to each of the following conditions
precedent, with all documents to be in form and substance acceptable to the
Agent and the Participants:
(1) Corporate Proceedings. Each of the Participants, the
Agent, the Owner Trustee and the Lessee shall have received evidence
of the corporate existence and the incumbency of officers, and
copies of such corporate resolutions and authorizations, of each of
the other parties as each such party shall reasonably request.
(2) Opinions of Counsel for Lessee. Each of the Participants,
the Agent and the Owner Trustee shall have received favorable
opinions, dated such date, addressed to each of them from internal
counsel of the Lessee and Altheimer & Gray, special counsel for the
Lessee, which opinions shall be substantially in the forms of
Exhibit D-1 and Exhibit D-2 hereto, respectively.
(3) Opinion of Counsel for Owner Trustee. Each of the
Certificate Holders and the Lessee shall have received a favorable
opinion, dated such date addressed to each of them from Richards,
Layton & Finger, special counsel for Wilmington Trust Company and
the Owner Trustee, which opinion shall be substantially in the form
of Exhibit E hereto.
(4) Illegality. There is no Applicable Law which would make it
illegal for the Certificate Holders, the Owner Trustee, or the
Lessee to participate in any of the transactions contemplated by the
Operative Documents.
(5) Documents in Full Force and Effect. Each of this
Participation Agreement and each of the Operative Documents
delivered on the Documentation Date shall be in form and substance
reasonably satisfactory to the Agent, the Lessee, the Participants
and the Owner Trustee, shall be in full force and effect on the
Documentation Date, and an executed counterpart of each thereof
shall have been delivered to each such party.
(6) No Default. No Default or Event of Default shall have
occurred and be continuing on the Documentation Date.
(7) Governmental Actions. There shall be no Governmental
Actions by, from or with any Governmental Authority that are
necessary or, in the reasonable opinion of the Agent, the Lessee,
any Participant or the Owner Trustee, advisable (i) in connection
with the due execution, delivery and performance by the parties to
each of the Operative Documents of such Operative Documents to which
it is or will become a party or with respect to the transactions
contemplated hereby or thereby, and (ii) so that none of the
Participants, the Agent, Owner Trustee or Wilmington Trust Company
will become, (x) solely by reason of entering into this
Participation Agreement or the other Operative Documents or (except
with respect to the exercise by any Person of any control over a
Site upon the
Participation Agreement 41
<PAGE>
occurrence of a Lease Event of Default or the expiration or other
termination of the Lease) the consummation of any of the
transactions contemplated hereby or thereby, subject to regulation
by any Governmental Authority which regulates or otherwise has
jurisdiction over any facilities for the retail distribution of
petroleum products; or (y) except for regulation the applicability
of which depends on the existence of facts in addition to the
ownership of the Sites upon the exercise of remedies under the Lease
or upon the expiration of the Lease, subject to ongoing regulation
of its operations by any Governmental Authority.
(8) No Litigation. There shall be no legal action, suit,
investigation or proceeding by or before any Governmental Authority
pending or threatened against or affecting the Lessee or any of its
respective properties, which materially and adversely affects any of
the transactions contemplated by this Participation Agreement or the
other Operative Documents or the ability of the Lessee to perform
its obligations hereunder or under the other Operative Documents.
(9) No Violation. The Lessee shall be in compliance with all
Applicable Laws the violation of which is reasonably likely to
affect materially and adversely the transactions contemplated by
this Participation Agreement and the other Operative Documents,
including, without limitation, all Environmental Laws.
(10) Representations and Warranties. The representations and
warranties of each of the Participants, Wilmington Trust Company,
the Owner Trustee and the Lessee contained herein or in any other
Operative Document executed and delivered on or prior to such date
(other than representations and warranties made with respect to
Sites) shall be true and accurate on and as of the Documentation
Date, as though made on and as of such date (or, if stated to have
been made as of an earlier date, shall have been true and accurate
as of such date) and each of the Participants, the Owner Trustee and
the Lessee shall have received an Officer's Certificate, dated such
date, to such effect from each of such parties.
(b) Conditions Precedent to each Advance. The obligations of the
Participants to make an Advance on each Site Acquisition Date or each Funding
Date, as the case may be, the obligation of the Certificate Holders to fund the
related Equity Amount on each Site Acquisition Date or such Funding Date, as the
case may be, and the obligation of the Lenders to make the related Loan on such
Site Acquisition Date or such Funding Date, as the case may be, are subject to
satisfaction or waiver of the following conditions precedent, with all documents
to be in form and substance acceptable to the Agent and the Participants:
(1) Funding Request. Each of the Agent and the Certificate
Holders shall have received a fully executed counterpart of the
applicable Funding Request, executed by the Lessee, in accordance
with Section 3(c). Each of the delivery of a Funding Request and the
acceptance by the Lessee of the proceeds of such Advance shall
constitute a representation and warranty by the Lessee that on the
applicable Funding Date (both immediately before and after giving
effect to the
Participation Agreement 42
<PAGE>
making of such Advance and the application of the proceeds thereof),
the statements made in Section 8 are true and correct.
(2) Construction Certificate. With respect to any Site Costs
to be paid or reimbursed using the proceeds of such Advance, the
Certificate Holders and Agent shall have received, at least three
(3) days prior to the applicable Funding Date, a Construction
Certificate in the form of Exhibit I hereto (a "Construction
Certificate"), together with all attachments thereto.
(3) Governmental Permits, etc. The Certificate Holders and
Agent shall have received evidence satisfactory to it that all
permits, licenses and consents required by any Governmental
Authority in connection with the Construction for which the Advance
is being requested have been obtained and are in full force and
effect on the applicable Funding Date.
(4) Fees. The Arranger shall have received all fees then due
and payable pursuant to the Fee Letter, and each Participant shall
have received all Commitment Fees and upfront fees then due and
payable pursuant to Section 4(d).
(5) Representations and Warranties. The representations and
warranties of each of the Certificate Holders, Wilmington Trust
Company, the Owner Trustee and the Lessee contained herein or in any
other Operative Document executed and delivered on or prior to such
date (other than representations and warranties made with respect to
Sites that are not the subject of such Site Acquisition Date) shall
be true and accurate on and as of such Site Acquisition Date, as
though made on and as of such date (or, if stated to have been made
as of an earlier date, shall have been true and accurate as of such
date) and each of the Certificate Holders, Wilmington Trust Company,
the Owner Trustee, the Agent and the Lessee shall have received an
Officer's Certificate, dated such date, to such effect from each of
such parties.
(6) No Litigation. There shall be no legal action, suit,
investigation or proceeding by or before any Governmental Authority
pending or threatened against or affecting the Lessee or any of its
respective properties, which materially and adversely affects any
Site to be leased on such Site Acquisition Date, or any of the
transactions contemplated by this Participation Agreement or the
other Operative Documents or the ability of the Lessee to perform
its obligations hereunder or under the other Operative Documents.
(7) Event of Default. There shall not have occurred and be
continuing any Lease Event of Default, and no Lease Event of Default
will have occurred after giving effect to the making of the Advance
requested by such Funding Request.
(8) Available Commitments. After giving effect to the
applicable Advance, the condition set forth in the last sentence of
Section 3(a)(1) shall not be violated.
Participation Agreement 43
<PAGE>
(9) Construction Costs. After giving effect to the applicable
Advance, the estimated as yet unpaid cost to the Construction Agent
of completing the Construction pursuant to the Construction
Documents shall not exceed the Available Commitments.
(10) Title Insurance Policy. After giving effect to the
applicable Advance, the aggregate amount of the owner's title
insurance policy or policies described in clause (x) of Section
9(c)(13) shall not be less than the Property Cost for the Property,
and the aggregate amount of the lender's title insurance policy or
policies described in clause (y) of Section 9(c)(13) shall not be
less than ninety-six percent (96%) of the Property Cost.
(c) Further Conditions to each Site Acquisition Date. The obligation of
the Lessor to acquire the Sites on each Site Acquisition Date, the obligation of
the Certificate Holders to fund the related Equity Amount on such Site
Acquisition Date and the obligation of each Lender to make the related Loan on
such Site Acquisition Date, are subject to satisfaction or waiver of the
following conditions precedent, with all documents to be in form and substance
acceptable to the Agent and the Participants:
(1) Taxes. All Taxes, if any, due and payable on or prior to
the Documentation Date in connection with the execution, delivery,
recording and filing of the Operative Documents and in connection
with the consummation of the transactions contemplated thereby shall
have been paid in full on or prior to the Documentation Date.
(2) Appraisal. The Appraisal of such Site shall (a) be
delivered to each Participant, the Lessor, the Agent and the Owner
Trustee at least one (1) week prior to the applicable Site
Acquisition Date, (b) comply with FIRREA, and (c) be in form and
substance satisfactory to the Participants.
(3) Governmental Actions. There shall be no Governmental
Actions by, from or with any Governmental Authority that are
necessary or, in the reasonable opinion of the Certificate Holders,
the Owner Trustee, the Agent or the Lessee, advisable (i) in
connection with the due execution, delivery and performance by the
Certificate Holders, the Owner Trustee, the Agent, the Lenders or
Lessee of each Operative Document to which it is or will become a
party or with respect to the transactions contemplated hereby or
thereby (including, without limitation, the construction, location,
sale, ownership, leasing, use or operation of the Sites to be leased
on such Site Acquisition Date) and (ii) so that none of the
Certificate Holders, the Owner Trustee, the Lenders or Wilmington
Trust Company will become, (x) solely by reason of entering into
this Participation Agreement or the other Operative Documents or
(except with respect to the exercise by any Person of any control
over a Site upon the occurrence of a Lease Event of Default or the
expiration or other termination of the Master Lease) the
consummation of any of the transactions contemplated hereby or
thereby, subject to regulation by any Governmental Authority which
regulates or otherwise has jurisdiction over the commercial
operations for which such properties are intended; or (y) except for
Participation Agreement 44
<PAGE>
regulation the applicability of which depends on the existence of
facts in addition to the ownership of the Sites upon the exercise of
remedies under the Master Lease or upon the expiration of the Master
Lease, subject to ongoing regulation of its operations by any
Governmental Authority.
(4) No Litigation. There shall be no legal action, suit,
investigation or proceeding by or before any Governmental Authority
pending or threatened against or affecting the Lessee or any of the
Sites, which materially and adversely affects any Site to be leased
on such Site Acquisition Date, or any of the transactions
contemplated by this Participation Agreement or the other Operative
Documents or the ability of the Lessee to perform its obligations
hereunder or under the other Operative Documents.
(5) Illegality. There is no Applicable Law which would make it
illegal for the Certificate Holders, the Owner Trustee, or the
Lessee to participate in any of the transactions contemplated by the
Operative Documents.
(6) Recordation. The Lessor, the Certificate Holders and the
Lenders shall have received evidence reasonably satisfactory to it
that the Lender Mortgage, Specific Assignment of Leases and Rents
and Lease Supplement relating to the applicable Site have been, or
are being, recorded (or satisfactory arrangements have been made for
prompt recordation) in a manner sufficient to properly secure each
of their interests therein and fees payable in connection therewith
have been paid by Lessee.
(7) Evidence of Property Insurance. The Agent, the Lessor and
the Certificate Holders shall have received evidence that the
insurance maintained by the Lessee with respect to the applicable
Site satisfies the requirements set forth in Section 12 of the
Master Lease, setting forth the respective coverage, limits of
liability, carrier, policy number and period of coverage.
(8) Environmental Audit. Each Participant, the Lessor, the
Agent and the Owner Trustee shall have received an Environmental
Audit with respect to the applicable Site, dated no earlier than
five months prior to the applicable Site Acquisition Date, with
respect to which it shall have received a letter from the
environmental consultant to the effect that it shall be entitled to
rely thereupon; and the Environmental Audit shall be satisfactory in
form and substance to each Participant, the Lessor, the Agent and
the Owner Trustee in their respective sole discretion.
(9) Construction Agency Agreement Supplement. On or prior to
the applicable Site Acquisition Date, the Lessee and the Lessor
shall have delivered to the Agent a Construction Agency Agreement
Supplement with respect to the applicable Site fully executed by the
Lessee, as Construction Agent, and the Lessor.
Participation Agreement 45
<PAGE>
(10) Specific Assignment of Leases and Rents. On or prior to
the applicable Site Acquisition Date, the Lessor shall have
delivered to the Agent a Specific Assignment of Leases and Rents
substantially in the form attached to the Master Assignment of
Leases and Rents with respect to the applicable Site, together with
a consent to and acknowledgment of such Specific Assignment of
Leases and Rents duly executed by the Lessee.
(11) Lease Supplement. On or prior to the applicable Site
Acquisition Date, the Lessee and the Lessor shall have delivered the
original counterpart of the Lease Supplement executed by the Lessee
and the Lessor with respect to the applicable Site to the Agent.
(12) Lender Mortgage. On or prior to the applicable Site
Acquisition Date, the Lessor shall have delivered to the Agent a
Lender Mortgage substantially in the form attached hereto as Exhibit
G (with appropriate modifications for applicable state law) with
respect to the applicable Site, together with a consent to and
acknowledgment of such Lender Mortgage duly executed by the Lessee.
(13) Property Survey; Title Policies. At least one (1) week
prior to the applicable Site Acquisition Date, the Lessee shall have
delivered to the Lessor, Certificate Holders and Agent, on behalf of
the Lenders, an American Land Title Association ("ALTA")/1992
(Urban) Survey of the applicable Land Interest certified to the
Lessor, the Agent and the title company and otherwise in form
reasonably acceptable to the Agent and a commitment to deliver the
following title policies (the "Title Policies"): (x) an ALTA
extended coverage owner's title insurance policy covering the
applicable Site in favor of the Lessor and (y) an ALTA extended
coverage lender's title insurance policy covering the applicable
Site in favor of the Agent, on behalf of the Lenders. The owner's
policy described in clause (x) shall be subject only to Permitted
Exceptions, be in an amount not less than the Commitment for the
applicable Site, be reasonably satisfactory to the Lessor and
contain comprehensive, mechanics liens, encroachment, non-violation
of covenants and restrictions, survey matters, recharacterization,
3.1 zoning (based upon plans and specifications) endorsements and
such other commercially available endorsements as may be requested
by the Agent. The lender's title insurance policy described in
clause (y) shall (i) be subject only to Permitted Exceptions, (ii)
be in an amount not less than 97% of the amount of the related
owner's title insurance policy, (iii) be reasonably satisfactory to
the Agent and contain revolving credit, variable rate, usury,
comprehensive, fraudulent conveyances, recharacterization, doing
business, mechanics liens, encroachment, non-violation of covenants
and restrictions, survey matters, recharacterization, 3.1 zoning
(based upon plans and specifications) endorsements and such other
commercially available endorsements as may be requested by the
Agent.
(14) Title Representations. Title to the applicable Site shall
conform to the representations and warranties set forth in Section
8(c)(9).
Participation Agreement 46
<PAGE>
(15) No Default. There shall not have occurred and be
continuing any Event of Default under any of the Operative
Documents, and no Event of Default under any of the Operative
Documents will have occurred after giving effect to the acquisition
of the Land Interest requested by such Funding Request.
(16) Supplemental Opinions of Counsel of Lessee. On or prior
to the applicable Site Acquisition Date, the Lessee shall have
delivered to the Agent, each Participant and the Lessor a supplement
to the opinion of Altheimer & Gray, counsel to the Lessee.
(17) UCC Financing Statements. Lessee and Lessor shall have
executed and submitted for filing or recording, as applicable,
Uniform Commercial Code financing statements (which may be in the
form of amendments to existing financing statements) with respect to
each new Site.
(18) Residual Value Insurance Policy. The Agent shall have
received a residual value insurance policy with respect to such Site
in form and amount and from an insurer satisfactory to the Agent and
the Required Participants.
(19) Other Documents. The Lessee shall have delivered or
caused to be delivered such other documents as the Lessor and Agent
may reasonably request.
(d) Conditions to Initial Construction Advance. In addition to the
conditions precedent set forth above, for the first Advance with respect to any
Identified Project for the payment of Construction of the applicable
Improvements for such Identified Project, the obligation of the Certificate
Holders to fund the related Equity Amount on such Funding Date and the
obligation of each Lender to make the related Loan on such Funding Date, are
subject to satisfaction or waiver of the following conditions precedent (it
being understood that the Lessor's obligations shall not be subject to the
following to the extent such conditions are actions required of the Lessor):
(1) Plans and Specifications; Construction Schedule;
Construction Milestones. On or prior to the applicable Funding Date,
the Lessee shall have delivered to the Agent the Plans and
Specifications (which need not be final construction Plans and
Specifications, and may be preliminary drawings and specifications),
a schedule for Construction completion for the Improvements for the
applicable Property, and the Construction Milestones, certified by
the Construction Agent;
(2) Construction Budget. On or prior to the applicable Funding
Date, the Lessee shall have delivered to the Agent the Construction
Budget for the applicable Property, certified by the Construction
Agent; and
(3) Construction Contract. On or prior to the applicable
Funding Date, the Lessee shall have delivered to the Agent the
Construction Contract for the Construction of the Improvements on
the applicable Property, which Construction Contract and the
contractor party thereto shall have been approved by the Required
Participants, and under which Construction Contract, the cost of
design
Participation Agreement 47
<PAGE>
of the applicable Improvements, including, without limitation, the
applicable Plans and Specifications and the cost of Construction of
such Improvements in accordance with such Plans and Specifications
shall not exceed the applicable Construction Budget
All documents and instruments required to be delivered on each Site Acquisition
Date shall be delivered at the offices of Mayer, Brown & Platt, 190 South
LaSalle Street, Chicago, Illinois 60603, or at such other location as may be
determined by the Agent and the Lessee.
SECTION 10. COMPLETION DATE CONDITIONS.
(a) Completion Date. The Completion Date with respect to each Site shall
be deemed to have occurred for purposes of the Operative Documents on the
earlier of:
(1) the earliest date on which each of the following events
shall have occurred:
(a) the Construction relating to such Site shall have
been substantially completed in accordance with the Plans and
Specifications and all Applicable Law;
(b) such Site shall be ready for occupancy and operation
for its intended purpose in accordance with the Plans and
Specifications, as evidenced by the issuance by the
appropriate Governmental Authority of temporary and/or
permanent certificates of occupancy for all of the
Improvements (other than such Improvements that are not
essential to the operation of such Site for its intended
purpose in accordance with the Plans and Specifications)
contemplated by the Plans and Specifications; and
(c) the Lessor and the Agent shall have received a
Completion Certificate from the Construction Agent
substantially in the form of Exhibit F hereto (a "Completion
Certificate"), or
(2) the Outside Completion Date.
(b) Reappraisal Upon Completion. Within ten (10) days from the Completion
Date for any Site, the Participants shall be entitled to require, at Lessee's
sole cost and expense, a new Appraisal of such Site taking into account such
Completion. Such new Appraisal shall use methodology similar to that of the
Appraisal delivered in connection with the applicable Site Acquisition Date,
with appropriate changes in assumptions. In the event such new Appraisal shall
conclude that the Fair Market Sales Value of such Site upon such Completion or
as of the end of the Basic Term, and as may be extended pursuant to Section 6(a)
of the Master Lease, is less than the Site Balance (such amount, a "FMV
Shortfall"), Lessee shall make a special lease payment to the Agent equal to
such FMV Shortfall. Notwithstanding the foregoing, Lessee may elect, at Lessee's
cost, to deliver to the Participants, the Agent and the Owner Trustee, not later
than sixty (60) days prior to the Completion Date, a residual value insurance
policy in amount, form and substance acceptable to each of the Participants, the
Agent and the Owner Trustee from
Participation Agreement 48
<PAGE>
an insurance company acceptable to the Participants, the Agent and the Owner
Trustee, which will insure any loss from the value of the applicable Site being
less than the applicable Site Balance. In such event, the Participants shall not
request a new Appraisal.
SECTION 11. TRANSFERS OF LENDERS' INTERESTS.
(a) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with Applicable Law, at any time assign to one or
more banks or other entities ("Transferees") all or any part of its rights and
obligations under the Operative Documents or the Property subject to the consent
of Lessee, which consent shall not be unreasonably withheld. Such assignment
shall be substantially in the form of Exhibit J-1 or in such other form as may
be agreed to by the parties thereto. The consent of the Lessee and the Agent
shall be required prior to an assignment becoming effective with respect to a
Transferee which is not a Lender or an Affiliate thereof; provided, however,
that if an Event of Default has occurred and is continuing, the consent of the
Lessee shall not be required. Such consent shall not be unreasonably withheld or
delayed. Each such assignment with respect to a Transferee which is not a Lender
or an Affiliate thereof shall (unless each of the Lessee and the Agent otherwise
consents) be in an amount not less than the lesser of (i) $5,000,000.00 or (ii)
the remaining amount of the assigning Lender's Commitment (calculated as at the
date of such assignment) or outstanding Loans (if the applicable Commitment has
been terminated).
(b) Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Section 11(a), and (ii)
payment of a $4,000 fee to the Agent for processing such assignment (unless such
fee is waived by the Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Transferee to the effect that none of the consideration
used to make the purchase of the Commitment and Loans under the applicable
assignment agreement constitutes "plan assets" as defined under ERISA and that
the rights and interests of the Transferee in and under the Operative Documents
or the Property will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Transferee shall for all purposes be a
Lender party to this Agreement and any other Operative Document executed by or
on behalf of the Lenders and shall have all the rights and obligations of a
Lender under the Operative Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Lessee, the
Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the aggregate Commitments and Loans assigned to
such Transferee. Upon the consummation of any assignment to a Transferee
pursuant to this Section 11(b), the transferor Lender, the Agent and the Lessee
shall, if the transferor Lender or the Transferee desires that its Loans be
evidenced by Notes, make appropriate arrangements so that new Notes or, as
appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Transferee, in
each case in principal amounts reflecting their respective Commitments, as
adjusted pursuant to such assignment.
(c) Rights of Transferees. Each of the Lessee and the Lessor acknowledges
and agrees that each Transferee, for purposes of Sections 13 and 14, shall be
considered a Lender; provided, however, that each of the Lessee and the Lessor
shall have no greater liability to any
Participation Agreement 49
<PAGE>
Transferee than it would have had to the applicable Lender, except as reflected
in amounts necessary to indemnify such Person on an After-Tax Basis.
(d) Withholding Taxes; Disclosure of Information; Pledge Under Regulation
A(1). (1) If any Lender (or the assignee in any Note, each a "Transferee") is
organized under the laws of any jurisdiction other than the United States or any
State thereof, then such Participant or Transferee, as applicable, shall (as a
condition precedent to acquiring or participating in such Loan and so long as it
shall be legally entitled to an exemption from withholding as a continuing
obligation to the Lessor and the Lessee), furnish on a timely basis to the
Agent, the Lessor and the Lessee in duplicate, for each taxable year of such
Lender or Transferee during the Lease Term of the Master Lease, a properly
completed and executed copy of either Internal Revenue Service Form W-8ECI or
Internal Revenue Service Form W8-BEN or Internal Revenue Service Form W-9 and
any additional form (or such other form) as is necessary to claim complete
exemption from United States withholding taxes (wherein such Lender or
Transferee claims entitlement to complete exemption from United States
withholding taxes on all payments hereunder), and provide on a timely basis to
the Agent, the Lessor and the Lessee a new Internal Revenue Service Form W-8ECI
or Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-9 and
any such additional form (or any successor form or forms) upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable United States laws and regulations and amendments
duly executed and completed by such Lender or Transferee, and to comply from
time to time with all applicable United States laws and regulations with regard
to such withholding tax exemption. By its acceptance of a participation or
assignment of a Lender's Note, each Transferee shall be deemed bound by the
provisions set forth in this Section 11.
(2) Subject to Section 6(c)(4) hereof (except in the case of
disclosure of information in connection with Section 11(d)(3)
below), any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 11, disclose to the assignee or participant or proposed
assignee or participant any information relating to the Lessee.
(3) Anything in this Section 11 to the contrary
notwithstanding, any Lender may assign and pledge all or any portion
of the Notes held by it to any Federal Reserve Bank, the United
States Treasury or to any other financial institution as collateral
security pursuant to Regulation A of the F.R.S. Board and any
operating circular issued by the Federal Reserve System and/or the
Federal Reserve Bank or otherwise.
SECTION 12. TRANSFERS OF CERTIFICATE HOLDERS' INTEREST.
(a) Assignments. All or any part of the interest of any Certificate Holder
in, to or under this Participation Agreement, the other Operative Documents, the
Property or the Trust may be assigned or transferred by such Certificate Holder
at any time, subject to the consent of Lessee, which consent shall not be
unreasonably withheld, to (i) any Affiliate of such Certificate Holder, (ii) any
other Participant or any Affiliate of any such other Participant, or (iii) with
the consent of the Agent (such consent not to be unreasonably withheld), to any
other Person; provided, however, that (A) prior to a Lease Event of Default, no
interest shall be assigned to
Participation Agreement 50
<PAGE>
Lessee or any Affiliate of Lessee; (B) except as provided in (C) below, each
such assignment is in an amount equal to not less than twenty percent (20%) of
the sum of the aggregate amount of the Available Equity Commitments and the
outstanding Equity Amounts of all Certificate Holders (the "Permitted Equity
Assignment Amount"); (C) with respect to an assignment to a Lender or an
Affiliate of a Lender, each such assignment is in an amount equal to not less
than the product of (x) the sum of the Available Equity Commitment, if any, and
outstanding Equity Amounts of the assignor Certificate Holder and (y) the
fraction, expressed as a decimal, obtained by dividing the sum of the Available
Loan Commitments and outstanding principal amount of Loans of such Lender by the
sum of the aggregate amounts of the Available Loan Commitments and Loans of all
Lenders; and (D) in any event, and the assignor Certificate Holder retains an
interest equal to not less than the Permitted Equity Assignment Amount; and,
provided, further, that notice is given to the Owner Trustee and (A) each
assignment or transfer shall comply with all applicable securities laws; and (B)
the assignee, if it is not a Participant immediately prior to such assignment,
will deliver to the Agent a completed administrative questionnaire in form and
substance acceptable to the Agent. The Agent shall receive an administrative fee
of $4,000 from the applicable transferor or transferee in connection with any
assignment or participation under this Section 12. Each assignee or transferee
acknowledges that the obligations to be performed from and after the date of
such transfer or assignment under this Participation Agreement and all other
Operative Documents are its obligations, including the obligations imposed by
this Section 12(a) (and the transferor and transferee Participant shall deliver
to the Lessee and the Lessor an Assignment Agreement, in substantially the form
of Exhibit J-2, executed by the assignee or transferee) and further represents
and warrants to each Participant and the Lessee as set forth in Section 6 and
that:
(i) it has a net worth or combined capital and surplus of not less
than four (4) times the Certificate Holder's Commitment;
(ii) it has the requisite power and authority to accept such
assignment or transfer;
(iii) it will not transfer any interest in the Trust unless the
proposed transferee makes the foregoing representations and covenants;
(iv) it will not take any action with respect to such interest in
the Trust that would violate any applicable securities laws; and
(v) it will not assign or transfer any interest in the Trust except
in compliance with this Section 12.
(b) Rights of Transferees. Each of the Lessee and the Lessor acknowledges
and agrees that each Transferee, for purposes of Sections 13 and 14, shall be
considered a Certificate Holder; provided, however, that each of the Lessee and
the Lessor shall have no greater liability to any Transferee than it would have
had to the applicable Certificate Holder transferor, except as reflected in
amounts necessary to indemnify such Person on an After-Tax Basis.
(c) Withholding Taxes; Disclosure of Information; Pledge Under Regulation
A(1) . (1) If any Certificate Holder (or the assignee of any Equity Amount, each
also a "Transferee") is
Participation Agreement 51
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organized under the laws of any jurisdiction other than the United States or any
State thereof, then such Participant or Transferee, as applicable, shall (as a
condition precedent to acquiring or participating in such Equity Amount and so
long as it shall be legally entitled to an exemption from withholding as a
continuing obligation to the Lessor and the Lessee), furnish on a timely basis
to the Agent, the Lessor and the Lessee in duplicate, for each taxable year of
such Certificate Holder or Transferee during the Lease Term of the Master Lease,
a properly completed and executed copy of either Internal Revenue Service Form
W-8ECI or Internal Revenue Service Form W-8BEN or Internal Revenue Service Form
W-9 and any additional form (or such other form) as is necessary to claim
complete exemption from United States withholding taxes (wherein such Lender,
the Lessor or Transferee claims entitlement to complete exemption from United
States withholding taxes on all payments hereunder), and provide on a timely
basis to the Agent, the Lessor and the Lessee a new Internal Revenue Service
Form W-8ECI or Internal Revenue Service Form W-8BEN or Internal Revenue Service
Form W-9 and any such additional form (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such Certificate Holder or Transferee,
and to comply from time to time with all applicable United States laws and
regulations with regard to such withholding tax exemption. By its acceptance of
a participation or assignment of all or any portion of a Certificate Holder's
Equity Amounts, each Transferee shall be deemed bound by the provisions set
forth in this Section 12.
(2) Subject to Section 6(c)(4) hereof (except in the case of
disclosure of information in connection with Section 12(c)(3)
below), any Certificate Holder may, in connection with any
assignment or participation or proposed assignment or participation
pursuant to this Section 12, disclose to the assignee or participant
or proposed assignee or participant any information relating to the
Lessee.
(3) Anything in this Section 12 to the contrary
notwithstanding, any Certificate Holder may assign and pledge all or
any portion of its interest in the Trust held by it to any Federal
Reserve Bank, the United States Treasury or to any other financial
institution as collateral security pursuant to Regulation A of the
F.R.S. Board and any operating circular issued by the Federal
Reserve System and/or the Federal Reserve Bank or otherwise.
SECTION 13. GENERAL TAX INDEMNITY.
(a) Tax Indemnitee Defined. For purposes of this Section 13, "Tax
Indemnitee" means (x) each Participant, the Lessor and the Affiliates of each of
the foregoing, and the Owner Trustee, both in its individual capacity and as
trustee, and each of their respective successors, assigns, servants, agents,
officers, directors and employees and the Trust Estate, and (y) except with
respect to any Taxes relating to a Site during the applicable Construction
Period for such Site, each Lender and its Affiliates, and each of their
respective successors, assigns, servants, agents, officers, directors and
employees.
(b) Taxes Indemnified. The Lessee agrees to pay promptly when due, and
will indemnify and hold harmless each Tax Indemnitee on an After-Tax Basis
against, all taxes, fees, withholdings, and governmental charges attributable to
the transactions contemplated herein
Participation Agreement 52
<PAGE>
including all license, recording, documentary, registration, transfer taxes, and
other fees and all taxes (including, without limitation, income, adjusted gross
income, gross receipts, franchise, net worth, capital, sales, rental, use, value
added, property (tangible and intangible), ad valorem, excise and stamp taxes),
fees, levies, imposts, recording duties, charges, assessments or withholdings of
any nature whatsoever, together with any assessments, penalties, fines,
additions to tax or interest thereon (individually, a "Tax" and collectively
called "Taxes"), however imposed (whether imposed upon any Tax Indemnitee, the
Lessee, or all or any part of the Sites or any payment made in connection with
the transactions contemplated hereunder), by any Federal, state or local
government or taxing authority in the United States of America, or by any
government or taxing authority of a foreign country, of any political
subdivision or taxing authority thereof or by a territory or possession of the
United States of America or an international taxing authority, upon or with
respect to, based upon or measured by:
(1) the Sites or any part thereof;
(2) the location, replacement, conditioning, refinancing,
control, purchase, repossession, improvement, maintenance,
redelivery, manufacture, acquisition, purchase, ownership,
acceptance, rejection, delivery, non-delivery, leasing, subleasing,
transportation, insuring, inspection, registration, assembly,
abandonment, preparation, installation, possession, use, operation,
return, presence, storage, repair, transfer of title, modification,
rebuilding, import, export, alteration, addition, replacement,
assignment, overhaul, transfer or registration, imposition of any
lien, sale or other disposition of the Sites or any part thereof or
interest therein;
(3) the rentals, receipts or earnings arising from the
Operative Documents or from the purchase, ownership, delivery,
leasing, possession, use, operation, return, storage, transfer of
title, sale or other disposition of the Sites or any part thereof;
(4) any or all of the Operative Documents or the Development
Agreements;
(5) the income or other proceeds received with respect to the
Sites, held by the Owner Trustee under the Trust Agreement; or
(6) otherwise with respect to or by reason of the transactions
described in or contemplated by the Operative Documents.
(c) Taxes Excluded. The indemnity provided for in paragraph 13(b) above
shall not extend to any of the following (in each case, except in the case of
Taxes otherwise indemnifiable under the Operative Documents, additional amounts
necessary to indemnify a Tax Indemnitee for such Taxes on an After-Tax Basis):
(1) Federal income taxes;
(2) in the case of each Tax Indemnitee which is a Lender, (i)
net income taxes and (ii) other taxes that would not have been
incurred but for such Indemnitee or a person related thereto being
organized in the jurisdiction
Participation Agreement 53
<PAGE>
imposing such taxes or conducting activities therein that are
unrelated to the Overall Transaction;
(3) in the case of each Certificate Holder, (i) net income
taxes other than net income taxes imposed by jurisdictions in which
such Indemnitee is not otherwise subject to such taxes to the extent
such net income taxes exceed the net income taxes that would have
been payable if such jurisdiction had treated the Master Lease as a
secured loan consistent with the parties' intention and (ii) other
taxes that would not have been incurred but for such Indemnitee or a
person related thereto being organized in the jurisdiction imposing
such taxes or conducting activities therein that are unrelated to
the contemplated transactions;
(4) in the case of the Lessor, income, franchise, conduct of
business or similar taxes that are imposed on the Lessor and not the
Certificate Holders and that, if imposed on the Certificate Holders,
would not have been indemnified against;
(5) Taxes imposed on or measured by the net or gross income,
excess profits, receipts, minimum or alternative minimum taxable
income, capital, net worth, tax preferences, accumulated earnings or
capital gains of a Tax Indemnitee or that are conduct of business,
doing business or franchise Taxes of such Tax Indemnitee (other than
any Taxes which are, or are in the nature of, sales, use, value
added, transfer, excise, rental, license, ad valorem or property
Taxes imposed by reason of the location, use, operation or presence
of a Site or any part thereof or a Person which is the Lessee, any
sublessee, any sub-sublessee, assignee or any other Person using
through any of the foregoing (including any Affiliate of any of the
foregoing, but excluding the Lessor, any Participant or any
Affiliate of any such excluded Person) (each, a "Lessee Person") in
such jurisdiction or the fact that any payment by a Lessee Person
contemplated by the Operative Documents is made from such
jurisdiction) ("Income Taxes") imposed by the United States or any
state or local government or taxing authority within the United
States; provided, however, provisions of this clause (5) relating to
Income Taxes shall not exclude from the indemnity described in this
Section 13 any state or local Income Taxes imposed by reason of the
location, use, operation or presence of any Improvement or any part
thereof in any state in which a Site is located, other than any
state which such Tax Indemnitee agrees in writing (on or prior to
the Improvements becoming subject to the Operative Documents) is
excluded from the indemnity otherwise implied by the proviso to this
clause 5;
(6) Taxes arising out of or measured by acts, omissions,
events or periods of time (or any combination of the foregoing)
which occur after (and are not attributable to acts, omissions or
events occurring contemporaneously with or prior to) the payment in
full of all amounts payable by the Lessee pursuant to and in
accordance with the Operative Documents, or the earlier discharge in
full of the Lessee's payment obligations under and in accordance
with the Master Lease and the other Operative Documents, and the
earliest of (x) the expiration of the Lease Term and return of the
Sites in accordance with the return provisions of the
Participation Agreement 54
<PAGE>
Master Lease, (y) the termination of the Master Lease in accordance
with the applicable provisions of the Master Lease and return or
disposition of the Sites in accordance with the Master Lease, or (z)
the termination of the Master Lease in accordance with the
applicable provisions of the Master Lease and the transfer of all
right, title and interest in the Sites to the Lessee pursuant to its
exercise of any of its purchase options (other than sales or other
transfer taxes as imposed thereon) except that, notwithstanding
anything to the contrary, Taxes incurred in connection with the
exercise of any remedies following the occurrence of a Lease Event
to Default shall not be excluded from the indemnity;
(7) Taxes imposed on a Tax Indemnitee that would not have been
imposed but for the willful misconduct or gross negligence of any
Tax Indemnitee (other than gross negligence or willful misconduct
not actually committed by but instead imputed to, such Indemnitee by
reason of such Tax Indemnitee's participation in the transactions
and entering into the Operative Documents) or the breach by any Tax
Indemnitee of any representation, warranty or covenant set forth in
the Operative Documents;
(8) Taxes imposed on a Tax Indemnitee which became payable by
reason of any transfer or disposition by such Tax Indemnitee of any
interest in some or all of the Sites, the Operative Documents, any
other Tax Indemnitee or the Trust Estate other than (A) Taxes that
result from transfers or dispositions which occur while a Lease
Event of Default has occurred and is continuing or (B) Taxes that
result from any transfer or disposition pursuant to the terms of the
Master Lease (other than Section 19(b) thereof if clause (A) of this
Section 13(c)(8) is not applicable);
(9) Taxes imposed upon the Owner Trustee with respect to any
trustee's fees for services rendered in its capacity as trustee;
(10) Taxes that have been included in Property Cost or
Transaction Expenses; and
(11) If Lessee cannot under Applicable Law pay any Taxes
directly on behalf of a Tax Indemnitee, the failure of such Tax
Indemnitee to pay such Taxes for which the Lessee has timely
advanced the funds to such Tax Indemnitee to pay such Taxes.
Notwithstanding any of the exclusions otherwise set forth in Section 13(c)(1)
through (10), the indemnity set forth in Section 13(b) shall apply to any
Illinois franchise taxes imposed on or with respect to the Lessor if:
(a) the Lessor is a Delaware business trust and (i) files its relevant
Illinois tax returns and reports in a manner consistent with such
status or (ii) files its relevant Illinois tax returns and reports
in a manner inconsistent with such status as the result of, or in
response to, any act, omission or breach of any representation,
warranty or covenant of a Lessee Person;
Participation Agreement 55
<PAGE>
(b) any Lessee Person prepares or files a Filing (within the meaning of
Section 13(g) pursuant to Section 13(g)) in a manner inconsistent
with the status of the Lessor as a Delaware business trust; or
(c) the Lessor changes its status from that of a Delaware business trust
as the result of, or in response to, any act, omission or breach of
any representation, warranty or covenant of a Lessee Person or in
connection with the exercise of any remedies following the
occurrence of a Lease Event of Default.
(d) Payments to the Lessee.
(1) If any Tax Indemnitee or any Affiliate of any Tax
Indemnitee actually shall realize a Tax benefit (whether by way of
deduction, credit, allocation or apportionment or otherwise) with
respect to a Tax not indemnifiable hereunder which would not have
been realized but for any Tax with respect to which Lessee has
reimbursed or indemnified such Tax Indemnitee on an After-Tax Basis
pursuant to the Operative Documents, which benefit was not
previously taken into account in determining the amount of the
Lessee's payment to such Tax Indemnitee, such Tax Indemnitee shall
pay to the Lessee, on an After-Tax Basis, an amount equal to the
amount of such Tax benefit; provided, however, that no payment shall
be made as long as a Payment Default or a Lease Event of Default is
continuing; provided further, however, that no Tax Indemnitee shall
be required to pay to the Lessee any Tax benefit to the extent such
payment is greater than the amount of such Taxes in respect of which
the reimbursement or indemnification was paid by Lessee, reduced by
all prior payments by such Tax Indemnitee under this Section 13(d)
in respect of such amount; any payment to the Lessee which is so
limited shall, to the extent of such unpaid excess, be carried over
and shall be available to offset any future obligations of the
Lessee under this Section 13). If such repaid Tax benefit is
thereafter lost, the additional Tax payable shall be treated as a
Tax indemnifiable hereunder without regard to the exclusions set
forth in Section 13.
(2) Upon receipt by a Tax Indemnitee of a refund or credit of
all or part of any Taxes paid or indemnified against by the Lessee,
which refund or credit was not previously taken into account in
determining the amount of the Lessee's payment to such Tax
Indemnitee, such Tax Indemnitee shall pay to the Lessee, on an
After-Tax Basis, an amount equal to the amount of such refund, plus
any interest received by or credited to such Tax Indemnitee with
respect to such refund; provided, however, that no such payment
shall be made as long as a Payment Default or a Lease Event of
Default is continuing.
(3) The Tax Indemnitee will, at the Lessee's expense, pursue
refunds and tax benefits that would result in any such payments to
the Lessee, but only if the Tax Indemnitee has been notified in
writing by the Lessee that such refunds or tax benefits are
available.
Participation Agreement 56
<PAGE>
(e) Procedures. Any amount payable to a Tax Indemnitee pursuant to
paragraph 13(b) shall be paid within thirty (30) days after receipt of a written
demand therefor from such Tax Indemnitee accompanied by a written statement
describing in reasonable detail the basis for such indemnity and the computation
of the amount so payable, provided, however, that such amount need not be paid
prior to the later of (i) the date on which such Taxes are due or (ii) in the
case of amounts which are being contested pursuant to paragraph 13(f) hereof,
the time such contest (including all appeals permitted hereunder) is finally
resolved; provided, further, that with respect to Taxes of a recurring nature,
the Tax Indemnitee shall only be required to provide one such written notice.
Any amount payable to the Lessee pursuant to paragraph 13(d) shall be paid
within thirty (30) days of the day on which a return (including estimated tax
returns) is filed reflecting such Tax benefit or promptly after the Tax
Indemnitee actually receives a refund giving rise to a payment under paragraph
13(d), and shall be accompanied by a written statement by the Tax Indemnitee
setting forth in reasonable detail the basis for computing the amount of such
payment. Within thirty (30) days following the Lessee's receipt of any
computation from the Tax Indemnitee, the Lessee may request that an accounting
firm reasonably acceptable to the Tax Indemnitee determine whether such
computations of the Tax Indemnitee are correct. Such accounting firm shall be
requested to make the determination contemplated by this paragraph 13(e) within
thirty (30) days of its selection. In the event such accounting firm shall
determine that such computations are incorrect, such firm shall determine what
it believes to be the correct computations. The Tax Indemnitee shall cooperate
with such accounting firm and supply it with all information necessary to permit
it to accomplish such determination (which information shall be held by such
firm in confidence). The computations of such accounting firm shall be final,
binding and conclusive upon the parties and the Lessee shall have no right to
inspect the books, records or tax returns of the Tax Indemnitee (or the
information supplied by the Tax Indemnitee to the accounting firm) to verify
such computation or for any other purpose. All fees and expenses of the
accounting firm payable under this Section 13(e) shall be borne by the Lessee,
except that if such accounting firm's computation shall result in a decrease in
the amount due from, or an increase in the amount payable to, the Lessee by more
than the greater of 5% or $10,000, then the Tax Indemnitee shall bear the cost
of such accounting firm.
(f) Contest. If any claim shall be made against any Tax Indemnitee or if
any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Tax as to which the Lessee may have
an indemnity obligation hereunder, or if any Tax Indemnitee shall determine that
any Tax as to which the Lessee may have an indemnity obligation hereunder may be
payable, such Tax Indemnitee shall promptly notify the Lessee in writing and
shall not take any action with respect to such claim, proceeding or Tax without
the consent of the Lessee for thirty (30) days after receipt of such notice by
the Lessee unless the failure to take action could result in the imposition of
penalties or fines or material danger of sale, forfeiture or loss of, or the
creation of any Lien on, the Sites or any portion thereof or interest therein;
provided, however, that any failure to provide such notice shall not relieve the
Lessee of any obligation to indemnify any Tax Indemnitee hereunder unless the
contest is precluded as a result of such failure and such failure arises out of
or is caused by the misconduct or negligence (excluding imputed negligence) of
such Tax Indemnitee; provided, further, however, that if such Tax Indemnitee
shall be required by law or regulation to take action with respect to any such
claim, proceeding or Tax prior to the end of such thirty (30) day period such
Tax Indemnitee shall, in such notice to the Lessee, so inform the Lessee and
such Tax Indemnitee shall not take any action with respect to such claim,
proceeding or Tax without
Participation Agreement 57
<PAGE>
the consent of the Lessee before the date on which such Tax Indemnitee shall be
required to take action. If, within thirty (30) days after its receipt of such
notice (or such shorter period referred to in the preceding sentence), the
Lessee shall request in writing that such Tax Indemnitee contest the imposition
of such Tax, the Tax Indemnitee shall, at the expense of the Lessee, in good
faith contest (including by pursuit of appeals, excluding any requirement to
appeal to the U.S. Supreme Court), and shall not settle without the Lessee's
consent (such consent not to be unreasonably withheld), or if such contest can
be pursued independently from any other proceeding involving a Tax liability of
such Tax Indemnitee (a "Lessee-Controlled Contest"), the Tax Indemnitee shall
allow the Lessee to contest the validity, applicability or amount of such Tax
(other than withholding or net income Taxes indemnifiable hereunder) by, in the
sole discretion of the Person conducting such contest:
(1) resisting payment thereof;
(2) not paying the same except under protest, if protest shall
be necessary and proper; or
(3) if payment shall be made, using reasonable efforts to
obtain a refund thereof in appropriate administrative and judicial
proceedings;
provided, however, that in no event shall such Tax Indemnitee be required
to contest (or permit the Lessee to contest) the imposition of any Tax for
which the Lessee may be obligated unless: (t) if a Payment Default or a
Lease Event of a Default shall have occurred and be continuing, Lessee
shall either (I) provide security for such tax indemnity obligations that
is reasonably acceptable to such Tax Indemnitee or (II) pay such Tax, (u)
in the case of net income Taxes indemnifiable hereunder, the amount of the
claim and all future related claims exceeds $25,000, (v) in the case of
net income and non-U.S. withholding Taxes indemnifiable hereunder, the
Lessee shall have delivered to the Certificate Holders an opinion of tax
counsel chosen by, and reasonably acceptable to, the Certificate Holders
to the effect that there is substantial authority to contest such claim,
(w) the Lessee shall have acknowledged in writing its liability hereunder
if the contest is unsuccessful, (x) the Lessee shall have agreed to pay
such Tax Indemnitee all costs and expenses that such Tax Indemnitee shall
incur in connection with contesting such claim (including all reasonable
legal and accounting fees and disbursements and internally allocated time
charges), (y) the Certificate Holders shall have reasonably determined
that action to be taken will not result in any material danger of sale,
forfeiture or loss of the Sites or any portion thereof or interest therein
and (z) if such contest shall involve payment of the claim, the Lessee
shall advance the amount thereof, plus interest, penalties and additions
to Tax with respect thereto, to such Tax Indemnitee on an interest-free
basis and on an After-Tax Basis to such Tax Indemnitee. The Tax Indemnitee
shall consult in good faith with the Lessee regarding the conduct of any
contest controlled by such Tax Indemnitee and shall allow the Lessee to
attend all hearings at which unrelated issues are not discussed and to
comment upon all related submissions in such Tax Indemnitee-controlled
contests and vice versa. Notwithstanding the above, if Lessee has
reasonably withheld its consent to settlement, a Tax Indemnitee may settle
and will not be required to contest the imposition of any Taxes if such
Tax Indemnitee shall waive its right to indemnity with respect to such
Taxes and shall have
Participation Agreement 58
<PAGE>
paid to the Lessee any and all funds paid by the Lessee to such Tax
Indemnitee with regard to such contested amount (other than those
described in clause (x) of this Section 13(f)) plus any interest which the
Lessee paid on such funds. Any contest by the Lessee or at the Lessee's
request shall be subject to the following requirements: (i) such contest
shall be conducted in good faith by appropriate proceedings which have the
effect of staying the enforcement of the lien for such Taxes and the sale,
forfeiture or other loss of the applicable Site during the pendency of
such contest, (ii) none of the Lessor, the Owner Trustee, the Agent and
the Participants shall be subject to any risk of criminal liability or
material civil liability by virtue of the matters being contested or such
proceedings, and (iii) the Lessee, in accordance with prudent practice,
has set aside adequate reserves for the payment thereof and has provided
evidence reasonably acceptable to the Agent, the Lessor and the
Participants of such reserves.
(g) Reports. In the event any report, return or statement or any
certification or procedure (a "Filing") with respect to Taxes is required to be
made with respect to any Tax that may be subject to indemnification under this
Section 13, the Lessee will, at the Lessee's expense, either prepare and file
such Filing (and in the case of any Filing which is required to be filed on the
basis of individual Sites, such Filing shall be prepared and filed in such
manner as to show as required the interests of each Tax Indemnitee in such
Sites) or, if it shall not be permitted to file the same, it will notify each
Tax Indemnitee of such reporting requirements, prepare such Filing in such
manner as shall be reasonably satisfactory to each Tax Indemnitee and deliver
the same to each Tax Indemnitee within a reasonable period prior to the date the
same is to be filed; provided, however, that the relevant Tax Indemnitees shall
have furnished the Lessee, at the Lessee's request and expense, within a
reasonable time, with such information, not within the control of (nor
reasonably available to) the Lessee, in such Tax Indemnitee's control (or which
is reasonably available to such Tax Indemnitee) and is necessary to complete
such Filing.
(h) Non-Parties. If a Tax Indemnitee is not a party to this Participation
Agreement, Lessee may require the Tax Indemnitee to agree in writing, in a form
reasonably acceptable to Lessee, to the terms of this Section 13 prior to making
any payment to such Tax Indemnitee under this Section 13.
(i) Survival. The provisions of this Section 13 shall continue in full
force and effect, notwithstanding the expiration or termination of any Operative
Document, until all obligations hereunder have been met and all liabilities
hereunder paid in full.
(j) Construction Period. Notwithstanding the foregoing, during the
Construction Period, (i) the Lessor, in lieu of the Lessee, shall indemnify all
Lender Indemnitees under this Section 13, to the same extent that the Lessee is
obligated to so indemnify such parties absent the provisions of this subsection
(j), (ii) the Lessee will indemnify the Lessor for all obligations of the Lessor
under this subsection (j), and (iii) the Lessor hereby assigns to each of the
Lender Indemnitees the Lessor's right to indemnification by the Lessee under
this subsection (j) to the extent of any claim by the respective Lender
Indemnitee under this Section 13. Any indemnification by the Lessor shall be
subject to all of the provisions of this Section 13 to the same extent as
applicable to indemnification by the Lessee under this Section 13.
Participation Agreement 59
<PAGE>
SECTION 14. GENERAL INDEMNITY.
(a) Indemnification. The Lessee does hereby assume liability for, and does
hereby agree to indemnify, defend, protect, save and keep harmless, on an
After-Tax Basis, each Indemnified Person from and against any and all
liabilities, obligations, losses, damages, penalties, claims (including, without
limitation, claims involving strict or absolute liability in tort, warranty
claims, claims based on negligence, products liability or statutory liability or
claims for enforcement, cleanup, removal, response, remedial or other actions or
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief pursuant to any Environmental Law or alleged injury or threat
of injury, to health, safety, the environment or natural resources), actions,
suits, costs, expenses (including transfer taxes) and disbursements (including,
without limitation, reasonable legal fees and expenses and Owner Trustee's
Expenses) of any kind and nature whatsoever (all of the foregoing being referred
to as Claims) which may be imposed on, incurred by or asserted against such
Indemnified Person, whether or not such Indemnified Person shall also be
indemnified as to any such Claim by any other Person, in any way relating to or
arising out of:
(1) this Participation Agreement or any other Operative
Document, or any document contemplated hereby or thereby; or the
execution, delivery or performance or non-performance or enforcement
of any of the terms of this Participation Agreement or any other
Operative Document by the Lessee, the Owner Trustee or the
Participants or any other Person;
(2) the Sites or any part thereof or the purchase,
manufacture, design, financing, refinancing, construction,
acceptance, rejection, ownership, management, acquisition, delivery,
non-delivery, occupancy, lease, ground lease, sublease, rental,
preparation, inspection, installation, modification, substitution,
possession, use, non-use, operation, maintenance, condition,
registration, repair, transportation, transfer of title, any action
taken by Lessee or requested by Lessee under Section 8(d) of the
Master Lease, abandonment, rental, importation, exportation, sale
(including, without limitation, any sale pursuant to the Master
Lease), retirement, return, storage or other disposition of the
Sites or any part thereof or any accident in connection therewith
(including, without limitation, latent and other defects, whether or
not discoverable, whether preexisting or not and any Claim for
patent, trademark or copyright infringement) or the failure of any
Site to be located wholly within the land related thereto;
(3) the Development Agreements;
(4) the performance of any labor or services or the furnishing
of any materials or other property in respect of the Sites or any
part thereof by or on behalf of or with the knowledge of the Lessee
or any Affiliate;
(5) any negligence or tortious acts on the part of the Lessee
or any Affiliate or any agents, contractors, sublessee, franchisees,
licensees or invitees thereof;
Participation Agreement 60
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(6) any alterations, changes, modifications, new construction
or demolition of any of the Sites or any part thereof;
(7) any violation of law by the Lessee, any sublessee of
Lessee or any Affiliate of the Lessee or any such sublessee; or any
breach of any covenant, warranty or representation in any Operative
Document by the Lessee or any certificate required to be delivered
pursuant to any Operative Document by the Lessee or any Affiliate;
(8) the offer, issue, sale, purchase or delivery of any
interest in the Trust Estate (including the trust certificates) or
the Trust Agreement or any similar interest or in any way resulting
from or arising out of the Trust Agreement and the Trust Estate
(including Claims arising under or resulting from applicable
Federal, state or foreign securities laws or common law);
(9) the imposition of any Lien on any of the Sites (other than
Permitted Liens or Lessor Liens) or the enforcement of any
agreement, restriction or legal requirement affecting any of the
Sites;
(10) a disposition of the Sites or any part thereof in
connection with a termination of the Master Lease pursuant to
Sections 11 or 16 of the Master Lease;
(11) the transactions contemplated by the Master Lease or by
any other Operative Document, in respect of the application of Parts
4 and 5 of Subtitle B of Title I of ERISA and any prohibited
transaction described in Section 4975(c) of the Code; or
(12) the presence, Release or threat of Release into the
environment of any Hazardous Substances; the presence on or under
any Sites of any Hazardous Substances, or any Releases, threats of
Release or discharges of any Hazardous Substances on, under or from
any Sites, irrespective of when such presence, Release, threat of
Release or discharge of Hazardous Substances occurred or originated;
any activity carried on or undertaken on or off any Sites in
connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous
Substances (including, without limitation, from any corrective
action plan and the development and implementation thereof); any
residual contamination on, under or from any Sites and affecting any
natural resources or any property of others; in any and all such
circumstances irrespective of whether any of such activities were
undertaken in accordance with Applicable Law, or whether claims with
respect thereto are made pursuant to Environmental Law.
DURING THE LEASE TERM OF ANY SITES, THE LESSEE AGREES THAT NEITHER THE
CERTIFICATE HOLDERS NOR THE OWNER TRUSTEE (INCLUDING WILMINGTON TRUST
COMPANY, INDIVIDUALLY) SHALL BE LIABLE TO THE LESSEE FOR ANY CLAIM CAUSED
DIRECTLY OR
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INDIRECTLY BY THE INADEQUACY OF SUCH SITES OR ANY PART THEREOF FOR ANY
PURPOSE OR ANY DEFICIENCY OR DEFECT THEREIN OR ANY FAILURE OF TITLE WITH
RESPECT THERETO (OTHER THAN BY VIRTUE OF LESSOR LIENS OR THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE CERTIFICATE HOLDERS OR THE OWNER
TRUSTEE) OR THE USE OR MAINTENANCE THEREOF OR ANY REPAIRS, SERVICING OR
ADJUSTMENTS THERETO OR ANY DELAY IN PROVIDING OR FAILURE TO PROVIDE ANY
THEREOF OR ANY INTERRUPTION OR LOSS OF SERVICE OR USE THEREOF OR ANY LOSS
OF BUSINESS, ALL OF WHICH SHALL BE THE RISK AND RESPONSIBILITY OF THE
LESSEE.
(b) Survival. Unless otherwise expressly provided in the Operative
Documents, the obligations, agreements, rights and liabilities of the Lessee,
the Owner Trustee and each Indemnified Person arising under this Section shall
continue in full force and effect, notwithstanding the expiration or other
termination of the Master Lease or this Participation Agreement. Until all
obligations have been met, all liabilities arising under this Section 14 shall
be enforceable by the Lessee, the Owner Trustee and each Indemnified Person and
their successors, assigns and agents.
(c) Certain Exceptions. Notwithstanding the foregoing, the Lessee shall
not assume liability for or indemnify, defend, protect, save and keep harmless
pursuant to Section 14(a) hereof (i) any Indemnified Person from and against any
Claims to the extent arising out of any act, occurrence or omission (other than
(x) an act or omission of, or an occurrence caused by, or attributable to, the
Lessee or (y) for any Site, if the Lessee shall duly exercise and consummate the
Sale Option with respect to such Site, occurring during or attributable to any
period ending on or before the consummation of such Sale Option) on, under, in
or from any Site after the Return Date with respect to such Site; (ii) any
Indemnified Person for any Claim that is a Tax or a loss of Tax benefits or the
costs and expenses of contesting any Tax or loss of tax benefits, except to
provide indemnification under this Section 14 on an After-Tax Basis; (iii) any
Indemnified Person for any Claim to the extent it results from any failure on
the part of such Indemnified Person to comply with any representation, warranty,
agreement or covenant of such Indemnified Person in favor of the Lessee in any
Operative Document except to the extent such failure to comply resulted from any
default by the Lessee under any Operative Document; provided, however, that the
failure of any Indemnified Person to comply with any such representation,
warranty, agreement or covenant shall not affect the rights of any other
Indemnified Person hereunder; (iv) any Indemnified Person for any Claim to the
extent a court of competent jurisdiction shall have determined that such Claim
results from acts which would constitute the willful misconduct or gross
negligence (or, in the case of an Indemnified Person operating the business
conducted at such Site, negligence) of such Indemnified Person or a related
Indemnified Person (it being agreed that for purposes of this clause (iv) the
Owner Trustee shall be deemed a related Indemnified Person of the Certificate
Holders only to the extent it acts on the written instructions of the
Certificate Holders); provided that: (A) negligence or gross negligence or
willful misconduct will not be imputed to such Indemnified Person, the
Certificate Holders or any related Indemnified Person solely as a result of the
Owner Trustee's ownership of or ground leasehold interest in Sites; (B) the
willful misconduct or gross negligence of an Indemnified Person shall not affect
the rights of any other Indemnified Person
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hereunder; and (C) with respect to the Owner Trustee, it shall not constitute
willful misconduct or gross negligence of Wilmington Trust Company to rely on
the written instructions of the Certificate Holders; or (v) a transfer of the
Trust Estate by Certificate Holders or Owner Trustee (other than to Lessee or an
Affiliate of Lessee or as the result of or during a Lease Event of Default or an
Event of Loss).
The indemnities set forth in this Section shall not constitute a
guarantee, representation or warranty to any Indemnified Person of or as to the
value or useful life of any Site.
(d) Claims Procedure. An Indemnified Person shall, after obtaining actual
knowledge thereof, promptly notify Lessee of any Claim as to which
indemnification is sought (unless Lessee theretofore has notified such
Indemnified Person of such Claim); provided, however, that the failure to give
such notice shall not release Lessee from any of its obligations under this
Section 14, except to the extent that failure to give notice of any action, suit
or proceeding against such Indemnified Person is shown to increase Lessee's
liability under such Claim from that which would have existed if the failure to
give notice had not occurred. Subject to the following paragraph, Lessee agrees
to defend such Claim and shall at its sole cost and expense be entitled to
control, and shall assume full responsibility for, the defense of such Claim;
provided, however, that Lessee shall keep the Indemnified Person that is the
subject of such proceeding fully apprised of the status of such proceeding and
shall provide such Indemnified Person with all information with respect to such
proceeding as such Indemnified Person reasonably requests; and provided,
further, that in the event Lessee fails to defend such Claim, Lessee shall pay
the reasonable costs and expenses (including reasonable legal fees and expenses)
of the Indemnified Person in defending such Claim.
Notwithstanding any of the foregoing to the contrary, Lessee shall not be
entitled to control and assume responsibility for the defense of such Claim if
(1) a Lease Default or Lease Event of Default exists, and the Indemnified Person
notifies Lessee that it is no longer permitted to control the defense of such
Claim, (2) such proceeding involves any material danger of the sale, forfeiture
or loss of, or the creation of any Lien (other than any Permitted Lien) on, any
Site, (3) the amounts involved, in the good faith opinion of such Indemnified
Person, are likely to have a materially adverse effect on the business of such
Indemnified Person other than the ownership, leasing and financing of the Sites,
(4) in the good faith opinion of such Indemnified Person, there exists an actual
or potential conflict of interest such that it is advisable for such Indemnified
Person to retain control of such proceeding or (5) such Claim or liability
involves the possibility of criminal actions or liability to such Indemnified
Person. In the circumstances described in clauses (1) through (5), the
Indemnified Person shall be entitled to control and assume responsibility for
the defense of such Claim or liability at the expense of Lessee. In addition,
any Indemnified Person, at its own expense, may (A) participate in any
proceeding controlled by Lessee pursuant to this Section 14(d) and (B) employ
separate counsel. Lessee may in any event participate in all such proceedings at
its own cost. Nothing contained in this Section 14(d) shall be deemed to require
an Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto.
(e) Subrogation. If a Claim indemnified by Lessee under this Section 14 is
paid in full by Lessee and/or an insurer under a policy of insurance maintained
by Lessee, or if payment of the Claim has otherwise been provided for in full in
a manner reasonably satisfactory to the
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Indemnified Person, Lessee and/or such insurer, as the case may be, shall be
subrogated to the extent of such payment (or provision) to the rights and
remedies of the Indemnified Person (other than under insurance policies
maintained by such Indemnified Person) on whose behalf such Claim was paid (or
provided for) with respect to the act or event giving rise to such Claim. So
long as no Payment Default and no Lease Event of Default exists, if an
Indemnified Person receives any refund, in whole or in part, with respect to any
Claim paid by Lessee hereunder, it shall promptly pay over the amount refunded
(but not in excess of the amount Lessee or any of its insurers has paid in
respect of such Claim paid or payable by such Indemnified Person on account of
such refund) to Lessee; provided, however, if any Payment Default or Lease Event
of Default exists, any such refund shall be retained by, or paid over to, the
Lessor to be held and applied against amounts payable by the Lessee hereunder
and under the other Operative Documents.
(f) Insured Claims. In the case of any Claim indemnified by the Lessee
hereunder which is covered by a policy of insurance maintained by or for the
benefit of the Lessee, each Indemnified Person agrees to cooperate, at the
expense of the Lessee, with the insurers in the exercise of their rights to
investigate, defend or compromise such Claim as may be required to retain the
benefits of such insurance with respect to such Claim (but the failure to do so
shall not relieve the Lessee of its obligation to indemnify such Indemnified
Person except to the extent that the Lessee or its insurer is materially
prejudiced as a result of such failure).
(g) Waiver of Certain Claims. Lessee hereby waives and releases any Claim
now or hereafter existing against any Indemnified Person out of death or
personal injury to personnel of Lessee (including its directors, officers,
employees, agents and servants), loss or damage to property of Lessee or its
Affiliates, of the loss of use of any property of Lessee or its Affiliates,
which may result from or arise out of the condition, use or operation of the
Sites during the Lease Term and the Renewal Term, if any, including, without
limitation, any latent or patent defect whether or not discoverable.
(h) Consent. Unless an Event of Default shall have occurred and be
continuing, no Indemnified Person shall enter into any settlement or other
compromise with respect to any Claim which is entitled to be indemnified under
this Section 14 without the prior written consent of the Lessee, which consent
shall not be unreasonably withheld, unless such Indemnified Person waives its
right to be indemnified under this Section 14 with respect to such Claim.
(i) Construction Period. Notwithstanding the foregoing, during the
Construction Period, (i) the Lessor, in lieu of the Lessee, shall indemnify all
Lender Indemnitees under this Section 14, to the same extent that the Lessee is
obligated to so indemnify such parties absent the provisions of this subsection
(i), (ii) the Lessee will indemnify the Lessor for all obligations of the Lessor
under this subsection (i), and (iii) the Lessor hereby assigns to each of the
Lender Indemnitees the Lessor's right to indemnification by the Lessee under
this subsection (i) to the extent of any claim by the respective Lender
Indemnitee under this Section 14. Any indemnification by the Lessor shall be
subject to all of the provisions of this Section 14 to the same extent as
applicable to indemnification by the Lessee under this Section 14.
SECTION 15. TRANSACTION EXPENSES.
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The Lessee agrees, for the benefit of the Lessor, the Certificate Holders
and the Lenders, that:
(a) Transaction Expenses.
(1) The Lessee shall pay, or cause to be paid, from time to
time all Transaction Expenses in respect of the transactions on the
Documentation Date, each Site Acquisition Date and each Funding
Date; provided, however, that if the Lessee has not received written
invoices therefor at least five (5) Business Days prior to such
date, such Transaction Expenses shall be paid within thirty (30)
days after the Lessee has received written invoices therefor.
Transaction Expenses may, subject to the conditions hereof
(including without limitation the last sentence of Section 3(a)(1)),
be paid with the proceeds of an Advance.
(2) The Lessee shall pay or cause to be paid all Transaction
Expenses incurred by the Agent, the Lessor, any Lender or any
Certificate Holder in entering into any future amendments or
supplements with respect to any of the Operative Documents, whether
or not such amendments or supplements are ultimately entered into,
or giving or withholding of waivers or consents hereto or thereto or
review of any matter (including, without limitation, the Development
Agreements), in each case which have been requested by or approved
by the Lessee, all Transaction Expenses incurred by the Lessee, the
Lessor, the Agent, the Lenders or the Certificate Holders in
connection with any purchase of the Property by the Lessee or other
Person pursuant to Section 6 of the Master Lease and all Transaction
Expenses incurred by any of the other parties hereto in respect of
enforcement of any of their rights or remedies against the Lessee or
any Affiliate of the Lessee in respect of the Operative Documents.
(b) Brokers' Fees and Stamp Taxes. The Lessee shall pay or cause to be
paid any brokers' fees (other than brokers' fees that are payable solely as a
result of any Participant's breach of the representation set forth in Section
6(a)(vii)) and any and all stamp, transfer and other similar taxes, fees and
excises, if any, including any interest and penalties, which are payable in
connection with the transactions contemplated by this Participation Agreement
and the other Operative Documents.
(c) Loan Agreement and Related Obligations. Except as provided in the last
sentence of Section 15(a)(1), the Lessee shall pay, before the delinquency date
thereof, all costs, expenses and other amounts (other than principal and
interest on the Loans which are payable to the extent otherwise required by the
Operative Documents) required to be paid by the Lessor under the Loan Agreement,
the Lender Mortgage, the Assignment of Leases and Rents and the Construction
Agency Agreement Assignment.
SECTION 16. CONSENT TO JURISDICTION.
Lessee, Certificate Holders and Lessor hereby irrevocably each (i) agree
that any legal or equitable action, suit or proceeding against the Lessee
arising out of or relating to this Participation Agreement or any other
Operative Document or any transaction contemplated
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hereby or thereby or the subject matter of any of the foregoing may be
instituted in any state court of competent jurisdiction in the State of Illinois
or Federal court in the Northern District of Illinois, (ii) to the extent
permitted by Applicable Law, waives any objection which it may now or hereafter
have to the venue of any such action, suit or proceeding, including, without
limitation, inconvenient forum and (iii) submits itself to the jurisdiction of
any state court of competent jurisdiction in the State of Illinois or Federal
court in the Northern District of Illinois for purposes of any such action, suit
or proceeding. Nothing contained in this Section shall be deemed to affect the
rights of the Certificate Holders or the Owner Trustee to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Lessee in any other jurisdiction.
SECTION 17. LIMITATIONS OF LIABILITY OF OWNER TRUSTEE.
It is expressly understood and agreed by and among the parties hereto
that, except as otherwise expressly provided herein or therein, each of this
Participation Agreement and the other Operative Documents is executed by
Wilmington Trust Company, not individually or personally but solely as Owner
Trustee under the Trust Agreement in the exercise of the power and authority
conferred and vested in it as such Owner Trustee, that each and all of the
representations, undertakings and agreements herein or therein made on the part
of the Owner Trustee or the Trust are intended not as personal representations,
undertakings and agreements by Wilmington Trust Company, or for the purpose or
with the intention of binding Wilmington Trust Company, personally, but are made
and intended for the purpose of binding only the Trust Estate, that nothing
herein contained shall be construed as creating any liability of Wilmington
Trust Company, or any incorporator or any past, present or future subscriber to
the capital stock of, or stockholder, officer or director of Wilmington Trust
Company, to perform any covenant either express or implied contained herein or
in the other Operative Documents to which the Owner Trustee or the Trust is a
party, and that so far as Wilmington Trust Company is concerned, any Person
shall look solely to the Trust Estate for the performance of any obligation
hereunder or thereunder or under any of the instruments referred to herein or
therein; provided, however, that nothing contained in this Section shall be
construed to limit in scope or substance the general corporate liability of
Wilmington Trust Company, expressly provided (i) to the Certificate Holders
under the Trust Agreement, (ii) in respect of those representations, warranties,
agreements and covenants of Wilmington Trust Company expressly set forth in
Section 7(a) hereof or in any Operative Document to which it is a party or (iii)
pursuant to the Trust Agreement, for the gross negligence or willful misconduct
of Wilmington Trust Company or to exercise the same degree of care and skill as
is customarily exercised by similar institutions in the receipt and disbursement
of moneys under similar circumstances.
SECTION 18. LIMITATION OF LIABILITY OF CERTIFICATE HOLDERS.
The Certificate Holders shall not have any obligation or duty to Owner
Trustee, the Lessee, Wilmington Trust Company or to others with respect to the
transactions contemplated hereby, or for any loss arising under the Operative
Documents in respect of a Title Defect, except those obligations or duties of
Certificate Holders expressly set forth in this Participation Agreement and the
other Operative Documents and the Certificate Holders shall not be liable for
performance by any other party of such other party's obligations or duties
hereunder or thereunder. Without limiting the generality of the foregoing, under
no circumstances whatsoever
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shall the Certificate Holders be liable for any action or inaction on the part
of Owner Trustee in connection with the transactions contemplated herein,
whether or not such action or inaction is caused by the willful misconduct or
gross negligence of Owner Trustee, unless such action or inaction is taken upon
the written instructions of the Certificate Holders or in violation of the
covenants of the Certificate Holders in the Operative Documents.
SECTION 19. NOTICES.
All communications, demands, notices and consents provided for herein
shall be given in writing (either by mail, reputable overnight courier, personal
delivery or by telecopier) and shall become effective, if given by personal
delivery or telecopier, when given, if given by overnight courier, on the first
Business Day after delivery to said courier, all fees therefor prepaid, and if
given by mail, five (5) days after deposit in the United States mail, with
proper postage for first-class mail prepaid, addressed: (i) if to the
Certificate Holders, at their respective Designated Offices set forth on
Schedule 2; (ii) if to the Owner Trustee, at Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, telecopier
number (302) 651-8882 Attention: Corporate Trust Administration; (iii) if to the
Lessee, at 311 South Wacker Drive, Chicago, Illinois 60606, telecopier number
(312) 913-3028, Attention: President; or (iv) if to the Agent or the Lenders at
their respective Designated Offices set forth on Schedule 2, or at such other
address as any party hereto may from time to time designate by notice duly given
in accordance with the provisions of this Section to the other parties hereto.
Each party hereto agrees to provide a copy of each notice of an Event of Default
which it gives to any party, to each party hereto.
SECTION 20. SURVIVAL OF REPRESENTATIONS; BINDING EFFECT.
All agreements, representations and warranties contained in this
Participation Agreement, or in any agreement, document or certificate delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Participation Agreement and the expiration or other termination
of this Participation Agreement and shall be considered relied upon by each
other party hereto regardless of any knowledge or investigation made by or on
behalf of any such party. All agreements, representations and warranties in this
Participation Agreement shall bind the party making the same and its successors
and permitted assigns and shall inure to the benefit of each party for whom made
and all their respective successors and permitted assigns and all Indemnified
Persons.
SECTION 21. THE AGENT.
(a) Appointment; Nature of Relationship. The Agent is hereby appointed by
each of the Participants as its contractual representative hereunder and under
each other Operative Document, and each of the Participants irrevocably
authorizes the Agent to act as the contractual representative of such
Participant with the rights and duties expressly set forth herein and in the
other Operative Documents. The Agent agrees to act as such contractual
representative upon the express conditions contained in this Section 21.
Notwithstanding the use of the defined term "Agent," it is expressly understood
and agreed that the Agent shall not have any fiduciary responsibilities to any
Participant by reason of this Participation Agreement or any other Operative
Document and that the Agent is merely acting as the contractual representative
of the
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Participants with only those duties as are expressly set forth in this
Participation Agreement and the other Operative Documents. In its capacity as
the Participants' contractual representative, the Agent (i) does not hereby
assume any fiduciary duties to any of the Participants, (ii) is a
"representative" of the Participants within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Participation Agreement and the other Operative Documents. Each of the
Participants hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Participant hereby waives.
(b) Powers. The Agent shall have and may exercise such powers under the
Operative Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Participants, or any obligation to
the Participants to take any action thereunder except any action specifically
provided by the Operative Documents to be taken by the Agent.
(c) General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Lessee, the Lessor, the
Participants or any Participant for any action taken or omitted to be taken by
it or them hereunder or under any other Operative Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen from the gross negligence or willful misconduct of such Person.
(d) No Responsibility for Recitals, etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Operative Document or any advances
thereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Operative Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Participant; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Event of Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any
Operative Document or any other instrument or writing furnished in connection
therewith; (f) the value, sufficiency, creation, perfection or priority of any
Lien in any collateral security; or (g) the financial condition of the Lessee or
any guarantor of any of the Obligations or of any of the Lessee's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Participants information that is not required to be furnished by the Lessee
to the Agent at such time, but is voluntarily furnished by the Lessee to the
Agent (either in its capacity as Agent or in its individual capacity).
(e) Action on Instructions of Participants. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Operative Document in accordance with written instructions signed by
the Required Participants, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Participants. The
Participants hereby acknowledge that the Agent shall be under no duty to take
any discretionary action permitted to be taken by it pursuant to the provisions
of this Participation Agreement or any other Operative Document unless it shall
be requested in writing
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to do so by the Required Participants. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Operative
Document unless it shall first be indemnified to its satisfaction by the
Participants pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
(f) Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Operative Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Participants, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the
Participants and all matters pertaining to the Agent's duties hereunder and
under any other Operative Document.
(g) Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
(h) Agent's Reimbursement and Indemnification. The Participants agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Lessee for which the Agent is entitled to reimbursement by the
Lessee under the Operative Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Participants, in connection with the preparation,
execution, delivery, administration and enforcement of the Operative Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Participant or between two
or more of the Participants) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the
Operative Documents or any other document delivered in connection therewith or
the transactions contemplated thereby (including, without limitation, for any
such amounts incurred by or asserted against the Agent in connection with any
dispute between the Agent and any Participant or between two or more of the
Participants), or the enforcement of any of the terms of the Operative Documents
or of any such other documents, provided that no Participant shall be liable for
any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the Agent. The obligations of
the Participants under this Section 21(h) shall survive payment of the
Obligations and termination of this Participation Agreement.
(i) Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has received written notice from a Participant or the Lessee referring to
this Agreement describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Participants.
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(j) Rights as a Participant. In the event the Agent is a Participant, the
Agent shall have the same rights and powers hereunder and under any other
Operative Document with respect to its Commitment and its Loans as any
Participant and may exercise the same as though it were not the Agent, and the
term "Participant" or "Participants" shall, at any time when the Agent is a
Participant, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Participation Agreement
or any other Operative Document, with the Lessee or any of its Subsidiaries in
which the Lessee or such Subsidiary is not restricted hereby from engaging with
any other Person. The Agent, in its individual capacity, is not obligated to
remain a Participant.
(k) Participant Credit Decision. Each Participant acknowledges that it
has, independently and without reliance upon the Agent, the Arranger or any
other Participant and based on the financial statements prepared by the Lessee
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Participation Agreement and
the other Operative Documents. Each Participant also acknowledges that it will,
independently and without reliance upon the Agent, the Arranger or any other
Participant and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Participation Agreement and the other Operative
Documents.
(l) Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Participants and the Lessee, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Participants, such
removal to be effective on the date specified by the Required Participants. Upon
any such resignation or removal, the Required Participants shall have the right
to appoint, on behalf of the Lessee and the Participants, a successor Agent. If
no successor Agent shall have been so appointed by the Required Participants
within thirty days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Lessee and the
Participants, a successor Agent. Notwithstanding the previous sentence, the
Agent may at any time without the consent of the Lessee or any Participant,
appoint any of its Affiliates which is a commercial bank as a successor Agent
hereunder. If the Agent has resigned or been removed and no successor Agent has
been appointed, the Participants may perform all the duties of the Agent
hereunder and the Lessee shall make all payments in respect of the Obligations
to the applicable Participant and for all other purposes shall deal directly
with the Participants. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the effectiveness of the resignation or removal
of the Agent, the resigning or removed Agent shall be discharged from its duties
and obligations hereunder and under the Operative Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
Section 21 shall continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and
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under the other Operative Documents. In the event that there is a successor to
the Agent by merger, or the Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 21(l), then the term "Prime Rate" as used in
this Participation Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
(m) Agent's Fee. The Lessee agrees to pay to the Agent, for its own
account, the fees agreed to by the Lessee and the Agent pursuant to the Fee
Letter and the Agent's reasonable fees, costs and expenses for the performance
of Agent's obligations hereunder.
(n) Delegation to Affiliates. The Lessee and the Participants agree that
the Agent may delegate any of its duties under this Participation Agreement to
any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Agent is entitled under Section 13
and 14.
(o) Execution of Collateral Documents. The Participants hereby empower and
authorize the Agent to execute and deliver to the Lessee on their behalf the
Pledge Agreement and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Pledge Agreement and any other
Operative Document.
(p) Collateral Releases. The Participants hereby empower and authorize the
Agent to execute and deliver to the Lessee on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Operative Document or which shall otherwise have been approved by the
Required Participants (or, if required by the terms of Section 22(c), all of the
Participants) in writing.
SECTION 22. MISCELLANEOUS.
(a) Counterpart Execution. This Participation Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
(b) Governing Law. THIS PARTICIPATION AGREEMENT SHALL BE GOVERNED BY, AND
BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(c) Amendments, Supplements, Waivers. Neither this Participation Agreement
nor any other Operative Document nor any of the terms hereof or thereof may be
amended, supplemented, waived or modified orally, or terminated in any manner
whatsoever except by written instrument signed by the Lessee (if Lessee is a
party thereto or if the Operative Document is the Loan Agreement, the Lender
Mortgage, the Master Assignment of Leases and Rents or the Specific Assignment
of Leases and Rents, or if such action adversely affects the
Participation Agreement 71
<PAGE>
Lessee), the Agent, the Required Participants and the Owner Trustee (if such
action adversely affects the Owner Trustee) and Wilmington Trust Company (if
such action adversely affects Wilmington Trust Company); and provided that the
following actions may not be taken:
(1) without the consent of the applicable party, any action
which will modify the timing or amount of any payment to such party
or increase the amount of its Commitment;
(2) without the consent of the applicable party, any action
which requires the consent of such party in its sole discretion if
such party has not provided its consent (including, without
limitation, consents under the provisions of Section 9(c)(9) and
Section 13(f) above);
(3) without the consent of all Participants, any action which
will modify any of the provisions of this Section 22(c), change the
definition of "Required Participants" or modify or waive any
provision of any Operative Document requiring action by any of the
foregoing, or extend the Expiration Date, or release all or
substantially all of the collateral;
(4) without the consent of the applicable party, any action
which will reduce, modify, amend or waive any indemnities in favor
of any Participant, the Agent or the Owner Trustee;
(5) without the consent of all Participants, modify, amend,
waive or supplement any of the provisions of Sections 11, 12, 14, 15
or 16 of the Master Lease;
(6) without the consent of all Participants, consent to any
assignment of the Master Lease or other Operative Document releasing
the Lessee from its obligations thereunder or changing the absolute
and unconditional character of such obligations;
(7) without the consent of all Participants, permit the
creation of any Lien on any of the Sites or any part thereof except
as contemplated by the Operative Documents, or deprive any
Participant of the benefit of the security interest and lien secured
by the Sites.
Each party hereto shall be notified of each amendment to or supplement of any
Operative Document.
(d) Headings. The headings of the sections and paragraphs of this
Participation Agreement and the table of contents have been inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Participation Agreement.
(e) Business Day. If the date on which any payment is to be made pursuant
to this Participation Agreement or any other Operative Document is not a
Business Day, then (except as otherwise expressly provided herein of in any
other applicable Operative Document) the payment otherwise payable on such date
shall be payable on the next succeeding Business Day,
Participation Agreement 72
<PAGE>
and, except as may otherwise be required by the Master Lease, without any
additional amount accruing with respect thereto, with the same force and effect
as if made on the date when such payment is due.
(f) Reproduction of Documents. This Participation Agreement, all documents
constituting exhibits hereto, and all documents relating hereto received by a
party hereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by
Certificate Holders in connection with Owner Trustee's purchase of the Sites,
and (c) financial statements, certificates, and other information previously or
hereafter furnished to Certificate Holders or Owner Trustee may be reproduced by
the party receiving the same by any photographic, photostatic, microfilm or
other similar process. Each party hereto agrees and stipulates that, to the
extent permitted by law, any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not such reproduction was made by such party in the regular course of business)
and that, to the extent permitted by law, any enlargement, facsimile, or further
reproduction of such reproduction shall likewise be admissible in evidence.
(g) Opinions. The parties to this Participation Agreement hereby
acknowledge that they have irrevocably instructed their respective counsel to
deliver to and for the benefit of the addressees thereof, the opinions of such
counsel referred to in and required by Section 9 and Section 13(f) of this
Participation Agreement.
(h) Survival of Agreements. All agreements, indemnities, representations
and warranties contained in this Participation Agreement or in any agreement,
document or certificate delivered pursuant hereto following or in connection
herewith shall survive the execution and delivery of this Participation
Agreement and the expiration or other termination of this Participation
Agreement
(i) Enforcement. Any provision of this Participation Agreement which may
be determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by Applicable Law, the Lessee hereby
waives any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
(j) Preservation of Rights. No delay or omission of the Participants or
the Agent to exercise any right under the Operative Documents shall impair such
right or be construed to be a waiver of any Event of Default or an acquiescence
therein, and the making of an Advance notwithstanding the existence of an Event
of Default or the inability of the Lessee to satisfy the conditions precedent to
such Advance shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Operative Documents
whatsoever shall be valid unless in writing signed by the Participants required
pursuant to Section 22(c), and then only to the extent in such writing
specifically set forth. All remedies contained in the Operative Documents or by
law
Participation Agreement 73
<PAGE>
afforded shall be cumulative and all shall be available to the Agent and the
Participants until the Obligations have been paid in full.
(k) Entire Agreement. This Participation Agreement, together with the
other Operative Documents, represents the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes any and all prior
understandings.
Participation Agreement 74
<PAGE>
WITNESS WHEREOF, the parties hereto have each caused this Participation
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the date first above written.
MARCHFIRST, INC., a Delaware corporation,
as Lessee, Construction Agent and Guarantor
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
MARCHFIRST, INC. HEADQUARTERS TRUST NO. 2000-1,
a Delaware business trust, as Lessor
By: Wilmington Trust Company, not in its
individual capacity, but solely as owner
trustee of marchFIRST, Inc. Headquarters
Trust No. 2000-1
By:
---------------------------------------
Name:
-------------------------------------
Title: Authorized Officer
-----------------------------------
WILMINGTON TRUST COMPANY, not in its individual
capacity except as expressly provided herein,
but solely as Owner Trustee, and in its
individual capacity
By:
--------------------------------------------
Name:
------------------------------------------
Title: Authorized Officer
-----------------------------------------
BANK ONE, NA,
as a Lender and as Agent for the Lenders
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
Participation Agreement
<PAGE>
BANK ONE, NA,
as a Lender
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
BANK ONE LEASING SERVICES CORP.,
as a Certificate Holder
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
Participation Agreement
<PAGE>
SCHEDULE 1 to
Participation Agreement
COMMITMENTS OF PARTICIPANTS
--------------------------------------------------------------------------
Equity Commitment Commitment
Participant and Loan Commitment Percentage
----------- ------------------- -----------
--------------------------------------------------------------------------
Lender
(Tranche A and Tranche B)
--------------------------------------------------------------------------
Bank One, NA $90,210,000 97%
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Certificate Holders
--------------------------------------------------------------------------
Banc One Leasing Services
Corp. $2,790,000 3%
--------------------------------------------------------------------------
--------------
--------------------------------------------------------------------------
TOTAL $93,000,000 100%
--------------------------------------------------------------------------
Participation Agreement
<PAGE>
SCHEDULE 2 to
Participation Agreement
NOTICE ADDRESSES AND PAYMENT INSTRUCTIONS
1. Wilmington Trust Company
(A) All payments on account of the Owner Trustee shall be made by
wire transfer of immediately available funds to the following Payment
Office:
Wilmington Trust Company
ABA No. 031 100 092
Account Name: marchFIRST, Inc.
Account Number: 51515-0
Attention: Robert Hines / Corporate Trust Administration
with sufficient information to identify the source and application of
funds. In addition, a confirmation of each payment shall be sent
concurrently with such payment to the address stated in paragraph (B)
below.
(B) The Designated Office of the Owner Trustee is:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration Department
2. Banc One Leasing Services Corp. - Certificate Holder
(A) All payments on account of the Certificate Holders shall be made
by wire transfer of immediately available funds to the following Payment
Offices:
Bank One, N.A.
Chicago, Illinois
ABA#: 071000013
Account #: 481152860000
For Credit LS2 Incoming Account
Reference: MarchFirst Synthetic Lease
Attention: Kathie Blomquist
with sufficient information to identify the source and application of
funds. In addition, a confirmation of each payment shall be sent
concurrently to the address stated in Section 19 of the Participation
Agreement.
Participation Agreement
<PAGE>
(B) The Designated Office of Banc One Leasing Services Corp. is:
1 Bank One Plaza
Mail Suite IL1-0088
Chicago, Illinois 60670
3. Bank One, NA, as Agent
(A) All payments on account of Bank One, NA, as agent for the
Lenders shall be made by wire transfer of immediately available funds to
the following Payment Office:
Bank One, N.A.
Chicago, Illinois
ABA#: 071000013
Account #: 481152860000
For Credit LS2 Incoming Account
Reference: MarchFirst Synthetic Lease
Attention: Kathie Blomquist
with sufficient information to identify the source and application of
funds. In addition, a confirmation of each payment shall be sent
concurrently to the address stated in Section 19 of the Participation
Agreement.
(B) The Designated Office of Bank One, NA, as Agent for the Lenders
is:
1 Bank One Plaza
Mail Suite IL1-0088
Chicago, Illinois 60670
4. Each of the foregoing payment instructions are subject to change from
time to time by the applicable recipient (including, without limitation,
any applicable assignee), by notice made in accordance with Section 19 of
the Participation Agreement.
Participation Agreement
<PAGE>
SCHEDULE 8(a)(8) to
Participation Agreement
TAXES
None
Participation Agreement
<PAGE>
SCHEDULE 8(a)(22) to
Participation Agreement
SUBSIDIARIES
Participation Agreement
<PAGE>
SCHEDULE 8(a)(24) to
Participation Agreement
LIENS
None
Participation Agreement
<PAGE>
SCHEDULE 8(d)(9) to
Participation Agreement
EXISTING INVESTMENTS
Participation Agreement
<PAGE>
SCHEDULE 9(d)(1) to
Participation Agreement
CONSTRUCTION MILESTONES
Participation Agreement
<PAGE>
EXHIBIT A
Form of Trust Agreement
Participation Agreement
<PAGE>
EXHIBIT B
Form of Master Lease
Participation Agreement
<PAGE>
EXHIBIT C
Form of Annual No Default Certificate
OFFICER'S CERTIFICATE
To: Banc One Leasing Services Corp., as Owner Participant
Wilmington Trust Company, as Owner Trustee
On behalf of marchFIRST, Inc., a Delaware corporation (the "Company"), I,
the undersigned officer of the Company, hereby certify, pursuant to Section
8(d)(4)the Participation Agreement, dated as of April [__], 2000 (the
"Participation Agreement"), among the Company, as Lessee, Construction Agent and
Guarantor, marchFIRST, Inc. Headquarters Trust No. 2000-1, as Lessor, Wilmington
Trust Company, individually and as Owner Trustee, Banc One Leasing Services
Corp., Inc., as Owner Participant, Bank One, NA, and the various financial
institutions party to the Participation Agreement from time to time, as the
Tranche A and Tranche B Lenders, and Bank One, NA, as Agent, that:
(a) I am a Responsible Employee and an officer of the Company;
(b) I have reviewed the required insurance coverages, the
relevant terms of the Master Lease and the other Operative Documents
and have made, or caused to be made, under my supervision, a review
of the transactions and the condition of the Lessee for the fiscal
year beginning on through the date of this certificate; and
(c) Such review has not disclosed the existence during such
period of any condition or event which constitutes a Lease Default
or Lease Event of Default [or, if any such condition exists, specify
the nature and period of existence and what action the Lessee has
taken or proposes to take with respect thereto].
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings assigned thereto in Appendix A to the Participation
Agreement.
IN WITNESS WHEREOF, on behalf of the Company, the undersigned has executed
this Officer's Certificate as of the ___ day of _______________, ______.
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
Participation Agreement
<PAGE>
EXHIBIT D-1
Form of Opinion of In-house Counsel to the Lessee
Participation Agreement
<PAGE>
EXHIBIT D-2
Form of Opinion of Special Counsel to the Lessee
Participation Agreement
<PAGE>
EXHIBIT E
Form of Opinion of Special Counsel to Wilmington
Trust Company and Owner Trustee
Participation Agreement
<PAGE>
EXHIBIT F
Form of Completion Certificate
COMPLETION CERTIFICATE
To: _________________________, as Owner Trustee
_________________________, as Agent,
_________________________, as a Participant,
_________________________, as a Participant,
[list all Participants]
This Completion Certificate is delivered to you pursuant to Section
10(a) of the Participation Agreement, date as of [_______], 2000 (the
"Participation Agreement"), among marchFIRST, Inc. (the "Lessee,"
"Construction Agent" or "Guarantor,") as Lessee, Construction Agent and
Guarantor, Wilmington Trust Company, as Owner Trustee, marchFIRST, Inc.
Headquarters Trust No. 2000-1, as Lessor, the Persons named on Schedule
[____] hereto, as Certificate Holders, Bank One, NA, and other such
Lenders as may from time to time become parties thereto, as Tranche A
Lenders and Tranche B Lenders, and Bank One, NA, as Agent. Capitalized
terms used but not otherwise defined herein have the respective meanings
specified in Appendix A to the Participation Agreement.
With respect to the Site that is subject to Lease Supplement No. ___
(the "Subject Property"), the Construction Agent hereby certifies that:
(i) The representations and warranties of the Lessee set forth in
Section 8 of the Participation Agreement and in the other Operative
Documents are true and correct with respect to the Subject Property as of
the date hereof.
(ii) All amounts owing to third parties for the Construction of the
Improvements on the Subject Property have been paid in full (other than
contingent obligations for which the Lessee has made adequate reserves or
other amounts which are being disputed by the Lessee in good faith).
(iii) No changes or modifications were made to the Plans and
Specifications relating to the Subject Property after the related Site
Acquisition Date that have had a Material Adverse Effect on the value,
condition, use or useful life of the Subject Property.
Participation Agreement
<PAGE>
The Construction Agent has caused this Completion Certificate to be
executed and delivered this ________ day of _______________, ____.
MARCHFIRST, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
Participation Agreement
<PAGE>
EXHIBIT G
Form of Lender Mortgage
Participation Agreement
<PAGE>
EXHIBIT H
Form of Funding Request
FORM OF FUNDING REQUEST
To: [ ] as Owner Trustee
[ ] as Agent for the Lenders
This Funding Request is delivered to you pursuant to Section 9(b)
[and 9(c)] of the Participation Agreement dated as of [__________], 2000
(the "Participation Agreement"), among marchFIRST, Inc., a Delaware
corporation (the "Lessee"), as Lessee, Construction Agent and Guarantor,
Wilmington Trust Company, as Owner Trustee, marchFIRST, Inc. Headquarters
Trust No. 2000-1, as Lessor, the Persons listed on Schedule [__] thereto,
as Certificate Holders, Bank One, NA, and other such Lenders as may from
time to time become parties thereto, as Tranche A Lenders and Tranche B
Lenders, and Bank One, NA, as Agent. Capitalized terms used but not
otherwise defined herein have the respective meanings specified in
Appendix A to the Participation Agreement.
The Lessee hereby notifies you and certifies to you that:
(i) The Lessee requests the making of an Advance in the amount of
$__________________ on [DATE] (the "Proposed Funding Date");
(ii) The Proposed Funding Date [will] [will not] also be a Site
Acquisition Date;
(iii) The Advance will be allocated between the Sites and their
respective Site Costs as set forth on Schedule A hereto (and pro
rata portions of the related Equity Amounts and Loans shall likewise
be deemed to be so allocated); and
(iv) The interest and Yield shall be based on [the LIBO Rate for a
[1][3][6][9][12] month period] [the Alternate Base Rate]; provided,
however, that from the date of funding to the next Scheduled Payment
Date, interest and Yield will be based upon the Alternate Base Rate;
and provided, further, that during the Construction Period interest
and Yield shall be based upon [the LIBO Rate for a one (1) month
period][the Alternate Base Rate].
(v) [with respect to each acquisition of a ground leasehold interest
in a Land Interest, the following information is set forth on
Schedule B hereto: (A) a description of the Land Interest to be
acquired (the "Subject Property"), (B) whether the Subject Property
consists of a Land Interest only or a Land Interest and Improved
Property, (C) the Estimated Improvement Costs for the
Participation Agreement
<PAGE>
Subject Property, description of the Plans and Specifications, the
construction budget and anticipated disbursement schedule, (D) the
estimated sales costs as of the Expiration Date for such Site on the
assumption that the Lessee will elect the Sale Option, and (E)
evidence satisfactory to the Agent and the Participants that (x) the
portion of the total Commitments of the Participants properly
allocable to the Site Costs of such Site will be sufficient to
finance the Construction of such Site through Completion and (y)
such Construction is reasonably capable of being completed by the
applicable Outside Completion Date, in accordance with the Plans and
Specifications.](1)
In connection with such requested Advance, the Lessee hereby represents
and warrants to you as follows:
(a) On the Proposed Funding Date, each and every representation and
warranty of the Lessee contained in the Participation Agreement
(including without limitation Section 8 thereof) and in each of the
other Operative Documents are true and correct in all material
respects on and as of the Proposed Funding Date except to the extent
such representations or warranties relate solely to an earlier date,
in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier
date.
(b) Each Operative Document to which the Lessee is a party is in
full force and effect with respect to the Lessee.
(c) On the Proposed Funding Date, no Lease Event of Default or
Construction Agency Agreement Event of Default has occurred and is
continuing and no Lease Default or Construction Agency Agreement
Default of which the Lessee has knowledge and that has not been
previously disclosed to the Agent, the Owner Trustee and the
Participants has occurred and is continuing under the Master Lease
or the Construction Agency Agreement or, to the knowledge of the
Lessee, under any other Operative Document; provided, however, that
the Participants shall not be obligated to fund any Advance if such
a Default shall be continuing whether or not the Lessee shall have
previously disclosed the existence thereof. No Default or Event of
Default under the Master Lease or the Construction Agency Agreement
or, to the knowledge of the Lessee, and other Operative Document,
will occur as a result of or after giving effect to, the Advance
requested hereby.
(d) After giving effect to the Advance requested hereby, (i) the
aggregate outstanding amounts of each of the Loans and Equity
Amounts do not exceed the Commitments of the Participants, and (ii)
the aggregate outstanding amounts of each of the Loans and Equity
Amounts allocable to each Site do not exceed the Commitments of the
respective Participants with respect to such Site.
-----------------------
(1) Included for Advances in connection with the acquisition of a ground
leasehold interest in a Land Interest.
Participation Agreement
<PAGE>
(e) All of the conditions precedent set for in Section 9 of the
Participation Agreement applicable to the Advance requested hereby
have been satisfied or waived.
(f) The Lessee has duly performed and complied in all material
respects with all covenants, agreements and conditions contained in
the Participation Agreement or in any other Operative Document
required to be performed or complied with by it on or prior to the
Proposed Acquisition Date.
The undersigned hereby certifies that [s]he is a __________________ of the
Lessee, and that, as such [s]he is authorized to execute and deliver this
Funding Request on behalf of the Lessee
The Lessee has caused this Funding Request to be executed and delivered by
its duly authorized Responsible Employee this ______________________[TO BE
DELIVERED NO LATER THAN 10:00 AM FIVE (5) BUSINESS DAYS PRIOR TO THE
PROPOSED FUNDING DATE].
Please wire transfer the proceeds of the Advance to the accounts specified
by the Lessee in written notice to the Agent.
MARCHFIRST, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
Participation Agreement
<PAGE>
SCHEDULE A
TO FORM OF FUNDING REQUEST
ALLOCATION OF ADVANCE
------------------------------------------------------------------------------
APPLICABLE CURRENT AGGREGATE ADVANCES
SITE(2) REQUESTED TO DATE (after
ADVANCE giving effect to
the Current
ITEM Requested Advance)
------------------------------------------------------------------------------
Site Costs
------------------------------------------------------------------------------
Transaction Expenses
------------------------------------------------------------------------------
Fees
------------------------------------------------------------------------------
Basic Rent
------------------------------------------------------------------------------
------------ -------------
------------------------------------------------------------------------------
TOTAL ADVANCE
------------------------------------------------------------------------------
-----------------------------------
(2) Allocate separately for each Site. For Transaction Expenses, Fees and Basic
Rent, see Section 3(d) of the Participation Agreement regarding the method of
allocation.
Participation Agreement
<PAGE>
SCHEDULE B
TO FORM OF FUNDING REQUEST
INFORMATION REQUIRED FOR
SITE ACQUISITION
1) Description of the Subject Site:
2) The Subject Site Consists of [Land Interest Only] [Land Interest and
Improved Property].
3) Estimated Improvement Costs for the Subject Site:
$____________________________.
4) Description of the Plans and Specifications, the construction budget and
anticipated disbursement schedule.
5) Attached is evidence that (x) the portion of the total Commitments of
the Participants properly allocable to the Estimated Improvement Costs
of such Site will be sufficient to finance the Construction of such Site
through Completion and (y) such Construction is reasonably capable of
being completed by the applicable Outside Completion Date, in accordance
with the Plans and Specifications.
Participation Agreement
<PAGE>
EXHIBIT I
Form of Construction Certificate
CONSTRUCTION CERTIFICATE
To: _________________________, as Owner Trustee
_________________________, as Agent,
_________________________, as a Participant,
_________________________, as a Participant,
[list all Participants]
This Construction Certificate is delivered to you pursuant to Section
9(b)(2) of the Participation Agreement dated as of [__________], 2000 (the
"Participation Agreement"), among marchFIRST, Inc. (the "Construction Agent"),
as Lessee, Construction Agent and Guarantor, Wilmington Trust Company, as Owner
Trustee, marchFIRST, Inc. Headquarters Trust No. 2000-1, as Lessor, _________,
as Certificate Holders, Bank One, NA, and other such Lenders as may from time to
time become parties thereto, as Tranche A Lenders and Tranche B Lenders, and
Bank One, NA, as Agent. Capitalized terms used but not otherwise defined herein
have the respective meanings specified in Appendix A to the Participation
Agreement.
The Construction Agent hereby certifies to the Agent, the Owner Trustee
and each Participant as follows:
1. This Construction Certificate is being delivered in connection with an
Advance that the Lessee expects to request be made on
_______________________, ___ (the "Current Advance").
2. The portion of the Current Advance that is to be made in connection
with Property Improvement Costs will be used solely for the payment of
Property Improvement Costs relating to the Sites described on Schedule A
attached hereto (the "Subject Sites"), allocated to the applicable Subject
Site as shown on Schedule A.
3. With respect to each Subject Site, after giving effect to the making of
the Current Advance and the allocation thereof among the Subject Site, the
Property Improvement Costs for such Subject Site will not exceed the
Estimated Improvement Costs for such Subject Site.
4. All construction work for which funds are requested has been performed.
Participation Agreement
<PAGE>
5. To the Construction Agent's knowledge, no Force Majeure Event or Event
of Loss has occurred other than a Force Majeure Event or Event of Loss of
which the Construction Agent has provided written notice to the Agent, the
Owner Trustee and the Participants; provided, however, that the Participants
shall not be obligated to fund any Advance if such a event shall be
continuing whether or not the Lessee shall have previously disclosed the
existence thereof.
6. All building permits required by any Governmental Authority in
connection with the Construction for which the Current Advance is being
requested have been obtained.
7. No item for which payment is to be made from the Current Advance has
heretofore been paid or reimbursed to the Construction Agent from the
proceeds of any prior Advance.
8. All previous Advances received by the Construction Agent pursuant to
Construction Certificates dated prior to the date hereof on account of
Property Improvement Costs have been applied in accordance with the
Construction Agency Agreement and the other Operative Documents and paid to
the Persons entitled thereto in cash or by check.
9. All of the conditions set forth in Section 9 [(including, without
limitation, Section 9(c))^3 of the Participation Agreement are satisfied as
of the date hereof and will be satisfied or waived upon the funding of the
Current Advance.
The Construction Agent has caused this Construction Certificate to be
executed and delivered by its duly authorized Responsible Employee as of this
_____ day of _______________, ____ [TO BE DELIVERED NOT LATER THAN FIVE (5) DAYS
PRIOR TO THE DATE OF THE CURRENT ADVANCE].
MARCHFIRST, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
Participation Agreement
<PAGE>
SCHEDULE A
TO CONSTRUCTION CERTIFICATE
Subject Sites
--------------------------------------------------------------------------
Description Lease Supplement No.
----------- --------------------
--------------------------------------------------------------------------
1. Parking Facility and Fulton Center No. 1
--------------------------------------------------------------------------
Participation Agreement
<PAGE>
EXHIBIT J-1
Form of Assignment Agreement (Lender)
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_______________ _______________ (the "Assignor") and (the "Assignee") is dated
as of ___________, 20___ . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Participation
Agreement (which, as it may be amended, modified, renewed or extended from time
to time is herein called the "Participation Agreement") described in Item 1 of
Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Participation Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Participation
Agreement and the other Operative Documents, such that after giving effect to
such assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Participation Agreement and the
other Operative Documents relating to the facilities listed in Item 3 of
Schedule 1. The aggregate Commitment (or Loans, if the applicable Commitment has
been terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after
this Assignment Agreement, together with any consents required under the
Participation Agreement, are delivered to the Agent. In no event will the
Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. On and after the Effective
Date, the Assignee shall be entitled to receive from the Agent all payments of
principal, interest and fees with respect to the interest assigned hereby. The
Assignee will promptly remit to the Assignor any interest on Loans and fees
received from the Agent which relate to the portion of the Commitment or Loans
assigned to the Assignee hereunder for periods prior to the Effective Date and
not previously paid by the Assignee to the Assignor. In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
Participation Agreement
<PAGE>
5. RECORDATION FEE. The Assignor and Assignee each agree to pay one-half
of the recordation fee required to be paid to the Agent in connection with this
Assignment Agreement unless otherwise specified in Item 6 of Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representations or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Operative
Document, including without limitation, documents granting the Assignor and the
other Lenders a security interest in assets of the Lessee or any guarantor, (ii)
any representation, warranty or statement made in or in connection with any of
the Operative Documents (iii) the financial condition or creditworthiness of the
Lessee or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Operative Documents, (v) inspecting any of the
property, books or records of the Lessee, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the
Operative Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Participation Agreement, together
with copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Operative Documents, (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
under the Operative Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
confirms that the execution and delivery of this Assignment Agreement by the
Assignee is duly authorized, (v) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Operative Documents
are required to be performed by it as a Lender, (vi) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
Participation Agreement
<PAGE>
Schedule 1, (vii) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Operative Documents will not be "plan assets" under ERISA, (viii)
agrees to indemnify and hold the Assignor harmless against all losses, costs and
expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment Agreement, and (ix) if applicable, attaches the forms prescribed by
the Internal Revenue Service of the United States certifying that the Assignee
is entitled to receive payments under the Operative Documents without deduction
or withholding of any United States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Participation Agreement. For the purposes hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be
executed in counterparts. Transmission by facsimile of an executed counterpart
of this Assignment Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart and such facsimile shall be deemed to be an
original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto
have executed this Assignment Agreement by executing Schedule 1 hereto as of the
date first above written.
Participation Agreement
<PAGE>
EXHIBIT J-2
Form of Assignment Agreement (Certificate Holders)
[Date]
To: marchFIRST, Inc.
-----------------------------------------------
-----------------------------------------------
Attention:
-------------------------------
To: marchFIRST, Inc. Headquarters Trust No. 2000-1
-----------------------------------------------
-----------------------------------------------
Attention:
-------------------------------
To: Bank One, NA, as Agent
-----------------------------------------------
-----------------------------------------------
Attention:
-------------------------------
Re: Participation Agreement, dated as of April ___, 2000 (as
amended, modified or supplemented, the "Participation Agreement"),
among Banc One Leasing Services Corp. (the "Owner Participant"), as
Owner Participant, Wilmington Trust Company (the "Owner Trustee"),
individually and as Owner Trustee, marchFIRST, Inc. (the "Lessee"),
as Lessee, Construction Agent and Guarantor, marchFIRST, Inc.
Headquarters Trust No. 2000-1, (the "Lessor") as Lessor, Bank One,
NA and such other Lenders as may from time to time be or become
parties thereto as Tranche A Lenders and Tranche B Lenders
(collectively, the "Lenders"), and Bank One, NA (the "Agent"), as
Agent.
Ladies and Gentlemen:
We refer to Section 12(a) of the Participation Agreement defined above.
Capitalized terms used but not otherwise defined herein have the respective
meanings specified in Appendix A to the Participation Agreement.
This Assignment Agreement (this "Assignment Agreement") is delivered to
you pursuant to Section 12(a) of the Participation Agreement and also
constitutes notice of the assignment and delegation by ________________ (the
"Assignor") to ___________________ (the "Assignee") of [all] [a portion having
an aggregate principal amount of $ ] of the Assignor's right, title and interest
in and obligations with respect to the Equity Amounts, the Equity Commitment and
the interest in the Lessor of the Assignor. After giving effect to the foregoing
assignment and delegation, the Assignee shall hold the Commitments and
Commitment Percentages under
Participation Agreement
<PAGE>
the Participation Agreement previously held by Assignor. Such information is set
forth on Schedule 1 hereto.
The Assignee hereby acknowledges and confirms that it has received a copy
of the Participation Agreement and the exhibits related thereto, the Master
Lease, the Lease Supplements and each other document delivered under the
Participation Agreement as a condition to the obligations set forth in Section 3
thereof. The Assignee further confirms and agrees that in becoming a Participant
and a holder of such Equity Amounts, Equity Commitment and interest in the
Lessor, such actions have and will be made without recourse to, or
representation or warranty by the Lessor or the Agent.
Except as otherwise provided in the Participation Agreement, effective as
of the date of acceptance hereof by the Lessor (the "Effective Date"),
(a) the Assignee:
(i) shall be deemed automatically to have become a party
to the Participation Agreement and have all the rights and
obligations of a "Participant" under the Participation Agreement and
the other Operative Documents as if it were an original signatory
thereto to the extent specified in the second paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set
forth in the Participation Agreement and the other Operative
Documents as if it were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Participation Agreement and the other Operative Documents first arising
from and after the date hereof.
The Assignee (a) acknowledges that the obligations to be performed from
and after the Effective Date under the Participation Agreement and all other
Operative Documents, to the extent of the interest purchased by Assignee as set
forth in the second paragraph of this Assignment Agreement, are its obligations,
including the obligations imposed by Section 12(a) of the Participation
Agreement, and (b) represents and warrants to the Lessor, each Participant and
the Lessee as set forth in Section 6(a) and clauses (i) through (v) of Section
12(a) of the Participation Agreement.
The Assignee hereby advises each of you of the administrative details with
respect to the assigned Equity Amounts, Equity Commitment and interest in the
Lessor described in Attachment 1 hereto.
The Assignee (a) agrees to furnish the tax form or forms required by
Section 11(f) of the Participation Agreement (if so required) (i) no later than
the date of acceptance hereof by the Lessor and (ii) from time to time
thereafter as required by said Section 11(f), and (b) to comply
Participation Agreement
<PAGE>
from time to time with all applicable United States laws and regulations with
regard to withholding tax exemption.
Assignor's rights under Section 14(a) of the Participation Agreement shall
remain in full force and effect, and the provisions of Section 14(d) of the
Participation Agreement shall continue to be applicable to Assignor and Lessee.
THIS ASSIGNMENT AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE
INTERNAL LAW OF THE STATE OF ILLINOIS AS TO ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO CONFLICTS OF LAW.
Participation Agreement
<PAGE>
This Assignment Agreement may be executed by the Assignor and Assignee in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
ASSIGNOR:
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
ASSIGNEE:
[NAME OF ASSIGNEE]
By:
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
Participation Agreement
<PAGE>
Received and accepted this ______ day of
__________, ____:
MARCHFIRST, INC., as Lessee
By:
--------------------------------------------------------------------
Name:
---------------------------------------------------------------
Title:
--------------------------------------------------------------
Received and accepted this ______ day of
__________, ____:
MARCHFIRST, INC. HEADQUARTERS TRUST NO. 2000-1,
as Lessor
By: Wilmington Trust Company, not in its individual
capacity, but solely as owner trustee of
MARCHFIRST, INC.,HEADQUARTERS
TRUST NO. 2000-1
By:
--------------------------------------------------------------------
Name:
---------------------------------------------------------------
Title:
--------------------------------------------------------------
Received and accepted this ______ day of
__________, ____:
BANK ONE, NA,
By:
--------------------------------------------------------------------
Name:
---------------------------------------------------------------
Title:
--------------------------------------------------------------
Participation Agreement
<PAGE>
SCHEDULE 1
Adjusted and Assigned Commitment Percentages
Participation Agreement
<PAGE>
ATTACHMENT 1
to Assignment Agreement
[Attach Administrative Information Sheet]
Participation Agreement
<PAGE>
EXHIBIT K
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Participation Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Participation Agreement dated as of April ___, 2000 (as amended, modified,
renewed or extended from time to time, the "Agreement") among marchFIRST, Inc.
(the "Lessee"), the lenders party thereto marchFIRST, Inc. Headquarters Trust
No. 2000-1, Banc One Leasing Services Corp., and Bank One, NA (with its
principal office in Chicago, Illinois), as Agent for the Lenders. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the Lessee;
2. I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the Lessee and its Subsidiaries and Affiliates during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Default or an Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth Lessee's most current quarterly
financial statements and computations evidencing the Lessee's compliance with
the covenants of Section 8(d)(8) of the Agreement, all of which data and
computations are true, complete and correct.
5. Schedule II hereto sets forth the determination of the interest rates to
be paid for Advances and the Nonuse Fee rates commencing on the day hereof.
6. Schedule III attached hereto sets forth the various reports and deliveries
which are required at this time under the Agreement and the other Operative
Documents and the status of compliance.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Lessee has taken, is taking, or proposes to
take with respect to each such condition or event:
--------------------------------------------------------------------------------
Participation Agreement
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certifications, together with the computations set forth in
Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ___ day of
________, _____.
___________________________
Participation Agreement
<PAGE>
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of __________, ____ with
Provisions of ___ and ____ of
the Agreement
Participation Agreement
<PAGE>
SCHEDULE II TO COMPLIANCE CERTIFICATE
Borrower's Applicable Margin Calculation
Participation Agreement
<PAGE>
SCHEDULE III TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
Participation Agreement
<PAGE>
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Participation Agreement:
2. Date of Assignment Agreement: __________, 20__
3. Amounts (As of Date of Item 2 above):
Facility Facility
1* 2*
a. Assignee's percentage of
each Facility purchased
under the Assignment
Agreement** _________% _________%
b. Amount of each Facility
purchased under the
Assignment Agreement*** $_________ $_________
4. Assignee's Commitment (or Loans
with respect to terminated
Commitments) purchased hereunder: $______________________
5. Proposed Effective Date: _______________________
6. Non-standard Recordation Fee
Arrangement N/A***
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Agent]
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:______________________________ By:_______________________________
Title:_____________________________ Title:______________________________
<PAGE>
ACCEPTED AND CONSENTED TO****BY ACCEPTED AND CONSENTED TO****
[NAME OF BORROWER] BY [NAME OF AGENT]
By:_______________________________ By:________________________________
Title:______________________________ Title:_______________________________
* Insert specific facility names per Credit Agreement
** Percentage taken to 10 decimal places
*** If fee is split 50-50, pick N/A as option
**** Delete if not required by Participation Agreement
Participation Agreement
<PAGE>
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
Contact:
Name:___________________________ Telephone No.:_____________________________
Fax No.:_________________________ Telex No.:_________________________________
Answerback:________________________________
Payment Information:
Name & ABA # of Destination Bank:______________________________________________
_______________________________________________________________________________
Account Name & Number for Wire Transfer:_______________________________________
_______________________________________
Other Instructions:____________________________________________________________
_______________________________________________________________________________
Address for Notices for Assignor:______________________________________________
______________________________________________
______________________________________________
ASSIGNEE INFORMATION
Credit Contact:
Name:______________________________ Telephone No.:_______________________
Fax No.:___________________________ Telex No.:___________________________
Answerback:__________________________
Participation Agreement
<PAGE>
Key Operations Contacts:
Booking Installation:__________________ Booking Installation:_________________
Name:__________________________________ Name:_________________________________
Telephone No.:_________________________ Telephone No.:________________________
Fax No.:_______________________________ Fax No.:______________________________
Telex No.:_____________________________ Telex No.:____________________________
Answerback:____________________________ Answerback:___________________________
Payment Information:
Name & ABA # of Destination Bank: ______________________________________________
________________________________________________________________________________
Account Name & Number for Wire Transfer: ______________________________________
______________________________________
Other Instructions:_____________________________________________________________
________________________________________________________________________________
Address for Notices for Assignor:_______________________________________________
_______________________________________________
_______________________________________________
BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
Initial Funding Contact: Subsequent Operations Contact:
Name:______________________________ Name:_________________________________
Telephone No.: (312)______________ Telephone No.: (312)_________________
Fax No.: (312)____________________ Fax No.: (312)_______________________
Telex No.: 190201(Answerback: FNBC UT)
Initial Funding Standards:
Libor - Fund 3 days after rates are set.
Wire Instructions: Bank One, NA, ABA #____________________
BNF = Ref:__________________
Address for Notices: 1 Bank One Plaza, [Mail Suite _____] Chicago, IL 60670
Attn:_________________________
Fax No. (312) ___________ or (312) ______________
Participation Agreement
<PAGE>
EXHIBIT L
Redevelopment Agreement
and Recognition and Consent Agreement
Participation Agreement
<PAGE>
EXHIBIT M
Investment in Blue Vector
Participation Agreement
