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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ______ to _______
Commission File Number 1-11008
CATALINA MARKETING CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 33-0499007
------------------------------ ----------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
11300 9th Street North
St. Petersburg, Florida 33716-2329
----------------------- ----------
(727) 579-5000
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
At November 11, 1999, Registrant had outstanding 18,239,947 shares of
Common Stock.
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CATALINA MARKETING CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income
for the three and six month periods ended
September 30, 1999 and 1998 3
Condensed Consolidated Balance Sheets at
September 30, 1999 and March 31, 1999 4
Condensed Consolidated Statements of Cash Flows
for the six month periods ended
September 30, 1999 and 1998 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 16
</TABLE>
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CATALINA MARKETING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
--------- --------- --------- ---------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 86,828 $ 64,448 $ 159,442 $ 121,282
Costs and Expenses:
Direct operating expenses 36,369 28,198 65,705 51,748
Selling, general and administrative 22,648 14,022 43,288 29,327
Depreciation and amortization 8,577 6,638 16,764 13,042
--------- --------- --------- ---------
Total costs and expenses 67,594 48,858 125,757 94,117
--------- --------- --------- ---------
Income From Operations 19,234 15,590 33,685 27,165
Interest Expense, Net and Other (9) (2,893) (210) (2,921)
--------- --------- --------- ---------
Income Before Income Taxes and Minority Interest 19,225 12,697 33,475 24,244
Income Taxes (7,728) (6,308) (13,458) (11,117)
Minority Interest in Losses of Subsidiaries 175 -- 358 --
--------- --------- --------- ---------
Net Income $ 11,672 $ 6,389 $ 20,375 $ 13,127
Diluted:
Earnings Per Common Share $ 0.60 $ 0.34 $ 1.05 $ 0.69
Weighted Average Common Shares Outstanding
19,366 18,963 19,426 18,998
Basic:
Earnings Per Common Share $ 0.63 $ 0.35 $ 1.09 $ 0.71
Weighted Average Common Shares Outstanding 18,625 18,512 18,650 18,521
</TABLE>
The accompanying Notes are an integral part of these consolidated financial
statements.
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CATALINA MARKETING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
--------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 10,557 $ 13,942
Accounts receivable, net 45,468 44,045
Deferred tax asset 10,715 8,932
Prepaid expenses and other current assets 29,624 28,562
--------- ---------
Total current assets 96,364 95,481
--------- ---------
Property and Equipment:
Property and equipment 219,744 199,625
Accumulated depreciation and amortization (123,988) (111,939)
--------- ---------
Property and equipment, net 95,756 87,686
--------- ---------
Purchased intangible assets, net 54,524 35,628
Other assets 1,989 2,252
--------- ---------
Total Assets $ 248,633 $ 221,047
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 15,749 $ 14,149
Accrued expenses 53,390 44,697
Deferred revenue 30,031 27,349
Short term borrowings 20,625 7,635
--------- ---------
Total current liabilities 119,795 93,830
--------- ---------
Deferred tax liability 7,384 5,696
Minority interest 1,457 --
Long term debt 1,780 588
--------- ---------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock; $0.01 par value; 5,000,000
authorized shares; none issued and outstanding -- --
Common stock; $0.01 par value; 50,000,000 authorized
shares and 18,233,245 and 18,389,438 shares
issued and outstanding at September 30, 1999
and March 31, 1999, respectively 182 184
Paid-in capital 446 819
Accumulated other comprehensive income (438) 843
Retained earnings 118,027 119,087
--------- ---------
Total stockholders' equity 118,217 120,933
--------- ---------
Total Liabilities and Stockholders' Equity $ 248,633 $ 221,047
========= =========
</TABLE>
The accompanying Notes are an integral part of these consolidated financial
statements.
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CATALINA MARKETING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
-----------------------
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 20,375 $ 13,127
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest (358) --
Depreciation and amortization 16,764 14,003
Other 6,127 2,204
Changes in operating assets and liabilities 7,798 (9,438)
-------- --------
Net cash provided by operating activities 50,706 19,896
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (25,641) (17,096)
Purchase of investments, net of cash acquired (24,689) (2,480)
-------- --------
Net cash used in investing activities (50,330) (19,576)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on credit facility 10,000 --
Proceeds from debt obligations 13,524 13,436
Principal payments on debt obligations (8,764) (13,369)
Proceeds from issuance of common and subsidiary stock 11,796 3,152
Tax benefit from exercise of non-qualified options
and disqualified dispositions 4,304 1,010
Payment for repurchase of company common stock (34,531) (11,771)
-------- --------
Net cash used in financing activities (3,671) (7,542)
-------- --------
NET DECREASE IN CASH (3,295) (7,222)
Effect of exchange rate changes on cash (90) (312)
CASH, at end of prior period 13,942 18,434
-------- --------
CASH, at end of current period $ 10,557 $ 10,900
======== ========
</TABLE>
The accompanying Notes are an integral part of these consolidated financial
statements.
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CATALINA MARKETING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Condensed Consolidated Financial Statements:
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial
position of the Company as of September 30, 1999 and March 31, 1999, the
results of operations for the three and six months ended September 30, 1999 and
1998 and cash flows for the six month periods ended September 30, 1999 and
1998. Certain prior period balances have been reclassified to conform with the
current period presentation.
The condensed consolidated financial statements include the accounts of the
Company and its wholly-owned and majority-owned subsidiaries. The second
quarter balances and results of the majority and wholly owned foreign
subsidiaries are included as of June 30, 1999 and December 31, 1998 and for the
three and six month periods ended June 30, 1999 and 1998, respectively. All
material intercompany profits, transactions and balances have been eliminated.
These financial statements, including the condensed consolidated balance sheet
as of March 31, 1999, which has been derived from audited financial statements,
are presented in accordance with the requirements of Form 10-Q and consequently
may not include all disclosures normally required by generally accepted
accounting principles or those normally made in the Company's Annual Report on
Form 10-K. The accompanying condensed consolidated financial statements and
related notes should be read in conjunction with the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1999.
Note 2. Earnings Per Common Share:
The following is a reconciliation of the denominator of basic EPS to the
denominator of diluted EPS (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Basic weighted average common
shares outstanding 18,625 18,512 18,650 18,521
Dilutive effect of options outstanding 741 451 776 477
------ ------ ------ ------
Diluted weighted average common shares
outstanding 19,366 18,963 19,426 18,998
</TABLE>
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Options to purchase 120,650 shares of common stock at exercise prices per share
ranging from $91 1/4 to $106 7/8 were outstanding at September 30, 1999, but
were not included in the computation of diluted EPS because the options'
exercise prices were greater than the average market price of common stock.
Note 3. Comprehensive Income:
<TABLE>
<CAPTION>
Three months ended Six months ended
September 30, September 30,
--------------------- -----------------------
1999 1998 1999 1998
-------- ------ -------- --------
(in thousands)
<S> <C> <C> <C> <C>
Net income $ 11,672 $6,389 $ 20,375 $ 13,127
Other comprehensive income, net of tax:
Currency translation adjustment (695) 197 (1,281) (540)
-------- ------ -------- --------
Comprehensive Income $ 10,977 $6,586 $ 19,094 $ 12,587
</TABLE>
Note 4. Credit Facility:
In September 1999, the Company, as a part of its $150 million credit agreement,
extended the term of the $50 million 364 day line of credit facility to
September 26, 2000. At September 30, 1999, there was $10 million outstanding
thereunder.
Note 5. Convertible Long Term Debt:
Effective April 5, 1999, the Tribune Company, an unrelated entity, made an
investment in Supermarkets Online, a majority owned subsidiary of the Company.
In addition to this equity investment, Supermarkets Online borrowed $1.4
million from the Tribune Company in exchange for a subordinated convertible
note bearing interest at a rate of 4.5 percent per annum. This long term debt
obligation is convertible into 500,000 shares of Supermarkets Online common
stock upon certain occurrences.
Note 6. Acquisitions:
Effective April 21, 1999, the Company, through one of its wholly owned
subsidiaries, acquired one of its vendors, CompuScan Marketing, Inc.
("CompuScan"), for $9.1 million in initial cash consideration, net of cash
acquired, by means of a merger transaction. CompuScan provides the intellectual
property and backroom processing for the Company's Checkout Prizes product.
Terms of the merger agreement call for the Company to make a series of
additional payments, which are based on specified criteria, including future
revenue growth targets of the Checkout Prizes product.
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Effective July 1, 1999, the Company acquired certain assets and assumed certain
liabilities of Alliance Research, Inc., an attitudinal research company, for
$6.7 million in initial consideration, net of cash and cash equivalents
acquired. Terms of the purchase agreement call for the Company to make a series
of payments, which are contingent upon future operating performance of Alliance
Research, Inc.
The above referenced acquisitions have been accounted for using the purchase
method of accounting for acquisitions and, accordingly, the results of
operations of each acquisition have been included in the fiscal 2000 financial
statements since the date of such acquisition.
Note 7. Segment Information (in thousands):
<TABLE>
<CAPTION>
For the Three Months Ended September 30,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Targeted Targeted
Marketing Marketing
Services Eliminations Services Eliminations
-------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Revenue from external customers $ 86,828 $ 64,448
Revenue from internal sources 344 (344) 608 (608)
Net income 11,672 6,389
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended September 30,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Targeted Targeted
Marketing Marketing
Services Eliminations Services Eliminations
-------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Revenue from external customers $159,442 $ 121,282
Revenue from internal sources 654 (654) 1,089 (1,089)
Net income 20,375 13,127
</TABLE>
Note 8. Commitments and Contingencies
As of October 21, 1999, the Company entered into a lease financing agreement
for a new corporate headquarters building in St. Petersburg, Florida. The lease
term runs through September 2005. The Company has the option to extend the
lease term for up to three, five year renewal periods, subject to certain
conditions. The agreement includes a purchase option for the Company that
approximates the original cost of the building. The Company anticipates that it
will occupy the new corporate headquarters building and begin making lease
payments in the second quarter of FY 2001.
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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS:
FISCAL 2000 COMPARED TO FISCAL 1999
The Company's revenues for the second quarter and first six months of fiscal
2000 increased 34.7 percent and 31.5 percent, respectively, compared with the
same periods in fiscal 1999. The increase in revenues is due to an increase in
promotions printed worldwide, growth in the Checkout Direct(R) program and
increases in direct mail marketing programs. Additionally, the second quarter
and first six months of fiscal 2000 includes revenues from Market Logic and DCI
Cardmarketing, acquired in July 1998 and January 1999, respectively. The second
quarter of fiscal 2000 also includes revenues of approximately $2.5 million
from Alliance Research, Inc. acquired in July 1999.
In the U.S., the Catalina Marketing Network was in 12,635 stores at September
30, 1999, which reach 160 million shoppers each week as compared to 11,621
stores reaching 151 million shoppers each week at September 30, 1998 and 12,092
stores reaching 152 million shoppers each week at March 31, 1999. The Health
Resource Network was in 4,706 pharmacies at September 30, 1999 as compared to
3,186 pharmacies at September 30, 1998 and 3,861 pharmacies at March 31, 1999.
Outside the U.S., the Catalina Marketing Network was in 2,335 stores at
September 30, 1999, which reach 34 million shoppers each week as compared to
1,560 stores reaching 24 million shoppers each week at September 30, 1998 and
1,935 stores reaching 29 million shoppers each week at March 31, 1999.
In the first six months of fiscal 2000 the Company installed its Catalina
Marketing Network in 543 stores in the U.S., net of deinstallations, as
compared to 457 stores in the comparable fiscal 1999 period. Deinstallation
activity can and does occur primarily due to the consolidation and business
combination of supermarket chains as well as store closures made by retailers
in the ordinary course of business. The Company also installed its Health
Resource Network in 845 pharmacies in the first six months of fiscal 2000, net
of deinstallations, as compared to 1,266 stores in the comparable fiscal 1999
period. Outside the U.S., the Company installed 400 stores in the first six
months of fiscal 2000, net of deinstallations, as compared to 188 stores in the
comparable fiscal 1999 period.
Direct operating expenses consist of retailer fees; paper; sales commissions;
loyalty and direct marketing expenses; provision for doubtful accounts; the
expenses of operating and maintaining the Catalina Marketing and Health
Resource network, primarily expenses relating to operations personnel and
service offices; and the direct expenses associated with operating the outdoor
media business in a majority-owned subsidiary in Asia. Direct operating
expenses increased in absolute terms to $36.4 million and $65.7 million for the
second quarter and first six months of fiscal 2000, respectively, from $28.2
million and $51.7 million in the
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comparable periods of fiscal 1999. Direct operating expenses in the second
quarter and first six months of fiscal 2000 as a percentage of revenues
decreased to 41.9 percent and 41.2 percent, respectively, from 43.7 percent and
42.7 percent in the comparable periods of fiscal 1999. This decrease in fiscal
2000 is principally attributable to a favorable shift in product mix towards
higher margin domestic sales, partially offset by the higher material costs
component of direct costs as a function of revenue associated with the increase
in direct marketing programs, including Market Logic and the DCI Cardmarketing
business.
Selling, general and administrative expenses include personnel-related costs of
selling and administrative staff, overhead, marketing expenses and new product
development expenses. Selling, general and administrative expenses for the
second quarter and first six months of fiscal 2000 were $22.6 million and $43.3
million, respectively, compared to $14.0 million and $29.3 million for the
comparable period of fiscal 1999, increases of 61.5 percent and 47.6 percent,
respectively. As a percentage of revenues, selling, general and administrative
expenses increased 4.3 percent and 2.9 percent in the second quarter and first
six months of fiscal 2000, to 26.1 percent and 27.1 percent, respectively, from
21.8 percent and 24.2 percent for the comparable periods of fiscal 1999. These
increases relate primarily to administrative, advertising and marketing
expenses relating to new operating units and products.
Depreciation and amortization increased to $8.6 million and $16.7 million for
the second quarter and first six months of fiscal 2000 from $6.6 million and
$13.0 million for the comparable periods in fiscal 1999. Depreciation increased
due to the investment in capital expenditures, during the current and prior
periods, associated with new operating units and product lines, data processing
equipment and the increase in stores installed. Amortization expense increased
due to the increases in goodwill and other intangible assets related to the
Company's acquisitions.
Interest expense, net and other decreased to $9,000 and $210,000 net expense
for the second quarter and first six months of fiscal 2000 from $2.9 million
net expense for each of the comparable periods in fiscal 1999. The decrease is
primarily due to the Company writing off its $3.0 million investment in
Intelledge Corporation in the second quarter of fiscal 1999.
The provision for income taxes increased to $13.5 million, or 40.2 percent of
income before income taxes and minority interest, for the first six months of
fiscal 2000, compared to $11.1 million, or 45.9 percent of income before income
taxes and minority interest, for the same period in fiscal 1999. The rate
decrease is primarily due to the valuation allowance recorded against the $3.0
million deferred tax benefit for the Intelledge investment write off in the
second quarter of fiscal 1999 and secondarily due to the Company's ability to
utilize losses of a majority owned foreign subsidiary for income tax purposes
in fiscal 2000. The Company's effective tax rate is higher than the federal
statutory income tax rate due to state and foreign income taxes, various
nondeductible expenses, primarily the amortization of goodwill related to the
Company's acquisitions and, in the case of fiscal 1999, the valuation allowance
referred to in the previous sentence.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital expenditures are store equipment and third-party
store installation costs, as well as data processing equipment for the
Company's central data processing facilities. Total store equipment and
third-party store installation costs range from $3,000 to $13,000 per store.
During the first six months of fiscal 2000 and 1999, the Company made capital
expenditures of $25.6 million and $17.1 million, respectively. The pace of
installations varies depending on the timing of contracts entered into with
retailers and the scheduling of store installations by mutual agreement. During
the first six months of fiscal 2000, the Company spent $6.6 million more on
store equipment compared to the comparable fiscal 1999 period.
Effective April 21, 1999, the Company, through one of its wholly owned
subsidiaries, acquired one of its vendors, CompuScan, for $9.1 million in
initial cash consideration, net of cash acquired, by means of a merger
transaction. Terms of the merger agreement call for the Company to make a
series of additional payments, which are based on specified future revenue
growth targets of the Checkout Prizes product.
Effective July 1, 1999, the Company acquired certain assets and assumed certain
liabilities of Alliance Research, Inc., an attitudinal research company, for
$6.7 million in initial consideration, net of cash and cash equivalents
acquired. Terms of the purchase agreement call for the Company to make a series
of payments, which are contingent upon future operating performance of Alliance
Research, Inc.
Additionally, in the first six months of fiscal 2000, investments were made
totaling $8.9 million which were comprised of earnout payments attributable to
past acquisitions.
During the second quarter of fiscal 2000, the Company purchased 396,500 shares
of its common stock for $34.5 million. On October 25, 1999 the Company
announced approval by its Board of Directors of an additional $50.0 million to
buy back Company common stock. As of October 25, 1999, this authorization
increases the total funds available for share repurchases to $59.0 million.
During the second quarter of fiscal 2000, the Company borrowed approximately
$10 million against its $150 million credit facility. The $10 million was
outstanding as of September 30, 1999.
The Company believes working capital generated by operations along with
existing credit facilities is sufficient for its overall capital requirements.
Other
Year 2000 Readiness Disclosure
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This year 2000 disclosure is the most current information available and
replaces all previous disclosures made by the Company in its filings on Form
10-Q and Form 10-K, and in its Annual Report to Stockholders.
In the next few months, many companies will face potentially serious risks
associated with the inability of existing business systems to appropriately
recognize calendar dates beginning in the year 2000. The Company is aware of
the year 2000 issue and the effects it may have on its business systems. In
response, the Company has developed a detailed plan to address the issue. This
plan includes a campaign which began in fiscal 1998, revised from time to time
to consider acquired companies' business systems, and has a goal for completion
in December 1999. The plan currently includes spending of approximately $1.5
million for testing and upgrading hardware and software. The Company has spent
approximately $1.3 million on the year 2000 issue through September 30, 1999.
The Company has contacted substantially all of its hardware and software
vendors, suppliers and financial institution partners to evaluate their
compliance efforts. Those that have been considered noncompliant have been
evaluated and corrective action has been or will be taken by December 1999 to
ensure the vendors' year 2000 efforts or lack there of will not adversely
impact the Company's operations.
The Company's manufacturer clients and retailers may also encounter year 2000
issues and are in various states of readiness. If these manufacturers or
retailers encounter serious problems related to the year 2000 issue, those
problems could have a material adverse impact on the operations of the Company.
The Company believes most of its manufacturer clients and retailers are
addressing the year 2000 issue, and the Company is closely monitoring the
status of their readiness.
In the event that the Company's year 2000 compliance efforts are unsuccessful
and/or one or more of the Company's critical internal systems are not year 2000
compliant by December 31, 1999, the following could occur, any of which could
have a material adverse impact on the operations of the Company:
(a) Customer service could deteriorate to the point that a substantial number
of the Company's customers move their relationships to other
organizations;
(b) The Company may be unable to provide manufacturer and retail clients with
timely and accurate information about program execution; or
(c) The Company may be unable to fulfill various contractual obligations.
The Company believes substantially all of its internally developed applications
and purchased applications used internally will be year 2000 compliant by
December 1999. The Company has therefore focused its efforts on contingency
planning for business systems outside of those applications, as warranted.
Forward Looking Statements
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The statements in this Form 10-Q may be forward looking, and actual results may
differ materially. Statements not based on historical facts involve risks and
uncertainties, including, but not limited to, the changing market for
promotional activities, especially as it relates to policies and programs of
packaged goods manufacturers for the issuance of certain product coupons, the
effect of economic and competitive conditions and seasonal variations, actual
timing and level of promotional activities and programs with the Company's
customers, the pace of installation of the Company's store network, the success
of new services and businesses and the pace of their implementation, any
acquisitions or dispositions by the Company, and the Company's ability to
maintain favorable client relationships.
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company's Annual Meeting of Stockholders was held on July 20,
1999. The following members were elected as Class II members of the
Company's Board of Directors for the period ending as of the annual
meeting of stockholders in 2002:
Frederick W. Beinecke
Thomas W. Smith
The terms of the other directors of the Company continued after the
meeting. These directors are: Frank H. Barker, Patrick W. Collins,
George W. Off, Daniel D. Granger, Stephen I. D'Agostino and Michael B.
Wilson.
With regard to the proposal to ratify and approve the Company's 1999
Stock Option Plan, 12,449,868 votes were cast in favor, 1,833,057 were
cast against, there were 2,034,007 abstentions and broker non-votes,
and the proposal was approved.
With regard to the proposal to ratify and approve the Company's
independent certified public accountants for fiscal 2000, 16,298,075
votes were cast in favor, 3,800 were cast against, there were 15,057
abstentions, and the proposal was approved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
10.26.2 Second Amendment dated as of February 19, 1999, to
the Credit Agreement dated as of September 30, 1997,
by and between the Registrant and Nationsbank,
National Association, as agent and lender, and the
other lenders party thereto
10.27 Lease Agreement dated as of October 21, 1999 by and
between First Security Bank, National Association, as
the owner trustee under Dolphin Realty Trust 1999-1,
as lessor, and Catalina Marketing Sales Corporation,
as lessee
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10.28 Participation Agreement dated as of October 21, 1999
among Catalina Marketing Sales Corporation, as
lessee; the Registrant, as guarantor; First Security
Bank, National Association, as the owner trustee
under Dolphin Realty Trust 1999-1, as lessor and
borrower; the various banks and other lending
institutions and First Union National Bank, as the
agent for the lenders
10.29 Purchase and Sale Agreement dated as of October 21,
1999 by and among 200 Carillon, LLC, as seller,
Echelon International Corporation, as developer, and
Catalina Marketing Sales Corporation, as buyer
15 Acknowledgement Letter
19 Review Report of Independent Certified Public
Accountants
b. Reports of Form 8-K
None
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CATALINA MARKETING CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, Registrant's principal financial officer, thereunto duly
authorized.
November 12, 1999 CATALINA MARKETING CORPORATION
----------------------------------------
(Registrant)
/s/ Joseph P. Port
----------------------------------------
Joseph P. Port
Senior Vice President and
Chief Financial Officer
(Authorized officer of Registrant
and principal financial officer)
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<PAGE> 1
EXHIBIT 10.26.2
AMENDMENT AGREEMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT AGREEMENT is made and entered into this 19th day of
February, 1999, by and among CATALINA MARKETING CORPORATION, a Delaware
corporation (herein called the "Borrower"), NATIONSBANK, NATIONAL ASSOCIATION a
national banking association organized and existing under the laws of the
United States (the "Agent"), as Agent for the lenders (the "Lenders") party to
a Credit Agreement dated September 30, 1997, as amended by Amendment Agreement
No. 1 to Credit Agreement dated August 12, 1998, among such Lenders, Borrowers
and the Agent, as amended (the "Agreement") and Lenders party to this Amendment
Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders have entered into the
Agreement pursuant to which the Lenders have agreed to make revolving loans to
the Borrower in the principal amount of $150,000,000 as evidenced by the Notes
(as defined in the Agreement); and
WHEREAS, the Borrower has requested that the Agent and the Lenders
amend the Agreement as provided herein; and
WHEREAS, upon the terms and conditions contained herein the Agent and
the Lenders are willing to amend the Agreement;
NOW, THEREFORE, the Borrower, the Agent and the Lenders do hereby
agree as follows:
1. Definitions. The term "Agreement" as used herein and in the Loan
Documents (as defined in the Agreement) shall mean the Agreement as hereby
amended and modified. Unless the context otherwise requires, all terms used
herein without definition shall have the definition provided therefor in the
Agreement.
2. Amendment. The Agreement is hereby amended, effective as of
February 19, 1999, as follows:
(a) The following additional defined terms are hereby added to
Section 1.1:
"SMO" means Supermarkets On-Line, Inc.
"SMO Holdings" means an entity to be formed as a corporation,
limited liability company or partnership for purposes of the Tribune
Transaction, which entity will, upon consummation of the Tribune
Transaction, be jointly owned by the Borrower and Tribune.
<PAGE> 2
"SMO License" means a license to be granted by the Borrower or
its affiliates to SMO Holdings or SMO entitling SMO Holdings and/or
SMO to utilize certain of the proprietary technology, know-how and
information of the Borrower and its affiliates in connection with the
operation of SMO Holdings' and SMO's business, as such license may be
amended, modified, renewed, extended or replaced from time to time.
"Tribune" means Tribune Company or one of its subsidiaries.
"Tribune Transaction" means a transaction occurring on or
prior to August 31, 1999 pursuant to which the Borrower and Tribune
will enter into a joint venture, initially for the purpose of owning
and operating SMO's assets and business, which joint venture will be
structured as follows: (i) the parties to such transaction will form
and become joint owners of SMO Holdings and (ii) SMO will become a
subsidiary of SMO Holdings.
"Tribune Transaction Notice Date" means the date the Agent
receives written notice from the Borrower stating that the Borrower
intends to consummate the Tribune Transaction."
(b) The definition of "Acquisition" in Section 1.1 is hereby
amended by inserting the following proviso after the word "Person" at
the end of the definition:
"; provided, that the Borrower's acquisition of capital stock of
SMO Holdings in connection with the Tribune Transaction shall not
be deemed an Acquisition hereunder."
(c) The definition of "Subsidiary" in Section 1.1 is hereby
amended in its entirety so that as amended it shall read as follows:
""Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of
all equity interests is owned directly or indirectly by the
Borrower and/or by one or more of the Borrower's Subsidiaries;
provided, however, that (i) effective as of the Tribune
Transaction Notice Date, SMO shall not be deemed a Subsidiary for
all purposes of this Agreement and (ii) upon and after formation,
SMO Holdings and its subsidiaries (then existing or thereafter
formed) including, without limitation, SMO after SMO is
transferred to SMO Holdings in connection with the consummation of
the Tribune Transaction, shall not be deemed a Subsidiary for all
purposes of this Agreement."
(d) Effective as of the Tribune Transaction Notice Date Schedule
7.4 shall be deemed amended by removing any reference to SMO as a
Subsidiary.
2
<PAGE> 3
(e) Section 9.4 of the Agreement is hereby amended by (i) deleting
the phrase "of the Borrower" where it initially appears therein, and
(ii) amending clause (f) in its entirety so that as amended it shall
read as follows:
"(f) Indebtedness in an aggregate outstanding amount at any time
of up to $33,000,000 of Pacific Media KK including any existing
indebtedness described on Schedule 7.6 (the "Pacific Indebtedness"),
and with respect to Borrower guaranties (including through
indemnifications with respect to personal guaranties) of Pacific
Indebtedness, provided that the obligation of the Borrower under all
such guaranties shall at no time exceed the sum of (i) $8,000,000 and
(ii) fifty-one percent (51%) of the positive difference, if any,
between the aggregate amount of Pacific Indebtedness and $8,000,000;"
and (iii) amending clause (h) by deleting the figure "$2,000,000"
appearing therein and inserting in lieu thereof the figure
"$10,000,000".
(f) Section 9.5 is hereby amended by (i) deleting the word "and"
at the end of clause (c) and inserting in lieu thereof a comma, (ii)
deleting the period at the end of clause (d) and inserting in lieu
thereof the word "and" and (iii) inserting a new clause (e) thereto
which clause shall read as follows:
"(e) (i) the sale or other disposition of capital stock of SMO to
SMO Holdings in connection with the Tribune Transaction, (ii) the
sale or other disposition of capital stock of SMO Holdings to
Tribune in connection with the Tribune Transaction and (iii) after
consummation of the Tribune Transaction, the sale or other
disposition of capital stock of SMO Holdings, Inc."
(g) Section 9.6 is hereby amended by deleting the figure
"$5,000,000" appearing in clause (f) and inserting in lieu thereof the
figure "$15,000,000", (ii) deleting the word "and" at the end of
clause (g), (iii) deleting the period at the end of clause (h) and
inserting in lieu thereof a semi-colon and the word "and", and (iv) by
adding a new clause (i) at the end which reads as follows:
"(i) effective as of the Tribune Transaction Notice Date shares of
capital stock of SMO and SMO Holdings, provided that any
additional loan to or investment made in either of them shall be
deemed a loan or an investment pursuant to subsection 9.6(f)
hereof."
(h) Section 9.9 of the Agreement is hereby amended by inserting
the following proviso after the word "Affiliate" at the end of the
Section:
"; provided, that the foregoing restriction shall not be
applicable to the SMO License"
3
<PAGE> 4
3. Limitations with Respect to SMO. Notwithstanding any provision
contained in Article IX to the contrary, from the date hereof until the earlier
of (x) the release of SMO as a Guarantor pursuant to Section 4 below or (y)
August 31, 1999, (i) neither SMO nor SMO Holdings shall be entitled to incur
any additional Indebtedness for which the Borrower or any other Guarantor shall
be directly or indirectly liable, (ii) neither the Borrower nor any Subsidiary
shall make any additional loans to or investments in SMO or SMO Holdings except
to the extent the Borrower could make loans or investments under Section 9.6 if
neither SMO nor SMO Holdings were a Subsidiary, and (iii) the Borrower will not
permit any Subsidiary of the Borrower to consolidate with or merge into SMO or
SMO Holdings.
4. Release. Each of the Lenders hereby consent to (i) the release of
SMO as a Guarantor effective as of the Tribune Transaction Notice Date, (ii)
the release of the stock of SMO from the pledge thereof to the Agent as
security for the Obligations effective as of the Tribune Transaction Notice
Date, and (iii) the Agent taking such other and further action as may be
necessary or desirable to effect the foregoing. As soon as practicable
following the Notice Date, the Agent shall (i) execute and deliver to SMO a
release of SMO from the Guaranty and Suretyship Agreement dated as of September
30, 1997 and (ii) to release the Borrower's pledge of the stock of SMO, and
shall take such other actions as may be reasonably requested by the Borrower to
effect the releases described in this Section 4.
5. Representations and Warranties. The Borrower hereby certifies
that:
(a) The representations and warranties made by Borrower in Article
VII of the Agreement are true on and as of the date hereof except that
the financial statements referred to in Section 7.6 shall be those
most recently furnished to each Lender pursuant to Section 8.1(a) and
(b);
(b) There has been no material change in the condition, financial
or otherwise, of the Borrower and its Subsidiaries since the date of
the most recent financial reports of the Borrower received by each
Lender under Section 8.1 of the Agreement, other than changes in the
ordinary course of business, none of which has been a material adverse
change;
(c) The business and properties of the Borrower and its
Subsidiaries are not, and since the date of the most recent financial
report of the Borrower and its Subsidiaries received by each Lender
under Section 8.1 of the Agreement have not been, adversely affected
in any substantial way as the result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workers, flood,
embargo, riot, activities of armed forces, war or acts of God or the
public enemy, or cancellation or loss of any major contracts; and
(d) No event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, constituted a
Default or an Event of Default under
4
<PAGE> 5
the Agreement or the Notes either immediately or with the lapse of
time or the giving of notice, or both.
6. Conditions. As a condition to the effectiveness of this Amendment
Agreement, the Borrower shall deliver, or cause to be delivered to the Agent,
the following:
(a) Twelve (12) executed counterparts of this Amendment Agreement;
and
(b) copies of all additional agreements, instruments and documents
which the Agent may reasonably request, such documents, when
appropriate, to be certified by appropriate governmental authorities.
7. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that,
except as in this Amendment Agreement, no representations, warranties or
commitments, express or implied, have been made by any other party to the
other. None of the terms of conditions of this Amendment Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the parties hereto, specifying such change, modification, waiver
or cancellation of such terms or conditions, or of any proceeding or succeeding
breach thereof.
8. Consent. The Guarantors have joined in the execution of this
Amendment Agreement for the purpose of consenting hereto and confirming their
respective guaranty of the Obligations on the terms set forth in the Facility
Guaranty.
9. Full Force and Effect of Agreement. Except as hereby specifically
amended, modified or supplemented, the Agreement and all of the other Loan
Documents are hereby confirmed and ratified in all respects and shall remain in
full force and effect according to their respective terms.
[Remainder of page intentionally left blank.]
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
CATALINA MARKETING CORPORATION
WITNESS:
By:
- ---------------------------- -------------------------------------
Name:
- ---------------------------- -----------------------------------
Title:
----------------------------------
6
<PAGE> 7
GUARANTORS:
WITNESS: CATALINA MARKETING SALES CORPORATION
- --------------------------
By:
- -------------------------- -------------------------------------
Name: George W. Off
Title: Director
WITNESS: CATALINA MARKETING RETAIL SALES
CORPORATION
- --------------------------
By:
- -------------------------- -------------------------------------
Name: George W. Off
Title: Director
----------------------------------
WITNESS: CATALINA MARKETING INTERNATIONAL, INC.
- --------------------------
By:
- -------------------------- -------------------------------------
Name: George W. Off
Title: Chief Executive Officer
and President
WITNESS: CATALINA MARKETING WORLDWIDE, INC.
- --------------------------
By:
- -------------------------- -------------------------------------
Name: George W. Off
Title: President
WITNESS: CATALINA MARKETING U.K., INC.
- --------------------------
By:
- -------------------------- -------------------------------------
Name: George W. Off
Title: President
7
<PAGE> 8
WITNESS: HEALTH RESOURCE PUBLISHING COMPANY
- -------------------------
By:
- ------------------------- -------------------------------------
Name: George W. Off
Title: Vice President
CATALINA MARKETING LOYALTY
WITNESS: HOLDINGS, INC.
- -------------------------
By:
- ------------------------- -------------------------------------
Name: George W. Off
Title: President
WITNESS: MARKET LOGIC, INC.
- -------------------------
By:
- ------------------------- -------------------------------------
Name: Daniel D. Granger
Title: President/CEO
WITNESS: DYNAMIC CONTROLS, INC.
- -------------------------
By:
- ------------------------- -------------------------------------
Name: Daniel D. Granger
Title: President/CEO
8
<PAGE> 9
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and Lender
By:
-------------------------------------
Name: Richard M. Starke
Title: Senior Vice President
9
<PAGE> 10
FLEET NATIONAL BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
10
<PAGE> 11
FIRST UNION NATIONAL BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
11
<PAGE> 12
CREDIT LYONNAIS ATLANTA AGENCY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
12
<PAGE> 13
COMERICA BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
13
<PAGE> 14
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
14
<PAGE> 15
PNC BANK, N.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
15
<PAGE> 16
SUNTRUST BANK, TAMPA BAY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
16
<PAGE> 17
AMSOUTH BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
17
<PAGE> 18
UNION BANK OF CALIFORNIA
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
18
<PAGE> 19
RIGGS BANK, N.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
19
<PAGE> 1
EXHIBIT 10.27
- -------------------------------------------------------------------------------
LEASE AGREEMENT
Dated as of October 21, 1999
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the Dolphin Realty Trust 1999-1,
as Lessor
and
CATALINA MARKETING SALES CORPORATION,
as Lessee
- -------------------------------------------------------------------------------
This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent") under a Security Agreement dated as of October 21,
1999, between First Security Bank, National Association, not individually, but
solely as the Owner Trustee under the Dolphin Realty Trust 1999-1 and the
Agent, as amended, modified, extended, supplemented, restated and/or replaced
from time to time in accordance with the applicable provisions thereof. This
Lease Agreement has been executed in several counterparts. To the extent, if
any, that this Lease Agreement constitutes chattel paper (as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease Agreement may be created
through the transfer or possession of any counterpart other than the original
counterpart containing the receipt therefor executed by the Agent on the
signature page hereof.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
ARTICLE I........................................................................................1
1.1 Definitions....................................................................1
1.2 Interpretation.................................................................2
ARTICLE II.......................................................................................2
2.1 Property.......................................................................2
2.2 Lease Term.....................................................................2
2.3 Title..........................................................................2
2.4 Lease Supplements..............................................................2
ARTICLE III......................................................................................3
3.1 Rent...........................................................................3
3.2 Payment of Basic Rent..........................................................3
3.3 Supplemental Rent..............................................................3
3.4 Performance on a Non-Business Day..............................................4
3.5 Rent Payment Provisions........................................................4
ARTICLE IV.......................................................................................4
4.1 Taxes; Utility Charges.........................................................4
ARTICLE V........................................................................................5
5.1 Quiet Enjoyment................................................................5
ARTICLE VI.......................................................................................5
6.1 Net Lease......................................................................5
6.2 No Termination or Abatement....................................................6
ARTICLE VII..................................................................................... 6
7.1 Ownership of the Property......................................................6
ARTICLE VIII.....................................................................................7
8.1 Condition of the Property......................................................7
8.2 Possession and Use of the Property.............................................8
8.3 Integrated Property............................................................9
ARTICLE IX.......................................................................................9
9.1 Compliance With Legal Requirements, Insurance Requirements
and Manufacturer's Specifications and Standards................................9
ARTICLE X........................................................................................9
10.1 Maintenance and Repair; Return.................................................9
10.2 Environmental Inspection......................................................11
ARTICLE XI......................................................................................11
11.1 Modifications.................................................................11
ARTICLE XII.....................................................................................12
12.1 Warranty of Title.............................................................12
ARTICLE XIII....................................................................................13
13.1 Permitted Contests Other Than in Respect of Indemnities.......................13
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal
Requirements..................................................................14
ARTICLE XIV.....................................................................................14
14.1 Public Liability and Workers' Compensation Insurance..........................14
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
14.2 Permanent Hazard and Other Insurance..........................................14
14.3 Coverage......................................................................15
14.4 Additional Insurance Requirements.............................................16
ARTICLE XV......................................................................................16
15.1 Casualty and Condemnation.....................................................16
15.2 Environmental Matters.........................................................18
15.3 Notice of Environmental Matters...............................................19
ARTICLE XVI.....................................................................................19
16.1 Termination Upon Certain Events...............................................19
16.2 Procedures....................................................................19
ARTICLE XVII....................................................................................20
17.1 Lease Events of Default.......................................................20
17.2 Surrender of Possession.......................................................23
17.3 Reletting.....................................................................23
17.4 Damages.......................................................................24
17.5 Power of Sale.................................................................24
17.6 Final Liquidated Damages......................................................25
17.7 Environmental Costs...........................................................25
17.8 Waiver of Certain Rights......................................................26
17.9 Assignment of Rights Under Contracts..........................................26
17.10 Remedies Cumulative...........................................................26
ARTICLE XVIII...................................................................................26
18.1 Lessor's Right to Cure Lessee's Lease Defaults................................26
ARTICLE XIX.....................................................................................27
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option...............27
19.2 No Purchase or Termination With Respect to Less than All of the Property......27
ARTICLE XX......................................................................................27
20.1 Purchase Option or Sale Option-General Provisions.............................27
20.2 Lessee Purchase Option........................................................28
20.3 Third Party Sale Option.......................................................28
ARTICLE XXI.....................................................................................29
21.1 [Intentionally Reserved]......................................................29
ARTICLE XXII....................................................................................29
22.1 Sale Procedure................................................................29
22.2 Application of Proceeds of Sale...............................................32
22.3 Indemnity for Excessive Wear..................................................32
22.4 Appraisal Procedure...........................................................32
22.5 Certain Obligations Continue..................................................33
ARTICLE XXIII...................................................................................33
23.1 Holding Over..................................................................33
ARTICLE XXIV....................................................................................34
24.1 Risk of Loss..................................................................34
ARTICLE XXV.....................................................................................34
25.1 Assignment....................................................................34
25.2 Subleases.....................................................................34
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
ARTICLE XXVI....................................................................................35
26.1 No Waiver.....................................................................35
ARTICLE XXVII...................................................................................35
27.1 Acceptance of Surrender.......................................................35
27.2 No Merger of Title............................................................36
ARTICLE XXVIII..................................................................................36
28.1 Incorporation of Covenants....................................................36
ARTICLE XXIX....................................................................................37
29.1 Notices.......................................................................37
ARTICLE XXX.....................................................................................37
30.1 Miscellaneous.................................................................37
30.2 Amendments and Modifications..................................................38
30.3 Successors and Assigns........................................................38
30.4 Headings and Table of Contents................................................38
30.5 Counterparts..................................................................38
30.6 Governing Law.................................................................38
30.7 Calculation of Rent...........................................................38
30.8 Memoranda of Lease and Lease Supplements......................................38
30.9 Allocations between the Lenders and the Holders...............................39
30.10 Limitations on Recourse.......................................................39
30.11 Waivers of Jury Trial.........................................................39
30.12 Exercise of Lessor Rights.....................................................39
30.13 Submission to Jurisdiction; Venue.............................................39
30.14 Usury Savings Provision.......................................................40
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
</TABLE>
iii
<PAGE> 5
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of October 21, 1999 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Lease") is among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at 79 South Main Street, Third
Floor, Salt Lake City, Utah 84111, not individually, but solely as the Owner
Trustee under the Dolphin Realty Trust 1999-1, as lessor (the "Lessor"), and
CATALINA MARKETING SALES CORPORATION, a Delaware corporation, having its
principal place of business at 11300 Ninth Street North, St. Petersburg,
Florida 33716, as lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, effective on the date of the Lease Supplement (the
"Supplement Date"), Lessor will be the owner of the Property (as such term is
Appendix A to the Participation Agreement described below); and
B. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires
to lease from Lessor, the Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
For purposes of this Lease, capitalized terms used in this Lease
and not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Participation Agreement dated as of October 21, 1999
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among the Lessee, Catalina Marketing Corporation, as
the Guarantor, Lessor, the various banks and other lending institutions which
are parties thereto from time to time, as the Holders, the various banks and
other lending institutions which are parties thereto from time to time, as the
Lenders, and First Union National Bank, as agent for the Lenders and respecting
the Security Documents, as the agent for the Lenders and the Holders, to the
extent of their interests. Unless otherwise indicated, references in this Lease
to articles, sections, paragraphs, clauses, appendices, schedules and exhibits
are to the same contained in this Lease.
1
<PAGE> 6
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
Effective on the Supplement Date and subject to the terms and
conditions hereinafter set forth and contained in the Lease Supplement relating
to the Property, Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor, the Property.
2.2 LEASE TERM.
This Lease shall be effective as of the Closing Date;
notwithstanding the foregoing, the basic term of this Lease with respect to the
Property (the "Basic Term") shall begin on the Property Closing Date (the
"Basic Term Commencement Date") and shall end on the sixth annual anniversary
of the Closing Date (the "Basic Term Expiration Date"), unless the Basic Term
is earlier terminated.
To the extent no Default or Event of Default has occurred and is
continuing, and provided the Lessor, the Agent, every Lender and every Holder
consents (which such consent may be withheld for any reason), the Lessee shall
have the option to extend the term of this Lease for up to three (3) additional
terms (each, a "Renewal Term") each of five (5) years' duration from the later
of (i) the Basic Term Expiration Date or (ii) the last day of the immediately
prior Renewal Term; provided that the Expiration Date shall not be later than
the twenty-first annual anniversary of the Closing Date, unless such later
expiration date has been expressly agreed to, at the request of Lessee, in
writing by each of Lessor, the Agent, the Lenders and the Holders in their sole
and absolute discretion.
2.3 TITLE.
The Property is leased to Lessee without any representation or
warranty, express or implied, by Lessor and subject to the rights of parties in
possession (if any), the existing state of title (including without limitation
the Permitted Liens) and all applicable Legal Requirements. Lessee shall in no
event have any recourse against Lessor for any defect in Lessor's title to the
Property or any interest of Lessee therein other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS.
On or before the Property Closing Date, Lessee and Lessor shall
execute and deliver a Lease Supplement for the Property substantially the form
of Exhibit A hereto.
2
<PAGE> 7
ARTICLE III
3.1 RENT.
(a) Basic Rent shall be due and payable in arrears on each
Payment Date, and on any date on which this Lease shall terminate with
respect to the Property during the Term.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by immediately available funds on the
due date therefor (or within the applicable grace period) to such
account or accounts at such bank or banks as Lessor shall from time to
time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of the Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, Lessee or any other
Person or for any other reason whatsoever, shall not delay or
otherwise affect Lessee's obligation to pay Rent for such Property in
accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00 Noon,
Charlotte, North Carolina time, on the applicable date for payment of
such amount.
3.2 PAYMENT OF BASIC RENT.
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable, and if
Lessee fails to pay any Supplemental Rent within three (3) days after the same
is due, Lessor shall have all rights, powers and remedies provided for herein
or by law or equity or otherwise in the case of nonpayment of Basic Rent. All
such payments of Supplemental Rent shall be in the full amount thereof, without
setoff, deduction or reduction. Lessee shall pay to the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
(a) any and all payment obligations (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by any Person to the
Agent, any Lender, any Holder or any other Person, (b) interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due
(subject to the applicable grace period) for the period for which the same
shall be overdue and on any payment of Supplemental Rent not paid when due or
demanded by the appropriate Person (subject to any applicable grace period) for
the period from the due date or the date of any such demand, as the case may
be, until the same shall be paid and (c) amounts referenced as Supplemental
Rent obligations pursuant to Section 8.3 of the Participation Agreement. The
3
<PAGE> 8
expiration or other termination of Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any
Supplemental Rent as and when due, Lessee shall also promptly pay and discharge
any fine, penalty, interest or cost which may be assessed or added for
nonpayment or late payment of such Supplemental Rent, all of which shall also
constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date. If any Supplemental Rent is required hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the
next succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
All Basic Rent and Supplemental Rent shall be paid when due
(subject to the applicable grace periods) regardless of whether any of the
Operative Agreements pursuant to which same is calculated and is owing shall
have been rejected, avoided or disavowed in any bankruptcy or insolvency
proceeding involving any of the parties to any of the Operative Agreements.
Such provisions of such Operative Agreements and their related definitions are
incorporated herein by reference and shall survive any termination, amendment
or rejection of any such Operative Agreements.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
Lessee shall pay or cause to be paid all Impositions with
respect to the Property and/or the use, occupancy, operation, repair, access,
maintenance or operation thereof and all charges for electricity, power, gas,
oil, water, telephone, sanitary sewer service and all other rents, utilities
and operating expenses of any kind or type used in or on the Property and
related real property during the Term. Upon Lessor's request, Lessee shall
provide from time to time Lessor with evidence of all such payments referenced
in the foregoing sentence. Lessee shall be entitled to receive any credit or
refund with respect to any Imposition or utility charge paid by Lessee. Unless
an Event of Default shall have occurred and be continuing, the amount of any
credit or refund received by Lessor on account of any Imposition or utility
charge paid by Lessee, net of the costs and expenses incurred by Lessor in
obtaining such credit or refund, shall be promptly paid over to Lessee. All
charges for Impositions or utilities imposed with respect to the Property for a
period during which this Lease expires or terminates shall be adjusted and
prorated on a daily basis between Lessor and Lessee, and each party shall pay
or reimburse the other for such party's pro rata share thereof.
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ARTICLE V
5.1 QUIET ENJOYMENT.
Subject to the rights of Lessor contained in Sections 17.2, 17.3
and 20.3 and the other terms of this Lease and the other Operative Agreements
and so long as no Event of Default shall have occurred and be continuing,
Lessee shall peaceably and quietly have, hold and enjoy the Property for the
applicable Term, free of any claim or other action by Lessor or anyone
rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the Basic Term Commencement Date.
ARTICLE VI
6.1 NET LEASE.
This Lease shall constitute a net lease, and the obligations of
Lessee hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of the Property.
Any present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the
Rent, nor shall the obligations of Lessee hereunder be affected (except as
expressly herein permitted and by performance of the obligations in connection
therewith) for any reason whatsoever, including without limitation by reason
of: (a) any damage to or destruction of the Property or any part thereof; (b)
any taking of the Property or any part thereof or interest therein by
Condemnation or otherwise; (c) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of the Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any
Person or for any other reason; (d) any title defect, Lien or any matter
affecting title to the Property; (e) any eviction by paramount title or
otherwise; (f) any default by Lessor hereunder; (g) any action for bankruptcy,
insolvency, reorganization, liquidation, dissolution or other proceeding
relating to or affecting the Agent, any Lender, Lessor, Lessee, any Holder or
any Governmental Authority; (h) the impossibility or illegality of performance
by Lessor, Lessee or both; (i) any action of any Governmental Authority or any
other Person; (j) Lessee's acquisition of ownership of all or part of the
Property; (k) breach of any warranty or representation with respect to the
Property or any Operative Agreement; (l) any defect in the condition, quality
or fitness for use of the Property or any part thereof; or (m) any other cause
or circumstance whether similar or dissimilar to the foregoing and whether or
not Lessee shall have notice or knowledge of any of the foregoing. The parties
intend that the obligations of Lessee hereunder shall be covenants, agreements
and obligations that are separate and independent from any obligations of
Lessor hereunder and shall continue unaffected unless such covenants,
agreements and obligations shall have been modified or terminated in accordance
with an express provision of this Lease. Lessor and Lessee acknowledge and
agree that the provisions of this Section 6.1 have been specifically reviewed
and subjected to negotiation.
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6.2 NO TERMINATION OR ABATEMENT.
Lessee shall remain obligated under this Lease in accordance
with its terms and shall not take any action to terminate, rescind or avoid
this Lease, notwithstanding any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution, or other proceeding affecting any
Person or any Governmental Authority, or any action with respect to this Lease
or any Operative Agreement which may be taken by any trustee, receiver or
liquidator of any Person or any Governmental Authority or by any court with
respect to any Person, or any Governmental Authority. Lessee hereby waives all
right (a) to terminate or surrender this Lease (except as permitted under the
terms of the Operative Agreements) or (b) to avail itself of any abatement,
suspension, deferment, reduction, setoff, counterclaim or defense with respect
to any Rent. Lessee shall remain obligated under this Lease in accordance with
its terms and Lessee hereby waives any and all rights now or hereafter
conferred by statute or otherwise to modify or to avoid strict compliance with
its obligations under this Lease. Notwithstanding any such statute or
otherwise, Lessee shall be bound by all of the terms and conditions contained
in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTY.
(a) Lessor and Lessee intend that for federal and all state and
local income tax purposes, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes and all other purposes (other
than for accounting purposes) (A) this Lease will be treated as a
financing arrangement and (B) Lessee will be treated as the owner of
the Property and will be entitled to all tax benefits ordinarily
available to owners of property similar to the Property for such tax
purposes. Notwithstanding the foregoing, neither party hereto has
made, or shall be deemed to have made, any representation or warranty
as to the availability of any of the foregoing treatments under
applicable accounting rules, tax, bankruptcy, regulatory, commercial
or real estate law or under any other set of rules. Lessee shall claim
the cost recovery deductions associated with the Property, and Lessor
shall not, to the extent not prohibited by Law, take on its tax return
a position inconsistent with Lessee's claim of such deductions.
(b) For all purposes described in Section 7.1(a), Lessor and
Lessee intend this Lease to constitute a finance lease and not a true
lease. In order to secure the obligations of Lessee now existing or
hereafter arising under any and all Operative Agreements, Lessee
hereby conveys, grants, assigns, transfers, hypothecates, mortgages
and sets over to Lessor, for the benefit of all Financing Parties, a
first priority security interest (but subject to the security interest
in the assets granted by Lessee in favor of the Agent in accordance
with the Security Agreement) in and lien on all right, title and
interest of Lessee (now owned or hereafter acquired) in and to the
Property to the extent such is personal property and irrevocably
grants and conveys a lien, deed of trust and mortgage on all right,
title and interest of Lessee (now owned or hereafter acquired) in and
to the Property to the extent such is a real property. Lessor and
Lessee further intend and agree
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that, for the purpose of securing the obligations of Lessee now
existing or hereafter arising under the Operative Agreements, (i) this
Lease shall be a security agreement and financing statement within the
meaning of Article 9 of the Uniform Commercial Code respecting the
Property and all proceeds (including without limitation insurance
proceeds thereof) to the extent such is personal property and an
irrevocable grant and conveyance of a lien, deed of trust and mortgage
on the Property and all proceeds (including without limitation
insurance proceeds thereof) to the extent such is real property; (ii)
the acquisition of title by Lessor in the Property referenced in
Article II constitutes a grant by Lessee to Lessor of a security
interest, lien, deed of trust and mortgage in all of Lessee's right,
title and interest in and to the Property and all proceeds (including
without limitation insurance proceeds thereof) of the conversion,
voluntary or involuntary, of the foregoing into cash, investments,
securities or other property, whether in the form of cash,
investments, securities or other property, and an assignment of all
rents, profits and income produced by the Property; and (iii)
notifications to Persons holding such property, and acknowledgments,
receipts or confirmations from financial intermediaries, bankers or
agents (as applicable) of Lessee shall be deemed to have been given
for the purpose of perfecting such lien, security interest, mortgage
lien and deed of trust under applicable law. Lessee shall promptly
take such actions as Lessor may reasonably request (including without
limitation the filing of Uniform Commercial Code Financing Statements,
Uniform Commercial Code Fixture Filings and memoranda (or short forms)
of this Lease and the various Lease Supplements) to ensure that the
lien, security interest, mortgage lien and deed of trust in the
Property and the other items referenced above will be deemed to be a
perfected lien, security interest, mortgage lien and deed of trust of
first priority under applicable law and will be maintained as such
throughout the Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTY.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE PROPERTY
"AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR
OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF TITLE,
(B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF
FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW,
(D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS
WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE APPLICABLE LEASE
SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE
OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR
OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE
TITLE, VALUE, HABITABILITY, USE, CONDITION,
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DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF), AND
NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR
ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR
ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO
THE BASIC TERM COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO
INSPECT THE PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE
(INSOFAR AS LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE CONCERNED)
SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE
SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS
INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR,
THE AGENT, THE LENDERS AND THE HOLDERS, ON THE ONE HAND, AND LESSEE, ON THE
OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTY.
(a) At all times during the Term with respect to the Property,
such Property shall be a Permitted Facility and shall be used by
Lessee in the ordinary course of its business. Lessee shall pay, or
cause to be paid, all charges and costs required in connection with
the use of the Property as contemplated by this Lease. Lessee shall
not commit or permit any waste of the Property or any part thereof.
(b) The address stated in Section 29.1 of this Lease is the
principal place of business and chief executive office of Lessee (as
such terms are used in Section 9-103(3) of the Uniform Commercial Code
of any applicable jurisdiction), and Lessee will provide Lessor with
prior written notice of any change of location of its principal place
of business or chief executive office. Regarding the Property, the
Lease Supplement correctly identifies the initial location of the
related Equipment (if any) and Improvements (if any) and contains an
accurate legal description for the related parcel of Land. The
Equipment and Improvements respecting the Property will be located
only at the location identified in the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment
to or in any other item of equipment or personal property or to or in
any real property in a manner that could give rise to the assertion of
any Lien on such item of Equipment by reason of such attachment or the
assertion of a claim that such item of Equipment has become a fixture
and is subject to a Lien in favor of a third party that is prior to
the Liens thereon created by the Operative Agreements.
(d) At all times during the Term with respect to the Property,
Lessee will comply with all obligations under and (to the extent no
Event of Default exists and
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provided that such exercise will not impair the value, utility or
remaining useful life of such Property) shall be permitted to exercise
all rights and remedies under, all operation and easement agreements
and related or similar agreements applicable to such Property.
8.3 INTEGRATED PROPERTY.
At all times during the Term, Lessee shall, at its sole cost and
expense, cause the Property to constitute all of the equipment, facilities,
rights, other personal property and other real property necessary or
appropriate to operate, utilize, maintain and control a Permitted Facility in a
commercially reasonable manner.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all Environmental
Laws) and all Insurance Requirements relating to the Property, (b) procure,
maintain and comply with all licenses, permits, orders, approvals, consents and
other authorizations required for the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of the Property and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Property, whether or not
compliance therewith shall require structural or extraordinary changes in the
Property or interfere with the use and enjoyment of the Property, unless the
failure to procure, maintain and comply with such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not have and
could not reasonably be expected to have a Material Adverse Effect. Lessor
agrees to take such actions as may be reasonably requested by Lessee in
connection with the compliance by Lessee of its obligations under this Section
9.1.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain the
Property in good condition, repair and working order (ordinary wear
and tear excepted) and in the repair and condition as when originally
delivered to Lessor and make all necessary repairs thereto and
replacements thereof, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to
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the applicable Property, such that such Property is capable of
being immediately utilized by a third party and in compliance with
standard industry practice subject, however, to the provisions of
Article XV with respect to Casualty and Condemnation.
(b) Lessee shall not move or relocate any component of the
Property beyond the boundaries of the Land (comprising part of such
Property) described in the applicable Lease Supplement, except for the
temporary removal of Equipment and other personal property for repair
or replacement.
(c) If any component of the Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered
unfit for use, Lessee, at its own expense, will within a reasonable
time replace such component with a replacement component which is free
and clear of all Liens (other than Permitted Liens and Lessor Liens)
and has a value, utility and useful life at least equal to the
component replaced (assuming the component replaced had been
maintained and repaired in accordance with the requirements of this
Lease). All components which are added to the Property shall
immediately become the property of (and title thereto shall vest in)
Lessor and shall be deemed incorporated in such Property and subject
to the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents shall
have the right to inspect the Property and all maintenance records
with respect thereto at any reasonable time during normal business
hours but shall not, in the absence of an Event of Default, materially
disrupt the business of Lessee.
(e) Lessee shall cause to be delivered to Lessor (at Lessee's
sole expense) one or more additional Appraisals (or reappraisals of
Property) as Lessor may request if any one of Lessor, the Agent, the
Trust Company, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such Appraisals (or
reappraisals) and upon the occurrence of any Event of Default.
(f) Lessor shall under no circumstances be required to build
any improvements or install any equipment on the Property, make any
repairs, replacements, alterations or renewals of any nature or
description to the Property, make any expenditure whatsoever in
connection with this Lease or maintain the Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part
of the Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of the Property, or (ii)
make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenant,
condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination of
this Lease with respect to the Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) pursuant to the
exercise of the applicable remedies upon the occurrence of a Lease
Event
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of Default, to Lessor or (ii) pursuant to the second paragraph of
Section 22.1(a) hereof, to Lessor or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease
(including without limitation the obligations of Lessee at the time of
such surrender under Sections 9.1, 10.1(a) through (f), 10.2, 11.1,
12.1, 22.1 and 23.1).
10.2 ENVIRONMENTAL INSPECTION.
If Lessee has not given notice of exercise of its Purchase
Option on the Expiration Date pursuant to Section 20.1 or for whatever
reason Lessee does not purchase the Property in accordance with the
terms of this Lease, then not more than one hundred twenty (120) days
nor less than sixty (60) days prior to the Expiration Date, Lessee
shall cause to be delivered to Lessor a Phase I environmental site
assessment recently prepared (no more than thirty (30) days prior to
the date of delivery) by an independent recognized professional
reasonably acceptable to Lessor, and in form, scope and content
reasonably satisfactory to Lessor. The cost incurred respecting such
Phase I environmental site assessment shall be paid for in accordance
with the provisions set forth in Section 20.3(b).
ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make modifications,
alterations, renovations, improvements and additions to the Property
or any part thereof and substitutions and replacements therefor
(collectively, "Modifications"), and Lessee shall make any and all
Modifications required to be made pursuant to all Legal Requirements,
Insurance Requirements and manufacturer's specifications and
standards; provided, that: (i) no Modification shall materially impair
the value, utility or useful life of the Property from that which
existed immediately prior to such Modification; (ii) each Modification
shall be done expeditiously and in a good and workmanlike manner;
(iii) no Modification shall adversely affect the structural integrity
of the Property; (iv) to the extent required by Section 14.2(a),
Lessee shall maintain builders' risk insurance at all times when a
Modification is in progress; (v) subject to the terms of Article XIII
relating to permitted contests, Lessee shall pay all costs and
expenses and discharge any Liens arising with respect to any
Modification; (vi) each Modification shall comply with the
requirements of this Lease (including without limitation Sections 8.2
and 10.1); and (vii) no Improvement shall be demolished or otherwise
rendered unfit for use unless Lessee shall finance the proposed
replacement Modification outside of this lease facility; provided,
further, Lessee shall not make any Modification (unless required by
any Legal Requirement) to the extent any such Modification,
individually or in the aggregate, shall have or could reasonably be
expected to have a Material Adverse Effect. Title to each Modification
shall vest in Lessee to the extent such Modification (a) is not
financed pursuant to the Operative Agreements, (b) is not a fixture or
other real estate interest, (c) is readily removable without causing
material damage to any Property, (d) is not required in order
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for the applicable Property to comply with any Legal Requirement, any
Insurance Requirement or any requirement of Section 8.3 of this Lease
and (e) is not necessary to conform to any applicable manufacturer's
specification and/or standard respecting any Property or any
Modification which is the property of the Lessor. All other
Modifications shall immediately and without further action upon their
incorporation into the applicable Property (1) become property of
Lessor, (2) be subject to this Lease and (3) be titled in the name of
Lessor. Lessee may freely remove or replace any equipment, trade
fixtures and other personal property located on the Property and not
financed pursuant to the Operative Agreements and any Modifications
titled in the name of Lessee; provided Lessee at its sole cost and
expense shall repair in a good and workmanlike manner any and all
damage done to any Property due to the removal, detachment, attempted
removal or attempted detachment of any Modification from a Property
and all such repairs shall be completed by the earlier of (a) thirty
(30) days after such removal, detachment, attempted removal or
attempted detachment of the applicable Modification from the
applicable Property and (b) the Expiration Date. Lessee shall not
remove or attempt to remove any Modification from the Property except
in accordance with the provisions of this Section 11.1. Lessee, at its
own cost and expense, will pay for the repairs of any damage to the
Property caused by the removal or attempted removal of any
Modification.
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee hereby acknowledges and shall cause title in the
Property (including without limitation all Equipment, all
Improvements, all replacement components to the Property and all
Modifications) immediately and without further action to vest in and
become the property of Lessor and to be subject to the terms of this
Lease from and after the date hereof or such date of incorporation
into the Property. Lessee agrees that, subject to the terms of Article
XIII relating to permitted contests, Lessee shall not directly or
indirectly create or allow to remain, and shall promptly discharge at
its sole cost and expense, any Lien, defect, attachment, levy, title
retention agreement or claim upon the Property, any component thereof
or any Modifications or any Lien, attachment, levy or claim with
respect to the Rent or with respect to any amounts held by Lessor, the
Agent, any Lender or any Holder pursuant to any Operative Agreement,
other than Permitted Liens and Lessor Liens. Lessee shall promptly
notify Lessor in the event it receives actual knowledge that a Lien
other than a Permitted Lien or Lessor Lien has occurred with respect
to the Property, the Rent or any other such amounts, and Lessee
represents and warrants to, and covenants with, Lessor that the Liens
in favor of Lessor and/or the Agent created by the Operative
Agreements are (and until the Financing Parties under the Operative
Agreements have been paid in full shall remain) first priority
perfected Liens subject only to Permitted Liens and Lessor Liens. At
all times during the Term, Lessee shall (i) cause a valid, perfected,
first priority Lien on the Property to be in place in favor of the
Agent (for the benefit of the Lenders and the
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Holders) and (ii) file, or cause to be filed, all necessary documents
under the applicable real property law and Article 9 of the Uniform
Commercial Code to perfect such title and Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied,
to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration,
addition, repair or demolition of or to the Property or any part
thereof. NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO LESSEE, OR TO ANYONE HOLDING A PROPERTY OR ANY PART
THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS
FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT
THE INTEREST OF LESSOR IN AND TO THE PROPERTY.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES.
Except to the extent otherwise provided for in Section 11 of the
Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the
amount, validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the applicable Property, Lessor, each Holder, the Agent and each Lender; (b)
there shall not be imposed a Lien (other than Permitted Liens and Lessor Liens)
on the Property and no part of the Property nor any Rent would be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there
shall be a material risk of extending the application of such item beyond the
end of the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee such authorizations and other documents as may reasonably be
required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
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13.2 IMPOSITIONS, UTILITY CHARGES, OTHER MATTERS; COMPLIANCE WITH
LEGAL REQUIREMENTS.
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility
charges and such other matters to be timely paid, settled or compromised, as
appropriate, with respect to the Property and (b) the Property to comply with
all applicable Legal Requirements.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
During the Term for the Property, Lessee shall procure and
carry, at Lessee's sole cost and expense, commercial general liability and
umbrella liability insurance for claims for injuries or death sustained by
persons or damage to property while on such Property or respecting the
Equipment and such other public liability coverages as are then customarily
carried by similarly situated companies conducting business similar to that
conducted by Lessee. Such insurance shall be on terms and in amounts that are
no less favorable than insurance maintained by Lessee with respect to similar
properties and equipment that it owns and are then carried by similarly
situated companies conducting business similar to that conducted by Lessee, and
in, but in no event shall such coverage have a minimum combined single limit
per occurrence coverage (i) for commercial general liability of less than
$1,000,000 and (ii) for umbrella liability of less than $10,000,000. The
policies shall name Lessee as the insured and shall be endorsed to name Lessor,
the Holders, the Agent and the Lenders as additional insureds. The policies
shall also specifically provide that such policies shall be considered primary
insurance which shall apply to any loss or claim before any contribution by any
insurance which Lessor, any Holder, the Agent or any Lender may have in force.
In the operation of the Property, Lessee shall comply with applicable workers'
compensation laws and protect Lessor, each Holder, the Agent and each Lender
against any liability under such laws.
14.2 PERMANENT HAZARD AND OTHER INSURANCE.
(a) During the Term for the Property, Lessee shall keep the
Property insured against all risk of physical loss or damage by fire
and other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in each case in
amounts no less than the then current replacement value of such
Property (assuming that such Property was in the condition required by
the terms of this Lease immediately prior to such loss) and on terms
that (i) are no less favorable than insurance covering other similar
properties owned by Lessee and (ii) are then carried by similarly
situated companies conducting business similar to that conducted by
Lessee. The policies shall name Lessee as the insured and shall be
endorsed to name Lessor and the Agent (on behalf of the Lenders and
the Holders) as a named additional insured and loss payee, to
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the extent of their respective interests; provided, so long as no
Event of Default exists, any loss payable under the insurance policies
required by this Section for losses up to $1,000,000 will be paid to
Lessee.
(b) If, during the Term, the area in which the Property is
located is designated a "flood-prone" area pursuant to the Flood
Disaster Protection Act of 1973, or any amendments or supplements
thereto or is in a zone designated A or V, then Lessee shall comply
with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973. In addition, Lessee will fully comply
with the requirements of the National Flood Insurance Act of 1968 and
the Flood Disaster Protection Act of 1973, as each may be amended from
time to time, and with any other Legal Requirement, concerning flood
insurance to the extent that it applies to any such Property. During
the Term, Lessee shall, in the operation and use of the Property,
maintain workers' compensation insurance consistent with that carried
by similarly situated companies conducting business similar to that
conducted by Lessee and containing minimum liability limits of no less
than $100,000. In the operation of the Property, Lessee shall comply
with workers' compensation laws applicable to Lessee, and protect
Lessor, each Holder, the Agent and each Lender against any liability
under such laws.
14.3 COVERAGE.
(a) As of the date of this Lease and annually thereafter during
the Term, Lessee shall furnish the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) with certificates
prepared by the insurers or insurance broker of Lessee showing the
insurance required under Sections 14.1 and 14.2 to be in effect,
naming (to the extent of their respective interests) Lessor, the
Holders, the Agent and the Lenders as additional insureds and loss
payees and evidencing the other requirements of this Article XIV. All
such insurance shall be at the cost and expense of Lessee and provided
by nationally recognized, financially sound insurance companies having
an A+ or better rating by A.M. Best's Key Rating Guide. Lessee shall
cause such certificates to include a provision for thirty (30) days'
advance written notice by the insurer to the Agent (on behalf of
Lessor and the other beneficiaries of such insurance coverage) in the
event of cancellation or material alteration of such insurance. If an
Event of Default has occurred and is continuing and the Agent (on
behalf of Lessor and the other beneficiaries of such insurance
coverage) so requests, Lessee shall deliver to the Agent (on behalf of
Lessor and the other beneficiaries of such insurance coverage) copies
of all insurance policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies
required by Sections 14.1, 14.2(a) and 14.2(b) shall include an
appropriate clause pursuant to which any such policy shall provide
that it will not be invalidated should Lessee waive, at any time, any
or all rights of recovery against any party for losses covered by such
policy or due to any breach of warranty, fraud, action, inaction or
misrepresentation by Lessee or any Person acting on behalf of Lessee.
Lessee hereby waives any and all such rights against Lessor,
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the Holders, the Agent and the Lenders to the extent of payments made
to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this Article XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as
(i) Lessee's insurance is designated as primary and in no event excess
or contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
Article XIV to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof or otherwise
maintain the coverage required by such Sections without any lapse in
coverage.
14.4 ADDITIONAL INSURANCE REQUIREMENTS.
Not in limitation of any provision of the Operative Agreements
but in addition thereto, Lessee shall obtain any and all additional insurance
policies (including without limitation with respect to Condemnation) with
regard to the Property or otherwise with respect to the transactions
contemplated by the Operative Agreements as requested from time to time by
Lessor.
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of this Article XV and Article
XVI (in the event Lessee delivers, or is obligated to deliver or is
deemed to have delivered, a Termination Notice), and prior to the
occurrence and continuation of a Default or an Event of Default,
Lessee shall be entitled to receive (and Lessor hereby irrevocably
assigns to Lessee all of Lessor's right, title and interest in) any
condemnation proceeds, award, compensation or insurance proceeds under
Sections 14.2(a) or 14.2(b) hereof to which Lessee or Lessor may
become entitled by reason of their respective interests in the
Property (i) if all or a portion of such Property is damaged or
destroyed in whole or in part by a Casualty or (ii) if the use,
access, occupancy, easement rights or title to such Property or any
part thereof is the subject of a Condemnation; provided, however, if a
Default or an Event of Default shall have occurred and be continuing
or if such award, compensation or insurance proceeds shall exceed
$1,000,000, then such award, compensation or insurance proceeds shall
be paid directly to Lessor or, if received by Lessee, shall be held in
trust for Lessor, and shall be paid over by Lessee to Lessor and held
in accordance with the terms of this Article XV. All amounts held by
Lessor hereunder on account of any award,
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compensation or insurance proceeds either paid directly to Lessor or
turned over to Lessor shall be held as security for the performance of
Lessee's obligations hereunder and under the other Operative
Agreements and when all such obligations of Lessee with respect to
such matters (and all other obligations of Lessee which should have
been satisfied pursuant to the Operative Agreements as of such date)
have been satisfied, all amounts so held by Lessor shall be paid over
to Lessee.
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or
insurance payment on account of any such Casualty or Condemnation and
shall pay all expenses thereof. At Lessee's reasonable request, and at
Lessee's sole cost and expense, Lessor and the Agent shall participate
in any such proceeding, action, negotiation, prosecution or
adjustment. Lessor and Lessee agree that this Lease shall control the
rights of Lessor and Lessee in and to any such award, compensation or
insurance payment.
(c) If Lessee shall receive notice of a Casualty or a
Condemnation of the Property or any interest therein where damage to
the affected Property is estimated to equal or exceed twenty-five
percent (25%) of the Property Cost of such Property, Lessee shall give
notice thereof to Lessor promptly after Lessee's receipt of such
notice. In the event such a Casualty or Condemnation occurs
(regardless of whether Lessee gives notice thereof), then Lessee shall
be deemed to have delivered a Termination Notice to Lessor and the
provisions of Sections 16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation (regardless of
whether notice thereof must be given pursuant to paragraph (c)), this
Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall continue
in full force and effect following a Casualty or Condemnation with
respect to the affected Property, Lessee shall, at its sole cost and
expense (subject to reimbursement in accordance with Section 15.1(a))
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built Plans and
Specifications or manufacturer's specifications for the applicable
Improvements, Equipment or other components of the applicable Property
(as modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable
Legal Requirements), so as to restore the applicable Property to the
same or a greater remaining economic value, useful life, utility,
condition, operation and function as existed immediately prior to such
Casualty or Condemnation (assuming all maintenance and repair
standards have been satisfied). In such event, title to the applicable
Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III.
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(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term a Casualty
occurs with respect to such Property or Lessee receives notice of a
Condemnation with respect to such Property, and following such
Casualty or Condemnation, the applicable Property cannot reasonably be
restored, repaired or replaced on or before the day one hundred eighty
(180) days prior to the Expiration Date or the date nine (9) months
after the occurrence of such Casualty or Condemnation (if such
Casualty or Condemnation occurs during the Term) to the same or a
greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty
or Condemnation (assuming all maintenance and repair standards have
been satisfied) or on or before such day such Property is not in fact
so restored, repaired or replaced, then Lessee shall be required to
exercise its Purchase Option for such Property on the next Payment
Date (notwithstanding the limits on such exercise contained in Section
20.2) and pay Lessor the Termination Value for such Property;
provided, if any Default or Event of Default has occurred and is
continuing, Lessee shall also promptly (and in any event within three
(3) Business Days) pay Lessor any award, compensation or insurance
proceeds received on account of any Casualty or Condemnation with
respect to the Property; provided, further, that if no Default or
Event of Default has occurred and is continuing, any Excess Proceeds
shall be paid to Lessee. If a Default or an Event of Default has
occurred and is continuing and any Loans, Holder Advances or other
amounts are owing with respect thereto, then any Excess Proceeds (to
the extent of any such Loans, Holder Advances or other amounts owing
with respect thereto) shall be paid to Lessor, held as security for
the performance of Lessee's obligations hereunder and under the other
Operative Agreements and applied to such obligations upon the exercise
of remedies in connection with the occurrence of an Event of Default,
with the remainder of such Excess Proceeds in excess of such Loans,
Holder Advances and other amounts owing with respect thereto being
distributed to the Lessee.
15.2 ENVIRONMENTAL MATTERS.
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of the Property in concentrations and
conditions that constitute an Environmental Violation and which, in the
reasonable opinion of Lessee, the cost to undertake any legally required
response, clean up, remedial or other action will or might result in a cost to
Lessee of more than $15,000, Lessee shall notify Lessor in writing of such
condition. In the event of any Environmental Violation (regardless of whether
notice thereof must be given), Lessee shall, not later than thirty (30) days
after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
pursuant to Section 16.1, if applicable, or, at Lessee's sole cost and expense,
promptly and diligently undertake and diligently complete any response, clean
up, remedial or other action (including without limitation the pursuit by
Lessee of appropriate action against any off-site or third party source for
contamination) necessary to remove, cleanup or remediate the Environmental
Violation in accordance with all Environmental Laws. Any such undertaking shall
be timely completed in accordance with prudent industry standards. If Lessee
does not deliver a Termination Notice with respect to such Property pursuant to
Section 16.1, Lessee
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shall, upon completion of remedial action by Lessee, cause to be prepared by a
reputable environmental consultant acceptable to Lessor a report describing the
Environmental Violation and the actions taken by Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant
that the Environmental Violation has been remedied in full compliance with
applicable Environmental Law. Not less than sixty (60) days prior to any time
that Lessee elects to cease operations with respect to the Property or to
remarket the Property pursuant to Section 20.1 hereof or any other provision of
any Operative Agreement, Lessee at its expense shall cause to be delivered to
Lessor a Phase I environmental site assessment respecting such Property
recently prepared (no more than thirty (30) days prior to the date of delivery)
by an independent recognized professional acceptable to Lessor in its
reasonable discretion and in form, scope and content satisfactory to Lessor in
its reasonable discretion. Notwithstanding any other provision of any Operative
Agreement, if Lessee fails to comply with the foregoing obligation regarding
the Phase I environmental site assessment, Lessee shall be obligated to
purchase such Property for its Termination Value and shall not be permitted to
exercise (and Lessor shall have no obligation to honor any such exercise) any
rights under any Operative Agreement regarding a sale of such Property to a
Person other than Lessee.
15.3 NOTICE OF ENVIRONMENTAL MATTERS.
Promptly, but in any event within five (5) Business Days from
the date Lessee has actual knowledge thereof, Lessee shall provide to Lessor
written notice of any pending or threatened claim, action or proceeding
involving any Environmental Law or any Release on or in connection with the
Property. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with the Property.
Lessee shall also promptly provide such detailed reports of any such material
environmental claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
If Lessee has delivered, or is deemed to have delivered, written
notice of a termination of this Lease with respect to the applicable Property
to Lessor in the form described in Section 16.2(a) (a "Termination Notice")
pursuant to the provisions of this Lease, then following the applicable
Casualty, Condemnation or Environmental Violation, this Lease shall terminate
with respect to the affected Property on the applicable Termination Date.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a
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binding and irrevocable agreement of Lessee to pay the Termination
Value for the applicable Property and purchase such Property on such
Termination Date.
(b) On the Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey
such Property or the remaining portion thereof, if any, to Lessee (or
Lessee's designee), all in accordance with Section 20.2.
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
If any one (1) or more of the following events (each a "Lease
Event of Default") shall occur:
(a) Failure of the Lessor to receive payment of (i) any Basic
Rent on the date the same has become due and payable or (ii) any
Termination Value, on the date any such payment is due and payable, or
any payment of Basic Rent or Supplemental Rent due on the due date of
any such payment of Termination Value, or (iii) any amount due on the
Expiration Date on such date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or
any other Credit Party shall fail to make any payment of any amount
under any Operative Agreement which has become due and payable within
five (5) Business Days after receipt of notice that such payment is
due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or to deliver any requisite annual
certificate with respect thereto within ten (10) days of the date such
certificate is due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant or obligation of Lessee under this Lease (including without
limitation the Incorporated Covenants) or any other Operative
Agreement to which Lessee is a party other than those set forth in
Sections 17.1(a), (b) or (c) hereof, or any other Credit Party shall
fail to observe or perform any term, covenant or obligation of such
Credit Party under any Operative Agreement other than those set forth
in Section 17.1(b) hereof and such failure shall continue for thirty
(30) days (or with respect to the Incorporated Covenants, the grace
period, if any, applicable thereto) after notice thereof to the
Lessee, or such Credit Party, or (ii) any representation or warranty
made by Lessee or any other Credit Party set forth in this Lease
(including without limitation the Incorporated Representations and
Warranties) or in any other Operative Agreement or in any document
entered into in connection herewith or therewith or in any document,
certificate or financial or other
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statement delivered in connection herewith or therewith shall be false
or inaccurate in any material way when made;
(e) [Intentionally Reserved].
(f) Any Credit Party or any Subsidiary of any Credit Party shall
default (beyond applicable periods of grace and/or notice and cure) in
the payment when due of any principal of or interest on any
Indebtedness having an outstanding principal amount of at least
$10,000,000; or any other event or condition shall occur which results
in a default of any such Indebtedness or enables the holder of any
such Indebtedness or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) The liquidation or dissolution of any Credit Party, or the
suspension of the business of any Credit Party, or the filing by any
Credit Party of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any
other relief under the United States Bankruptcy Code, as amended, or
under any other insolvency act or law, state or federal, now or
hereafter existing, or any other action of any Credit Party indicating
its consent to, approval of or acquiescence in, any such petition or
proceeding; the application by any Credit Party for, or the
appointment by consent or acquiescence of any Credit Party of a
receiver, a trustee or a custodian of any Credit Party for all or a
substantial part of its property; the making by any Credit Party of
any assignment for the benefit of creditors; the inability of any
Credit Party or the admission by any Credit Party in writing of its
inability to pay its debts as they mature or any Credit Party taking
any corporate action to authorize any of the foregoing;
(h) The filing of an involuntary petition against any Credit
Party in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the United
States Bankruptcy Code, as amended, or under any other insolvency act
or law, state or federal, now or hereafter existing; or the
involuntary appointment of a receiver, a trustee or a custodian of any
Credit Party for all or a substantial part of its property; or the
issuance of a warrant of attachment, execution or similar process
against any substantial part of the property of any Credit Party, and
the continuance of any of such events for ninety (90) days undismissed
or undischarged;
(i) The adjudication of any Credit Party as bankrupt or
insolvent;
(j) The entering of any order in any proceedings against any
Credit Party or any Subsidiary, if any, decreeing the dissolution,
divestiture or split-up of any Credit Party or any Subsidiary of any
Credit Party, if any, and such order remains in effect for more than
sixty (60) days;
(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of any Credit Party
pursuant to the terms of this Lease or any other Operative Agreement
is false or misleading in any material respect when made or delivered;
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(l) Any Lessee Credit Agreement Event of Default shall have
occurred and be continuing and shall not have been waived;
(m) A final judgment or judgments for the payment of money shall
be rendered by a court or courts against any Credit Party or any
subsidiary of any Credit Party where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is
in excess of $2,000,000 in the aggregate, and (i) the same shall not
be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within forty-five
(45) days from the date of entry thereof, or (ii) any Credit Party or
any such Subsidiary, if any, shall not, within said period of
forty-five (45) days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal, or (iii) such
judgment or judgments shall not be discharged (or provisions shall not
be made for such discharge) within forty-five (45) days after a
decision has been reached with respect to such appeal and the related
stay has been lifted;
(n) Any Credit Party or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of
$2,000,000 which it shall have become liable to pay to the PBGC or to
a Pension Plan under Title IV of ERISA; or notice of intent to
terminate a Pension Plan or Pension Plans having aggregate Unfunded
Liabilities in excess of $2,000,000 shall be filed under Title IV of
ERISA by any Credit Party or any member of the Controlled Group, any
plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Pension Plan or
Pension Plans or a proceeding shall be instituted by a fiduciary of
any such Pension Plan or Pension Plans against any Credit Party or any
member of the Controlled Group to enforce Section 515 or 4219(c)(5) of
ERISA; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Pension Plan or
Pension Plans must be terminated;
(o) (i) As a result of one (1) or more transactions after the
date of this Lease, any "person" or "group" of persons (other than
Persons owning thirty percent (30%) or more of the outstanding common
stock of Lessee on the Closing Date shall have "beneficial ownership"
(within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder) of thirty percent (30%) or more of the
outstanding common stock of Lessee; or (ii) without limiting the
generality of the foregoing, during any period of twelve (12)
consecutive months, commencing after the date of this Lease,
individuals who at the beginning of such period of twelve (12) months
were directors of Lessee shall cease for any reason (other than death,
disability or retirement of an officer of Lessee that is serving as a
director at such time so long as another officer of Lessee replaces
such Person as a director) to constitute a majority of the board of
directors of Lessee, provided, that the relationships among the
respective shareholders of Lessee on the Closing Date
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shall not be deemed to constitute all or any combination of them as a
"group" for purposes of clause (o)(i);
(p) Any Operative Agreement shall cease to be in full force and
effect and such cessation is caused by or is a result of Lessee's own
actions or failure to act; or
(q) The guaranty given by the Guarantor under the Participation
Agreement or any material provision thereof shall cease to be in full
force and effect, or the Guarantor or any Person acting by or on
behalf of the Guarantor shall deny or disaffirm the Guarantor's
obligations under such guaranty, or the Guarantor shall default in the
due performance or observance of any term, covenant or agreement on
its part to be performed or observed pursuant to any guaranty.
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination (provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g), (h) or (i), and this Lease shall terminate, and
all rights of Lessee under this Lease shall cease. Lessee shall, to the fullest
extent permitted by law, pay as Supplemental Rent all costs and expenses
incurred by or on behalf of Lessor or any other Financing Party, including
without limitation reasonable fees and expenses of counsel, as a result of any
Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE
MAY ALLOW LESSOR TO TAKE THE PROPERTY AND SELL THE PROPERTY WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 SURRENDER OF POSSESSION.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant
to Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender
to Lessor possession of the Property. Lessor may enter upon and repossess the
Property by such means as are available at law or in equity, and may remove
Lessee and all other Persons and any and all personal property and Lessee's
equipment and personalty and severable Modifications from the Property. Lessor
shall have no liability by reason of any such entry, repossession or removal
performed in accordance with applicable law. Upon the written demand of Lessor,
Lessee shall return the Property promptly to Lessor, in the manner and
condition required by, and otherwise in accordance with the provisions of,
Section 22.1(c) hereof.
17.3 RELETTING.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant
to Section 17.1, Lessor may, but shall be
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under no obligation to, relet any or all of the Property, for the account of
Lessee or otherwise, for such term or terms (which may be greater or less than
the period which would otherwise have constituted the balance of the Term) and
on such conditions (which may include concessions or free rent) and for such
purposes as Lessor may determine, and Lessor may collect, receive and retain
the rents resulting from such reletting. Lessor shall not be liable to Lessee
for any failure to relet the Property or for any failure to collect any rent
due upon such reletting.
17.4 DAMAGES.
Neither (a) the termination of this Lease as to the Property
pursuant to Section 17.1; (b) the repossession of the Property; nor (c) the
failure of Lessor to relet the Property, the reletting of all or any portion
thereof, nor the failure of Lessor to collect or receive any rentals due upon
any such reletting, shall relieve Lessee of its liabilities and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. If any Lease Event of Default shall have occurred and be continuing
and notwithstanding any termination of this Lease pursuant to Section 17.1,
Lessee shall forthwith pay to Lessor all Rent and other sums due and payable
hereunder to and including without limitation the date of such termination.
Thereafter, on the days on which the Basic Rent or Supplemental Rent, as
applicable, are payable under this Lease or would have been payable under this
Lease if the same had not been terminated pursuant to Section 17.1 and until
the end of the Term hereof or what would have been the Term in the absence of
such termination, Lessee shall pay Lessor, as current liquidated damages (it
being agreed that it would be impossible accurately to determine actual
damages) an amount equal to the Basic Rent and Supplemental Rent that are
payable under this Lease or would have been payable by Lessee hereunder if this
Lease had not been terminated pursuant to Section 17.1, less the net proceeds,
if any, which are actually received by Lessor with respect to the period in
question of any reletting of the Property or any portion thereof; provided,
that Lessee's obligation to make payments of Basic Rent and Supplemental Rent
under this Section 17.4 shall continue only so long as Lessor shall not have
received the amounts specified in Section 17.6. In calculating the amount of
such net proceeds from reletting, there shall be deducted all of Lessor's, any
Holder's, the Agent's and any Lender's reasonable expenses in connection
therewith, including without limitation repossession costs, brokerage or sales
commissions, fees and expenses for counsel and any necessary repair or
alteration costs and expenses incurred in preparation for such reletting. To
the extent Lessor receives any damages pursuant to this Section 17.4, such
amounts shall be regarded as amounts paid on account of Rent. Lessee
specifically acknowledges and agrees that its obligations under this Section
17.4 shall be absolute and unconditional under any and all circumstances and
shall be paid and/or performed, as the case may be, without notice or demand
and without any abatement, reduction, diminution, setoff, defense, counterclaim
or recoupment whatsoever.
17.5 POWER OF SALE.
Without limiting any other remedies set forth in this Lease,
Lessor and Lessee agree that Lessee has granted, pursuant to Section 7.1(b)
hereof and the Lease Supplement, a Lien against the Property WITH POWER OF
SALE, and that, upon the occurrence and during the continuance of any Lease
Event of Default, Lessor shall have the power and authority, to the
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extent provided by law, after prior notice and lapse of such time as may be
required by law, to foreclose its interest (or cause such interest to be
foreclosed) in all or any part of the Property.
17.6 FINAL LIQUIDATED DAMAGES.
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to Lessee and at Lessor's election, and Lessee shall pay to
Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 11 of the Participation Agreement (which, if requested,
shall be paid concurrently), and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages) the Termination Value. Upon payment of
the amount specified pursuant to the first sentence of this Section 17.6,
Lessee shall be entitled to receive from Lessor, either at Lessee's request or
upon Lessor's election, in either case at Lessee's cost, an assignment of
Lessor's entire right, title and interest in and to the Property, Improvements,
Fixtures, Modifications, Equipment and all components thereof, in each case in
recordable form and otherwise in conformity with local custom and free and
clear of the Lien of this Lease (including without limitation the release of
any memoranda of Lease and/or the Lease Supplement recorded in connection
therewith) and any Lessor Liens. The Property shall be conveyed to Lessee
"AS-IS, WHERE-IS" and in their then present physical condition. If any statute
or rule of law shall limit the amount of such final liquidated damages to less
than the amount agreed upon, Lessor shall be entitled to the maximum amount
allowable under such statute or rule of law; provided, however, Lessee shall
not be entitled to receive an assignment of Lessor's interest in the Property,
the Improvements, Fixtures, Modifications, Equipment or the components thereof
unless Lessee shall have paid in full the Termination Value. Lessee
specifically acknowledges and agrees that its obligations under this Section
17.6 shall be absolute and unconditional under any and all circumstances and
shall be paid and/or performed, as the case may be, without notice or demand
and without any abatement, reduction, diminution, setoff, defense, counterclaim
or recoupment whatsoever.
17.7 ENVIRONMENTAL COSTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant
to Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor for) the cost of any environmental testing and/or
remediation work undertaken respecting the Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor, and shall indemnify
and hold harmless Lessor and each other Indemnified Person therefrom. Lessee
shall pay all amounts referenced in the immediately preceding sentence within
ten (10) days of any request by Lessor for such payment. The provisions of this
Section 17.7 shall not limit the obligations of Lessee under any Operative
Agreement regarding indemnification obligations, environmental testing,
remediation and/or work.
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17.8 WAIVER OF CERTAIN RIGHTS.
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of
re-entry or the institution of legal proceedings to obtain re-entry or
possession; (b) any right of redemption, re-entry or possession; (c) the
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt; and (d) any other rights which might otherwise limit or
modify any of Lessor's rights or remedies under this Article XVII.
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant
to Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer
and set over to Lessor all of Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Property (including without limitation all
right, title and interest of Lessee with respect to all warranty, performance,
service and indemnity provisions), as and to the extent that the same relate to
the acquisition, installation, testing, use, development, construction,
operation, maintenance, repair, refurbishment and restoration of the Property
or any of them.
17.10 REMEDIES CUMULATIVE.
The remedies herein provided shall be cumulative and in addition
to (and not in limitation of) any other remedies available at law, equity or
otherwise, including without limitation any mortgage foreclosure remedies.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon the
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All
out-of-pocket costs and expenses so incurred (including without limitation fees
and expenses of counsel), together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid by Lessor, shall be paid
by Lessee to Lessor on demand.
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ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE OPTION.
Subject to Section 19.2, in connection with any termination of
this Lease with respect to the Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date
on which this Lease is to terminate with respect to the Property, and upon
tender by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as
applicable, Lessor shall execute and deliver to Lessee (or to Lessee's
designee) at Lessee's cost and expense an assignment (by deed or other
appropriate instrument) of Lessor's entire interest in such Property, in each
case in recordable form and otherwise in conformity with local custom and free
and clear of any Lessor Liens attributable to Lessor but without any other
warranties (of title or otherwise) from Lessor. Such Property shall be conveyed
to Lessee "AS-IS, "WHERE-IS" and in then present physical condition.
19.2 NO PURCHASE OR TERMINATION WITH RESPECT TO LESS THAN ALL OF THE
PROPERTY.
Lessee shall not be entitled to exercise its Purchase Option or
the Sale Option separately with respect to a portion of the Property consisting
of Land, Equipment, Improvements but shall be required to exercise its Purchase
Option or the Sale Option with respect to the entire Property.
ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
Not less than sixty (60) days and no more than one hundred
eighty (180) days prior to the Expiration Date or (respecting the Purchase
Option only) any Payment Date, Lessee may give Lessor irrevocable written
notice (the "Election Notice") that Lessee (or its designee) is electing to
exercise either (a) the option to purchase all, but not less than all, the
Property on the Expiration Date or on the Payment Date specified in the
Election Notice (the "Purchase Option") or (b) with respect to an Election
Notice given in connection with the Expiration Date only, the option to
remarket all, but not less than all, the Property to a Person other than Lessee
or any Affiliate of Lessee and cause a sale of such Property to occur on the
Expiration Date pursuant to the terms of Section 22.1 (the "Sale Option"). If
Lessee does not give an Election Notice indicating the Purchase Option or the
Sale Option at least sixty (60) days and not more than one hundred eighty (180)
days prior to the Expiration Date, then, Lessee shall be deemed to have elected
the Purchase Option. If Lessee shall either (i) elect (or be deemed to have
elected) to exercise the Purchase Option or (ii) elect the Sale Option and fail
to cause all, but not less than all, the Property to be sold in accordance with
the terms of Section 22.1 on the Expiration Date, then in either case Lessee
shall pay to Lessor on the date on which such purchase or sale is scheduled to
occur an amount equal to the Termination Value for all, but not less than all,
the Property (which the parties do not intend to be a "bargain" purchase price)
and, upon receipt of such amounts and satisfaction of such obligations, Lessor
shall transfer to Lessee (or its
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designee) all of Lessor's right, title and interest in and to all, but not less
than all, the Property in accordance with Section 20.2.
20.2 LESSEE PURCHASE OPTION.
Provided, no Default or Event of Default shall have occurred and
be continuing (other than those that will be cured by the payment of the
Termination Value for all the Property) and provided, that the Election Notice
has been appropriately given specifying the Purchase Option, Lessee (or its
designee) shall purchase all the Property on the Expiration Date or Payment
Date at a price equal to the Termination Value for the Property (which the
parties do not intend to be a "bargain" purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to the Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date
on which this Lease is to terminate with respect to the Property or all of the
Property, and upon tender by Lessee (or its designee) of the amounts set forth
in Section 16.2(b) or this Section 20.2, as applicable, Lessor shall execute,
acknowledge (where required) and deliver to Lessee (or its designee), at
Lessee's cost and expense, each of the following: (a) a termination or
assignment (as requested by the Lessee) of any applicable and special or
limited warranty Deeds conveying the Property to Lessee (or its designee) free
and clear of the Lien of this Lease, the Lien of the Credit Documents and any
Lessor Liens; (b) a Bill of Sale conveying the Property (to the extent it is
personal property) to Lessee (or its designee) free and clear of the Lien of
this Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed; and (d) FIRPTA affidavits. All of the
foregoing documentation must be in form and substance reasonably satisfactory
to Lessor. The applicable Property shall be conveyed to Lessee (or its
designee) "AS-IS, WHERE-IS" and in then present physical condition.
If the Property is the subject of remediation efforts respecting
Hazardous Substances at the Expiration Date which could materially and
adversely impact the Fair Market Sales Value of such Property (with materiality
determined in Lessor's discretion), then Lessee shall be obligated to purchase
the Property pursuant to Section 20.2.
On the Expiration Date and/or any Payment Date on which Lessee
has elected to exercise its Purchase Option, Lessee shall pay (or cause to be
paid) to Lessor, the Agent and all other parties, as appropriate, the sum of
all costs and expenses incurred by any such party in connection with the
election by Lessee to exercise its Purchase Option and all Rent and all other
amounts then due and payable or accrued under this Lease and/or any other
Operative Agreement.
20.3 THIRD PARTY SALE OPTION.
(a) Provided, that (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the
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Sale Option, Lessee shall undertake to cause a sale of the Property on
the Expiration Date (all as specified in the Election Notice) in
accordance with the provisions of Section 22.1 hereof. Such Election
Date on which a Sale is required may be hereafter referred to as the
"Sale Date".
(b) In the event Lessee exercises the Sale Option then, as soon
as practicable and in all events not less than sixty (60) days prior
to the Expiration Date, Lessee shall cause to be delivered to Lessor a
Phase I environmental site assessment for the Property recently
prepared (no more than thirty (30) days old prior to the Sale Date) by
an independent recognized professional reasonably acceptable to Lessor
and in form, scope and content reasonably satisfactory to Lessor. In
the event that Lessor shall not have received such environmental site
assessment by the date sixty (60) days prior to the Expiration Date or
in the event that such environmental assessment shall reveal the
existence of any material violation of Environmental Laws, other
material Environmental Violation or potential material Environmental
Violation (with materiality determined in each case by Lessor in its
reasonable discretion), then Lessee on the Expiration Date shall pay
to Lessor an amount equal to the Termination Value for the Property
and any and all other amounts due and owing hereunder. Upon receipt of
such payment and all other amounts due under the Operative Agreements,
Lessor shall transfer to Lessee all of Lessor's right, title and
interest in and to the Property in accordance with Section 19.1.
ARTICLE XXI
21.1 [INTENTIONALLY RESERVED].
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of the Property in connection
with a sale to one (1) or more third party purchasers to be
consummated on the Sale Date for the highest price available, shall
notify Lessor promptly of the name and address of each prospective
purchaser and the cash price which each prospective purchaser shall
have offered to pay for each such Property and shall provide Lessor
with such additional information about the bids and the bid
solicitation procedure as Lessor may reasonably request from time to
time. All such prospective purchasers must be Persons other than
Lessee or any Affiliate of Lessee. On the Sale Date, Lessee shall pay
(or cause to be paid) to Lessor and all other parties, as appropriate,
all Rent and all other amounts then due and payable or accrued under
this Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided,
however, that notwithstanding the
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foregoing, Lessor may not reject the bids submitted by Lessee if such
bids, in the aggregate, are greater than or equal to the sum of the
Limited Recourse Amount for all the Property, and represent bona fide
offers from one (1) or more third party purchasers. If the highest
price which a prospective purchaser or the prospective purchasers
shall have offered to pay for all the Property on the Sale Date is
less than the sum of the Limited Recourse Amount for all the Property
or if such bids do not represent bona fide offers from one (1) or more
third parties or if there are no bids, Lessor may elect to retain the
Property by giving Lessee prior written notice of Lessor's election to
retain the same, and promptly upon receipt of such notice, Lessee
shall surrender, or cause to be surrendered, the Property specified in
such notice in accordance with the terms and conditions of Section
10.1. Upon acceptance of any bid, Lessor agrees, at Lessee's request
and expense, to execute a contract of sale with respect to such sale,
so long as the same is consistent with the terms of this Article 22
and provides by its terms that it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain the Property pursuant
to the provisions of the preceding paragraph, Lessee shall arrange for
Lessor to sell the Property free and clear of the Lien of this Lease
and any Lessor Liens attributable to Lessor, without recourse or
warranty (of title or otherwise), for cash on the Sale Date to the
purchaser or purchasers offering the highest cash sales price, as
identified by Lessee or Lessor, as the case may be; provided, however,
solely as to Lessor or the Trust Company, in its individual capacity,
any Lessor Lien shall not constitute a Lessor Lien so long as Lessor
or the Trust Company, in its individual capacity, is diligently and in
good faith contesting, at the cost and expense of Lessor or the Trust
Company, in its individual capacity, such Lessor Lien by appropriate
proceedings in which event the applicable Sale Date, all without
penalty or cost to Lessee, shall be delayed for the period of such
contest. To effect such transfer and assignment, Lessor shall execute,
acknowledge (where required) and deliver to the appropriate purchaser
each of the following: (a) special or limited warranty Deeds conveying
the Property (to the extent it is real property titled to Lessor) to
the appropriate purchaser free and clear of the Lien of this Lease,
the Lien of the Credit Documents and any Lessor Liens; (b) a Bill of
Sale conveying the Property (to the extent it is personal property)
titled to Lessor to the appropriate purchaser free and clear of the
Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (c) any real estate tax affidavit or other document required by
law to be executed and filed in order to record the Deed; and (d)
FIRPTA affidavits, as appropriate. All of the foregoing documentation
must be in form and substance reasonably satisfactory to Lessor.
Lessee shall surrender the Property so sold or subject to such
documents to each purchaser in the condition specified in Section
10.1, or in such other condition as may be agreed between Lessee and
such purchaser. Lessee shall not take or fail to take any action which
would have the effect of unreasonably discouraging bona fide third
party bids for the Property. If the Property is not either (i) sold on
the Sale Date in accordance with the terms of this Section 22.1, or
(ii) retained by Lessor pursuant to an affirmative election made by
Lessor pursuant to the second sentence of the second paragraph of this
Section 22.1(a), then (x) Lessee shall be obligated to pay Lessor on
the Sale Date an amount equal to the aggregate Termination Value for
the Property less any sales proceeds
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received by the Lessor, and (y) Lessor shall transfer the Property to
Lessee in accordance with Section 20.2.
(b) If the Property is sold on a Sale Date to one (1) or more
third party purchasers in accordance with the terms of Section 22.1(a)
and the aggregate purchase price paid for the Property is less than
the sum of the aggregate Property Cost for the Property (hereinafter
such difference shall be referred to as the "Deficiency Balance"),
then Lessee hereby unconditionally promises to pay to Lessor on the
Sale Date all Rent and all other amounts then due and owing pursuant
to the Operative Agreements and the lesser of (i) the Deficiency
Balance, or (ii) the Maximum Residual Guarantee Amount for the
Property. On a Sale Date if (x) Lessor receives the aggregate
Termination Value for the Property from one (1) or more third party
purchasers, (y) Lessor and such other parties receive all other
amounts specified in the last sentence of the first paragraph of
Section 22.1(a) and (z) the aggregate purchase price paid for all the
Property on such date exceeds the sum of the aggregate Property Cost
for all the Property, then Lessee may retain such excess. If the
Property are retained by Lessor pursuant to an affirmative election
made by Lessor pursuant to the provisions of Section 22.1(a), then
Lessee hereby unconditionally promises to pay to Lessor on the Sale
Date all Rent and all other amounts then due and owing pursuant to the
Operative Agreements and an amount equal to the Maximum Residual
Guarantee Amount for the Property so retained. Any payment of the
foregoing amounts described in this Section 22.1(b) shall be made
together with a payment of all other amounts referenced in the last
sentence of the first paragraph of Section 22.1(a).
(c) In the event that all the Property is either sold to one (1)
or more third party purchasers on the Sale Date or retained by Lessor
in connection with an affirmative election made by Lessor pursuant to
the provisions of Section 22.1(a), then in either case on the
applicable Sale Date Lessee shall provide Lessor or such third party
purchaser (unless otherwise agreed by such third party purchaser) with
(i) all permits, certificates of occupancy, governmental licenses and
authorizations necessary to use, operate, repair, access and maintain
the Property for the purpose it is being used by Lessee, and (ii) such
manuals, permits, easements, licenses, intellectual property,
know-how, rights-of-way and other rights and privileges in the nature
of an easement as are reasonably necessary or desirable in connection
with the use, operation, repair, access to or maintenance of the
Property for its intended purpose or otherwise as Lessor or such third
party purchaser(s) shall reasonably request (and a royalty-free
license or similar agreement to effectuate the foregoing on terms
reasonably agreeable to Lessor or such third party purchaser(s), as
applicable). All assignments, licenses, easements, agreements and
other deliveries required by clauses (i) and (ii) of this paragraph
(c) shall be in form reasonably satisfactory to Lessor or such third
party purchaser(s), as applicable, and shall be fully assignable
(including without limitation both primary assignments and assignments
given in the nature of security) without payment of any fee, cost or
other charge.
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22.2 APPLICATION OF PROCEEDS OF SALE.
In the event Lessee receives any proceeds of sale of the
Property, such proceeds shall be deemed to have been received in trust on
behalf of Lessor and Lessee shall promptly remit such proceeds to Lessor.
Lessor shall apply the proceeds of sale of the Property in the following order
of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
the case may be) for the payment of all reasonable costs and expenses
incurred by Lessor (and/or the Agent, as the case may be) in
connection with the sale (to the extent Lessee has not satisfied its
obligation to pay such costs and expenses);
(b) SECOND, so long as the Credit Agreement is in effect and any
Loans or Holder Advances or any amount is owing to the Financing
Parties under any Operative Agreement, to the Agent to be applied
pursuant to intercreditor provisions among Lessor, the Lenders and the
Holders contained in the Operative Agreements; and
(c) THIRD, to Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR.
If the proceeds of the sale described in Section 22.1 with
respect to the Property shall be less than the Limited Recourse Amount with
respect to the Property, and at the time of such sale it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair
Market Sales Value of the Property shall have been impaired by greater than
expected wear and tear during the term of the Lease, Lessee shall pay to Lessor
within ten (10) days after receipt of Lessor's written statement (i) the amount
of such excess wear and tear determined by the Appraisal Procedure or (ii) the
amount of the Sale Proceeds Shortfall, whichever amount is less.
22.4 APPRAISAL PROCEDURE.
For determining the Fair Market Sales Value of the Property or
any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor,
shall mutually agree thereupon, but if either party shall fail to choose an
appraiser within twenty (20) days after notice from the other party of the
selection of its appraiser, then the appraisal by such appointed appraiser
shall be binding on Lessee and Lessor. If the two (2) appraisers cannot agree
within twenty (20) days after both shall have been appointed, then a third
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appraiser shall be selected by the two (2) appraisers or, failing agreement as
to such third appraiser within thirty (30) days after both shall have been
appointed, by the American Arbitration Association. The decisions of the three
(3) appraisers shall be given within twenty (20) days of the appointment of the
third appraiser and the decision of the appraiser most different from the
average of the other two (2) shall be discarded and such average shall be
binding on Lessor and Lessee; provided, that if the highest appraisal and the
lowest appraisal are equidistant from the third appraisal, the third appraisal
shall be binding on Lessor and Lessee. The fees and expenses of the appraiser
appointed by Lessee shall be paid by Lessee; the fees and expenses of the
appraiser appointed by Lessor shall be paid by Lessor (such fees and expenses
not being indemnified pursuant to Section 11 of the Participation Agreement);
and the fees and expenses of the third appraiser shall be divided equally
between Lessee and Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
During the Marketing Period, the obligation of Lessee to pay
Rent with respect to the Property (including without limitation the installment
of Basic Rent due on the Expiration Date) shall continue undiminished until
payment in full to Lessor of the sale proceeds, if any, the Maximum Residual
Guarantee Amount, the amount due under Section 22.3, if any, and all other
amounts due to Lessor or any other Person with respect to all Property or any
Operative Agreement. Lessor shall have the right, but shall be under no duty,
to solicit bids, to inquire into the efforts of Lessee to obtain bids or
otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXII.
ARTICLE XXIII
23.1 HOLDING OVER.
If Lessee shall for any reason remain in possession of the
Property after the expiration or earlier termination of this Lease as to such
Property (unless such Property is conveyed to Lessee), such possession shall be
as a tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall
continue to pay Basic Rent at the lesser of the highest lawful rate and one
hundred ten percent (110%) of the last payment of Basic Rent due with respect
to such Property prior to such expiration or earlier termination of this Lease.
Such Basic Rent shall be payable from time to time upon demand by Lessor and
such additional amount of Basic Rent shall be applied by Lessor ratably to the
Lenders and the Holders based on their relative amounts of the then outstanding
aggregate Property Cost for the Property. During any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be
obligated to perform and observe all of the terms, covenants and conditions of
this Lease, but shall have no rights hereunder other than the right, to the
extent given by law to tenants at sufferance, to continue their occupancy and
use of such Property. Nothing contained in this Article XXIII shall constitute
the consent, express or implied, of Lessor to the holding over of Lessee after
the expiration or earlier termination of this Lease as to the Property (unless
such Property is conveyed to Lessee) and nothing contained herein shall be read
or construed as preventing Lessor from maintaining a suit for possession of
such Property or exercising any other remedy available to Lessor at law or in
equity.
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ARTICLE XXIV
24.1 RISK OF LOSS.
During the Term, unless Lessee shall not be in actual possession
of the Property in question solely by reason of Lessor's exercise of its
remedies of dispossession under Article XVII, the risk of loss or decrease in
the enjoyment and beneficial use of such Property as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
ARTICLE XXV
25.1 ASSIGNMENT.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to the Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor, which consent shall be in such
parties' absolute discretion. Notwithstanding anything in this Lease
to the contrary, Lessee shall have the right, without obtaining
Lessor's consent, but with prior written notice to the Lessor, to
assign this Lease to an Affiliate, Subsidiary or successor by merger
or transfer of substantially all of Lessee's assets; provided, after
the effective date of such assignment, Lessee shall remain in
compliance with all of its covenants, agreements and obligations under
the Operative Agreements, including without limitation compliance with
the Incorporated Representations and Warranties and the Incorporated
Covenants.
(b) No assignment by Lessee (referenced in this Section 25.1 or
otherwise) or other relinquishment of possession to the Property shall
in any way discharge or diminish any of the obligations of Lessee to
Lessor hereunder and Lessee shall remain directly and primarily liable
under the Operative Agreements as to any rights or obligations
assigned by Lessee or regarding the Property in which rights or
obligations have been assigned or otherwise transferred. In connection
with any such assignment, Guarantor shall reaffirm the guaranties set
forth in Section 6B of the Participation Agreement.
25.2 SUBLEASES.
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor of the execution of such
sublease. As of the Closing Date, Lessee shall lease the respective
Property described in such Lease Supplement from Lessor, and any
existing tenant respecting such Property shall automatically be deemed
to be a subtenant of Lessee and not a tenant of Lessor.
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(b) Without the prior written consent of the Agent, any Lender,
any Holder or Lessor and subject to the other provisions of this
Section 25.2, Lessee may sublet the Property or portion thereof to any
wholly-owned Subsidiary of Lessee or any other Person reasonably
acceptable to the Agent; provided, (i) all subleasing shall be done on
market terms and shall in no way diminish the fair market value or
useful life of any applicable Property, (ii) no sublease (referenced
in this Section 25.2 or otherwise) or other relinquishment of
possession of the Property shall in any way discharge or diminish any
of Lessee's obligations to Lessor hereunder and Lessee shall remain
directly and primarily liable under this Lease as to the Property, or
portion thereof, so sublet, (iii) the term of any such sublease shall
not extend beyond the Term, and (iv) each sublease shall be expressly
subject and subordinate to this Lease. Except as referenced in the
immediately preceding sentence, no other sublease shall be permitted
unless consented to in writing by Lessor which consent shall not be
unnecessarily withheld, delayed or conditioned. All sublessees shall
be in all respects subject and subordinate to the Lease and shall in
no way diminish the fair market value or useful life of the Property.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to the Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder
and Lessee shall remain directly and primarily liable under this Lease
as to such Property, or portion thereof, so sublet.
ARTICLE XXVI
26.1 NO WAIVER.
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
No surrender to Lessor of this Lease or of all or any portion of
the Property or of any part of any thereof or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by Lessor and no
act by Lessor or the Agent or any representative or agent of Lessor or the
Agent, other than a written acceptance, shall constitute an acceptance of any
such surrender.
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27.2 NO MERGER OF TITLE.
There shall be no merger of this Lease or of the leasehold
estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in the Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 INCORPORATION OF COVENANTS.
Reference is made to the Lessee Credit Agreement and the
representations and warranties contained in Article VII of the Lessee Credit
Agreement and the covenants contained in Articles VIII and IX of the Lessee
Credit Agreement. Such representations and warranties and such covenants, other
than (a) those solely relating to an earlier point in time, (b) those
concerning only the Lessee Credit Agreement facility or related loan documents
and which could not, under any reasonable interpretation, be deemed applicable
in connection with the transactions contemplated under the Operative
Agreements, and (c) those the subject matter of which is already covered by a
provision contained in Section 6.2 of the Participation Agreement (in the case
of representations and warranties) or Section 8.3 of the Participation
Agreement (in the case of such covenants), shall hereinafter be referred to as
the "Incorporated Representations and Warranties" and the "Incorporated
Covenants," respectively. Lessee agrees with Lessor that the Incorporated
Representations and Warranties and the Incorporated Covenants (and all other
relevant provisions of the Lessee Credit Agreement related thereto, including
without limitation the defined terms contained in Article I thereof which are
used in the Incorporated Representations and Warranties and the Incorporated
Covenants, hereinafter referred to as the "Additional Incorporated Terms") are
hereby incorporated by reference into this Lease to the same extent and with
the same effect as if set forth fully herein and shall inure to the benefit of
Lessor, without giving effect to any waiver, amendment, modification or
replacement of the Lessee Credit Agreement or any term or provision of the
Incorporated Representations and Warranties or the Incorporated Covenants
occurring subsequent to the date of this Lease, except to the extent otherwise
specifically provided in the following provisions of this paragraph. Lessee
shall be deemed to make each of the Incorporated Representations and Warranties
as to the parties and the matters specified therein and agrees to cause
Guarantor, and to the extent applicable, its Subsidiaries, to comply with the
Incorporated Covenants as to the matters specified therein, except that the
term "Material Adverse Effect" as used therein shall mean Material Adverse
Effect as defined in Appendix A to the Participation Agreement, the terms
"Agent," "Required Lenders," and "Lenders" as used therein (except as used in
Sections 9.3(a), 9.4(b), and 9.16 thereof), shall mean the Lessor, the terms
"Default" or "Event of Default" shall mean Default or Event of Default as
defined in Appendix A to the Participation Agreement, and the term "Loan
Documents" as used in Section 9.7 shall mean the Operative Agreements, unless,
in any case, such interpretation is inappropriate under any reasonable
interpretation. In the event a waiver is granted under the Lessee Credit
Agreement or an amendment or modification is
36
<PAGE> 41
executed with respect to the Lessee Credit Agreement, and such waiver,
amendment and/or modification affects the Incorporated Representations and
Warranties, the Incorporated Covenants or the Additional Incorporated Terms,
then such waiver, amendment or modification shall be effective with respect to
the Incorporated Representations and Warranties, the Incorporated Covenants and
the Additional Incorporated Terms as incorporated by reference into this Lease
only if consented to in writing by the Agent (acting upon the direction of the
Majority Secured Parties). In the event of any replacement of the Lessee Credit
Agreement with a similar credit facility (the "New Facility") the
representations and warranties, covenants and additional terms contained in the
New Facility which correspond to the representations and warranties, covenants
contained in Article VII and Articles VIII and IX, respectively, and such
additional terms (each of the foregoing contained in the Lessee Credit
Agreement) shall become the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms only if consented
to in writing by the Agent (acting upon the direction of the Majority Secured
Parties) and, if such consent is not granted or if the Lessee Credit Agreement
is terminated and not replaced, then the representations and warranties and
covenants contained in Article VII and Articles VIII and IX, respectively, and
such additional terms (each of the foregoing contained in the Lessee Credit
Agreement (together with any modifications or amendments approved in accordance
with this paragraph)) shall continue to be the Incorporated Representations and
Warranties, the Incorporated Covenants and the Additional Incorporated Terms
hereunder.
ARTICLE XXIX
29.1 NOTICES.
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
ARTICLE XXX
30.1 MISCELLANEOUS.
Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
37
<PAGE> 42
30.2 AMENDMENTS AND MODIFICATIONS.
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 HEADINGS AND TABLE OF CONTENTS.
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 COUNTERPARTS.
This Lease may be executed in any number of counterparts, each
of which shall be an original, but all of which shall together constitute one
(1) and the same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE
REQUIRED TO APPLY.
30.7 CALCULATION OF RENT.
All calculation of Rent payable hereunder shall be computed
based on the actual number of days elapsed over a year of three hundred sixty
(360) days or, to the extent such Rent is based on the Prime Lending Rate,
three hundred sixty-five (365) (or three hundred sixty-six (366), as
applicable) days.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
This Lease shall not be recorded; provided, Lessor and Lessee
shall promptly record (a) a memorandum of this Lease and the applicable Lease
Supplement (in substantially the form of Exhibit B attached hereto) or a short
form lease (in form and substance reasonably satisfactory to Lessor) regarding
the Property promptly after the acquisition thereof in the local filing office
with respect thereto and as required under applicable law to sufficiently
evidence this Lease and any such Lease Supplement in the applicable real estate
filing records.
38
<PAGE> 43
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
Notwithstanding any other term or provision of this Lease to the
contrary, the allocations of the proceeds of the Property and any and all other
Rent and other amounts received hereunder shall be subject to the
inter-creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 LIMITATIONS ON RECOURSE.
Notwithstanding anything contained in this Lease to the
contrary, Lessee agrees to look solely to Lessor's estate and interest in the
Property (and in no circumstance to the Agent, the Lenders, the Holders, the
Owner Trustee, the Trust Company or otherwise to Lessor) for the collection of
any judgment requiring the payment of money by Lessor in the event of liability
by Lessor, and no other property or assets of Lessor or any shareholder, owner
or partner (direct or indirect) in or of Lessor, or any director, officer,
employee, beneficiary, Affiliate of any of the foregoing shall be subject to
levy, execution or other enforcement procedure for the satisfaction of the
remedies of Lessee under or with respect to this Lease, the relationship of
Lessor and Lessee hereunder or Lessee's use of the Property or any other
liability of Lessor to Lessee. Nothing in this Section shall be interpreted so
as to limit the terms of Sections 6.1 or 6.2 or the provisions of Section 12.9
of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY
COUNTERCLAIM THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
Lessee hereby acknowledges and agrees that the rights and powers
of Lessor under this Lease have been assigned to the Agent pursuant to the
terms of the Security Agreement and the other Operative Agreements. Lessor and
Lessee hereby acknowledge and agree that (a) the Agent shall, in its
discretion, direct and/or act on behalf of Lessor pursuant to the provisions of
Sections 8.2(h) and 8.6 of the Participation Agreement, (b) all notices to be
given to Lessor shall be given to the Agent and (c) all notices to be given by
Lessor may be given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE
HEREIN, MUTATIS MUTANDIS.
39
<PAGE> 44
30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND
CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN
EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER
CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT
OR PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS
"INTEREST." ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE
PROVISIONS OF THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH
AGREEMENTS, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR
ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION
PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY
INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS LEASE
OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMISSIBLE UNDER
APPLICABLE LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE
AGREEMENTS OR ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE BE
PAYABLE IN EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION
SHALL BE SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER
SUCH DOCUMENTS OR AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM
NONUSURIOUS AMOUNT PERMITTED UNDER APPLICABLE LAW, WITHOUT THE NECESSITY OF
EXECUTION OF ANY AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER
RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST WITH RESPECT TO
THE OBLIGATIONS OWED HEREUNDER OR UNDER APPLICABLE LAW AND WHICH WOULD, APART
FROM THIS PROVISION, BE IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL
TO THE AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE INTEREST SHALL, WITHOUT PENALTY,
BE APPLIED TO THE REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL
AND NOT TO THE PAYMENT OF INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR
THEREOF, IF AND TO THE EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE
EXCEEDS THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND
PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT
INCLUDE THE RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON
THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY
UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO
BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE
AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE FULL STATED TERM
(INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS LEASE SO THAT
THE AMOUNT OF INTEREST ON ACCOUNT
40
<PAGE> 45
OF SUCH PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY
APPLICABLE LAW.
[signature page follows]
41
<PAGE> 46
IN WITNESS WHEREOF, the parties have caused this Lease to be
duly executed and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under the
Dolphin Realty Trust 1999-1, as Lessor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CATALINA MARKETING SALES CORPORATION,
as Lessee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
<PAGE> 47
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
________, between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually, but solely as the Owner Trustee under the
Dolphin Realty Trust 1999-1, as lessor (the "Lessor") and Catalina Marketing
SALES Corporation, a Delaware corporation, as lessee (the "Lessee").
WHEREAS, Lessor is the owner or will be the owner of the Property
described on Schedule 1 hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in Appendix A to the Participation
Agreement, dated as of October 21, 1999, among Lessee, Catalina Marketing
Corporation, as Guarantor, Lessor, not individually, except as expressly stated
therein, but solely as the Owner Trustee under the Dolphin Realty Trust 1999-1,
the various banks and other lending institutions which are parties thereto from
time to time, as the Holders, the various banks and other lending institutions
which are parties thereto from time to time, as the Lenders, and First Union
National Bank, as the Agent for the Lenders and respecting the Security
Documents, as the Agent for the Lenders and Holders, to the extent of their
interests, as such may be amended, modified, extended, supplemented, restated
and/or replaced from time to time.
SECTION 2. THE PROPERTY. Attached hereto as Schedule 1 is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule 1-A, an Improvement Schedule attached hereto as Schedule 1-B and a
legal description of the Land attached hereto as Schedule 1-C. Effective upon
the execution and delivery of this Lease Supplement by Lessor and Lessee, the
Leased Property shall be subject to the terms and provisions of the Lease.
Without further action, any and all additional Equipment funded under the
Operative Agreements and any and all additional Improvements made to the Land
shall be deemed to be titled to the Lessor and subject to the terms and
conditions of the Lease and this Lease Supplement.
This Lease Supplement shall constitute a mortgage, deed of trust,
security agreement and financing statement under the laws of the state in which
the Leased Property is situated. The maturity date of the obligations secured
hereby shall be the Basic Term Expiration Date.
For purposes of provisions of the Lease and this Lease Supplement
related to the creation and enforcement of the Lease and this Lease Supplement
as a security agreement and a fixture
A-1
<PAGE> 48
filing, Lessee is the debtor and Lessor is the secured party. The mailing
addresses of the debtor (Lessee herein) and of the secured party (Lessor
herein) from which information concerning security interests hereunder may be
obtained are set forth on the signature pages hereto. A carbon, photographic or
other reproduction of the Lease and this Lease Supplement or of any financing
statement related to the Lease and this Lease Supplement shall be sufficient as
a financing statement for any of the purposes referenced herein.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to the Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided, that such exercise will not
impair the value of such Property) shall be permitted to exercise all rights
and remedies under, all operation and easement agreements and related or
similar agreements applicable to such Property.
SECTION 4. RATIFICATION; INCORPORATION BY REFERENCE. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE
OF North Carolina, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A
PARTICULAR PROPERTY IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. MORTGAGE; POWER OF SALE. Without limiting any other
remedies set forth in the Lease, in the event that a court of competent
jurisdiction rules that the Lease constitutes a mortgage, deed of trust or
other secured financing as is the intent of the parties, then Lessor and Lessee
agree that Lessee hereby grants a Lien against the Leased Property WITH POWER
OF SALE, and that, upon the occurrence of any Lease Event of Default, Lessor
shall have the power and authority, to the extent provided by law, after prior
notice and lapse of such time as may be required by law, to foreclose its
interest (or cause such interest to be foreclosed) in all or any part of the
Leased Property.
SECTION 8. COUNTERPART EXECUTION. This Lease Supplement may be
executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts together constituting but one (1)
and the same instrument.
A-2
<PAGE> 49
For purposes of the provisions of this Lease Supplement concerning
this Lease Supplement constituting a security agreement and fixture filing, the
addresses of the debtor (Lessee herein) and the secured party (Lessor herein),
from whom information may be obtained about this Lease Supplement, are as set
forth on the signature pages hereto.
[The remainder of this page has been intentionally left blank.]
A-3
<PAGE> 50
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of
the date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under the
Dolphin Realty Trust 1999-1, as Lessor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Security Bank,
National Association
79 South Main Street,
3rd Floor
Salt Lake City, Utah 84111
Attn: Val T. Orton
Vice President
CATALINA MARKETING SALES CORPORATION,
as Lessee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Catalina Marketing Sales Corporation
11300 Ninth Street North
St. Petersburg, Florida 33716
Attn: Chris Wolf
A-4
<PAGE> 51
Receipt of this original
counterpart of the foregoing Lease
Supplement is hereby acknowledged
as the date hereof.
FIRST UNION NATIONAL BANK, as the Agent
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
First Union National Bank
c/o First Union Capital Markets Group
301 South College Street, DC-6
Charlotte, North Carolina 28288-0166
Attn: Christy Lee Foster
A-5
<PAGE> 52
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not individually,
but solely as the Owner Trustee under the Dolphin Realty Trust 1999-1, on
behalf of the Owner Trustee.
[Notarial Seal]
----------------------------------------
Notary Public
My commission expires:
---------------
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of CATALINA
MARKETING SALES CORPORATION, a Delaware corporation, on behalf of the
corporation.
[Notarial Seal]
----------------------------------------
Notary Public
My commission expires:
---------------
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ________________ this ____ day of
___________, by _____________, as __________________ of FIRST UNION NATIONAL
BANK, a national banking association, as the Agent.
[Notarial Seal]
----------------------------------------
Notary Public
My commission expires:____________
A-6
<PAGE> 53
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
A-7
<PAGE> 54
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
A-8
<PAGE> 55
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
A-9
<PAGE> 56
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
[(LAND)]
A-10
<PAGE> 57
EXHIBIT B TO THE LEASE
Prepared by and after
recordation return to:
Lea Stromire Johnson
Moore & Van Allen, PLLC
100 North Tryon Street, Floor 47
Charlotte, NC 28202-4003
Space above this line for Recorder's use
- -------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT
AND
LEASE SUPPLEMENT NO. 1
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO. 1
("Memorandum"), dated as of _____________, _____, is by and between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the Dolphin Realty Trust
1999-1, with an office at 79 South Main Street, Salt Lake City, Utah 84111
(hereinafter referred to as "Lessor") and CATALINA MARKETING SALES CORPORATION,
a Delaware corporation, with an office at 11300 Ninth Street North, St.
Petersburg, Florida 33716 (hereinafter referred to as "Lessee").
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise
and agree as follows:
1. DEMISED PREMISES AND DATE OF LEASE. Lessor has leased to Lessee,
and Lessee has leased from Lessor, for the Term (as hereinafter defined),
certain real property and other property located in ________________ County,
Florida which is described in the attached Schedule 1 (the "Property"),
pursuant to the terms of a Lease Agreement between Lessor and Lessee dated as
of October 21, 1999 (as such may be amended, modified, extended, supplemented,
restated and/or replaced from time to time, "Lease") and a Lease Supplement No.
_____ between Lessor and Lessee dated as of ______________ (the "Lease
Supplement").
2. TERM AND PURCHASE OPTION. The term of the Lease for the Property
("Term") commenced as of __________, 19__ and shall end as of _________, 19__,
unless the Term is extended or earlier terminated in accordance with the
provisions of the Lease. The tenant has a purchase option under the Lease.
B-1
<PAGE> 58
3. TAX PAYER NUMBERS.
Lessor's tax payer number: __________________.
Lessee's tax payer number: __________________.
4. EFFECT OF MEMORANDUM. The purpose of this instrument is to give
notice of the Lease and the Lease Supplement and their respective terms,
covenants and conditions. This Memorandum shall not modify in any manner the
terms, conditions or intent of the Lease or the Lease Supplement and the
parties agree that this Memorandum is not intended nor shall it be used to
interpret the Lease or the Lease Supplement or determine the intent of the
parties under the Lease or the Lease Supplement.
[The remainder of this page has been intentionally left blank.]
B-2
<PAGE> 59
IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument as of the day and year first written.
LESSOR:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under the
Dolphin Realty Trust 1999-1
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
First Security Bank,
National Association
79 South Main Street
Third Floor
Salt Lake City, Utah 84111
Attn: Val T. Orton
Vice President
LESSEE:
CATALINA MARKETING SALES CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Catalina Marketing Sales Corporation
11300 Ninth Street North
St. Petersburg, Florida 33716
Attn: Chris Wolf
<PAGE> 60
STATE OF ____________ ss.
ss.
COUNTY OF ___________ ss.
The foregoing instrument was acknowledged before me this _____ day of
____________, _____ by __________ as ________ of First Security Bank, National
Association, a national banking association, not individually but solely as
Owner Trustee under the Dolphin Realty Trust 1999-1, on behalf of the national
banking association. He/she personally appeared before me and is/are personally
known to me or produced _________________ as identification.
Notary:
---------------------------------
[NOTARIAL SEAL] Printed Name:
---------------------------
Notary Public, State of
-----------------
<PAGE> 61
STATE OF ____________ ss.
ss.
COUNTY OF ___________ ss.
The foregoing instrument was acknowledged before me this _____ day of
____________, ____ by __________ as ________ of Catalina Marketing Sales
Corporation, a ____________ corporation, on behalf of the corporation. He/she
personally appeared before me and is/are personally known to me or produced
_________________ as identification.
Notary:
---------------------------------
[NOTARIAL SEAL] Printed Name:
---------------------------
Notary Public, State of
-----------------
<PAGE> 62
SCHEDULE 1
(Description of Property)
<PAGE> 1
Exhibit 10.28
- --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Dated as of October 21, 1999
among
CATALINA MARKETING sales CORPORATION,
as the Lessee,
CATALINA MARKETING CORPORATION, as Guarantor,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner Trustee
under the Dolphin Realty Trust 1999-1, as Lessor and Borrower,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Holders,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Lenders,
and
FIRST UNION NATIONAL BANK,
as the Agent for the Lenders
and respecting the Security Documents,
as the Agent for the Lenders and the Holders,
to the extent of their interests
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1A. INITIAL LENDER AND INITIAL HOLDER.....................................................................1
SECTION 1. THE LOANS AND HOLDER ADVANCES.........................................................................1
SECTION 2. INTENTIONALLY OMITTED.................................................................................2
SECTION 3. SUMMARY OF TRANSACTIONS...............................................................................2
3.1. Operative Agreements..................................................................................2
3.2. Property Purchase.....................................................................................2
3.3. [Intentionally Reserved]..............................................................................2
3.4. Ratable Interests of the Holders and the Lenders......................................................2
SECTION 4. THE CLOSINGS..........................................................................................2
SECTION 5. CLOSING CONDITIONS....................................................................................3
5.1. General...............................................................................................3
5.2. Procedures for Funding................................................................................3
5.3. Conditions Precedent for the Lessor, the Agent, the Lenders and the Holders Relating to the
Closing Date and the Property Closing Date............................................................4
5.4. [Intentionally Reserved]..............................................................................9
5.5. [Intentionally Reserved]..............................................................................9
5.6. [Intentionally Reserved]..............................................................................9
5.8. Payments..............................................................................................9
5.9. Maintenance of the Lessee as a Wholly-Owned Entity....................................................9
5.10 Liability of Credit Parties Limited to Transactions Contemplated by the Operative Agreements..........9
5.11 Payment of Early Termination Amount...................................................................9
SECTION 6. REPRESENTATIONS AND WARRANTIES.......................................................................10
6.1. Representations and Warranties of the Borrower.......................................................10
6.2. Representations and Warranties of the Credit Parties.................................................12
SECTION 6B. GUARANTY.............................................................................................15
6B.1. Guaranty of Payment and Performance..................................................................15
6B.2. Guaranty of Payment and Performance..................................................................16
6B.3. Modifications........................................................................................17
6B.4. Waiver of Rights.....................................................................................17
6B.5. Reinstatement........................................................................................18
6B.6. Remedies.............................................................................................18
6B.7. Limitation of Guaranty...............................................................................18
6B.8. Payment of Amounts to the Agent......................................................................18
SECTION 7. PAYMENT OF CERTAIN EXPENSES..........................................................................19
7.1. Transaction Expenses.................................................................................19
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
7.2. Brokers' Fees........................................................................................19
7.3. Certain Fees and Expenses............................................................................19
7.4. Unused Fees..........................................................................................20
SECTION 8. OTHER COVENANTS AND AGREEMENTS.......................................................................20
8.1. Cooperation with the Lessee..........................................................................20
8.2. Covenants of the Owner Trustee, the Trust Company, the Lessor and the Holders........................20
8.3. Credit Party Covenants, Consent and Acknowledgment...................................................22
8.4. Sharing of Certain Payments..........................................................................25
8.5. Grant of Easements, etc..............................................................................25
8.6. Appointment by the Agent, the Lenders, the Holders and the Lessor....................................25
8.7. Collection and Allocation of Payments and Other Amounts..............................................26
8.8. Release of Property, etc.............................................................................29
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.................................................................29
9.1. The Lessee's Credit Agreement Rights.................................................................29
9.2. The Lessee's Trust Agreement Rights..................................................................30
SECTION 10. TRANSFER OF INTEREST.................................................................................30
10.1. Restrictions on Transfer.............................................................................30
10.2. Effect of Transfer...................................................................................31
SECTION 11. INDEMNIFICATION......................................................................................32
11.1. General Indemnity....................................................................................32
11.2. General Tax Indemnity................................................................................34
11.3. Increased Costs, Illegality, etc.....................................................................38
11.4. Funding/Contribution Indemnity.......................................................................40
11.5. Express Indemnification for Ordinary Negligence, Strict Liability, etc...............................41
11.6. Indemnity Prior to Completion Date/Construction Period Termination Date..............................41
SECTION 12. MISCELLANEOUS........................................................................................42
12.1. Survival of Agreements...............................................................................42
12.2. Notices..............................................................................................42
12.3. Counterparts.........................................................................................44
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters......................................44
12.5. Headings, etc........................................................................................45
12.6. Parties in Interest..................................................................................46
12.7. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Venue...............................46
12.8. Severability.........................................................................................46
12.9. Liability Limited....................................................................................47
12.10. Rights of the Credit Parties.........................................................................48
12.11. Further Assurances...................................................................................48
12.12. Calculations under Operative Agreements..............................................................48
12.13. Confidentiality......................................................................................49
12.14. Financial Reporting/Tax Characterization.............................................................49
12.15. Set-off..............................................................................................49
</TABLE>
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EXHIBITS
- --------
A - Form of Requisition - Sections 4, 5.2 and 5.3
B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Officer's Certificate - Section 5.3(w)
D - Form of Secretary's Certificate - Section 5.3(x)
E - Form of Officer's Certificate - Section 5.3(y)
F - Form of Secretary's Certificate - Section 5.3(z)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(aa)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(bb)
J - Description of Material Litigation - Section 6.2(d)
Appendix A - Rules of Usage and Definitions
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<PAGE> 5
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of October 21, 1999 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Agreement") is by and among CATALINA MARKETING SALES CORPORATION, a
Delaware corporation (the "Lessee"); CATALINA MARKETING CORPORATION, a Delaware
corporation (the "Guarantor"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not individually (in its individual capacity, the
"Trust Company"), except as expressly stated herein, but solely as the Owner
Trustee under the Dolphin Realty Trust 1999-1 (the "Owner Trustee", the
"Borrower" or the "Lessor"); the various banks and other lending institutions
which are parties hereto from time to time as holders of certificates issued
with respect to the Dolphin Realty Trust 1999-1 (subject to the definition of
Holders in Appendix A hereto, individually, a "Holder" and collectively, the
"Holders"); the various banks and other lending institutions which are parties
hereto from time to time as lenders (subject to the definition of Lenders in
Appendix A hereto, individually, a "Lender" and collectively, the "Lenders");
and FIRST UNION NATIONAL BANK, a national banking association, as the agent for
the Lenders and respecting the Security Documents, as the agent for the Lenders
and the Holders, to the extent of their interests (in such capacity, the
"Agent"). Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings set forth in Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1A. INITIAL LENDER AND INITIAL HOLDER.
Notwithstanding the various references in the Operative Agreements to
multiple Lenders and multiple Holders, First Union National Bank is the only
Lender and the only Holder as of the date of this Agreement. Additional Lenders
and additional Holders may become parties to the Operative Agreements
subsequent to the date hereof pursuant to the assignment provisions set forth
in the applicable Operative Agreements.
SECTION 1. THE LOANS AND HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, the
Lenders have agreed to make Loans to the Lessor and the Holders have agreed to
make Holder Advances to the Lessor pursuant to the terms of the Credit
Agreement, the Trust Agreement and the other Operative Agreements in an
aggregate principal amount of up to the sum of the aggregate Commitments plus
the aggregate Holder Commitments. The Loans and Holder Advances and the
obligations of the Lessor under the Operative Agreements shall be secured by
the Collateral.
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SECTION 2. INTENTIONALLY OMITTED
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS.
On the date hereof, each of the respective parties hereto and thereto
shall execute and deliver this Agreement, the Lease, the Credit Agreement, the
Notes, the Trust Agreement, the Certificates, the Security Agreement and such
other documents, instruments, certificates and opinions of counsel as agreed to
by the parties hereto.
3.2. PROPERTY PURCHASE.
On the Property Closing Date and subject to the terms and conditions
of this Agreement (a) the Holders will each make a Holder Advance in accordance
with Section 5 of this Agreement and the terms and provisions of the Trust
Agreement, (b) the Lenders will each make Loans in accordance with Section 5 of
this Agreement and the terms and provisions of the Credit Agreement, (c) the
Lessor will purchase and acquire good and marketable title to the Property
pursuant to a Deed or Bill of Sale, as the case may be, and grant the Agent a
lien on such Property by execution of the required Security Documents, (d) the
Agent, the Lessee and the Lessor shall execute and deliver a Lease Supplement
relating to such Property and (e) the Basic Term shall commence with respect to
such Property.
3.3. [INTENTIONALLY RESERVED]
3.4. RATABLE INTERESTS OF THE HOLDERS AND THE LENDERS.
Each Holder and Lender agrees at all times to hold the same ratable
portion of the aggregate Lender Commitment for Tranche A Loans, the aggregate
Lender Commitment for Tranche B Loans and the aggregate Holder Commitment.
SECTION 4. THE CLOSINGS.
All documents and instruments required to be delivered on the Closing
Date shall be delivered at the offices of Moore & Van Allen, PLLC, Charlotte,
North Carolina, or at such other location as may be determined by the Lessor,
the Agent and the Lessee.
The Lessor shall deliver to the Agent a requisition (a "Requisition"),
in the form attached hereto as Exhibit A or in such other form as is
satisfactory to the Agent, in its reasonable discretion, in connection with the
Loans and Holder Advances to be extended on the Closing Date and on the
Property Closing Date.
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<PAGE> 7
SECTION 5. CLOSING CONDITIONS.
5.1. GENERAL.
(a) To the extent funds have been advanced to the Lessor as
Loans by the Lenders and to the Lessor as Holder Advances by the
Holders, the Lessor will use such funds from time to time in
accordance with the terms and conditions of this Agreement and the
other Operative Agreements (i) at the direction of the Lessee to
acquire the Properties in accordance with the terms of this Agreement
and the other Operative Agreements, and (ii) to pay Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor
under Sections 7.1.
(b) In lieu of the payment of interest on the Loans and
Holder Yield on the Holder Advances on any Scheduled Interest Payment
Date during the period prior to the initial Property Closing Date, (i)
each Lender's Loan shall automatically be increased by the amount of
interest accrued and unpaid on such Loan for such period (except to
the extent that at any time such increase would cause such Lender's
Loan to exceed such Lender's Available Commitment, in which case the
Lessee shall pay such excess amount to such Lender in immediately
available funds on the date such Lender's Available Commitment was
exceeded), and (ii) each Holder's Holder Advance shall automatically
be increased by the amount of Holder Yield accrued and unpaid on such
Holder Advance for such period (except to the extent that at any time
such increase would cause the Holder Advance of such Holder to exceed
such Holder's Available Holder Commitment, in which case the Lessee
shall pay such excess amount to such Holder in immediately available
funds on the date the Available Holder Commitment of such Holder was
exceeded). Such increases in a Lender's Loan and a Holder's Holder
Advance shall occur without any disbursement of funds by any Person.
5.2. PROCEDURES FOR FUNDING.
(a) The Lessee shall deliver to the Agent, not less than
three (3) Business Days prior to the Closing Date and the Property
Closing Date, as applicable, a Requisition as described in Section 4
hereof (including without limitation a legal description of the Land,
if any, a schedule of the Improvements, if any, and a schedule of the
Equipment, if any, acquired or to be acquired on the Property Closing
Date, each of the foregoing in a form reasonably acceptable to the
Agent).
(b) Subject to the satisfaction of the conditions precedent
set forth in Section 5.3 on the Closing Date and on the Property
Closing Date, (i) the Lenders shall make Loans based on their
respective Lender Commitments to the Lessor in an aggregate amount
equal to ninety-seven percent (97%) of the amounts requested in the
Requisition ratably between the Tranche A Lenders and the Tranche B
Lenders with the Tranche A Lenders funding eighty-four percent (84%)
of the amounts and the Tranche B Lenders funding thirteen percent
(13%) of such amounts, up to an aggregate principal amount equal to
the aggregate of the Holder Commitments and Lender Commitments, (ii)
the Holders shall make Holder Advances based on their respective
Holder Commitments in
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<PAGE> 8
an aggregate amount equal to three percent (3%) of the balance of the
amounts requested in such Requisition up to the aggregate advanced
amount equal to the aggregate of the Holder Commitments; and (iii) the
total amount of such Loans and Holder Advances made on the Closing
Date and on the Property Closing Date shall be used by the Lessor to
purchase the Property and pay the Transactions Expenses related
thereto.
(c) [Intentionally Reserved]
(d) All Operative Agreements which are to be delivered to the
Lessor, the Agent, the Lenders or the Holders shall be delivered to
the Agent, on behalf of the Lessor, the Agent, the Lenders or the
Holders, and such items (except for Notes, Certificates, Bills of
Sale, with respect to which in each case there shall be only one
original) shall be delivered with originals sufficient for the Lessor,
the Agent, each Lender and each Holder. All other items which are to
be delivered to the Lessor, the Agent, the Lenders or the Holders
shall be delivered to the Agent, on behalf of the Lessor, the Agent,
the Lenders or the Holders, and such other items shall be held by the
Agent. To the extent any such other items are requested in writing
from time to time by the Lessor, any Lender or any Holder, the Agent
shall provide a copy of such item to the party requesting it.
(e) Notwithstanding the completion of any closing under this
Agreement pursuant to Section 5.3, each condition precedent in
connection with any such closing may be subsequently enforced by the
Agent (unless such has been expressly waived in writing by the Agent).
5.3. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS AND THE
HOLDERS RELATING TO THE CLOSING DATE AND THE PROPERTY CLOSING DATE.
The obligations on the Closing Date and the Property Closing Date of
the Lessor, the Agent, the Lenders and the Holders to enter into the
transactions contemplated by this Agreement, including without limitation the
obligation to execute and deliver the applicable Operative Agreements to which
each is a party are subject to the satisfaction or waiver of the following
conditions precedent on or prior to the Closing Date or the Property Closing
Date, as the case may be (to the extent such conditions precedent require the
delivery of any agreement, certificate, instrument, memorandum, legal or other
opinion, appraisal, commitment, title insurance commitment, lien report or any
other document of any kind or type, such shall be in form and substance
satisfactory to the Agent, in its reasonable discretion; notwithstanding the
foregoing, the obligations of each party shall not be subject to any conditions
contained in this Section 5.3 which are required to be performed by such
party):
(a) the correctness of the representations and warranties of
the parties to this Agreement contained herein, in each of the other
Operative Agreements and each certificate delivered pursuant to any
Operative Agreement (including without limitation the Incorporated
Representations and Warranties) on each such date;
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<PAGE> 9
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed
counterpart copy of the Requisition, appropriately completed;
(d) as of the Property Closing Date, title to the Property
shall conform to the representations and warranties set forth in
Section 6.2(l) hereof;
(e) as of the Property Closing Date, the Lessee shall have
delivered (or shall have caused to be delivered) to the Agent a good
standing certificate for the Lessee in the state where the Property is
located, the Deed with respect to the Land and existing Improvements
(if any), and a copy of the Bill of Sale with respect to the Equipment
(if any), respecting such of the foregoing as are being acquired on
the Property Closing Date with the proceeds of the Loans and Holder
Advances or which have been previously acquired with the proceeds of
the Loans and Holder Advances;
(f) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Advance requested by
each such Requisition;
(g) as of the Property Closing Date, the Lessee shall have
delivered (or shall have caused to be delivered) to the Agent a title
insurance commitment to issue a policy respecting the Property, with
such endorsements as the Agent deems necessary, in favor of the Lessor
and the Agent from a title insurance company acceptable to the Agent,
but only with such title exceptions thereto as are acceptable to the
Agent;
(h) as of the Property Closing Date, the Lessee shall have
delivered (or shall have caused to be delivered) to the Agent an
environmental site assessment, including without limitation a Phase I
environmental audit, respecting the Property prepared by an
independent recognized professional acceptable to the Agent and
evidencing no pre-existing environmental condition with respect to
which there is more than a remote risk of loss;
(i) as of the Property Closing Date, the Lessee shall have
delivered (or shall have caused to be delivered) to the Agent a survey
(with a flood hazard certification) respecting the Property prepared
(i) by an independent recognized professional acceptable to the Agent
and (ii) in a manner and including such information as is required by
the Agent;
(j) as of the Property Closing Date, Lessee shall have caused
to be delivered to the Agent a legal opinion in the form attached
hereto as Exhibit B or in such other form as is acceptable to the
Agent with respect to local law real property issues respecting the
state in which the Property is located addressed to the Lessor, the
Agent,
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<PAGE> 10
the Lenders and the Holders, from counsel located in the state where
the Property is located, prepared by counsel acceptable to the Agent
and a separate flood hazard certificate respecting the Property
prepared by an independent recognized professional acceptable to the
Agent;
(k) [Intentionally Reserved]
(l) the Lessee shall have delivered to the Agent invoices
for, or other reasonably satisfactory evidence of, the various
Transaction Expenses and other fees, expenses and disbursements
referenced in Section 7.1 of this Agreement, as appropriate;
(m) as of the Property Closing Date, the Lessee shall have
caused to be delivered to the Agent a Mortgage Instrument (in the form
attached hereto as Schedule 5.3(m) or in such other form as is
acceptable to the Agent, with revisions as necessary to conform to
applicable state law), Lessor Financing Statements and Lender
Financing Statements respecting each such Property, all fully executed
and in recordable form;
(n) as of the Property Closing Date, the Lessee shall have
delivered to the Agent with respect to the Property a Lease Supplement
and a memorandum (or short form lease) regarding the Lease and such
Lease Supplement (such memorandum or short form lease to be in the
form attached to the Lease as Exhibit B or in such other form as is
acceptable to the Agent, with modifications as necessary to conform to
applicable state law, and in form suitable for recording);
(o) [Intentionally Reserved]
(p) as of the Property Closing Date, the Property shall have
been substantially completed in accordance with the Plans and
Specifications related to the Property, such that a certificate of
occupancy shall have been issued with respect to the Property (with
only immaterial punch list items remaining to be completed);
(q) as of the Property Closing Date, the Lessee shall have
provided evidence to the Agent of insurance with respect to the
Property as provided in the Lease;
(r) not later than thirty (30) days after the Closing Date,
the Lessee shall have caused an Appraisal regarding the Property to be
provided to the Agent from an appraiser selected by the Agent;
(s) the Lessee shall cause (i) Uniform Commercial Code lien
searches, tax lien searches and judgment lien searches regarding the
Lessee to be conducted (and copies thereof to be delivered to the
Agent) in such jurisdictions as determined by the Agent by a
nationally recognized search company acceptable to the Agent and (ii)
the liens referenced in such lien searches which are objectionable to
the Agent to be either removed or otherwise handled in a manner
satisfactory to the Agent;
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<PAGE> 11
(t) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements and/or documents related thereto shall have been
paid or provisions for such payment shall have been made to the
satisfaction of the Agent;
(u) (i) in the opinion of the Agent and its counsel, the
transactions contemplated by the Operative Agreements do not and will
not subject the Lessor, the Lenders, the Agent or the Holders to any
adverse regulatory prohibitions, constraints, penalties or fines; and
(ii) each of the Operative Agreements to be entered into on such date
shall have been duly authorized, executed and delivered by the parties
thereto, and shall be in full force and effect, and the Agent shall
have received a fully executed copy of each of the Operative
Agreements;
(v) as of the Closing Date and the Property Closing Date,
since the date of the most recent audited financial statements (as
delivered pursuant to the requirements of the Lessee Credit Agreement)
of the Lessee, there shall not have occurred any event, condition or
state of facts which shall have or could reasonably be expected to
have a Material Adverse Effect, other than as specifically
contemplated by the Operative Agreements;
(w) as of the Closing Date, the Agent shall have received an
Officer's Certificate, dated as of the Closing Date, of the Lessee in
the form attached hereto as Exhibit C or in such other form as is
acceptable to the Agent stating that (i) each and every representation
and warranty of each Credit Party contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Closing Date; (ii) no Lease Default or Lease Event of Default has
occurred and is continuing under any Operative Agreement; (iii) each
Operative Agreement to which any Credit Party is a party is in full
force and effect with respect to it; and (iv) each Credit Party has
duly performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Agreement required to
be performed or complied with by it on or prior to the Closing Date;
(x) as of the Closing Date, the Agent shall have received (i)
a certificate of the Secretary or an Assistant Secretary of each
Credit Party, dated as of the Closing Date, in the form attached
hereto as Exhibit D or in such other form as is acceptable to the
Agent attaching and certifying as to (1) the resolutions of the Board
of Directors of such Credit Party duly authorizing the execution,
delivery and performance by such Credit Party of each of the Operative
Agreements to which it is or will be a party, (2) the articles of
incorporation of such Credit Party (or state equivalent) certified as
of a recent date by the Secretary of State of its state of
incorporation and its by-laws and (3) the incumbency and signature of
persons authorized to execute and deliver on behalf of such Credit
Party the Operative Agreements to which it is or will be a party and
(ii) a good standing certificate (or local equivalent) from the
respective states where such Credit Party is incorporated and where
the principal place of business of such Credit Party is located as to
its good standing in each such state. To the extent any Credit Party
is a partnership, a limited liability company or is otherwise
organized, such Person shall deliver to the Agent (in
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<PAGE> 12
form and substance satisfactory to the Agent) as of the Closing Date
(A) a certificate regarding such Person and any corporate general
partners covering the matters described in Exhibit D and (B) a good
standing certificate, a certificate of limited partnership or a local
equivalent of either of the foregoing, as applicable;
(y) as of the Closing Date, the Agent shall have received an
Officer's Certificate of the Lessor dated as of the Closing Date in
the form attached hereto as Exhibit E or in such other form as is
acceptable to the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Closing Date, (ii) each Operative Agreement to which the Lessor is a
party is in full force and effect with respect to it and (iii) the
Lessor has duly performed and complied with all covenants, agreements
and conditions contained herein or in any Operative Agreement required
to be performed or complied with by it on or prior to the Closing
Date;
(z) as of the Closing Date, the Agent shall have received (i)
a certificate of the Secretary, an Assistant Secretary, Trust Officer
or Vice President of the Trust Company in the form attached hereto as
Exhibit F or in such other form as is acceptable to the Agent,
attaching and certifying as to (A) the signing resolutions duly
authorizing the execution, delivery and performance by the Lessor of
each of the Operative Agreements to which it is or will be a party,
(B) its articles of association or other equivalent charter documents
and its by-laws, as the case may be, certified as of a recent date by
an appropriate officer of the Trust Company and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Agreements to which it is a party and (ii) a good
standing certificate from the Office of the Comptroller of the
Currency;
(aa) as of the Closing Date, counsel for the Lessor
acceptable to the Agent shall have issued to the Lessee, the Holders,
the Lenders and the Agent its opinion in the form attached hereto as
Exhibit G or in such other form as is reasonably acceptable to the
Agent;
(bb) as of the Closing Date, the Lessee shall have caused to
be delivered to the Agent a legal opinion in the form attached hereto
as Exhibit H or in such other form as is acceptable to the Agent,
addressed to the Lessor, the Agent, the Lenders and the Holders, from
counsel acceptable to the Agent; and
(cc) as of the Closing Date, the Lessee shall cause (i) tax
lien searches and judgment lien searches regarding each Credit Party
to be conducted (and copies thereof to be delivered to the Agent) in
such jurisdictions as determined by the Agent by a
nationally-recognized search company acceptable to the Agent and (ii)
the liens referenced in such lien searches which are objectionable to
the Agent to be either removed or otherwise handled in a manner
satisfactory to the Agent.
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5.4. [INTENTIONALLY RESERVED]
5.5. [INTENTIONALLY RESERVED]
5.6. [INTENTIONALLY RESERVED]
5.7. [INTENTIONALLY RESERVED]
5.8. PAYMENTS.
All payments of principal, interest, Holder Advances, Holder Yield and
other amounts to be made by the Lessee under this Agreement or any other
Operative Agreements (excluding Excepted Payments which shall be paid directly
to the party to whom such payments are owed) shall be made to the Agent at the
office designated by the Agent from time to time in Dollars and in immediately
available funds, without setoff, deduction, or counterclaim. Subject to the
definition of "Interest Period" in Appendix A attached hereto, whenever any
payment under this Agreement or any other Operative Agreements shall be stated
to be due on a day that is not a Business Day, such payment may be made on the
next succeeding Business Day, and such extension of time in such case shall be
included in the computation of interest, Holder Yield and fees payable pursuant
to the Operative Agreements, as applicable and as the case may be.
5.9. MAINTENANCE OF THE LESSEE AS A WHOLLY-OWNED ENTITY.
From the Closing Date and thereafter until such time as all
obligations of all Credit Parties under the Operative Agreements have been
satisfied and performed in full, Guarantor shall retain the Lessee as a
Wholly-Owned Entity.
5.10 LIABILITY OF CREDIT PARTIES LIMITED TO TRANSACTIONS CONTEMPLATED BY
THE OPERATIVE AGREEMENTS.
Notwithstanding the right under Section 2.1 or the Trust Agreement of
the Owner Trustee to act as Owner Trustee in other transactions similar to the
transactions contemplated by the Operative Agreements, the parties hereto
acknowledge and agree that the Credit Parties shall not be liable for costs or
expenses of the Trust or the Owner Trustee arising solely as a result of such
other similar transactions entered into by the Owner Trustee, and that the
Credit Parties shall only be liable for costs and expenses of the Trust and the
Owner Trustee to the extent such costs and expenses are attributable to the
transactions contemplated by the Operative Agreements.
5.11 PAYMENT OF EARLY TERMINATION AMOUNT.
The Lessee hereby agrees to pay to the Owner Trustee on June 29, 2001
(the "Early Termination Date"), an amount (the "Early Termination Amount")
equal to the product of ninety-seven percent (97%) times the sum of (a) all
Loans then outstanding, together with any accrued but unpaid interest on such
Loans, plus (b) all Holder Advances then outstanding, together with any accrued
but unpaid Holder Yield on such Holder Advances, plus (c) any other
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<PAGE> 14
amounts payable by the Owner Trustee to the Agent, the Lenders or the Holders
as of such date pursuant to the Operative Agreements; provided, the Lessee
shall not be required to pay such Early Termination Amount if the Property
Closing Date shall have occurred on or prior to the Early Termination Date and
an amount equal to the sum of all Loans outstanding on such Property Closing
Date, together with any accrued but unpaid interest on such Loans as of such
Property Closing Date, plus all Holder Advances outstanding on such Property
Closing Date, together with any accrued but unpaid Holder Yield on such Holder
Advances as of such Property Closing Date, plus any other amounts payable by
the Owner Trustee to the Agent, the Lenders or the Holders as of such Property
Closing Date pursuant to the Operative Agreements, shall have been added to the
Property Cost for the Property on such Property Closing Date.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Trust Company in its individual capacity and as the Borrower, as
indicated, represents and warrants to each of the other parties hereto as
follows, provided, that the representations in the following paragraphs (h),
(j) and (k) are made solely in its capacity as the Borrower:
(a) It is a national banking association and is duly
organized and validly existing and in good standing under the laws of
the United States of America and has the power and authority to enter
into and perform its obligations under the Trust Agreement and
(assuming due authorization, execution and delivery of the Trust
Agreement by the Holders) has the corporate and trust power and
authority to act as the Owner Trustee and to enter into and perform
the obligations under each of the other Operative Agreements to which
the Trust Company or the Owner Trustee, as the case may be, is or will
be a party and each other agreement, instrument and document to be
executed and delivered by it on or before the Closing Date in
connection with or as contemplated by each such Operative Agreement to
which the Trust Company or the Owner Trustee, as the case may be, is
or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of
the transactions contemplated thereby, nor compliance by it with any
of the terms and provisions thereof (i) does or will require any
approval or consent of any trustee or holders of any of its
indebtedness or obligations, (ii) does or will contravene any Legal
Requirement relating to its banking or trust powers, (iii) does or
will contravene or result in any breach of or constitute any default
under, or result in the creation of any Lien upon any of its property
under, (A) its charter or by-laws, or (B) any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, bank loan
or credit agreement or other agreement or instrument to which it is a
party or by which it or its properties may be bound or affected, which
contravention, breach, default or Lien under clause (B)
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would materially and adversely affect its ability, in its individual
capacity or as the Owner Trustee, to perform its obligations under the
Operative Agreements to which it is a party or (iv) does or will
require any Governmental Action by any Governmental Authority
regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee,
as the case may be, is or will be a party have been, or on or before
the Closing Date will be, duly executed and delivered by the Trust
Company or the Owner Trustee, as the case may be, and the Trust
Agreement and each such other Operative Agreement to which the Trust
Company or the Owner Trustee, as the case may be, is a party
constitutes, or upon execution and delivery will constitute, a legal,
valid and binding obligation enforceable against the Trust Company or
the Owner Trustee, as the case may be, in accordance with the terms
thereof;
(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and
adversely affect its ability, in its individual capacity or as the
Owner Trustee, to perform its obligations under the Operative
Agreements to which it is a party or would question the validity or
enforceability of any of the Operative Agreements to which it is or
will become a party;
(e) It, either in its individual capacity or as the Owner
Trustee, has not assigned or transferred any of its right, title or
interest in or under the Lease, or its interest in the Property or any
portion thereof, except in accordance with the Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) The Owner Trustee's principal place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are located at 79 South Main
Street, Third Floor, Salt Lake City, Utah 84111;
(h) The Owner Trustee is not engaged principally in, and does
not have as one (1) of its important activities, the business of
extending credit for the purpose of purchasing or carrying any margin
stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States), and no part of the
proceeds of the Loans or the Holder Advances will be used by it to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of
Regulations T, U, or X of the Board of Governors of the Federal
Reserve System of the United States;
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(i) The Owner Trustee is not an "investment company" or a
company controlled by an "investment company" within the meaning of
the Investment Company Act;
(j) The Property is free and clear of all Lessor Liens
attributable to the Owner Trustee, either in its individual capacity
or as the Owner Trustee; and
(k) The Owner Trustee, in its trust capacity, is not a party
to any documents, instruments or agreements other than the Operative
Agreements executed by the Owner Trustee, in its trust capacity.
6.2. REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES.
Each Credit Party represents and warrants as of the Closing Date and
the Property Closing Date (unless otherwise specified) to each of the other
parties hereto that:
(a) The Incorporated Representations and Warranties are true
and correct (unless such relate solely to an earlier point in time)
and the Lessee has delivered to the Agent the financial statements and
other reports referred to in Article VIII of the Lessee Credit
Agreement;
(b) The execution and delivery by each Credit Party of this
Agreement and the other applicable Operative Agreements as of such
date and the performance by each Credit Party of its respective
obligations under this Agreement and the other applicable Operative
Agreements are within the corporate, partnership or limited liability
company (as the case may be) powers of each Credit Party, have been
duly authorized by all necessary corporate, partnership or limited
liability company (as the case may be) action on the part of each
Credit Party (including without limitation any necessary shareholder
action), have been duly executed and delivered, have received all
necessary governmental approval, and do not and will not (i) violate
any Legal Requirement which is binding on any Credit Party or any of
its Subsidiaries, (ii) contravene or conflict with, or result in a
breach of, any provision of the Articles of Incorporation, By-Laws or
other organizational documents of any Credit Party or any of its
Subsidiaries or of any agreement, indenture, instrument or other
document which is binding on any Credit Party or any of its
Subsidiaries or (iii) result in, or require, the creation or
imposition of any Lien (other than pursuant to the terms of the
Operative Agreements) on any asset of any Credit Party or any of its
Subsidiaries;
(c) This Agreement and the other applicable Operative
Agreements executed prior to and as of such date by any Credit Party
constitute the legal, valid and binding obligation of such Credit
Party, as applicable, enforceable against such Credit Party, as
applicable, in accordance with their terms. Each Credit Party has
executed the various Operative Agreements required to be executed by
such Credit Party as of such date;
(d) There are no material actions, suits or proceedings
pending or, to our knowledge, threatened against any Credit Party in
any court or before any Governmental
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Authority (nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority to set aside,
restrain, enjoin or prevent the full performance of any Operative
Agreement or any transaction contemplated thereby) that (i) concern
the Property or any Credit Party's interest therein, (ii) question the
validity or enforceability of any Operative Agreement or any
transaction described in the Operative Agreements or (iii) shall have
or could reasonably be expected to have a Material Adverse Effect;
provided, for purposes of disclosure, the Credit Parties have
described the litigation set forth on Exhibit J;
(e) No Governmental Action by any Governmental Authority or
other authorization, registration, consent, approval, waiver, notice
or other action by, to or of any other Person pursuant to any Legal
Requirement, contract, indenture, instrument or agreement or for any
other reason is required to authorize or is required in connection
with (i) the execution, delivery or performance of any Operative
Agreement, (ii) the legality, validity, binding effect or
enforceability of any Operative Agreement, (iii) the acquisition,
ownership, completion, occupancy, operation, leasing or subleasing of
the Property or (iv) any Advance, in each case, except those which
have been obtained and are in full force and effect;
(f) Upon the execution and delivery of the Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in such Property, subject only to the
Permitted Liens, and (ii) no offset will exist with respect to any
Rent or other sums payable under the Lease;
(g) [Intentionally Reserved]
(h) All information heretofore or contemporaneously herewith
furnished by each Credit Party or any of its Subsidiaries to the
Agent, the Owner Trustee, any Lender or any Holder for purposes of or
in connection with this Agreement and the transactions contemplated
hereby is, and all information hereafter furnished by or on behalf of
each Credit Party or any of its Subsidiaries to the Agent, the Owner
Trustee, any Lender or any Holder pursuant hereto or in connection
herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and such
information, taken as a whole, does not and will not omit to state any
material fact necessary to make such information, taken as a whole,
not misleading;
(i) The principal place of business, chief executive office
and office of the Lessee where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are located at 11300 Ninth Street
North, St. Petersburg, Florida 33716 and the states of formation and
the chief executive offices of each other Credit Party are located at
the places set forth in Schedule 6.2(i);
(j) The representations and warranties of each Credit Party
set forth in any of the Operative Agreements are true and correct in
all material respects on and as of each
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such date as if made on and as of such date. Each Credit Party is in
all material respects in compliance with its obligations under the
Operative Agreements and there exists no Lease Default or Lease Event
of Default under any of the Operative Agreements which is continuing
and which has not been cured within any cure period expressly granted
under the terms of the applicable Operative Agreement or otherwise
waived in accordance with the applicable Operative Agreement;
(k) [Intentionally Reserved];
(l) As of the Property Closing Date only, the Lessor has good
and marketable fee simple title to the Property, subject only to
Permitted Liens;
(m) As of the Property Closing Date only, no portion of the
Property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency, or if the such Property is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency
or other applicable agency, then flood insurance has been obtained for
such Property in accordance with Section 14.2(b) of the Lease and in
accordance with the National Flood Insurance Act of 1968, as amended;
(n) As of the Property Closing Date only, the Property
complies with all Insurance Requirements and all standards of Lessee
with respect to similar properties owned by Lessee;
(o) As of the Property Closing Date only, the Property
complies with all Legal Requirements as of such date (including
without limitation all zoning and land use laws and Environmental
Laws), except to the extent that failure to comply therewith,
individually or in the aggregate, shall not have and could not
reasonably be expected to have a Material Adverse Effect;
(p) As of the Property Closing Date only, all utility
services and facilities necessary for the operation of the
Improvements and the operation of the Equipment regarding the Property
(including without limitation gas, electrical, water and sewage
services and facilities) are available at the applicable Land;
(q) [Intentionally Reserved];
(r) (i) The Security Documents create, as security for the
Obligations (as such term is defined in the Security
Agreement), valid and enforceable security interests in, and
Liens on, all of the Collateral, in favor of the Agent, for
the ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements, and
such security interests and Liens are subject to no other
Liens other than Liens that are expressly set forth as title
exceptions on the title commitment issued under Section
5.3(g) with respect to the Property. Upon recordation of the
Mortgage Instrument in the appropriate real estate recording
office, the Lien created by the Mortgage Instrument in the
real property
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described therein shall be a perfected first priority
mortgage Lien on such real property in favor of the Agent,
for the ratable benefit of the Lenders and the Holders, as
their respective interests appear in the Operative
Agreements. To the extent that the security interests in the
portion of the Collateral comprised of personal property can
be perfected by filing in the filing offices in the state
where the Property is located, upon filing of the Lender
Financing Statements in such filing offices, the security
interests created by the Security Agreement shall be
perfected first priority security interests in such personal
property in favor of the Agent, for the ratable benefit of
the Lenders and the Holders, as their respective interests
appear in the Operative Agreements;
(ii) The Lease Agreement creates, as security for
the obligations of the Lessee under the Lease Agreement,
valid and enforceable security interests in, and Liens on,
the Property leased thereunder, in favor of the Lessor, and
such security interests and Liens are subject to no other
Liens other than Liens that are expressly set forth as title
exceptions on the title commitment issued under Section
5.3(g) with respect to the Property. Upon recordation of the
memorandum of the Lease Agreement (or a short form lease) in
the appropriate real estate recording office, the Lien
created by the Lease Agreement in the real property described
therein shall be a perfected first priority mortgage Lien on
such real property in favor of the Agent, for the ratable
benefit of the Lenders and the Holders, as their respective
interests appear in the Operative Agreements. To the extent
that the security interests in the portion of the Property
comprised of personal property can be perfected by the filing
in the filing offices in the state where the Property is
located, a security interest created by the Lease Agreement
shall be perfected first priority security interests in such
personal property in favor of the Lessor, which rights
pursuant to the Lessor Financing Statements are assigned to
the Agent, for the ratable benefit of the Lenders and the
Holders, as their respective interests appear in the
Operative Agreements; and
(s) As of the Property Closing Date only, each of the
representations and warranties made in the Purchase Agreement by each
of the parties thereto is true and correct in all material respects,
and such representations and warranties are hereby incorporated herein
by reference with the same effect as though set forth in their
entirety herein, as qualified therein.
SECTION 6B. GUARANTY.
6B.1. GUARANTY OF PAYMENT AND PERFORMANCE.
Subject to Section 6B.7, the Guarantor hereby unconditionally
guarantees to each Financing Party the prompt payment and performance of the
Company Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise) or when such is otherwise
to be performed; provided, notwithstanding the foregoing, the obligations of
the Guarantor under this Section 6B shall not constitute a direct guaranty of
the indebtedness of the Lessor evidenced by the Notes but rather a guaranty of
the Company Obligations arising
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under the Operative Agreements. This Section 6B is a guaranty of payment and
performance and not of collection and is a continuing guaranty and shall apply
to all Company Obligations whenever arising. All rights granted to the
Financing Parties under this Section 6B shall be subject to the provisions of
Section 8.2(h) and 8.6.
6B.2. GUARANTY OF PAYMENT AND PERFORMANCE.
The Guarantor agrees that the obligations of the Guarantor hereunder
are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Operative Agreements, or
any other agreement or instrument referred to therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Company Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety, guarantor or
co-obligor, it being the intent of this Section 6B.2 that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. The Guarantor agrees that this Section 6B may be enforced by the
Financing Parties without the necessity at any time of resorting to or
exhausting any other security or collateral and without the necessity at any
time of having recourse to the Notes, the Certificates or any other of the
Operative Agreements or any collateral, if any, hereafter securing the Company
Obligations or otherwise and the Guarantor hereby waives the right to require
the Financing Parties to proceed against the Lessee or any other Person
(including without limitation a co-guarantor) or to require the Financing
Parties to pursue any other remedy or enforce any other right. The Guarantor
further agrees that it hereby waives any and all right of subrogation,
indemnity, reimbursement or contribution against the Lessee for amounts paid
under this Section 6B until such time as the Loans, Holder Advances, accrued
but unpaid interest, accrued but unpaid Holder Yield and all other amounts
owing under the Operative Agreements have been paid in full. Without limiting
the generality of the waiver provisions of this Section 6B, the Guarantor
hereby waives any rights to require the Financing Parties to proceed against
the Lessee or any co-guarantor or to require Lessor to pursue any other remedy
or enforce any other right, including without limitation, any and all rights
under N.C. Gen. Stat. 26-7 through 26-9. The Guarantor further agrees that
nothing contained herein shall prevent the Financing Parties from suing on any
Operative Agreement or foreclosing any security interest in or Lien on any
collateral, if any, securing the Company Obligations or from exercising any
other rights available to it under any Operative Agreement, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of the Guarantor's obligations hereunder; it being the purpose and
intent of the Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances; provided that
any amounts due under this Section 6B which are paid to or for the benefit of
any Financing Party shall reduce the Company Obligations by a corresponding
amount (unless required to be rescinded at a later date). Neither the
Guarantor's obligations under this Section 6B nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or limitation
of the liability of the Lessee or by reason of the bankruptcy or insolvency of
the Lessee. The Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Company Obligations and notice of or proof
of reliance by any Financing Party upon this Section 6B or acceptance of this
Section 6B. The Company
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Obligations shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Section 6B. All dealings between the Lessee and the Guarantor, on the one hand,
and the Financing Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Section 6B.
6B.3. MODIFICATIONS.
The Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Company Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) no Financing Party shall have
any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Company
Obligations or the properties subject thereto; (c) the time or place of payment
of the Company Obligations may be changed or extended, in whole or in part, (d)
the Lessee and any other party liable for payment under the Operative
Agreements may be granted indulgences generally; (e) any of the provisions of
the Notes, the Certificates or any of the other Operative Agreements may be
modified, amended or waived; (f) any party (including any co-guarantor) liable
for the payment thereof may be granted indulgences or be released; and (g) any
deposit balance for the credit of the Lessee or any other party liable for the
payment of the Company Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Company Obligations, all without notice to or
further assent by the Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
6B.4. WAIVER OF RIGHTS.
The Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Section 6B by any Financing
Party and of all extensions of credit or other Advances to the Lessee by the
Lenders pursuant to the terms of the Operative Agreements; (b) presentment and
demand for payment or performance of any of the Company Obligations; (c)
protest and notice of dishonor or of default with respect to the Company
Obligations or with respect to any security therefor; (d) notice of any
Financing Party obtaining, amending, substituting for, releasing, waiving or
modifying any security interest, lien or encumbrance, if any, hereafter
securing the Company Obligations, or any Financing Party's subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances, if any; and (e) all other notices to which the Guarantor might
otherwise be entitled. Notwithstanding anything to the contrary herein, (i) the
Guarantor's payments hereunder shall be due five (5) Business Days after
written demand by the Agent for such payment (unless the Company Obligations
are automatically accelerated pursuant to the applicable provisions of the
Operative Agreements in which case the Guarantor's payments shall be
automatically due) and (ii) any modification of the Operative Agreements which
has the effect of increasing the Company Obligations shall not be enforceable
against the Guarantor unless the Guarantor executes the document evidencing
such modification or otherwise reaffirms its guaranty in writing in connection
with such modification.
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6B.5. REINSTATEMENT.
The obligations of the Guarantor under this Section 6B shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Company Obligations is
rescinded or must be otherwise restored by any holder of any of the Company
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Guarantor agrees that it will indemnify
each Financing Party on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by any
Financing Party in connection with such rescission or restoration, including
without limitation any such costs and expense incurred in defending against any
claim alleging that such payment constituted a preference, fraudulent transfer
or similar payment under any bankruptcy, insolvency or similar law.
6B.6. REMEDIES.
The Guarantor agrees that, as between the Guarantor, on the one hand,
and each Financing Party, on the other hand, the Company Obligations may be
declared to be forthwith due and payable as provided in the applicable
provisions of the Operative Agreements (and shall be deemed to have become
automatically due and payable in the circumstances provided therein)
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing such Company Obligations from becoming automatically
due and payable) as against any other Person and that, in the event of such
declaration (or such Company Obligations being deemed to have become
automatically due and payable), such Company Obligations (whether or not due
and payable by any other Person) shall forthwith become due and payable by the
Guarantor in accordance with the applicable provisions of the Operative
Agreements.
6B.7. LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in
any of the other Operative Agreements, to the extent the obligations of the
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including without limitation because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of the
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including without limitation
the Bankruptcy Code).
Subject to Section 6B.5, upon the satisfaction of the Company
Obligations in full, regardless of the source of payment, the Guarantor's
obligations hereunder shall be deemed satisfied, discharged and terminated
other than indemnifications set forth herein that expressly survive.
6B.8. PAYMENT OF AMOUNTS TO THE AGENT.
Each Financing Party hereby instructs the Guarantor, and the Guarantor
hereby acknowledges and agrees, that until such time as the Loans and the
Holder Advances are paid in full and the Liens evidenced by the Security
Agreement and the Mortgage Instruments have been released any and all Rent
(excluding Excepted Payments which shall be payable to each Holder
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or other Person as appropriate) and any and all other amounts of any kind or
type under any of the Operative Agreements due and owing or payable to any
Person shall instead be paid directly to the Agent (excluding Excepted Payments
which shall be payable to each Holder or other Person as appropriate) or as the
Agent may direct from time to time for allocation and distribution in
accordance with the procedures set forth in Section 8.7 hereof.
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. TRANSACTION EXPENSES.
(a) The Lessor agrees on the Closing Date and the Property
Closing Date, as the case may be, to pay, or cause to be paid, all
Transaction Expenses arising from the transactions consummated on the
Closing Date and the Property Closing Date, as the case may be,
including without limitation all reasonable fees, expenses and
disbursements of the various legal counsels for the Lessor and the
Agent in connection with the transactions contemplated by the
Operative Agreements, the initial fees and expenses of the Owner
Trustee due and payable on the Closing Date and the Property Closing
Date, as the case may be, all fees, taxes and expenses for the
recording, registration and filing of documents and all other
reasonable fees, expenses and disbursements incurred in connection
with the Closing Date and the Property Closing Date, as the case may
be; provided, however, the Lessor shall pay such amounts described in
this Section 7.1 only from the proceeds of Loans and Holder Advances
received by the Owner Trustee. The Lessee agrees to timely pay all
amounts referenced to in this Section 7.1 to the extent not paid by
the Owner Trustee.
7.2. BROKERS' FEES.
The Lessee agrees to pay or cause to be paid any and all brokers'
fees, if any, including without limitation any interest and penalties thereon,
which are payable in connection with the transactions contemplated by this
Agreement and the other Operative Agreements.
7.3. CERTAIN FEES AND EXPENSES.
The Lessee agrees to pay or cause to be paid (a) the initial and
annual Owner Trustee's fee and all reasonable expenses of the Owner Trustee and
any co-trustees (including without limitation reasonable counsel fees and
expenses) or any successor owner trustee and/or co-trustee, for acting as the
owner trustee under the Trust Agreement (but only to the extent such fees and
expenses are attributable to the transactions contemplated by this Agreement
and the other Operative Agreements), (b) all reasonable costs and expenses
incurred by the Credit Parties, the Agent, the Lenders, the Holders or the
Lessor in entering into any Lease Supplement and any future amendments,
modifications, supplements, restatements and/or replacements with respect to
any of the Operative Agreements, whether or not such Lease Supplement,
amendments, modifications, supplements, restatements and/or replacements are
ultimately entered into, or giving or withholding of waivers of consents hereto
or thereto, which have been requested by any Credit Party, the Agent, the
Lenders, the Holders or the Lessor, (c) all reasonable costs and expenses
incurred by the Credit Parties, the Agent, the Lenders, the Holders
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<PAGE> 24
or the Lessor in connection with any exercise of remedies under any Operative
Agreement or the purchase of the Property by the Lessee or any third party and
(d) all reasonable costs and expenses incurred by the Lessee, the Agent, the
Lenders, the Holders or the Lessor in connection with any transfer or
conveyance of the Property, whether or not such transfer or conveyance is
ultimately accomplished.
7.4. UNUSED FEES.
During the Commitment Period, the Lessor agrees to pay to the Agent
for the account of (a) the Lenders, respectively, an unused fee (the "Lender
Unused Fee") equal to the product of the average daily Available Commitment of
each Lender multiplied by a rate of one-tenth of one percent (0.10%) per annum
and (b) the Holders, respectively, an unused fee (the "Holder Unused Fee")
equal to the product of the average daily Available Holder Commitment of each
Holder multiplied by a rate of one-tenth of one percent (0.10%) per annum;
provided, however, the Lessor shall pay such amounts described in this Section
7.4 only from the proceeds of Loans and Holder Advances received by the Owner
Trustee. Such Unused Fees shall be payable quarterly in arrears on each Unused
Fee Payment Date. If all or a portion of any such Unused Fee shall not be paid
when due, such overdue amount shall bear interest, payable by the Lessee on
demand, at a rate per annum equal to the ABR (or in the case of Holder Yield,
the ABR plus the Applicable Percentage for Eurodollar Holder Advances) plus two
percent (2%) from the date of such non-payment until such amount is paid in
full (as well as before judgment). The Lessee agrees to timely pay all amounts
referenced in this Section 7.4 to the extent not paid by the Owner Trustee.
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. COOPERATION WITH THE LESSEE.
The Holders, the Lenders, the Lessor (at the direction of the Majority
Secured Parties) and the Agent shall, at the expense of and to the extent
reasonably requested by the Lessee (but without assuming additional liabilities
on account thereof and only to the extent such is acceptable to the Holders,
the Lenders, the Lessor (at the direction of the Majority Secured Parties) and
the Agent in their reasonable discretion), cooperate with the Lessee in
connection with the Lessee satisfying its covenant obligations contained in the
Operative Agreements including without limitation at any time and from time to
time, promptly and duly executing and delivering any and all such further
instruments, documents and financing statements (and continuation statements
related thereto).
8.2. COVENANTS OF THE OWNER TRUSTEE, THE TRUST COMPANY, THE LESSOR AND
THE HOLDERS.
Each of the Owner Trustee, the Trust Company, the Lessor and the
Holders hereby agrees that so long as this Agreement is in effect:
(a) None of the Owner Trustee, the Lessor, the Trust Company
or any Holder will create or permit to exist at any time, and each of
them will, at its own cost and
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expense, promptly take such action as may be necessary duly to
discharge, or to cause to be discharged, all Lessor Liens on the
Property attributable to it; provided, however, that the Owner
Trustee, the Lessor, the Trust Company and the Holders shall not be
required to so discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently
prosecuted so long as such proceedings shall not materially and
adversely affect the rights of the Lessee under the Lease and the
other Operative Agreements or involve any material danger of
impairment of the Liens of the Security Documents or of the sale,
forfeiture or loss of, and shall not interfere with the use or
disposition of, the Property or title thereto or any interest therein
or the payment of Rent;
(b) Without prejudice to any right under the Trust Agreement
of the Owner Trustee to resign (subject to the requirement set forth
in the Trust Agreement that such resignation shall not be effective
until a successor shall have agreed to accept such appointment), or
the Holders' rights under the Trust Agreement to remove the
institution acting as the Owner Trustee (after consent to such removal
by the Agent as provided in the Trust Agreement), each of the Owner
Trustee and the Holders hereby agrees with the Lessee and the Agent
(i) not to terminate or revoke the trust created by the Trust
Agreement except as permitted by Article VIII of the Trust Agreement,
(ii) not to amend, supplement, terminate or revoke or otherwise modify
any provision of the Trust Agreement in such a manner as to adversely
affect the rights of any such party without the prior written consent
of such party and (iii) to comply with all of the terms of the Trust
Agreement, the nonperformance of which would adversely affect such
party;
(c) The Owner Trustee or any successor may resign or be
removed by the Holders as the Owner Trustee, a successor Owner Trustee
may be appointed and a corporation may become the Owner Trustee under
the Trust Agreement, only in accordance with the provisions of Article
IX of the Trust Agreement and, with respect to such appointment, with
the consent of the Lessee (so long as there shall be no Lease Event of
Default that shall have occurred and be continuing), which consent
shall not be unreasonably withheld or delayed;
(d) The Owner Trustee, in its capacity as the Owner Trustee
under the Trust Agreement, and not in its individual capacity, shall
not contract for, create, incur or assume any Indebtedness, or enter
into any business or other activity or enter into any contracts or
agreements, other than pursuant to or under the Operative Agreements;
(e) The Holders will not instruct the Owner Trustee to take
any action in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i)
commence any case, proceeding or other action with respect to the
Owner Trustee under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization, arrangement, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (ii)
seek appointment of a receiver, trustee, custodian or other similar
official with respect to the Owner Trustee or for all or any
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substantial benefit of the creditors of the Owner Trustee; and neither
any Holder nor the Owner Trustee shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any
of the acts set forth in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee,
the Holders and the Agent if the Owner Trustee's principal place of
business or chief executive office, or the office where the records
concerning the accounts or contract rights relating to the Property
are kept, shall cease to be located at 79 South Main Street, Salt Lake
City, Utah 84111, or if it shall change its name; and
(h) The Owner Trustee shall take or refrain from taking such
actions and grant or refrain from granting such approvals with respect
to the Operative Agreements and/or relating to the Property in each
case as directed in writing by the Agent (until such time as the Loans
are paid in full, and then by the Majority Holders) or, in connection
with Sections 8.5 and 9.2 hereof, the Lessee; provided, however, that
notwithstanding the foregoing provisions of this subparagraph (h) the
Owner Trustee, the Agent, the Lenders and the Holders each
acknowledge, covenant and agree that neither the Owner Trustee nor the
Agent shall act or refrain from acting, regarding each Unanimous Vote
Matter, until such party has received the approval of each Lender and
each Holder affected by such matter.
8.3. CREDIT PARTY COVENANTS, CONSENT AND ACKNOWLEDGMENT.
(a) Each Credit Party acknowledges and agrees that the Owner
Trustee, pursuant to the terms and conditions of the Security
Agreement and the Mortgage Instruments, shall create Liens respecting
the various personal property, fixtures and real property described
therein in favor of the Agent. Each Credit Party hereby irrevocably
consents to the creation, perfection and maintenance of such Liens.
Each Credit Party shall, to the extent reasonably requested by any of
the other parties hereto, cooperate with the other parties in
connection with their covenants herein or in the other Operative
Agreements and shall from time to time duly execute and deliver any
and all such future instruments, documents and financing statements
(and continuation statements related thereto) as any other party
hereto may reasonably request.
(b) The Lessor hereby instructs each Credit Party, and each
Credit Party hereby acknowledges and agrees, that until such time as
the Loans and the Holder Advances are paid in full and the Liens
evidenced by the Security Agreement and the Mortgage Instruments have
been released (i) any and all Rent (excluding Excepted Payments which
shall be payable to each Holder or other Person as appropriate) and
any and all other amounts of any kind or type under any of the
Operative Agreements due and owing or payable to any Person shall
instead be paid directly to the Agent (excluding Excepted Payments
which shall be payable to each Holder or other Person as appropriate)
or as the Agent may direct from time to time for allocation and
distribution in accordance with the procedures set forth in Section
8.7 hereof, (ii) all rights of the Lessor under the Lease shall be
exercised by the Agent and (iii) each Credit Party shall cause all
notices, certificates, financial statements, communications and other
information which are
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delivered, or are required to be delivered, to the Lessor, to also be
delivered at the same time to the Agent.
(c) No Credit Party shall consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement except in accordance with Section 12.4 of this
Agreement.
(d) The Lessee hereby covenants and agrees to cause an
Appraisal or reappraisal (in form and substance satisfactory to the
Agent and from an appraiser selected by the Agent) to be issued
respecting the Property as requested by the Agent from time to time
(i) at each and every time as such shall be required to satisfy any
regulatory requirements imposed on the Agent, the Lessor, the Trust
Company, any Lender and/or any Holder and (ii) after the occurrence of
an Event of Default.
(e) Each Credit Party hereby covenants and agrees that,
except for amounts payable as Basic Rent, any and all payment
obligations owing from time to time under the Operative Agreements by
any Person to the Agent, the Lessor, any Lender, any Holder or any
other Person shall (without further action) be deemed to be
Supplemental Rent obligations payable by the Lessee and guaranteed by
the other Credit Parties. Without limitation, such obligations of the
Credit Parties shall include the Supplement Rent obligations pursuant
to Section 3.3 of the Lease, arrangement fees, administrative fees,
participation fees, commitment fees, prepayment penalties, breakage
costs, indemnities, property taxes, insurance costs, trustee fees and
transaction expenses incurred by the parties hereto in connection with
the transactions contemplated by the Operative Agreements.
(f) At any time the Lessor or the Agent is entitled under the
Operative Agreements to possession of a Property or any component
thereof, the Lessee hereby covenants and agrees, at its own cost and
expense, to assemble and make the same available to the Agent (on
behalf of the Lessor).
(g) The Lessee hereby covenants and agrees that it shall give
prompt notice to the Agent if the Lessee's principal place of business
or chief executive office, or the office where the records concerning
the accounts or contract rights relating to the Property are kept,
shall cease to be located at 11300 Ninth Street North, St. Petersburg,
Florida 33716 or if it shall change its name.
(h) [Intentionally Reserved]
(i) Each Credit Party shall promptly notify the Agent, or
cause the Agent to be promptly notified, upon such Credit Party
gaining knowledge of the occurrence of any Default or Event of Default
which is continuing at such time. In any event, such notice shall be
provided to the Agent within ten (10) days of when such Credit Party
gains such knowledge.
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(j) Until all of the obligations under the Operative
Agreements have been finally and indefeasibly paid and satisfied in
full unless consent has been obtained from the Majority Secured
Parties, each Credit Party will:
(i) except as permitted by the express provisions of
the Lessee Credit Agreement, preserve and maintain its
separate legal existence and all rights, franchises, licenses
and privileges necessary to the conduct of its business, and
qualify and remain qualified as a foreign corporation (or
partnership, limited liability company or other such similar
entity, as the case may be) and authorized to do business in
each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect;
(ii) pay and perform all obligations of Credit
Parties under the Operative Agreements and pay and perform
(A) all taxes, assessments and other governmental charges
that may be levied or assessed upon it or any of its
property, and (B) all other indebtedness, obligations and
liabilities in accordance with customary trade practices,
which if not paid would have a Material Adverse Effect;
provided that any Credit Party may contest any item described
in this Section 8.3(n)(ii) in good faith so long as adequate
reserves are maintained with respect thereto in accordance
with GAAP;
(iii) to the extent failure to do so would have a
Material Adverse Effect, observe and remain in compliance
with all applicable Laws and maintain in full force and
effect all Governmental Actions, in each case applicable to
the conduct of its business; keep in full force and effect
all licenses, certifications or accreditations necessary for
any Facility to carry on its business; and not permit the
termination of any insurance reimbursement program available
to any Facility; and
(iv) provided that the Agent, the Lenders and the
Holders use reasonable efforts to minimize disruption to the
business of the Lessee, permit representatives of the Agent
or any Lender or Holder, from time to time, to visit and
inspect its properties; inspect, audit and make extracts from
its books, records and files, including without limitation
management letters prepared by independent accountants; and
discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects.
(k) The Lessee shall, as soon as practical and in any event
within 50 days after the end of each fiscal quarter of the Guarantor
(except for the last fiscal quarter of the Guarantor's fiscal year, in
which case as soon as practical and in any event within 95 days after
the end of such fiscal year), furnish to the Agent a written notice
setting forth the Guarantor's calculation, in reasonable detail, of
the Consolidated Leverage Ratio for the immediately preceding fiscal
quarter of the Guarantor.
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(l) Lessee shall take all action necessary to assure that
Lessee's computer based systems are able to operate and effectively
process data including dates on and after January 1, 2000. At the
request of the Agent, Lessee shall provide Agent assurance acceptable
to Agent of Lessee's Year 2000 compatibility.
8.4. SHARING OF CERTAIN PAYMENTS.
Except for Excepted Payments, the parties hereto acknowledge and agree
that all payments due and owing by any Credit Party to the Lessor under the
Lease or any of the other Operative Agreements shall be made by such Credit
Party directly to the Agent as more particularly provided in Section 8.3
hereof. The Lessor, the Holders, the Agent, the Lenders and the Credit Parties
acknowledge the terms of Section 8.7 of this Agreement regarding the allocation
of payments and other amounts made or received from time to time under the
Operative Agreements and agree, that all such payments and amounts are to be
allocated as provided in Section 8.7 of this Agreement.
8.5. GRANT OF EASEMENTS, ETC.
The Agent, the Lenders and the Holders hereby agree that, so long as
no Event of Default shall have occurred and be continuing, the Owner Trustee
shall, from time to time at the request of the Lessee (and with the prior
consent of the Agent), in connection with the transactions contemplated by the
Lease or the other Operative Agreements, (i) grant easements and other rights
in the nature of easements with respect to the Property, (ii) release existing
easements or other rights in the nature of easements which are for the benefit
of the Property, (iii) execute and deliver to any Person any instrument
appropriate to confirm or effect such grants or releases, and (iv) execute and
deliver to any Person such other documents or materials in connection with the
acquisition, testing or operation of the Property, including without limitation
reciprocal easement agreements, operating agreements, development agreements,
plats, replats or subdivision documents; provided, that each of the agreements
referred to in this Section 8.5 shall be of the type normally executed by the
Lessee in the ordinary course of the Lessee's business and shall be on
commercially reasonable terms so as not to diminish the value of the Property
in any material respect.
8.6. APPOINTMENT BY THE AGENT, THE LENDERS, THE HOLDERS AND THE LESSOR.
The Holders hereby appoint the Agent to act as collateral agent for
the Holders in connection with the Lien granted by the Security Documents to
secure the Holder Amount. The Lenders and the Holders acknowledge and agree and
direct that the rights and remedies of the beneficiaries of the Lien of the
Security Documents shall be exercised by the Agent on behalf of the Lenders and
the Holders as directed from time to time by the Majority Secured Parties or,
pursuant to Sections 8.2(h) and 12.4, all of the Lenders and the Holders, as
the case may be; provided, in all cases, the Agent shall allocate payments and
other amounts received in accordance with Section 8.7. The Agent is further
appointed to provide notices under the Operative Agreements on behalf of the
Owner Trustee (as determined by the Agent, in its reasonable discretion), to
receive notices under the Operative Agreements on behalf of the Owner Trustee
and (subject to Sections 8.5 and 9.2) to take such other action under the
Operative
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Agreements on behalf of the Owner Trustee as the Agent shall determine in its
reasonable discretion from time to time. The Agent hereby accepts such
appointments. For purposes hereof, the provisions of Section 7 of the Credit
Agreement, together with such other terms and provisions of the Credit
Agreement and the other Operative Agreements as required for the full
interpretation and operation of Section 7 of the Credit Agreement are hereby
incorporated by reference as if restated herein for the mutual benefit of the
Agent and each Holder as if each Holder were a Lender thereunder. Outstanding
Holder Advances and outstanding Loans shall each be taken into account for
purposes of determining Majority Secured Parties. Further, the Agent shall be
entitled to take such action on behalf of the Owner Trustee as is delegated to
the Agent under any Operative Agreement (whether express or implied) as may be
reasonably incidental thereto. The parties hereto hereby agree to the
provisions contained in this Section 8.6. Any appointment of a successor agent
under Section 7.9 of the Credit Agreement shall also be effective as an
appointment of a successor agent for purposes of this Section 8.6.
8.7. COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
(a) Each Credit Party has agreed pursuant to Section 5.8 and
otherwise in accordance with the terms of this Agreement to pay to (i)
the Agent any and all Rent (excluding Excepted Payments) and any and
all other amounts of any kind or type under any of the Operative
Agreements due and owing or payable to any Person and (ii) each Person
as appropriate the Excepted Payments. Promptly after receipt, the
Agent shall apply and allocate, in accordance with the terms of this
Section 8.7, such amounts received from any Credit Party and all other
payments, receipts and other consideration of any kind whatsoever
received by the Agent pursuant to the Security Agreement or otherwise
received by the Agent, the Holders or any of the Lenders in connection
with the Collateral, the Security Documents or any of the other
Operative Agreements. Ratable distributions among the Lenders and the
Holders under this Section 8.7 shall be made based on (in the case of
the Lenders) the ratio of the outstanding Loans to the Property Cost
and (in the case of the Holders) the ratio of the outstanding Holder
Advances to the Property Cost. Ratable distributions among the Tranche
A Lenders under this Section 8.7 shall be made based on the ratio of
the individual Tranche A Lender's Commitment for Tranche A Loans to
the aggregate of all the Tranche A Lenders' Commitments for Tranche A
Loans. Ratable distributions among the Tranche B Lenders under this
Section 8.7 shall be made based on the ratio of the individual Tranche
B Lender's Commitment for Tranche B Loans to the aggregate of all the
Tranche B Lenders' Commitments for Tranche B Loans. Ratable
distributions among the Lenders (in situations where the Tranche A
Lenders are not differentiated from the Tranche B Lenders) shall be
made based on the ratio of the individual Lender's Commitment to the
aggregate of all the Lenders' Commitments. Ratable distributions among
the Holders under this Section 8.7 shall be based on the ratio of the
individual Holder's Holder Commitment to the aggregate of all the
Holders' Holder Commitments.
(b) Payments and other amounts received by the Agent from
time to time in accordance with the terms of subparagraph (a) shall be
applied and allocated as follows (subject in all cases to Section
8.7(c)):
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(i) Any such payment or amount identified as or
deemed to be Basic Rent shall be applied and allocated by the
Agent first, ratably to the Lenders and the Holders for
application and allocation to the payment of interest on the
Loans and thereafter the principal of the Loans which is due
and payable on such date and to the payment of accrued Holder
Yield with respect to the Holder Advances and thereafter the
portion of the Holder Advances which is due on such date; and
second, if no Default or Event of Default is in effect, any
excess shall be paid to such Person or Persons as the Lessee
may designate; provided, that if a Default or Event of
Default is in effect, such excess (if any) shall instead be
held by the Agent until the earlier of (I) the first date
thereafter on which no Default or Event of Default shall be
in effect (in which case such payments or returns shall then
be made to such other Person or Persons as the Lessee may
designate) and (II) the Maturity Date or the Expiration Date,
as the case may be (or, if earlier, the date of any
Acceleration), in which case such amounts shall be applied
and allocated in the manner contemplated by Section
8.7(b)(iv).
(ii) If on any date the Agent or the Lessor shall
receive any amount in respect of (A) any Casualty or
Condemnation pursuant to Sections 15.1(a) or 15.1(g) of the
Lease (excluding any payments in respect thereof which are
payable to the Lessee in accordance with the Lease), or (B)
the Termination Value in connection with the delivery of a
Termination Notice pursuant to Article XVI of the Lease, or
(C) the Termination Value in connection with the exercise of
the Purchase Option under Section 20.1 of the Lease or the
exercise of the option of the Lessor to transfer the Property
to the Lessee pursuant to Section 20.3 of the Lease, then in
each case, the Lessor shall be required to pay such amount
received (1) if no Acceleration has occurred, to prepay the
principal balance of the Loans and the Holder Advances, such
amount to be distributed first to the Lenders and thereafter
to the Holders or (2) if an Acceleration has occurred, to
apply and allocate the proceeds respecting Sections
8.7(b)(ii)(A) through 8.7(b)(ii)(C) in accordance with
Section 8.7(b)(iii) hereof.
(iii) An amount equal to any payment identified as
proceeds of the sale or other disposition (or lease upon the
exercise of remedies) of the Property or any portion thereof,
whether pursuant to Article XXII of the Lease or the exercise
of remedies under the Security Documents or otherwise, the
execution of remedies set forth in the Lease and any payment
in respect of excess wear and tear pursuant to Section 22.3
of the Lease shall be applied and allocated by the Agent
first, ratably to the payment of the principal and interest
of the Tranche B Loans then outstanding, second, to the
extent such amount exceeds the maximum amount to be returned
pursuant to the foregoing provisions of this paragraph (iii),
ratably to the payment of the principal and interest of the
Tranche A Loans then outstanding, third, to any and all other
amounts owing under the Operative Agreements to the Lenders
under the Tranche B Loans, fourth, to any and all other
amounts owing under the Operative Agreements to the Lenders
under the Tranche A Loans, fifth, ratably to the payment to
the Holders of the outstanding principal balance of all
Holder Advances plus all outstanding Holder Yield with
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respect to such outstanding Holder Advances, sixth, to any
and all other amounts owing under the Operative Agreements to
the Holders, and seventh, to the extent moneys remain after
application and allocation pursuant to clauses first through
sixth above, to the Owner Trustee (on behalf of the Lessor)
for application and allocation to any and all other amounts
owing to the Holders, the Owner Trustee or the Lessor and as
the Holders shall determine; provided, where no Event of
Default shall exist and be continuing and a prepayment is
made for any reason with respect to less than the full amount
of the outstanding principal amount of the Loans and the
outstanding Holder Advances, the proceeds shall be applied
and allocated ratably to the Lenders and to the Holders.
(iv) An amount equal to (A) any such payment
identified as a payment pursuant to Section 22.1(b) of the
Lease (or otherwise) of the Maximum Residual Guarantee Amount
(and any such lesser amount as may be required by Section
22.1(b) of the Lease) in respect of the Property and (B) any
other amount payable upon any exercise of remedies after the
occurrence of an Event of Default not covered by Sections
8.7(b)(i) or 8.7(b)(iii) above (including without limitation
any amount received in connection with an Acceleration which
does not represent proceeds from the sale or liquidation of
the Property), and (C) any other amount payable by any
Guarantor pursuant to Section 6B shall be applied and
allocated by the Agent first, ratably, to the payment of the
principal and interest balance of Tranche A Loans then
outstanding, second, ratably to the payment of the principal
and interest balance of the Tranche B Loans then outstanding,
third, ratably to the payment of the principal balance of all
Holder Advances plus all outstanding Holder Yield with
respect to such outstanding Holder Advances, fourth, to the
payment of any other amounts owing to the Lenders hereunder
or under any of the other Operative Agreement, and fifth, to
the extent moneys remain after application and allocation
pursuant to clauses first through fourth above, to the Owner
Trustee for application and allocation to Holder Advances and
Holder Yield and any other amounts owing to the Holders, the
Owner Trustee as the Holders shall determine.
(v) An amount equal to any such payment identified
as Supplemental Rent shall be applied and allocated by the
Agent to the payment of any amounts then owing to the Agent,
the Lenders, the Holders and the other parties to the
Operative Agreements (or any of them) (other than any such
amounts payable pursuant to the preceding provisions of this
Section 8.7(b)) as shall be determined by the Agent in its
reasonable discretion; provided, however, that Supplemental
Rent received upon the exercise of remedies after the
occurrence and continuance of an Event of Default in lieu of
or in substitution of the Maximum Residual Guarantee Amount
or as a partial payment thereon shall be applied and
allocated as set forth in Section 8.7(b)(iv).
(vi) The Agent in its reasonable judgment shall
identify the nature of each payment or amount received by the
Agent and apply and allocate each such amount in the manner
specified above.
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(c) Upon the payment in full of the Loans, the Holder
Advances and all other amounts then due and owing by the Owner Trustee
hereunder or under any Credit Document and the payment in full of all
other amounts then due and owing to the Lenders, the Holders, the
Agent, the Owner Trustee and the other Financing Parties pursuant to
the Operative Agreements, any moneys remaining with the Agent shall be
returned to the Lessee. In the event of an Acceleration it is agreed
that, prior to the application and allocation of amounts received by
the Agent in the order described in Section 8.7(b) above or any
distribution of money to the Lessee, any such amounts shall first be
applied and allocated to the payment of (i) any and all sums advanced
by the Agent in order to preserve the Collateral or to preserve its
Lien thereon, (ii) the expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Agent of its rights under the
Security Documents, together with reasonable attorneys' fees and
expenses and court costs and (iii) any and all other amounts
reasonably owed to the Agent under or in connection with the
transactions contemplated by the Operative Agreements (including
without limitation any accrued and unpaid administration fees).
8.8. RELEASE OF PROPERTY, ETC.
If the Lessee shall at any time purchase the Property pursuant to the
Lease, or if the Property shall be sold in accordance with Article XXII of the
Lease, then, upon satisfaction by the Owner Trustee of its obligation to prepay
the Loans, Holder Advances and all other amounts owing to the Lenders and the
Holders under the Operative Agreements, the Agent is hereby authorized and
directed to release such Property from the Liens created by the Security
Documents to the extent of its interest therein. In addition, upon payment in
full of the Loans, the Holder Advances and all other amounts owing by the Owner
Trustee and the Lessee hereunder or under any other Operative Agreement the
Agent is hereby authorized and directed to release all of the Property from the
Liens created by the Security Documents to the extent of its interest therein.
Upon request of the Owner Trustee following any such release, the Agent shall,
at the sole cost and expense of the Lessee, execute and deliver to the Owner
Trustee and the Lessee such documents as the Owner Trustee or the Lessee shall
reasonably request to evidence such release.
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
9.1. THE LESSEE'S CREDIT AGREEMENT RIGHTS.
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Agent, the Lenders, the Holders, the Credit Parties and the
Owner Trustee hereby agree that, prior to the occurrence and continuation of
any Default or Event of Default, the Lessee shall have the following rights:
(a) the right to terminate or reduce the Commitments pursuant
to Section 2.5(a) of the Credit Agreement;
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(b) the right to exercise the conversion and continuation
options pursuant to Section 2.7 of the Credit Agreement;
(c) the right to receive any notice and any certificate, in
each case issued pursuant to Section 2.8(a) of the Credit Agreement;
(d) the right to replace any Lender pursuant to Section
2.8(b) of the Credit Agreement;
(e) the right to approve any successor agent pursuant to
Section 7.9 of the Credit Agreement; and
(f) the right to consent to any assignment by a Lender to
which the Lessor has the right to consent pursuant to Section 9.8 of
the Credit Agreement.
9.2. THE LESSEE'S TRUST AGREEMENT RIGHTS.
Notwithstanding anything to the contrary contained in the Trust
Agreement, the Credit Parties, the Owner Trustee and the Holders hereby agree
that, prior to the occurrence and continuation of any Default or Event of
Default, the Lessee shall have the following rights:
(a) the right to exercise the conversion and continuation
options pursuant to Section 3.8 of the Trust Agreement;
(b) the right to receive any notice and any certificate, in
each case issued pursuant to Section 3.9(a) of the Trust Agreement;
(c) the right to replace any Holder pursuant to Section
3.9(b) of the Trust Agreement;
(d) the right to exercise the removal options contained in
Section 9.1 of the Trust Agreement; provided, however, that no removal
of the Owner Trustee and appointment of a successor Owner Trustee by
the Holders pursuant to Section 9.1 of the Trust Agreement shall be
made without the prior written consent (not to be unreasonably
withheld or delayed) of the Lessee.
SECTION 10. TRANSFER OF INTEREST.
10.1. RESTRICTIONS ON TRANSFER.
Each Lender may participate, assign or transfer all or a portion of
its interest hereunder and under the other Operative Agreements in accordance
with Sections 9.7 and 9.8 of the Credit Agreement; provided, each participant,
assignee or transferee must obtain the same ratable interest in Tranche A Loans
and Tranche B Loans (and to the extent the selling Lender is also a Holder (or
an Affiliate of a Holder), each such participant, assignor or transferee must
also obtain the same ratable interest in and to the Holder Advances, and the
Trust Estate); provided
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further, that each Lender that participates, assigns or transfers all or a
portion of its interest hereunder and under the other Operative Agreements
shall deliver to the Agent a copy of each Assignment and Acceptance (as
referenced in Section 9.8 of the Credit Agreement) for purposes of maintaining
the Register. The Holders may, directly or indirectly, assign, convey or
otherwise transfer any of their right, title or interest in or to the Trust
Estate or the Trust Agreement with the prior written consent of the Agent and
the Lessee (which consent shall not be unreasonably withheld or delayed) and in
accordance with the terms of Section 11.8(b) of the Trust Agreement; provided,
to the extent the selling Holder is also a Lender (or an Affiliate of a
Lender), each such assignee, receiver of a conveyance or other transferee must
also obtain the same ratable interest in and to the Tranche A Loans and Tranche
B Loans. The Owner Trustee may, subject to the rights of the Lessee under the
Lease and the other Operative Agreements and to the Lien of the applicable
Security Documents but only with the prior written consent of the Agent (which
consent may be withheld by the Agent in its sole discretion) and (provided, no
Default or Event of Default has occurred and is continuing) with the consent of
the Lessee, directly or indirectly, assign, convey, appoint an agent with
respect to enforcement of, or otherwise transfer any of its right, title or
interest in or to the Property, the Lease, the Trust Agreement and the other
Operative Agreements (including without limitation any right to indemnification
thereunder), or any other document relating to a Property or any interest in a
Property as provided in the Trust Agreement and the Lease. The provisions of
the immediately preceding sentence shall not apply to the obligations of the
Owner Trustee to transfer Property to the Lessee or a third party purchaser
pursuant to Article XXII of the Lease upon payment for such Property in
accordance with the terms and conditions of the Lease. No Credit Party may
assign any of the Operative Agreements or any of their respective rights or
obligations thereunder or with respect to the Property in whole or in part to
any Person without the prior written consent of the Agent, the Lenders, the
Holders and the Lessor.
10.2. EFFECT OF TRANSFER.
From and after any transfer effected in accordance with this Section
10, the transferor shall be released, to the extent of such transfer, from its
liability hereunder and under the other documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer;
provided, however, that any transferor shall remain liable hereunder and under
such other documents to the extent that the transferee shall not have assumed
the obligations of the transferor thereunder. Upon any transfer by the Owner
Trustee, a Holder or a Lender as above provided, any such transferee shall
assume the obligations of the Owner Trustee, the Holder or the Lender, as the
case may be, and shall be deemed an "Owner Trustee", "Holder", or "Lender", as
the case may be, for all purposes of such documents and each reference herein
to the transferor shall thereafter be deemed a reference to such transferee for
all purposes, except as provided in the preceding sentence. Notwithstanding any
transfer of all or a portion of the transferor's interest as provided in this
Section 10, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer including without limitation rights to
indemnification under any such document.
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SECTION 11. INDEMNIFICATION.
11.1. GENERAL INDEMNITY.
Whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims, which may be imposed on, incurred by or
asserted against an Indemnified Person by any third party, including without
limitation Claims arising from the negligence of an Indemnified Person (but not
to the extent such Claims arise from the gross negligence or willful misconduct
of such Indemnified Person itself, as determined by a court of competent
jurisdiction, as opposed to gross negligence or willful misconduct imputed to
such Indemnified Person) in any way relating to or arising or alleged to arise
out of the execution, delivery, performance or enforcement of this Agreement,
the Lease or any other Operative Agreement or on or with respect to the
Property or any component thereof, including without limitation Claims in any
way relating to or arising or alleged to arise out of (a) the financing,
refinancing, purchase, acceptance, rejection, ownership, design, delivery,
acceptance, nondelivery, leasing, subleasing, possession, use, occupancy,
operation, maintenance, repair, modification, transportation, condition, sale,
return, repossession (whether by summary proceedings or otherwise), or any
other disposition of the Property or any part thereof, including without
limitation the acquisition, holding or disposition of any interest in the
Property, lease or agreement comprising a portion of any thereof; (b) any
latent or other defects in the Property or any portion thereof whether or not
discoverable by an Indemnified Person or the Indemnity Provider; (c) a
violation of Environmental Laws, Environmental Claims or other loss of or
damage to the Property or the environment relating to the Property, the Lease,
or the Indemnity Provider; (d) the Operative Agreements, or any transaction
contemplated thereby; (e) any breach by the Indemnity Provider of any of its
representations or warranties under the Operative Agreements to which the
Indemnity Provider is a party or failure by the Indemnity Provider to perform
or observe any covenant or agreement to be performed by it under any of the
Operative Agreements; (f) the transactions contemplated hereby or by any other
Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle
B of Title I of ERISA; (g) personal injury, death or property damage, including
without limitation Claims based on strict or absolute liability in tort; and
(h) any fees, expenses and/or other assessments by any business park or any
other applicable entity with oversight responsibility for the applicable
Property.
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including
without limitation a written notice of such proceeding), for any Claim, such
Indemnified Person shall promptly notify the Indemnity Provider in writing and
shall not take action with respect to such Claim without the consent of the
Indemnity Provider for thirty (30) days after the receipt of such notice by the
Indemnity Provider; provided, however, that in the case of any such Claim, if
action shall be required by law or regulation to be taken prior to the end of
such period of thirty (30) days, such Indemnified Person shall endeavor to, in
such notice to the Indemnity Provider, inform the Indemnity Provider of such
shorter period, and no action shall be taken with respect to such Claim without
the consent of the Indemnity Provider before seven (7) days before the end of
such shorter period; provided, further, that the failure of such Indemnified
Person to give the notices referred
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to in this sentence shall not diminish the Indemnity Provider's obligation
hereunder except to the extent such failure precludes in all respects the
Indemnity Provider from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim, in the Indemnity
Provider's reasonable discretion, can be pursued by the Indemnity Provider on
behalf of or in the name of such Indemnified Person, the Indemnified Person, at
the Indemnity Provider's request, shall allow the Indemnity Provider to conduct
and control the response to such Claim and (B) in the case of any Claim (and
notwithstanding the provisions of the foregoing subsection (A)), the
Indemnified Person may request the Indemnity Provider to conduct and control
the response to such Claim (with counsel to be selected by the Indemnity
Provider and consented to by such Indemnified Person, such consent not to be
unreasonably withheld; provided, however, that any Indemnified Person may
retain separate counsel at the expense of the Indemnity Provider in the event
of a conflict of interest between such Indemnified Person and the Indemnity
Provider)) by, in the sole discretion of the Person conducting and controlling
the response to such Claim (1) resisting payment thereof, (2) not paying the
same except under protest, if protest is necessary and proper, (3) if the
payment be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4) taking such other
action as is reasonably requested by the Indemnity Provider from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the
controlling party. The parties agree that an Indemnified Person may at any time
decline to take further action with respect to the response to such Claim and
may settle such Claim if such Indemnified Person shall waive its rights to any
indemnity from the Indemnity Provider that otherwise would be payable in
respect of such Claim (and any future Claim, the pursuit of which is precluded
by reason of such resolution of such Claim) and shall pay to the Indemnity
Provider any amount previously paid or advanced by the Indemnity Provider
pursuant to this Section 11.1 by way of indemnification or advance for the
payment of an amount regarding such Claim.
Notwithstanding the foregoing provisions of this Section 11.1, an
Indemnified Person shall not be required to take any action and the Indemnity
Provider shall not be permitted to respond to any Claim in its own name or that
of the Indemnified Person unless (A) the Indemnity Provider shall have agreed
to pay and shall pay to such Indemnified Person on demand and on an After Tax
Basis all reasonable costs, losses and expenses that such Indemnified Person
actually incurs in connection with such Claim, including without limitation all
reasonable legal, accounting and investigatory fees and disbursements and, if
the Indemnified Person has informed the Indemnity Provider that it intends to
contest such Claim (whether or not the control of the contest is then assumed
by the Indemnity Provider), the Indemnity Provider shall have agreed
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that the Claim is an indemnifiable Claim hereunder, (B) in the case of a Claim
that must be pursued in the name of an Indemnified Person (or an Affiliate
thereof), the amount of the potential indemnity (taking into account all
similar or logically related Claims that have been or could be raised for which
the Indemnity Provider may be liable to pay an indemnity under this Section
11.1) exceeds $25,000 (or such lesser amount as may be subsequently agreed
between the Indemnity Provider and the Indemnified Person), (C) the Indemnified
Person shall have reasonably determined that the action to be taken will not
result in any material danger of sale, forfeiture or loss of the Property, or
any part thereof or interest therein, will not interfere with the payment of
Rent, and will not result in risk of criminal liability, (D) if such Claim
shall involve the payment of any amount prior to the resolution of such Claim,
the Indemnity Provider shall provide to the Indemnified Person an interest-free
advance in an amount equal to the amount that the Indemnified Person is
required to pay (with no additional net after-tax cost to such Indemnified
Person) prior to the date such payment is due, (E) in the case of a Claim that
must be pursued in the name of an Indemnified Person (or an Affiliate thereof),
the Indemnity Provider shall have provided to such Indemnified Person an
opinion of independent counsel selected by the Indemnity Provider and
reasonably satisfactory to the Indemnified Person stating that a reasonable
basis exists to contest such Claim (or, in the case of an appeal of an adverse
determination, an opinion of such counsel to the effect that the position
asserted in such appeal will more likely than not prevail) and (F) no Event of
Default shall have occurred and be continuing. In no event shall an Indemnified
Person be required to appeal an adverse judicial determination to the United
States Supreme Court. In addition, an Indemnified Person shall not be required
to contest any Claim in its name (or that of an Affiliate) if the subject
matter thereof shall be of a continuing nature and shall have previously been
decided adversely by a court of competent jurisdiction pursuant to the contest
provisions of this Section 11.1, unless there shall have been a change in law
(or interpretation thereof) and the Indemnified Person shall have received, at
the Indemnity Provider's expense, an opinion of independent counsel selected by
the Indemnity Provider and reasonably acceptable to the Indemnified Person
stating that as a result of such change in law (or interpretation thereof), it
is more likely than not that the Indemnified Person will prevail in such
contest. In no event shall the Indemnity Provider be permitted to adjust or
settle any Claim without the consent of the Indemnified Person to the extent
any such adjustment or settlement involves, or is reasonably likely to involve,
any performance by or adverse admission by or with respect to the Indemnified
Person.
11.2. GENERAL TAX INDEMNITY.
(a) The Indemnity Provider shall pay and assume liability
for, and does hereby agree to indemnify, protect and defend the
Property and all Indemnified Persons, and hold them harmless against,
all Impositions on an After Tax Basis, and all payments pursuant to
the Operative Agreements shall be made free and clear of and without
deduction for any and all present and future Impositions.
(b) Notwithstanding anything to the contrary in Section
11.2(a) hereof, the following shall be excluded from the indemnity
required by Section 11.2(a) (collectively, the "Excluded Taxes"):
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(i) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on a Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
the United States federal government that are based on or
measured by the net income (including without limitation
taxes based on capital gains and minimum taxes) of such
Person; provided, that this clause (i) shall not be
interpreted to prevent a payment from being made on an After
Tax Basis if such payment is otherwise required to be so
made;
(ii) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on any Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
any state or local jurisdiction or taxing authority within
any state or local jurisdiction and that are based upon or
measured by the net income (including without limitation
taxes based on capital gains and minimum taxes) of such
Person; provided that such Taxes shall not be excluded under
this subparagraph (ii) to the extent such Taxes would have
been imposed had the location, possession or use of the
Property in, the location or the operation of the Lessee in,
or the Lessee's making payments under the Operative
Agreements from, the jurisdiction imposing such Taxes been
the sole connection between such Indemnified Person and the
jurisdiction imposing such Taxes; provided, further, that
this clause (ii) shall not be interpreted to prevent a
payment from being made on an After Tax Basis if such payment
is otherwise required to be so made;
(iii) any Tax to the extent it relates to any act,
event or omission that occurs after the termination of the
Lease and redelivery or sale of the Property in accordance
with the terms of the Lease (but not any Tax that relates to
such termination, redelivery or sale and/or to any period
prior to such termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified
Person as a result of the gross negligence or willful
misconduct of such Indemnified Person itself, as determined
by a court of competent jurisdiction (as opposed to gross
negligence or willful misconduct imputed to such Indemnified
Person), but not Taxes imposed as a result of ordinary
negligence of such Indemnified Person;
(c) (i) Subject to the terms of Section 11.2(f), the
Indemnity Provider shall pay or cause to be paid all
Impositions directly to the taxing authorities where feasible
and otherwise to the Indemnified Person, as appropriate, and
the Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest
is conducted pursuant to Section 11.2(f) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to
the
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latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including
without limitation the computation of the amount payable),
accompanied by receipts or other reasonable evidence of such
demand. In the case of Impositions for which a contest is
conducted pursuant to Section 11.2(f), the Indemnity Provider
shall pay such Impositions or reimburse such Indemnified
Person for such Impositions, to the extent not previously
paid or reimbursed pursuant to subsection (a), prior to the
latest time permitted by the relevant taxing authority for
timely payment after conclusion of all contests under Section
11.2(f).
(iii) At the Indemnity Provider's request, the
amount of any indemnification payment by the Indemnity
Provider pursuant to subsection (a) shall be verified and
certified by an independent public accounting firm mutually
acceptable to the Indemnity Provider and the Indemnified
Person. The fees and expenses of such independent public
accounting firm shall be paid by the Indemnity Provider
unless such verification shall result in an adjustment in the
Indemnity Provider's favor of fifteen percent (15%) or more
of the payment as computed by the Indemnified Person, in
which case such fee shall be paid by the Indemnified Person.
(d) The Indemnity Provider shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns in
respect of the Property and any other tax returns required for the
Owner Trustee and any other Lessor respecting the transactions
described in the Operative Agreements. In case any other report or tax
return shall be required to be made with respect to any obligations of
the Indemnity Provider under or arising out of subsection (a) and of
which the Indemnity Provider has knowledge or should have knowledge,
the Indemnity Provider, at its sole cost and expense, shall notify the
relevant Indemnified Person of such requirement and (except if such
Indemnified Person notifies the Indemnity Provider that such
Indemnified Person intends to prepare and file such report or return)
(A) to the extent required or permitted by and consistent with Legal
Requirements, make and file in the Indemnity Provider's name such
return, statement or report; and (B) in the case of any other such
return, statement or report required to be made in the name of such
Indemnified Person, advise such Indemnified Person of such fact and
prepare such return, statement or report for filing by such
Indemnified Person or, where such return, statement or report shall be
required to reflect items in addition to any obligations of the
Indemnity Provider under or arising out of subsection (a), provide
such Indemnified Person at the Indemnity Provider's expense with
information sufficient to permit such return, statement or report to
be properly made with respect to any obligations of the Indemnity
Provider under or arising out of subsection (a). Such Indemnified
Person shall, upon the Indemnity Provider's request and at the
Indemnity Provider's expense, provide any data maintained by such
Indemnified Person (and not otherwise available to or within the
control of the
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Indemnity Provider) with respect to the Property which the Indemnity
Provider may reasonably require to prepare any required tax returns or
reports.
(e) As between the Indemnity Provider on one hand, and each
Financing Party on the other hand, the Indemnity Provider shall be
responsible for, and the Indemnity Provider shall indemnify and hold
harmless each Financing Party (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis
against, any obligation for United States or foreign withholding taxes
or similar levies, imposts, charges, fees, deductions or withholdings
(collectively, "Withholdings") imposed in respect of the interest
payable on the Notes, Holder Yield payable on the Certificates or with
respect to any other payments under the Operative Agreements (all such
payments being referred to herein as "Exempt Payments" to be made
without deduction, withholding or set off) (and, if any Financing
Party receives a demand for such payment from any taxing authority or
a Withholding is otherwise required with respect to any Exempt
Payment, the Indemnity Provider shall discharge such demand on behalf
of such Financing Party); provided, however, that the obligation of
the Indemnity Provider under this Section 11.2(e) shall not apply to:
(i) Withholdings on any Exempt Payment to any
Financing Party which is a non-U.S. Person unless such
Financing Party is, on the date hereof (or on the date it
becomes a Financing Party hereunder) and on the date of any
change in the principal place of business or the lending
office of such Financing Party, entitled to submit a Form
1001 (relating to such Financing Party and entitling it to a
complete exemption from Withholding on such Exempt Payment)
or Form 4224 or is otherwise subject to exemption from
Withholding with respect to such Exempt Payment (except where
the failure of the exemption results from a change in the
principal place of business of the Lessee; provided if a
failure of exemption for any Financing Party results from a
change in the principal place of business or lending office
of any other Financing Party, then such other Financing Party
shall be liable for any Withholding or indemnity with respect
thereto), or
(ii) Any U.S. Taxes imposed solely by reason of the
failure by a non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Taxes.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean
a citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or
under any laws of the United States of America or any State thereof,
or any estate or trust that is subject to Federal income taxation
regardless of the source of its income, (B) "U.S. Taxes" shall mean
any present or future tax, assessment or other charge or levy imposed
by or on behalf of the United States of America or any taxing
authority thereof or therein, (C) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department
of the Treasury of the United
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States of America and (D) "Form 4224" shall mean Form 4224(R)
(Exemption from Withholding of Tax on Income Effectively Connected
with the Conduct of a Trade or Business in the United States) of the
Department of Treasury of the United States of America (or in relation
to either such Form such successor and related forms as may from time
to time be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates).
Each of the Forms referred to in the foregoing clauses (C) and (D)
shall include such successor and related forms as may from time to
time be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates.
If a Financing Party or an Affiliate with whom such Financing
Party files a consolidated tax return (or equivalent) subsequently
receives the benefit in any country of a tax credit or an allowance
resulting from U.S. Taxes with respect to which it has received a
payment of an additional amount under this Section 11.2(e), such
Financing Party will pay to the Indemnity Provider such part of that
benefit as in the opinion of such Financing Party will leave it (after
such payment) in a position no more and no less favorable than it
would have been in if no additional payment had been required to be
paid, provided always that (i) such Financing Party will be the sole
judge of the amount of any such benefit and of the date on which it is
received, (ii) such Financing Party will have the absolute discretion
as to the order and manner in which it employs or claims tax credits
and allowances available to it and (iii) such Financing Party will not
be obliged to disclose to the Indemnity Provider any information
regarding its tax affairs or tax computations.
Each non-U.S. Person that shall become a Financing Party
after the date hereof shall, upon the effectiveness of the related
transfer or otherwise upon becoming a Financing Party hereunder, be
required to provide all of the forms and statements referenced above
or other evidences of exemption from Withholdings.
(f) If a written Claim is made against any Indemnified Person
or if any proceeding shall be commenced against such Indemnified
Person (including without limitation a written notice of such
proceeding), for any Impositions, the provisions in Section 11.1
relating to notification and rights to contest shall apply; provided,
however, that the Indemnity Provider shall have the right to conduct
and control such contest only if such contest involves a Tax other
than a Tax on net income of the Indemnified Person and can be pursued
independently from any other proceeding involving a Tax liability of
such Indemnified Person.
11.3. INCREASED COSTS, ILLEGALITY, ETC.
(a) If, due to either (i) the introduction of or any change
in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request hereafter adopted,
promulgated or made by any central bank or other governmental
authority (whether or not having the force of law), there shall be any
increase in the cost to any Financing Party of agreeing to make or
making, funding or maintaining the Advance, then the Lessee shall from
time to time, upon demand by such
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Financing Party (with a copy of such demand to the Agent but subject
to the terms of Section 2.8 of the Credit Agreement and 3.9 of the
Trust Agreement, as the case may be), pay to the Agent for the account
of such Financing Party additional amounts sufficient to compensate
such Financing Party for such increased cost. A certificate as to the
amount of such increased cost, submitted to the Lessee and the Agent
by such Financing Party, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If any Financing Party determines that compliance with
any law or regulation or any guideline or request from any central
bank or other governmental authority (whether or not having the force
of law, but in each case promulgated or made after the date hereof)
affects or would affect the amount of capital required or expected to
be maintained by such Financing Party or any corporation controlling
such Financing Party and that the amount of such capital is increased
by or based upon the existence of such Financing Party's commitment to
make the Advance and other commitments of this type or upon the
Advance, then, upon demand by such Financing Party (with a copy of
such demand to the Agent but subject to the terms of Section 2.8 of
the Credit Agreement and 3.9 of the Trust Agreement), the Lessee shall
pay to the Agent for the account of such Financing Party, from time to
time as specified by such Financing Party, additional amounts
sufficient to compensate such Financing Party or such corporation in
the light of such circumstances, to the extent that such Financing
Party reasonably determines such increase in capital to be allocable
to the existence of such Financing Party's commitment to make such the
Advance. A certificate as to such amounts submitted to the Lessee and
the Agent by such Financing Party shall be conclusive and binding for
all purposes, absent manifest error.
(c) Without limiting the effect of the foregoing, the Lessee
shall pay to each Financing Party on the last day of the Interest
Period therefor so long as such Financing Party is maintaining
reserves against "Eurocurrency liabilities" under Regulation D an
additional amount (determined by such Financing Party and notified to
the Lessee through the Agent) equal to the product of the following
for each Eurodollar Loan or Eurodollar Holder Advance, as the case may
be, for each day during such Interest Period:
(i) the principal amount of such Eurodollar Loan or
Eurodollar Holder Advance, as the case may be, outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator
of which is the rate (expressed as a decimal) at which
interest accrues on such Eurodollar Loan or Eurodollar Holder
Advance, as the case may be, for such Interest Period as
provided in the Credit Agreement or the Trust Agreement, as
the case may be (less the Applicable Percentage), and the
denominator of which is one (1) minus the effective rate
(expressed as a decimal) at which such reserve requirements
are imposed on such Financing Party on such day minus (y)
such numerator; and
(iii) 1/360.
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(d) Without affecting its rights under Sections 11.3(a),
11.3(b) or 11.3(c) or any other provision of any Operative Agreement,
each Financing Party agrees that if there is any increase in any cost
to or reduction in any amount receivable by such Financing Party with
respect to which the Lessee would be obligated to compensate such
Financing Party pursuant to Sections 11.3(a) or 11.3(b), such
Financing Party shall use reasonable efforts to select an alternative
office for the Advance which would not result in any such increase in
any cost to or reduction in any amount receivable by such Financing
Party; provided, however, that no Financing Party shall be obligated
to select an alternative office for the Advance if such Financing
Party determines that (i) as a result of such selection such Financing
Party would be in violation of any applicable law, regulation, treaty,
or guideline, or would incur additional costs or expenses or (ii) such
selection would be inadvisable for regulatory reasons or materially
inconsistent with the interests of such Financing Party.
(e) With reference to the obligations of the Lessee set forth
in Sections 11.3(a) through 11.3(d), the Lessee shall not have any
obligation to pay to any Financing Party amounts owing under such
Sections for any period which is more than one (1) year prior to the
date upon which the request for payment therefor is delivered to the
Lessee.
(f) Notwithstanding any other provision of this Agreement, if
any Financing Party shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes
it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for any Financing Party to perform its
obligations hereunder to make or maintain Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, then (i) each
Eurodollar Loan or Eurodollar Holder Advance, as the case may be, will
automatically, at the earlier of the end of the Interest Period for
such Eurodollar Loan or Eurodollar Holder Advance, as the case may be,
or the date required by law, convert into an ABR Loan or an ABR Holder
Advance, as the case may be, and (iii) the obligation of the Financing
Parties to make, convert or continue Eurodollar Loans or Eurodollar
Holder Advances, as the case may be, shall be suspended until the
Agent shall notify the Lessee that such Financing Party has determined
that the circumstances causing such suspension no longer exist.
11.4. FUNDING/CONTRIBUTION INDEMNITY.
Subject to the provisions of Section 2.8(a) of the Credit Agreement
and 3.9(a) of the Trust Agreement, as the case may be, the Lessee agrees to
indemnify each Financing Party and to hold each Financing Party harmless from
any loss or reasonable expense which such Financing Party may sustain or incur
as a consequence of (a) any default in connection with the drawing of funds for
any Advance, (b) any default in making any prepayment after a notice thereof
has been given in accordance with the provisions of the Operative Agreements or
(c) the making of a voluntary or involuntary payment of Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be
in an amount equal to the excess, if any, of (x) the amount of interest or
Holder Yield, as the case may be, which would have accrued on the amount so
paid, or not so borrowed, accepted, converted or continued for the period from
the date of
40
<PAGE> 45
such payment or of such failure to borrow, accept, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
accept, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable Eurodollar Rate plus
the Applicable Percentage for such Loan or Holder Advance, as the case may be,
for such Interest Period over (y) the amount of interest (as determined by such
Financing Party in its reasonable discretion) which would have accrued to such
Financing Party on such amount by (i) (in the case of the Lenders) reemploying
such funds in loans of the same type and amount during the period from the date
of payment or failure to borrow to the last day of the then applicable Interest
Period (or, in the case of a failure to borrow, the Interest Period that would
have commenced on the date of such failure) and (ii) (in the case of the
Holders) placing such amount on deposit for a comparable period with leading
banks in the relevant interest rate market. This covenant shall survive the
termination of the Operative Agreements and the payment of all other amounts
payable hereunder.
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.
WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF
ANY AND ALL OF THE OPERATIVE AGREEMENTS, EACH PERSON PROVIDING INDEMNIFICATION
OF ANOTHER PERSON UNDER ANY OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY
RELEASES EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS
OR DAMAGE, DESCRIBED IN ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION
ON THE PART OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE
(WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND
INDEMNIFIES, EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE AND HARMLESS FROM
AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, LOSSES,
COSTS, LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION
ATTORNEY'S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH
BENEFICIARY (IRRESPECTIVE OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE
ACTION FOR WHICH INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE
AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY.
11.6. INDEMNITY PRIOR TO COMPLETION DATE / CONSTRUCTION PERIOD TERMINATION
DATE.
Notwithstanding the provisions of Sections 11.1, 11.2, 11.3, 11.4 and
11.5, the Owner Trustee shall be the only beneficiary of the provisions set
forth in Sections 11.1, 11.2, 11.3, 11.4 and 11.5 with respect to any Claim
arising under such Sections and shall only be entitled to indemnification for
Claims that are caused by or is a result of the Indemnity Provider's own
actions or failure to act for the period from the Closing Date to the Property
Closing Date. Notwithstanding the foregoing, to the extent that the Owner
Trustee becomes obligated to any Indemnified Person pursuant to the next
succeeding paragraph of Section 11.6, the Owner
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<PAGE> 46
Trustee shall be entitled to further indemnity from the Indemnity Provider
under Sections 11.1, 11.2, 11.3, 11.4 and 11.5, as applicable, with respect to
all amounts owing or paid by it under this Section 11.6.
To the extent the Indemnity Provider is not obligated to indemnify any
Indemnified Person with respect to Claims arising under Sections 11.1, 11.2,
11.3, 11.4 or 11.5 during the period from the Closing Date to the Property
Closing Date, the Owner Trustee shall provide such indemnities in favor of such
Indemnified Person in accordance with the relevant provisions of Sections 11.1,
11.2, 11.3, 11.4 or 11.5 as the case may be. It is acknowledged and agreed that
any amount for which the Owner Trustee becomes obligated to any Indemnified
Person pursuant hereto shall become a Claim for which the Owner Trustee is
entitled to indemnity from the Indemnity Provider; provided, the Owner Trustee
shall only be entitled to indemnity for such Claims from the Indemnity Provider
to the extent such Claims are caused by or are a result of the Indemnity
Provider's own actions or failures to act.
THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE OWNER TRUSTEE PURSUANT TO
THIS SECTION 11.6 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY
REFERENCED IN SECTION 12.9.
SECTION 12. MISCELLANEOUS.
12.1. SURVIVAL OF AGREEMENTS.
The representations, warranties, covenants, indemnities and agreements
of the parties provided for in the Operative Agreements, and the parties'
obligations under any and all thereof, shall survive the execution and delivery
of this Agreement, the transfer of the Property to the Owner Trustee, the
acquisition of the Property (or any of its components), any disposition of any
interest of the Owner Trustee in the Property or any interest of the Holders in
the Trust Estate, the payment of the Notes and any disposition thereof and
shall be and continue in effect notwithstanding any investigation made by any
party and the fact that any party may waive compliance with any of the other
terms, provisions or conditions of any of the Operative Agreements. Except as
otherwise expressly set forth herein or in other Operative Agreements, the
indemnities of the parties provided for in the Operative Agreements shall
survive the expiration or termination of any thereof.
12.2. NOTICES.
All notices required or permitted to be given under any Operative
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage paid with return receipt requested; by private courier, prepaid;
by telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or
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<PAGE> 47
acknowledged by the addressee or its office. Personal delivery shall be
effective when accomplished. Unless a party changes its address by giving
notice to the other party as provided herein, notices shall be delivered to the
parties at the following addresses:
If to the Lessee, to it at the following address:
Catalina Marketing Sales Corporation
11300 Ninth Street North
St. Petersburg, Florida 33716
Attention: Chris Wolf
Telephone: (727) 579-5218
Telecopy: (727) 579-5327
If to the Guarantor, to it at the following address:
Catalina Marketing Corporation
11300 Ninth Street North
St. Petersburg, Florida 33716
Attention: Chris Wolf
Telephone: (727) 579-5218
Telecopy: (727) 579-5327
If to the Trust Company, the Owner Trustee or the Lessor, to
it at the following address:
First Security Bank, National Association
Third Floor
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton,
Vice President
Telephone: (801) 246-5300
Telecopy: (801) 246-5053
If to the Holders, to each such Holder at the address set
forth for such Holder on Schedule I of the Trust Agreement.
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<PAGE> 48
If to the Agent, to it at the following address:
First Union National Bank
c/o First Union Capital Markets Group
DC-6
301 South College Street
Charlotte, North Carolina 28288-0166
Attention: Christy Lee Foster, Capital Markets Services
Telephone: (704) 383-5398
Telecopy: (704) 383-7989
If to any Lender, to it at the address set forth for such
Lender in Schedule 2.1 of the Credit Agreement.
From time to time any party may designate additional parties
and/or another address for notice purposes by notice to each of the
other parties hereto. Each notice hereunder shall be effective upon
receipt or refusal thereof.
12.3. COUNTERPARTS.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one (1) and
the same instrument.
12.4. TERMINATIONS, AMENDMENTS, WAIVERS, ETC.; UNANIMOUS VOTE MATTERS.
Each Basic Document may be terminated, amended, supplemented, waived
or modified only by an instrument in writing signed by, subject to Article VIII
of the Trust Agreement regarding termination of the Trust Agreement, the
Majority Secured Parties and each Credit Party (to the extent such Credit Party
is a party to such Basic Document); provided, to the extent no Default or Event
of Default shall have occurred and be continuing, the Majority Secured Parties
shall not amend, supplement, waive or modify any provision of any Basic
Document in such a manner as to adversely affect the rights of any Credit Party
without the prior written consent (not to be unreasonably withheld or delayed)
of such Credit Party. Each Operative Agreement which is not a Basic Document
may be terminated, amended, supplemented, waived or modified only by an
instrument in writing signed by the parties thereto and (without the consent of
any other Financing Party) the Agent. In addition, the Unanimous Vote Matters
shall require the consent of each Lender and each Holder affected by such
matter.
Notwithstanding the foregoing, no such termination, amendment,
supplement, waiver or modification shall, without the consent of the Agent and,
to the extent affected thereby, each Lender and each Holder (collectively, the
"Unanimous Vote Matters") (i) reduce the amount of any Note or Certificate,
extend the scheduled date of maturity of any Note, extend the scheduled
Expiration Date, extend any payment date of any Note or Certificate, reduce the
stated rate of interest payable on any Note, reduce the stated Holder Yield
payable on any Certificate (other than as a result of waiving the applicability
of any post-default increase in interest rates or
44
<PAGE> 49
Holder Yields), modify the priority of any Lien in favor of the Agent under any
Security Document, subordinate any obligation owed to such Lender or Holder, or
(ii) terminate, amend, supplement, waive or modify any provision of this
Section 12.4 or reduce the percentages specified in the definitions of Majority
Lenders, Majority Holders or Majority Secured Parties, or consent to the
assignment or transfer by the Owner Trustee of any of its rights and
obligations under any Credit Document or release a material portion of the
Collateral (except in accordance with Section 8.8) or release any Credit Party
from its obligations under any Operative Agreement or otherwise alter any
payment obligations of any Credit Party to the Lessor or any Financing Party
under the Operative Agreements, or (iii) terminate, amend, supplement, waive or
modify any provision of Section 7 of the Credit Agreement (which shall also
require the consent of the Agent). Any such termination, amendment, supplement,
waiver or modification shall apply equally to each of the Lenders and the
Holders and shall be binding upon all the parties to this Agreement. In the
case of any waiver, each party to this Agreement shall be restored to its
former position and rights under the Operative Agreements, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Loan are, in the opinion of the Majority Lenders, satisfied,
any Lender shall fail to fulfill its obligations to make such Loan (any such
Lender, a "Defaulting Lender") then, for so long as such failure shall
continue, the Defaulting Lender shall (unless the Lessee and the Majority
Lenders, determined as if the Defaulting Lender were not a "Lender", shall
otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Loans, shall not be treated as a "Lender" when
performing the computation of Majority Lenders or Majority Secured Parties, and
shall have no rights under this Section 12.4; provided that any action taken
pursuant to the second paragraph of this Section 12.4 shall not be effective as
against the Defaulting Lender.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Holder Advance are, in the opinion of the Majority Holders,
satisfied, any Holder shall fail to fulfill its obligations to make such Holder
Advance (any such Holder, a "Defaulting Holder") then, for so long as such
failure shall continue, the Defaulting Holder shall (unless the Lessee and the
Majority Holders, determined as if the Defaulting Holder were not a "Holder",
shall otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Holder Advances, shall not be treated as a
"Holder" when performing the computation of Majority Holders or Majority
Secured Parties, and shall have no rights under this Section 12.4; provided
that any action taken pursuant to the second paragraph of this Section 12.4
shall not be effective as against the Defaulting Holder.
12.5. HEADINGS, ETC.
The Table of Contents and headings of the various Articles and
Sections of this Agreement are for convenience of reference only and shall not
modify, define, expand or limit any of the terms or provisions hereof.
45
<PAGE> 50
12.6. PARTIES IN INTEREST.
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
Any legal action or proceeding with respect to this Agreement or any
other Operative Agreement may be brought in the courts of the State of
North Carolina in Mecklenburg County or of the United States for the
Western District of North Carolina, and, by execution and delivery of
this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the parties to this Agreement further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the
address set out for notices pursuant to Section 12.2, such service to
become effective three (3) days after such mailing. Nothing herein
shall affect the right of any party to serve process in any other
manner permitted by Law or to commence legal proceedings or to
otherwise proceed against any party in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement or any other Operative Agreement
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
12.8. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
46
<PAGE> 51
12.9. LIABILITY LIMITED.
(a) The Lenders, the Agent, the Credit Parties, the Owner
Trustee and the Holders each acknowledge and agree that the Owner
Trustee is (except as otherwise expressly provided herein or therein)
entering into this Agreement and the other Operative Agreements to
which it is a party (other than the Trust Agreement and to the extent
otherwise provided in Section 6.1 of this Agreement), solely in its
capacity as trustee under the Trust Agreement and not in its
individual capacity and that the Trust Company shall not be liable or
accountable under any circumstances whatsoever in its individual
capacity for or on account of any statements, representations,
warranties, covenants or obligations stated to be those of the Owner
Trustee, except for its own gross negligence or willful misconduct and
as otherwise expressly provided herein or in the other Operative
Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, no Exculpated Person shall be personally liable in
any respect for any liability or obligation arising hereunder or in
any other Operative Agreement including without limitation the payment
of the principal of, or interest on, the Notes, or for monetary
damages for the breach of performance of any of the covenants
contained in the Credit Agreement, the Notes, this Agreement, the
Security Agreement or any of the other Operative Agreements. The
Lenders, the Holders and the Agent agree that, in the event any
remedies under any Operative Agreement are pursued, neither the
Lenders, the Holders nor the Agent shall have any recourse against any
Exculpated Person, for any deficiency, loss or Claim for monetary
damages or otherwise resulting therefrom and recourse shall be had
solely and exclusively against the Trust Estate (excluding Excepted
Payments) and the Credit Parties (with respect to the Credit Parties'
obligations under the Operative Agreements); but nothing contained
herein shall be taken to prevent recourse against or the enforcement
of remedies against the Trust Estate (excluding Excepted Payments) in
respect of any and all liabilities, obligations and undertakings
contained herein and/or in any other Operative Agreement.
Notwithstanding the provisions of this Section, nothing in any
Operative Agreement shall: (i) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Notes
and/or the Certificates arising under any Operative Agreement or
secured by any Operative Agreement, but the same shall continue until
paid or discharged; (ii) relieve any Exculpated Person from liability
and responsibility for (but only to the extent of the damages arising
by reason of): active waste knowingly committed by any Exculpated
Person with respect to the Property, any fraud, gross negligence or
willful misconduct on the part of any Exculpated Person; (iii) relieve
any Exculpated Person from liability and responsibility for (but only
to the extent of the moneys misappropriated, misapplied or not turned
over) (A) except for Excepted Payments, misappropriation or
misapplication by the Lessor (i.e., application in a manner contrary
to any of the Operative Agreements) of any insurance proceeds or
condemnation award paid or delivered to the Lessor by any Person other
than the Agent, (B) except for Excepted Payments, any deposits or any
escrows or amounts owed by the Lessee held by the Lessor or (C) except
for Excepted Payments, any rent or other income received by the
47
<PAGE> 52
Lessor from any Credit Party that is not turned over to the Agent; or
(iv) affect or in any way limit the Agent's rights and remedies under
any Operative Agreement with respect to the Rents and rights and
powers of the Agent under the Operative Agreements or to obtain a
judgment against the Lessee's interest in the Property or the Agent's
rights and powers to obtain a judgment against the Lessor or any
Credit Party (provided, that no deficiency judgment or other money
judgment shall be enforced against any Exculpated Person except to the
extent of the Lessor's interest in the Trust Estate (excluding
Excepted Payments) or to the extent the Lessor may be liable as
otherwise contemplated in clauses (ii) and (iii) of this Section
12.9(b)).
12.10. RIGHTS OF THE CREDIT PARTIES.
If at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents and the other Operative Agreements and
(ii) of the Credit Parties under the Operative Agreements have in each case
been satisfied or discharged in full, then the Credit Parties shall be entitled
to (a) terminate the Lease and guaranty obligations under Section 6B and (b)
receive all amounts then held under the Operative Agreements and all proceeds
with respect to the Property. Upon the termination of the Lease and Section 6B
pursuant to the foregoing clause (a), the Lessor shall transfer to the Lessee
all of its right, title and interest free and clear of the Lien of the Lease,
the Lien of the Security Documents and all Lessor Liens in and to the Property
then subject to the Lease and any amounts or proceeds referred to in the
foregoing clause (b) shall be paid over to the Lessee.
12.11. FURTHER ASSURANCES.
The parties hereto shall promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of the Lessee, all such further
acts, conveyances, documents and assurances as the other parties may from time
to time reasonably request in order to carry out and effectuate the intent and
purposes of this Participation Agreement, the other Operative Agreements and
the transactions contemplated hereby and thereby (including without limitation
the preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of Mortgage Instruments and other filings or
registrations which the parties hereto may from time to time request to be
filed or effected). The Lessee, at its own expense and without need of any
prior request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or (if the Owner Trustee shall so request) as so requested, in order to
maintain and protect all security interests provided for hereunder or under any
other Operative Agreement. In addition, in connection with the sale or other
disposition of the Property or any portion thereof, the Lessee agrees to
execute such instruments of conveyance as may be reasonably required in
connection therewith.
12.12. CALCULATIONS UNDER OPERATIVE AGREEMENTS.
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Owner Trustee
shall be made by the Agent and that such
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<PAGE> 53
calculations and determinations shall be conclusive and binding on the parties
hereto in the absence of manifest error.
12.13. CONFIDENTIALITY.
Each Financing Party agrees to keep confidential any information
furnished or made available to it by any Credit Party or any of its
Subsidiaries pursuant to this Agreement that is marked confidential; provided
that nothing herein shall prevent any Financing Party from disclosing such
information (a) to any other Financing Party or any Affiliate of any Financing
Party, or any officer, director, employee, agent, or advisor of any Financing
Party or Affiliate of any Financing Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Financing Party other than as a result
of a disclosure by any Financing Party prohibited by this Agreement, (g) in
connection with any litigation to which such Financing Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Operative Agreement,
and (i) subject to provisions substantially similar to those contained in this
Section, to any actual or proposed participant or assignee.
12.14. FINANCIAL REPORTING/TAX CHARACTERIZATION.
Lessee agrees to obtain advice from its own accountants and tax
counsel regarding the financial reporting treatment and the tax
characterization of the transactions described in the Operative Agreements.
Lessee further agrees that Lessee shall not rely upon any statement of any
Financing Party or any of their respective Affiliates and/or Subsidiaries
regarding any such financial reporting treatment and/or tax characterization.
12.15. SET-OFF.
In addition to any rights now or hereafter granted under applicable
Law and not by way of limitation of any such rights, upon and after the
occurrence of any Event of Default and during the continuance thereof, the
Lenders, the Holders, their respective Affiliates and any assignee or
participant of a Lender or a Holder in accordance with the applicable
provisions of the Operative Agreements are hereby authorized by the Credit
Parties at any time or from time to time, without notice to the Credit Parties
or to any other Person, any such notice being hereby expressly waived, to
set-off and to appropriate and to apply any and all deposits (general or
special, time or demand, including without limitation indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Lenders, the Holders, their
respective Affiliates or any assignee or participant of a Lender or a Holder in
accordance with the applicable provisions of the Operative Agreements to or for
the credit or the account of any Credit Party against and on account of the
obligations of any Credit Party under the Operative Agreements irrespective of
whether or not (a) the Lenders or the Holders shall have made any demand under
any Operative Agreement or (b) the Agent shall have declared any or all of the
obligations of any Credit Party under the Operative Agreements to be due and
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<PAGE> 54
payable and although such obligations shall be contingent or unmatured.
Notwithstanding the foregoing, neither the Agent nor any other Financing Party
shall exercise, or attempt to exercise, any right of setoff, banker's lien, or
the like, against any deposit account or property of any Credit Party held by
the Agent or any other Financing Party, without the prior written consent of
the Majority Secured Parties, and any Financing Party violating this provision
shall indemnify the Agent and the other Financing Parties from any and all
costs, expenses, liabilities and damages resulting therefrom. The contractual
restriction on the exercise of setoff rights provided in the foregoing sentence
is solely for the benefit of the Agent and the Financing Parties and may not be
enforced by any Credit Party.
[signature pages follow]
50
<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
LESSEE: CATALINA MARKETING SALES
CORPORATION, as the Lessee
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
GUARANTOR: CATALINA MARKETING CORPORATION,
as the Guarantor
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
OWNER TRUSTEE
AND LESSOR: FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly stated
herein, but solely as the Owner Trustee
under the Dolphin Realty Trust 1999-1
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
AGENT AND LENDERS: FIRST UNION NATIONAL BANK, as a Lender and
as the Agent
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
Participation Agreement
Dolphin Realty Trust 1999-1
<PAGE> 56
HOLDERS: FIRST UNION NATIONAL BANK, as a Holder
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
Participation Agreement
Dolphin Realty Trust 1999-1
<PAGE> 57
SCHEDULE 6.2(i)
[LIST OF STATES OF FORMATION AND CHIEF EXECUTIVE OFFICES OF CREDIT PARTIES]
<TABLE>
<CAPTION>
STATE OF PRINCIPAL
PLACE OF BUSINESS/
CREDIT PARTY STATE OF INCORPORATION/FORMATION CHIEF EXECUTIVE OFFICE
- ------------ -------------------------------- ----------------------
<S> <C> <C>
Catalina Marketing Delaware Florida
Sales Corporation
Catalina Marketing Delaware Florida
Corporation
</TABLE>
<PAGE> 58
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4, 5.2 and 5.3 of the Participation Agreement)
CATALINA MARKETING SALES CORPORATION, a Delaware corporation (the
"Company") hereby certifies as true and correct and delivers the following
Requisition to FIRST UNION NATIONAL BANK, as the agent for the Lenders
(hereinafter defined) and respecting the Security Documents, as the agent for
the Lenders and the Holders (hereinafter defined), to the extent of their
interests (the "Agent"):
Reference is made herein to that certain Participation Agreement dated
as of October 21, 1999 (as amended, modified, extended, supplemented, restated
and/or replaced from time to time, the "Participation Agreement") among the
Company, in its capacity as the Lessee, Catalina Marketing Corporation, as the
Guarantor, First Security Bank, National Association, as the Owner Trustee, the
various banks and other lending institutions which are parties thereto from
time to time, as holders (the "Holders"), the various banks and other lending
institutions which are parties thereto from time to time, as lenders (the
"Lenders"), and the Agent. Capitalized terms used herein but not otherwise
defined herein shall have the meanings set forth therefor in the Participation
Agreement.
PROPERTY CLOSING DATE:_________________
(three (3) Business Days prior notice required for Advance)
1. Transaction Expenses and other fees, expenses and disbursements under
Section 7.1 of the Participation Agreement and any and all other
amounts contemplated to be financed under the Participation Agreement
(with supporting invoices or closing statement attached):
Party to Whom Amount Owed
Amount is Owed (in U.S. Dollars)
-------------- -----------------
-------------- -----------------
-------------- -----------------
-------------- -----------------
-------------- -----------------
2. Description of Land (which shall be a legal description of the Land in
connection with an Advance): See attached Schedule 1
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
A-1
<PAGE> 59
In connection with this Requisition, the Company hereby requests that
the Lenders make Loans to the Lessor in the amount of $______________ and that
the Holders make Holder Advances to the Lessor in the amount of
$________________. The Company hereby certifies (i) that the foregoing amounts
requested do not exceed the total aggregate of the Available Commitments plus
the Available Holder Commitments and (ii) each of the provisions of the
Participation Agreement applicable to the Loans and Holder Advances requested
hereunder have been complied with as of the date of this Requisition.
The Company requests the Loans be allocated as follows:
$______________ ABR Loans
$______________ Eurodollar Loans
The Company requests the Holder Advances be allocated as follows:
$______________ ABR Holder Advances
$______________ Eurodollar Holder Advances
The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of __________, ______.
CATALINA MARKETING SALES
CORPORATION
By: __________________________________
Name: ________________________________
Title: _______________________________
A-2
<PAGE> 60
Schedule 1
Description of Land
(Legal Description and Street Address)
A-3
<PAGE> 61
Schedule 2
Description of Improvements
A-4
<PAGE> 62
Schedule 3
Description of Equipment
<TABLE>
<CAPTION>
General Description Make Model Serial Number
- ----------------------- ------------------- --------------------- -------------------------
<S> <C> <C> <C>
- ----------------------- ------------------- --------------------- -------------------------
- ----------------------- ------------------- --------------------- -------------------------
- ----------------------- ------------------- --------------------- -------------------------
- ----------------------- ------------------- --------------------- -------------------------
- ----------------------- ------------------- --------------------- -------------------------
- ----------------------- ------------------- --------------------- -------------------------
- ----------------------- ------------------- --------------------- -------------------------
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</TABLE>
A-5
<PAGE> 63
EXHIBIT B
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(j) of the
Participation Agreement)
__________ ___, 1999
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of Catalina Marketing
Sales Corporation
Dear Sirs:
We have acted as special counsel to Catalina Marketing Sales Corporation, a
Delaware corporation (the "Lessee") and Catalina Marketing Corporation, a
Delaware corporation (the "Guarantor"; individually the Lessee and the
Guarantor may be referred to herein as a "Credit Party" or collectively as the
"Credit Parties") in connection with certain transactions contemplated by the
Participation Agreement dated as of October 21, 1999 (the "Participation
Agreement"), among the Lessee, the Guarantor, First Security Bank, National
Association, as the Owner Trustee (the "Owner Trustee"), the various banks and
other lending institutions which are parties thereto from time to time, as
holders (the "Holders"), the various banks and other lending institutions which
are parties thereto from time to time, as lenders (the "Lenders") and First
Union National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent"). This opinion is delivered pursuant to Section 5.3(j)
of the Participation Agreement. All capitalized terms used herein, and not
otherwise defined herein, shall have the meanings assigned thereto in Appendix
A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of [IDENTIFY THE APPLICABLE OPERATIVE
AGREEMENTS, INCLUDING THE MORTGAGE INSTRUMENT, RELATED UCC FIXTURE FILINGS,
ADDITIONAL UCCS (HEREINAFTER DEFINED), DEEDS AND MEMORANDA OF LEASE] and such
other corporate documents and records of the Credit Parties, certificates of
public officials and representatives of the Credit Parties as to certain
factual matters, and such other instruments and documents which we have deemed
necessary or advisable to examine for the purpose of this opinion. With respect
to such examination, we have assumed (i) the statements of fact made in all
such certificates, documents and instruments are true, accurate and complete;
(ii) except as to the Credit Parties, the due authorization, execution and
delivery of the Operative Agreements by the parties thereto; (iii) the
genuineness of all signatures (except as to the Credit Parties), the
authenticity and completeness of all documents, certificates, instruments,
records and corporate records submitted to us as originals and the conformity
to the original instruments of all documents submitted to us as copies, and the
B-1
<PAGE> 64
authenticity and completeness of the originals of such copies; (iv) except as
to the Credit Parties, that all parties have all requisite corporate power and
authority to execute, deliver and perform the Operative Agreements; and (v)
except as to the Credit Parties, the enforceability of the Mortgage Instrument,
the Memorandum of Lease and the UCC financing statements against all parties
thereto.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Mortgage Instrument and Memorandum of Lease are enforceable in
accordance with their respective terms, except as limited by laws generally
affecting the enforcement of creditors' rights, which laws will not materially
prevent the realization of the benefits intended by such documents.
(b) The form of Mortgage Instrument and UCC fixture filing relating
thereto, attached hereto as Schedules 1 and 2, respectively, is in proper form
for filing and recording with the office of [IDENTIFY THE RECORDING OFFICE OF
THE COUNTY CLERK WHERE THE PROPERTY IS LOCATED]. Upon filing of the Mortgage
Instrument and UCC fixture filing in [IDENTIFY THE RECORDING OFFICE OF THE
COUNTY CLERK WHERE THE PROPERTY IS LOCATED], the Agent will have a valid,
perfected lien and security interest in that portion of the Collateral
described in such Mortgage Instrument or UCC fixture filing to the extent such
Collateral is comprised of real property and/or fixtures.
(c) The forms of UCC financing statements relating to the Security
Documents, attached hereto as Schedule 3 (the "Additional UCCs"), are in proper
form for filing and recording with the offices of [IDENTIFY (I) THE RECORDING
OFFICE OF THE COUNTY CLERK WHERE THE PROPERTY IS LOCATED AND (II) THE SECRETARY
OF STATE WHERE THE PROPERTY IS LOCATED]. Upon filing of the Additional UCCs in
[IDENTIFY (I) THE RECORDING OFFICE OF THE COUNTY CLERK WHERE THE PROPERTY IS
LOCATED AND (II) THE SECRETARY OF STATE WHERE THE PROPERTY IS LOCATED], the
Agent will have a valid, perfected lien and security interest in that portion
of the Collateral which can be perfected by filing UCC-1 financing statements
under Article 9 of the UCC.
(d) The form of Deed and Memorandum of Lease is in appropriate form
for filing and recording with the [IDENTIFY THE RECORDING OFFICE OF THE COUNTY
CLERK FOR THE COUNTY WHERE THE PROPERTY IS LOCATED].
(e) The Memorandum of Lease, when filed and recorded with the
[IDENTIFY THE RECORDING OFFICE OF THE COUNTY CLERK FOR THE COUNTY WHERE THE
PROPERTY IS LOCATED], will have been filed and recorded in all public offices
in the State of [__________] in which filing or recording is necessary to
provide constructive notice of the Lease to third Persons and to establish of
record the interest of the Lessor thereunder as to the Property described in
the Memorandum of Lease.
(f) Title to the Property located in the State of [___________] may be
held in the name of the Owner Trustee as follows: First Security Bank, National
Association, not individually, but solely as the Owner Trustee under the
Dolphin Realty Trust 1999-1.
B-2
<PAGE> 65
(g) The execution and delivery by First Security Bank, National
Association, individually or as the Owner Trustee, as the case may be, of the
Operative Agreements to which it is a party and compliance by First Security
Bank, National Association, individually or as the Owner Trustee, with all of
the provisions thereof do not and will not contravene any law, rule or
regulation of [IDENTIFY THE STATE].
(h) By reason of their participation in the transaction contemplated
under the Operative Agreements, none of the Agent, the Lenders, the Holders or
the Owner Trustee has to (a) qualify as a foreign corporation in [IDENTIFY THE
STATE], (b) file any application or any designation for service of process in
[IDENTIFY THE STATE] or (c) pay any franchise, income, sales, excise, stamp or
other taxes of any kind to [IDENTIFY THE STATE].
(i) The provisions in the Operative Agreements concerning Rent,
interest, fees, prepayment premiums and other similar charges do not violate
the usury laws or other similar laws regulating the use or forbearance of money
of [IDENTIFY THE STATE].
(j) If the transactions contemplated by the Operative Agreements are
characterized as a lease transaction by a court of competent jurisdiction, the
Lease and the applicable Lease Supplement shall demise to the Lessee a valid
leasehold interest in the Property described in such Lease Supplement.
(k) If the transactions contemplated by the Operative Agreements are
characterized as a loan transaction by a court of competent jurisdiction, the
combination of the Mortgage Instruments, the Deeds, the Lease and the
applicable Lease Supplements (and the other Operative Agreements incorporated
therein by reference) are sufficient to create a valid, perfected lien or
security interest in the Property therein described, enforceable as a mortgage
in [IDENTIFY THE STATE].
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the State of [___________] and the federal laws
of the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
This opinion is for the sole benefit of the Lessee, the Guarantor, the Owner
Trustee, the Holders, the Lenders, the Agent, the Arranger and their respective
successors and assigns and may not be relied upon by any other person other
than such parties and their respective successors and assigns without the
express written consent of the undersigned. The opinions expressed herein are
as of the date hereof and we make no undertaking to amend or supplement such
opinions if facts come to our attention or changes in the current law of the
jurisdictions mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
B-3
<PAGE> 66
Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
Catalina Marketing Sales Corporation, as the Lessee
Catalina Marketing Corporation, as the Guarantor
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the Dolphin Realty Trust 1999-1
B-4
<PAGE> 67
Schedule 1
Form of Mortgage Instrument
B-5
<PAGE> 68
Schedule 2
Forms of UCC Fixture Filings
B-6
<PAGE> 69
Schedule 3
Forms of UCC Financing Statements
B-7
<PAGE> 70
EXHIBIT C
CATALINA MARKETING SALES CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(w) of the Participation Agreement)
Catalina Marketing Sales Corporation, a Delaware corporation (the
"Company"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of each Credit
Party contained in the Operative Agreements to which it is a
party is true and correct on and as of the date hereof.
2. No Lease Default or Lease Event of Default has occurred and
is continuing under any Operative Agreement.
3. Each Operative Agreement to which any Credit Party is a party
is in full force and effect with respect to it.
4. Each Credit Party has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of October 21, 1999 among the Company, as the Lessee,
Catalina Marketing Corporation, as the Guarantor, First Security Bank, National
Association, as the Owner Trustee, the various banks and other lending
institutions which are parties thereto from time to time, as holders (the
"Holders"), the various banks and other lending institutions which are parties
thereto from time to time, as lenders (the "Lenders") and First Union National
Bank, as the agent for the Lenders and respecting the Security Documents, as
the agent for the Lenders and the Holders, to the extent of their interests
(the "Agent").
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be
duly executed and delivered as of this _____ day of __________, ______.
CATALINA MARKETING SALES
CORPORATION
By: ________________________________
Name: ______________________________
Title: _____________________________
C-1
<PAGE> 71
EXHIBIT D
[NAME OF CREDIT PARTY]
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(x) of the Participation Agreement)
[NAME OF CREDIT PARTY], a ______________ corporation (the "Company")
DOES HEREBY CERTIFY as follows:
1. Attached hereto as Schedule 1 is a true, correct and complete
copy of the resolutions of the Board of Directors of the
Company duly adopted by the Board of Directors of the Company
on __________. Such resolutions have not been amended,
modified or rescinded since their date of adoption and remain
in full force and effect as of the date hereof.
2. Attached hereto as Schedule 2 is a true, correct and complete
copy of the Articles of Incorporation of the Company on file
in the Office of the Secretary of State of __________. Such
Articles of Incorporation have not been amended, modified or
rescinded since their date of adoption and remain in full
force and effect as of the date hereof.
3. Attached hereto as Schedule 3 is a true, correct and complete
copy of the Bylaws of the Company. Such Bylaws have not been
amended, modified or rescinded since their date of adoption
and remain in full force and effect as of the date hereof.
4. The persons named below now hold the offices set forth
opposite their names, and the signatures opposite their names
and titles are their true and correct signatures.
<TABLE>
<CAPTION>
Name Office Signature
---- ------ ---------
<S> <C> <C>
------------------- ----------------------- -------------------------
------------------- ----------------------- -------------------------
</TABLE>
D-1
<PAGE> 72
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this _____ day of ___________, ______.
[NAME OF CREDIT PARTY]
By: ________________________________
Name: ______________________________
Title: _____________________________
D-2
<PAGE> 73
Schedule 1
Board Resolutions
D-3
<PAGE> 74
Schedule 2
Articles of Incorporation
D-4
<PAGE> 75
Schedule 3
Bylaws
D-5
<PAGE> 76
EXHIBIT E
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(y) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (except with respect to paragraph 1 below, to the
extent any such representations and warranties are made in its individual
capacity) but solely as the owner trustee under the Dolphin Realty Trust 1999-1
(the "Owner Trustee"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Owner
Trustee contained in the Operative Agreements to which it is
a party is true and correct on and as of the date hereof.
2. Each Operative Agreement to which the Owner Trustee is a
party is in full force and effect with respect to it.
3. The Owner Trustee has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of October 21, 1999 among Catalina Marketing Sales
Corporation, as the Lessee, Catalina Marketing Corporation, as the Guarantor,
the Owner Trustee, the various banks and other lending institutions which are
parties thereto from time to time, as holders (the "Holders"), the various
banks and other lending institutions which are parties thereto from time to
time, as lenders (the "Lenders") and First Union National Bank, as the agent
for the Lenders and respecting the Security Documents, as the agent for the
Lenders and the Holders, to the extent of their interests (the "Agent").
E-1
<PAGE> 77
IN WITNESS WHEREOF, the Owner Trustee has caused this Officer's Certificate to
be duly executed and delivered as of this _____ day of __________, ______.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually,
except as expressly stated herein,
but solely as the Owner Trustee
under the Dolphin Realty Trust
1999-1
By: ________________________________
Name: ______________________________
Title: _____________________________
E-2
<PAGE> 78
EXHIBIT F
FIRST SECURITY BANK, NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
CERTIFICATE OF ASSISTANT SECRETARY
I, ______________________, duly elected and qualified Assistant
Secretary of the Board of Directors of First Security Bank, National
Association (the "Association"), hereby certify as follows:
1. The Association is a National Banking Association duly organized,
validly existing and in good standing under the laws of the United States. With
respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as amended, 12
U.S.C. 1, et seq., the Comptroller of the Currency charters
and exercises regulatory and supervisory authority over all
National Banking Associations;
B. On December 9, 1881, the First National Bank of Ogden, Utah
was chartered as a National Banking Association under the
laws of the United States and under Charter No.
2597;
C. On October 2, 1922, in connection with a consolidation of The
First National Bank of Ogden, Ogden, Utah, and The Utah
National Bank of Ogden, Ogden, Utah, the title was changed to
"The First & Utah National Bank of Ogden"; on January 18,
1923, The First & Utah National Bank of Ogden changed its
title to "First Utah National Bank of Ogden"; on January 19,
1926, the title was changed to "First National Bank of
Ogden"; on February 24, 1934, the title was changed to "First
Security Bank of Utah, National Association"; on June 21,
1996, the title was changed to "First Security Bank, National
Association"; and
D. First Security Bank, National Association, Ogden, Utah,
continues to hold a valid certificate to do business as a
National Banking Association.
2. The Association's Articles of Association, as amended, are in full
force and effect, and a true, correct and complete copy is attached hereto as
Schedule A and incorporated herein by reference. Said Articles were last
amended October 20, 1975, as required by law on notice at a duly called special
meeting of the shareholders of the Association.
F-1
<PAGE> 79
3. The Association's By-Laws, as amended, are in full force and
effect; and a true, correct and complete copy is attached hereto as Schedule B
and incorporated herein by reference. Said By-Laws, still in full force and
effect, were adopted September 17, 1942, by resolution, after proper notice of
consideration and adoption of By-Laws was given to each and every shareholder,
at a regularly called meeting of the Board of Directors with a quorum present.
4. Pursuant to the authority vested in it by an Act of Congress
approved December 23, 1913 and known as the Federal Reserve Act, as amended,
the Federal Reserve Board (now the Board of Governors of the Federal Reserve
System) has granted to the Association now known as "First Security Bank,
National Association" of Ogden, Utah, the right to act, when not in
contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any other fiduciary capacity in which
State banks, trust companies or other corporations which come into competition
with National Banks are permitted to act under the laws of the State of Utah;
and under the provisions of applicable law, the authority so granted remains in
full force and effect.
5. Pursuant to authority vested by Act of Congress (12 U.S.C. 92a and
12 U.S.C. 481, as amended) the Comptroller of the Currency has issued
Regulation 9, as amended, dealing, in part, with the Fiduciary Powers of
National Banks, said regulation providing in subparagraph 9.7 (a) (1-2):
(1) The board of directors is responsible for the proper exercise
of fiduciary powers by the Bank. All matters pertinent
thereto, including the determination of policies, the
investment and disposition of property held in fiduciary
capacity, and the direction and review of the actions of all
officers, employees, and committees utilized by the Bank in
the exercise of its fiduciary powers, are the responsibility
of the board. In discharging this responsibility, the board
of directors may assign, by action duly entered in the
minutes, the administration of such of the Bank's fiduciary
powers as it may consider proper to assign to such
director(s), officer(s), employee(s) or committee(s) as it
may designate.
(2) No fiduciary account shall be accepted without the prior
approval of the board, or of the director(s), officer(s), or
committee(s) to whom the board may have designated the
performance of that responsibility. . . .
6. A Resolution relating to Exercise of Fiduciary Powers was adopted
by the Board of Directors at a meeting held July 26, 1994 at which time there
was a quorum present; said resolution is still in full force and effect and has
not been rescinded. Said resolution is attached hereto as Schedule C and
incorporated herein by reference.
7. A Resolution relating to the Designation of Officers and Employees
to Exercise Fiduciary Powers was adopted by the Trust Policy Committee at a
meeting held February 7,
F-2
<PAGE> 80
1996 at which time a quorum was present; said resolution is still in full force
and effect and has not been rescinded. Said resolution is attached hereto as
Schedule D and is incorporated herein by reference.
8. Attached hereto as Schedule E and incorporated herein by reference,
is a listing of facsimile signatures of persons authorized (herein "Authorized
Signatory or Signatories") on behalf of the Association and its Trust Group to
act in exercise of its fiduciary powers subject to the resolutions in
Paragraphs 6 and 7, above.
9. The principal office of the First Security Bank, National
Association, Trust Group and of its departments, except for the St. George,
Utah, Ogden, Utah, and Provo, Utah, branch offices, is located at 79 South Main
Street, Salt Lake City, Utah 84111 and all records relating to fiduciary
accounts are located at such principal office of the Trust Group or in storage
facilities within Salt Lake County, Utah, except for those of the Ogden, Utah,
St. George, Utah, and Provo, Utah, branch offices, which are located at said
office.
10. Each Authorized Signatory (i) is a duly elected or appointed, duly
qualified officer or employee of the Association; (ii) holds the office or job
title set forth below his or her name on the date hereof; (iii) and the
facsimile signature appearing opposite the name of each such officer or
employee is a true replica of his or her signature.
F-3
<PAGE> 81
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Association this __________ day of _________________, ______.
(SEAL)
________________________________________
R. James Steenblik
Senior Vice President
Assistant Secretary
F-4
<PAGE> 82
Schedule A
Articles of Association
F-5
<PAGE> 83
Schedule B
Bylaws
F-6
<PAGE> 84
Schedule C
Resolution Relating to
Exercise of Fiduciary Powers
F-7
<PAGE> 85
Schedule D
Resolution Relating to the
Designation of Officers and Employees
To Exercise Fiduciary Powers
F-8
<PAGE> 86
Schedule E
Authorized Signatory or Signatories
F-9
<PAGE> 87
EXHIBIT G
[Outside Counsel Opinion for the Owner Trustee]
(Pursuant to Section 5.3(aa) of the
Participation Agreement)
October 21, 1999
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Trust Agreement dated as of October 21, 1999
Dear Sirs:
We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity ("FSB")
and in its capacity as trustee (the "Owner Trustee") under the Trust Agreement
dated as of October 21, 1999 (the "Trust Agreement") by and among it and the
various banks and other lending institutions which are parties thereto from
time to time, as holders (the "Holders"), in connection with the execution and
delivery by the Owner Trustee of the Operative Agreements to which it is a
party. Except as otherwise defined herein, the terms used herein shall have the
meanings set forth in Appendix A to the Participation Agreement dated as of
October 21, 1999 (the "Participation Agreement") by and among Catalina
Marketing Sales Corporation (the "Lessee"), Catalina Marketing Corporation (the
"Guarantor"), First Security Bank, National Association, as the Owner Trustee,
the Holders, the various banks and other lending institutions which are parties
thereto from time to time, as lenders (the "Lenders") and First Union National
Bank, as the agent for the Lenders and respecting the Security Documents, as
the agent for the Lenders and the Holders, to the extent of their interests
(the "Agent").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary or advisable for the purpose of
rendering this opinion.
Based upon the foregoing, we are of the opinion that:
1. FSB is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America
and each of FSB and the Owner Trustee has under the laws of the State of Utah
and federal banking law the power and authority to enter into and perform its
obligations under the Trust Agreement and each other Operative Agreement to
which it is a party.
2. The Owner Trustee is the duly appointed trustee under the Trust
Agreement.
G-1
<PAGE> 88
3. The Trust Agreement has been duly authorized, executed and
delivered by one (1) of the officers of FSB and, assuming due authorization,
execution and delivery by the Holders, is a legal, valid and binding obligation
of the Owner Trustee (and to the extent set forth therein, against FSB),
enforceable against the Owner Trustee (and to the extent set forth therein,
against FSB) in accordance with its terms, and the Trust Agreement creates
under the laws of the State of Utah for the Holders the beneficial interest in
the Trust Estate it purports to create and is a valid trust under the laws of
the State of Utah.
4. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by FSB, and, assuming due authorization,
execution and delivery by the other parties thereto, are legal, valid and
binding obligations of FSB, enforceable against FSB in accordance with their
respective terms.
5. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by the Owner Trustee, and, assuming due
authorization, execution and delivery by the other parties thereto, are legal,
valid and binding obligations of the Owner Trustee, enforceable against the
Owner Trustee in accordance with their respective terms. The Notes and
Certificates have been duly issued, executed and delivered by the Owner
Trustee, pursuant to authorization contained in the Trust Agreement, and the
Certificates are entitled to the benefits and security afforded by the Trust
Agreement in accordance with its terms and the terms of the Trust Agreement.
6. The execution and delivery by each of FSB and the Owner Trustee of
the Trust Agreement and the Operative Agreements to which it is a party, and
compliance by FSB or the Owner Trustee, as the case may be, with all of the
provisions thereof do not and will not contravene any Laws applicable to or
binding on FSB, or as the Owner Trustee, or contravene the provisions of, or
constitute a default under, its charter documents or by-laws or, to our
knowledge after due inquiry, any indenture, mortgage contract or other
agreement or instrument to which FSB or Owner Trustee is a party or by which it
or any of its property may be bound or affected.
7. The execution and delivery of the Operative Agreements by each of
FSB and the Owner Trustee and the performance by each of FSB and the Owner
Trustee of their respective obligations thereunder does not require on or prior
to the date hereof the consent or approval of, the giving of notice to, the
registration or filing with, or the taking of any action in respect of any
Governmental Authority or any court.
8. Assuming that the trust created by the Trust Agreement is treated
as a grantor trust for federal income tax purposes within the contemplation of
Section 671 through 678 of the Internal Revenue Code of 1986, there are no
fees, taxes, or other charges (except taxes imposed on fees payable to the
Owner Trustee) payable to the State of Utah or any political subdivision
thereof in connection with the execution, delivery or performance by the Owner
Trustee, the Agent, the Lenders, the Lessee or the Holders, as the case may be,
of the Operative Agreements or in connection with the acquisition of the
Property by the Owner Trustee or in connection with the making by any Holder of
its investment in the Trust or its acquisition of the beneficial interest in
the Trust Estate or in connection with the issuance and acquisition of the
Certificates,
G-2
<PAGE> 89
or the Notes, and neither the Owner Trustee, the Trust Estate nor the trust
created by the Trust Agreement will be subject to any fee, tax or other
governmental charge (except taxes on fees payable to the Owner Trustee) under
the laws of the State of Utah or any political subdivision thereof on, based on
or measured by, directly or indirectly, the gross receipts, net income or value
of the Trust Estate by reason of the creation or continued existence of the
trust under the terms of the Trust Agreement pursuant to the laws of the State
of Utah or the Owner Trustee's performance of its duties under the Trust
Agreement.
9. There is no fee, tax or other governmental charge under the laws of
the State of Utah or any political subdivision thereof in existence on the date
hereof on, based on or measured by any payments under the Certificates, Notes
or the beneficial interest in the Trust Estate, by reason of the creation of
the trust under the Trust Agreement pursuant to the laws of the State of Utah
or the Owner Trustee's performance of its duties under the Trust Agreement
within the State of Utah.
10. Upon the filing of the financing statement on form UCC-1 in the
form attached hereto as Schedule 1 with the Utah Division of Corporation and
Commercial Code, the Agent's security interest in the Trust Estate, for the
benefit of the Lenders and the Holders, will be perfected, to the extent that
such perfection is governed by Article 9 of the Uniform Commercial Code as in
effect in the State of Utah (the "Utah UCC").
Your attention is directed to the Utah UCC, which provides, in part,
that a filed financing statement which does not state a maturity date or which
states a maturity date of more than five (5) years is effective only for a
period of five (5) years from the date of filing, unless within six (6) months
prior to the expiration of said period a continuation statement is filed in the
same office or offices in which the original statement was filed. The
continuation statement must be signed by the secured party, identify the
original statement by file number and state that the original statement is
still effective. Upon the timely filing of a continuation statement, the
effectiveness of the original financing statement is continued for five (5)
years after the last date to which the original statement was effective.
Succeeding continuation statements may be filed in the same manner to continue
the effectiveness of the original statement.
The foregoing opinions are subject to the following assumptions, exceptions and
qualifications:
A. We are attorneys admitted to practice in the State of Utah and in
rendering the foregoing opinions we have not passed upon, or purported to pass
upon, the laws of any jurisdictions other than the State of Utah and the
federal banking law governing the banking and trust powers of FSB. In addition,
without limiting the foregoing we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended, (iii) the
Federal Communications Act of 1934, as amended, or (iv) state securities or
blue sky laws. Insofar as the foregoing opinions relate to the legality,
validity, binding effect and enforceability of the documents involved in these
transactions, which by their terms are governed by the laws of a state other
than Utah, we have assumed that the laws of such state (as to which we express
no opinion), are in all material aspects identical to the laws of the State of
Utah.
G-3
<PAGE> 90
B. The opinions set forth in paragraphs 3, 4, and 5 above are subject
to the qualification that enforceability of the Trust Agreement and the other
Operative Agreements to which FSB and the Owner Trustee are parties, in
accordance with their respective terms, may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws affecting
enforcement of creditors' rights generally, and (ii) general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
C. As to the documents involved in these transactions, we have assumed
that each is a legal, valid and binding obligation of each party thereto, other
than FSB or the Owner Trustee, and is enforceable against each such party in
accordance with their respective terms.
D. We have assumed that all signatures, other than those of the Owner
Trustee or FSB, on documents and instruments involved in these transactions are
genuine, that all documents and instruments submitted to us as originals are
authentic, and that all documents and instruments submitted to us as copies
conform with the originals, which facts we have not independently verified.
E. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment or property involved in these transactions.
F. We have made no investigation of, and we express no opinion
concerning, the nature of the title to any part of the equipment or property
involved in these transactions or the priority of any mortgage or security
interest.
G. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.
H. In addition to any other limitation by operation of law upon the
scope, meaning, or purpose of this opinion, the opinions expressed herein speak
only as of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) and make no undertaking to amend or
supplement such opinions if facts come to our attention or changes in the
current law of the jurisdictions mentioned herein occur which could affect such
opinions the legal analysis, a legal conclusion or any information confirmation
herein.
G-4
<PAGE> 91
I. This opinion is for the sole benefit of the Lessee, the Guarantor,
the Owner Trustee, the Holders, the Lenders, the Agent, the Arranger and their
respective successors and assigns in matters directly related to the
Participation Agreement or the transaction contemplated thereunder and may not
be relied upon by any other person other than such parties and their respective
successors and assigns without the express written consent of the undersigned.
The opinions expressed in this letter are limited to the matter set forth in
this letter, and no other opinions should be inferred beyond the matters
expressly stated.
Very truly yours,
RAY, QUINNEY & NEBEKER
M. John Ashton
G-5
<PAGE> 92
Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
Catalina Marketing Sales Corporation, as the Lessee
Catalina Marketing Corporation, as the Guarantor
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the Dolphin Realty Trust 1999-1
G-6
<PAGE> 93
EXHIBIT H
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(bb) of the Participation Agreement)
October 21, 1999
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of Catalina Marketing
Sales Corporation
Dear Sirs:
We have acted as special counsel to Catalina Marketing Sales Corporation, a
Delaware corporation (the "Lessee") and Catalina Marketing Corporation, a
Delaware corporation (the "Guarantor") in connection with certain transactions
contemplated by the Participation Agreement dated as of October 21, 1999 (the
"Participation Agreement"), among the Lessee, the Guarantor, First Security
Bank, National Association, as the Owner Trustee (the "Owner Trustee"), the
various banks and other lending institutions which are parties thereto from
time to time, as holders (the "Holders"), the various banks and other lending
institutions which are parties thereto from time to time, as lenders (the
"Lenders") and First Union National Bank, as the agent for the Lenders and
respecting the Security Documents, as the agent for the Lenders and the
Holders, to the extent of their interests (the "Agent"). This opinion is
delivered pursuant to Section 5.3(bb) of the Participation Agreement. All
capitalized terms used herein, and not otherwise defined herein, shall have the
meanings assigned thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of the Operative Agreements, and such other
corporate, partnership or limited liability company documents and records of
the Credit Parties, certificates of public officials and representatives of the
Credit Parties as to certain factual matters, and such other instruments and
documents which we have deemed necessary or advisable to examine for the
purpose of this opinion. With respect to such examination, we have assumed (i)
the statements of fact made in all such certificates, documents and instruments
are true, accurate and complete; (ii) the due authorization, execution and
delivery of the Operative Agreements by the parties thereto other than the
Credit Parties; (iii) the genuineness of all signatures (other than the
signatures of persons signing on behalf of the Credit Parties), the
authenticity and completeness of all documents, certificates, instruments,
records and corporate records submitted to us as originals and the conformity
to the original instruments of all documents submitted to us as copies, and the
authenticity and completeness of the originals of such copies; (iv) that all
parties other than the Credit Parties have all requisite corporate power and
authority to execute, deliver and perform
H-1
<PAGE> 94
the Operative Agreements; and (v) the enforceability of the Operative
Agreements against all parties thereto other than the Credit Parties and
respecting the opinion set forth below in section (i), First Security Bank,
National Association, individually or as the Owner Trustee, as the case may be.
We have further assumed that the laws of the States of [STATE OF LAWYER'S
ADMISSION] and [GOVERNING LAW OF PARTICIPATION AGREEMENT] are substantively
identical.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) Each Credit Party is a [CORPORATION, PARTNERSHIP OR LIMITED
LIABILITY COMPANY] duly [INCORPORATED OR ORGANIZED], validly existing and in
good standing under the laws of the state of its ______ and has the power and
authority to conduct its business as presently conducted and to execute,
deliver and perform its obligations under the Operative Agreements to which it
is a party. Each Credit Party is duly qualified to do business in all
jurisdictions in which its failure to so qualify would materially impair its
ability to perform its obligations under the Operative Agreements to which it
is a party or its financial position or its business as now and now proposed to
be conducted.
(b) The execution, delivery and performance by each Credit Party of
the Operative Agreements to which it is a party have been duly authorized by
all necessary corporate action on the part of each Credit Party and the
Operative Agreements to which each Credit Party is a party have been duly
executed and delivered by each Credit Party.
(c) The Operative Agreements to which each Credit Party is a party
constitute valid and binding obligations of each Credit Party enforceable
against each Credit Party in accordance with the terms thereof, subject to
bankruptcy, insolvency, liquidation, reorganization, fraudulent conveyance, and
similar laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
(d) The execution and delivery by each Credit Party of the Operative
Agreements to which it is a party and compliance by each Credit Party with all
of the provisions thereof do not and will not (i) contravene the provisions of,
or result in any breach of or constitute any default under, or result in the
creation of any Lien (other than Permitted Liens and Lessor Liens) upon any of
its property under, its [ARTICLES OF INCORPORATION, BY-LAWS, OPERATING
AGREEMENT, PARTNERSHIP AGREEMENT OR OTHER SIMILAR DOCUMENT OF FORMATION] or any
indenture, mortgage, chattel mortgage, deed of trust, lease, conditional sales
contract, bank loan or credit agreement or other agreement or instrument to
which any Credit Party is a party or by which any Credit Party or any property
of any Credit Party may be bound or affected, or (ii) contravene any Laws or
any order of any Governmental Authority applicable to or binding on any Credit
Party.
(e) No Governmental Action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery or
performance by any Credit Party of any of the Operative Agreements to which any
Credit Party is a party or for the acquisition or ownership of the Property,
except for those which have been obtained.
H-2
<PAGE> 95
(f) Except as set forth on Schedule 1 hereto, there are no actions,
suits or proceedings pending or to our knowledge, threatened against any Credit
Party in any court or before any Governmental Authority, that concern the
Property or the interest of any Credit Party therein or that question the
validity or enforceability of any Operative Agreement to which any Credit Party
is a party or the overall transaction described in the Operative Agreements to
which any Credit Party is a party.
(g) Neither the nature of the Property, nor any relationship between
any Credit Party and any other Person, nor any circumstance in connection with
the execution, delivery and performance of the Operative Agreements to which
any Credit Party is a party is such as to require any approval of stockholders
of, or approval or consent of any trustee or holders of indebtedness of, any
Credit Party, except for such approvals and consents which have been duly
obtained and are in full force and effect.
(h) The Security Documents which have been executed and delivered as
of the date of this opinion create, for the benefit of the Agent, the security
interests in the Collateral described therein which by their terms such
Security Documents purport to create. Upon filing of the UCC-1 financing
statements (attached hereto as Schedule 2) relating to the Security Documents
in the recording offices of (A) the respective county clerk where the principal
place of business of the Lessee is located and (B) the Secretary of State where
the principal place of business of the Lessee is located, the Agent will have a
valid, perfected lien and security interest in that portion of the Collateral
which can be perfected by the filing of UCC-1 financing statements under
Article 9 of the UCC in [IDENTIFY THE STATE].
(i) The Operative Agreements to which First Security Bank, National
Association, individually or as the Owner Trustee, is a party constitute valid
and binding obligations of such party and are enforceable against First
Security Bank, National Association, individually or as the Owner Trustee, as
the case may be, in accordance with the terms thereof, subject to bankruptcy,
insolvency, liquidation, reorganization, fraudulent conveyance, and similar
laws affecting creditors, rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
(j) The offer, issuance, sale and delivery of the Notes and the offer,
issuance, sale and delivery of the Certificates under the circumstances
contemplated by the Participation Agreement do not, under existing law, require
registration of the Notes or the Certificates being issued on the date hereof
under the Securities Act of 1933, as amended, or the qualification of the Loan
Agreement under the Trust Indenture Act of 1939, as amended.
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the States of [__________], and the federal laws
of the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
H-3
<PAGE> 96
This opinion is for the sole benefit of the Lessee, the Guarantor, the Owner
Trustee, the Holders, the Lenders, the Agent, the Arranger and their respective
successors and assigns and may not be relied upon by any other person other
than such parties and their respective successors and assigns without the
express written consent of the undersigned. The opinions expressed herein are
as of the date hereof and we make no undertaking to amend or supplement such
opinions if facts come to our attention or changes in the current law of the
jurisdictions mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
H-4
<PAGE> 97
Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
Catalina Marketing Sales Corporation, as the Lessee
Catalina Marketing Corporation, as the Guarantor
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the Dolphin Realty Trust 1999-1
H-5
<PAGE> 98
Schedule 1
(Litigation)
H-6
<PAGE> 99
Schedule 2
(UCC-1 Financing Statements)
H-7
<PAGE> 100
EXHIBIT I
[INTENTIONALLY RESERVED]
I-1
<PAGE> 101
EXHIBIT J
(Pursuant to Section 6.2(d) of the Participation Agreement)
OUTSTANDING MAJOR LITIGATION AND CLAIMS
(as of 21 Oct 99)
INTER*ACT SYSTEMS, INC. VS. CATALINA MARKETING CORPORATION;
CATALINA MARKETING INTERNATIONAL, INC. VS. INTER*ACT SYSTEMS INC., et al
Civil Case No. 3:96cv274(AWT), US District Court, CT (Hartford)
Civil Case No. 3:98cv422(AWT), US District Court, CT (Hartford)
Matter: (Alleged infringement: by CMC of the Murphy Patent; and
by Inter*Act of the Off '868 Patent; and
by Inter*Act of the Lemon Patent)
INTER*ACT SYSTEMS, INC. VS. CATALINA MARKETING CORPORATION
Civil Case No. 3:98cv988(AWT), US District Court, CT (Hartford)
Matter: (Alleged infringement: by CMC of the Deaton Patents)
CATALINA MARKETING INTERNATIONAL, INC. VS. CREDIT VERIFICATION CORPORATION
Civil Action No. 98-4135-SAC,, US District Court, KS (Topeka)
Matter: (Alleged infringement: by CVC of CMC patent - Off '868
(Counterclaim by CVC to declare the Off `868 patent invalid)
COOLSAVINGS.COM, INC. VS. CATALINA MARKETING CORPORATION
Case No. 98C-6668 (Judge Grady, Magistrate Nolan), US District
Court, IL
Matter: (Alleged infringement: by CMC of "Golden Patent, '648)
SOCIETE ORANGINA FRANCE S.A. VS. CATALINA MARKETING FRANCE S.A.; COCA-COLA
BEVERAGES S.A.; SOGEC S.A.
Appellate Court of Lyon [France]
Matter: (alleged unfair competition from CMF coupon system)
INFOMIL SARL VS. CATALINA MARKETING CORP. AND CATALINA MARKETING FRANCE, S.A.
(Le Tribunal de Grande Instance de Paris [France])
Matter: (to declare CMC European patent in France INvalid)
J-1
<PAGE> 102
USPTO INTERFERENCE
Matter: (Effort to have Catalina Checkout Direct patent issue, and conflicting
Deaton patents declared invalid)
J-2
<PAGE> 103
- --------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
- --------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any document
to articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits are references to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any
document are solely for convenience of reference and shall not constitute a
part of any such document nor shall they affect the meaning, construction or
effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors, permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented, restated
and/or replaced from time to time in accordance with the applicable provisions
thereof.
(f) Except as otherwise expressly provided, references to any law
includes any amendment or modification to such law and any rules or regulations
issued thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable
document and not to any particular article, section, subsection, paragraph or
clause thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
Appendix A - 1
<PAGE> 104
(i) References herein to "attorney's fees", "legal fees", "costs of
counsel" or other such references shall be deemed to include the allocated cost
of in-house counsel.
(j) Each of the parties to the Operative Agreements and their counsel
have reviewed and revised, or requested revisions to, the Operative Agreements,
and the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction and
interpretation of the Operative Agreements and any amendments or exhibits
thereto.
(k) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
have the meaning so ascribed to such term in the applicable Operative
Agreement.
II. Definitions
"ABR" shall mean, for any day, a rate per annum equal to the greater
of (a) the Prime Lending Rate in effect on such day, and (b) one-half of one
percent (0.5%) plus the Federal Funds Effective Rate in effect on such day. For
purposes hereof: "Prime Lending Rate" shall mean the rate which the Agent
announces from time to time as its prime lending rate as in effect from time to
time. The Prime Lending Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. Any Lender
may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate. The Prime Lending Rate shall change automatically
and without notice from time to time as and when the prime lending rate of the
Agent changes. "Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds transactions with
members or the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the Agent from
three (3) Federal funds brokers of recognized standing selected by it. Any
change in the ABR due to a change in the Prime Lending Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Lending Rate or the Federal Funds
Effective Rate, respectively.
"ABR Holder Advance" shall mean a Holder Advance bearing a Holder
Yield based on the ABR.
"ABR Loans" shall mean Loans the rate of interest applicable to which
is based upon the ABR.
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
Appendix A - 2
<PAGE> 105
"Accounts" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Additional Incorporated Terms" shall have the meaning given to such
term in Section 28.1 of the Lease.
"Advance" shall mean the Loans and/or Holder Advances extended on the
Property Closing Date.
"Affiliate" shall mean, with respect to any Person, any Person or
group acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the then
maximum marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agent" shall mean First Union National Bank, as agent for the Lenders
pursuant to the Credit Agreement, or any successor agent appointed in
accordance with the terms of the Credit Agreement and respecting the Security
Documents, for the Lenders and the Holders, to the extent of their interests.
"Applicable Percentage" shall mean for Eurodollar Loans and Eurodollar
Holder Advances, the appropriate applicable percentages corresponding to the
Consolidated Leverage Ratio in effect as of the most recent Calculation Date as
shown below:
<TABLE>
<CAPTION>
Applicable Applicable
Percentage Percentage for
for Eurodollar
Pricing Consolidated Eurodollar Holder
Level Leverage Ratio Loans Advances
-----------------------------------------------------------------------
<S> <C> <C> <C>
Level I < 0.75 0.50% 1.25%
Level II > = 0.75 < 1.5 0.75% 1.50%
Level III > = 1.5 < 2.25 1.00% 1.75%
Level IV > = 2.25 < 2.75 1.25% 2.00%
Level V > = 2.75 1.625% 2.375%
</TABLE>
The Applicable Percentage for Eurodollar Loans and Eurodollar Holder
Advances shall, in each case, be determined and adjusted quarterly on the first
day of each fiscal quarter of the Guarantor (each a "Calculation Date");
provided, however, that (i) the initial Applicable Percentage, in each case,
shall be based on Pricing Level I (as shown above) and shall remain at Pricing
Level I until the occurrence of the Calculation Date relating to the second
fiscal quarter
Appendix A - 3
<PAGE> 106
of the Lessee occurring in fiscal year 1999 and, thereafter, the Pricing Level
shall be determined by the then current Consolidated Leverage Ratio, and (ii)
if the Lessee fails to provide the written notice required by Section 8.3(k) of
the Participation Agreement to the Agent on or before the most recent
Calculation Date, the Applicable Percentage, in each case, from such
Calculation Date shall be based on Pricing Level V until such time that such
written notice is provided whereupon the Pricing Level shall be determined by
the then current Consolidated Leverage Ratio as specified in such notice. Each
Applicable Percentage shall be effective from one Calculation Date until the
next Calculation Date. Any adjustment in the Applicable Percentage shall be
applicable to all existing Eurodollar Loans and Eurodollar Holder Advances as
well as any new Eurodollar Loans and Eurodollar Holder Advances made or issued.
"Appraisal" shall mean, with respect to the Property, an appraisal to
be delivered in connection with the Participation Agreement or in accordance
with the terms of the Lease, in each case prepared by a reputable appraiser
reasonably acceptable to the Agent, which in the judgment of counsel to the
Agent, complies with all of the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, the rules and
regulations adopted pursuant thereto, and all other applicable Legal
Requirements.
"Appraisal Procedure" shall have the meaning given such term in
Section 22.4 of the Lease.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying the Improvements or the Improvements,
including without limitation the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (b)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land or the Improvements.
"Assignment and Acceptance" shall mean the Assignment and Acceptance
in the form attached to the Credit Agreement as Exhibit B.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate outstanding principal amount of all Loans
made by such Lender as of such date.
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (a) the aggregate amount of the Holder Commitments over (b)
the aggregate outstanding amount of the Holder Advances made since the Closing
Date.
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Basic Documents" shall mean the following: the Participation
Agreement, the Trust Agreement, the Certificates, the Credit Agreement, the
Notes, the Lease and the Security Agreement.
Appendix A - 4
<PAGE> 107
"Basic Rent" shall mean, the sum of (a) the scheduled interest due on
the Loans on any Scheduled Interest Payment Date pursuant to the Credit
Agreement, but not including any overdue amounts under Section 2.8(b) of the
Credit Agreement or otherwise and (b) the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement but not including interest on overdue amounts under the Trust
Agreement or otherwise, each calculated as of the applicable date on which
Basic Rent is due.
"Basic Term" shall have the meaning specified in Section 2.2 of the
Lease.
"Basic Term Commencement Date" shall have the meaning specified in
Section 2.2 of the Lease.
"Basic Term Expiration Date" shall have the meaning specified in
Section 2.2 of the Lease.
"Benefited Lender" shall have the meaning specified in Section 9.10(a)
of the Credit Agreement.
"Bill of Sale" shall mean a Bill of Sale regarding Equipment in form
and substance satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Borrower" shall mean the Owner Trustee, not in its individual
capacity, but as Borrower under the Credit Agreement.
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.2(b) of the Credit Agreement as a date on which
the Lessor requests the Lenders to make Loans thereunder.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in North Carolina or any other states from which
the Agent, any Lender or any Holder funds or engages in administrative
activities with respect to the transactions under the Operative Agreements are
authorized or required by law to close; provided, however, that when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time including
Statement No. 13 of the Financial Accounting Standards Board and any successor
thereof.
"Capital Stock" shall mean any nonredeemable capital stock of any
Credit Party or any of its Subsidiaries, whether common or preferred.
Appendix A - 5
<PAGE> 108
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Casualty" shall mean any damage or destruction of all or any portion
of the Property as a result of a fire or other casualty.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended
by the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of each Holder issued
pursuant to the terms and conditions of the Trust Agreement in favor of each
Holder.
"Chattel Paper" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean October 21, 1999.
"Code" shall mean the Internal Revenue Code of 1986 together with
rules and regulations promulgated thereunder, as amended from time to time, or
any successor statute thereto.
"Collateral" shall mean all assets of the Lessor, and the Lessee, now
owned or hereafter acquired, upon which a Lien is purported to be created by
one or more of the Security Documents.
"Commitment Period" shall mean the period from and including the
Closing Date to and including the Property Closing Date.
"Company Obligations" shall mean the obligations of the Lessee, in any
and all capacities, under and with respect to the Operative Agreements and each
Property.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to the Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent
to, the Property or alter the pedestrian or vehicular traffic flow to the
Property so as to result in a change in access to such Property, or by or on
account of an eviction by paramount title or any transfer made in lieu of any
such proceeding or action.
Appendix A - 6
<PAGE> 109
"Consistent Basis" in reference to the application of GAAP means the
accounting principles observed in the period referred to are comparable in all
material respects to those applied in the preparation of the audited financial
statements of the Guarantor and its Subsidiaries referred to in Section 7.6(a)
of the Lessee Credit Agreement.
"Consolidated EBITDA" means, with respect to the Guarantor and its
Subsidiaries for any Four-Quarter Period ending on the date of computation
thereof, the sum of, without duplication, (i) Consolidated Net Income
(excluding (a) non-cash restructuring charges incurred in the fourth fiscal
quarter of 1997 in the amount of $1,430,000 in connection with discontinuance
of operations of Catalina Electronic Clearing Services Inc. and (b) non-cash
charges associated with investments in an aggregate amount net of tax benefits
not to exceed $4,000,000 during the term of the Lessee Credit Agreement), (ii)
Consolidated Interest Expense, (iii) taxes on income, (iv) amortization, and
(v) depreciation minus minority interest in losses of Subsidiaries or plus
minority interest in profits of Subsidiaries, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Funded Indebtedness" means, without duplication, all
Indebtedness for Money Borrowed and all Guaranties of the Guarantor and its
Subsidiaries, all determined on a consolidated basis.
"Consolidated Interest Expense" means, with respect to any period of
computation thereof, the gross interest expense of the Guarantor and its
Subsidiaries, including without limitation (i) the current amortized portion of
debt discounts to the extent included in gross interest expense, (ii) the
current amortized portion of all fees (including fees payable in respect of any
Swap Agreement) payable in connection with the incurrence of Indebtedness to
the extent included in gross interest expense and (iii) the portion of any
payments made in connection with Capital Leases allocable to interest expense,
all determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of computation
thereof, the ratio of (i) the sum of (without duplication) Consolidated Funded
Indebtedness (determined as at such date) to (ii) Consolidated EBITDA (for the
Four-Quarter Period ending on (or most recently ended prior to) such date).
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Guarantor and its
Subsidiaries (excluding payments received by the Lessee and its Subsidiaries of
(a) interest income, and (b) dividends and distributions made in the ordinary
course of their businesses by Persons in which investment is permitted pursuant
to the Lessee Credit Agreement and not related to an extraordinary event), less
all operating and non-operating expenses of the Guarantor and its Subsidiaries
including taxes on income, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; but excluding as income: (i) net gains
or losses on the sale, conversion or other disposition of capital assets, (ii)
net gains or losses on the acquisition, retirement, sale or other disposition
of capital stock and other securities of the Guarantor or its Subsidiaries,
(iii) net gains or losses on the collection of proceeds of life insurance
policies, (iv) any write-up of any asset, and (v) any other
Appendix A - 7
<PAGE> 110
net gain or loss or credit of an extraordinary nature as determined in
accordance with GAAP applied on a Consistent Basis.
"Contingent Obligation" of any Person means all contingent liabilities
required (or which, upon the creation or incurring thereof, would be required)
to be included in the financial statements (including footnotes) of such Person
in accordance with GAAP applied on a Consistent Basis, including Statement No.
5 of the Financial Accounting Standards Board, all Letters of Credit, Rate
Hedging Obligations and any obligation of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation or any
property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the
purchase or payment of such Indebtedness or other obligation, or (ii)
to maintain a minimum working capital, net worth or other balance
sheet condition or any income statement condition of the primary
obligor;
(3) to grant or convey any lien, security interest, pledge,
charge or other encumbrance on any property or assets of such Person
to secure payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner
or holder of such Indebtedness or obligation of the ability of the
primary obligor to make payment of such Indebtedness or other
obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect thereof.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Credit Party, are treated as a single
employer under Section 414 of the Code.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated on or about
the Closing Date, among the Lessor, the Agent and the Lenders, as specified
therein.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
Appendix A - 8
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"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Participation Agreement, the Credit
Agreement, the Notes and the Security Documents.
"Credit Parties" shall mean the Lessee and the Guarantor.
"Deed" shall mean a warranty deed regarding the Land and/or
Improvements in form and substance satisfactory to the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Holder" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Defaulting Lender" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Deficiency Balance" shall have the meaning given in Section 22.1(b)
of the Lease Agreement.
"Documents" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Dollars" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of America.
"Dolphin Realty Trust 1999-1" shall mean the grantor trust created
pursuant to the terms and conditions of the Trust Agreement.
"Early Termination Amount" shall have the meaning given to such term
in Section 5.11 of the Participation Agreement.
"Early Termination Date" shall have the meaning given to such term in
Section 5.11 of the Participation Agreement.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Eligible Assignee" shall mean (i) a Lender or a Holder, as the case
may be; (ii) an Affiliate of a Lender or a Holder, as the case may be; and
(iii) any other Person approved by the Agent and, unless an Event of Default
has occurred and is continuing at the time any assignment is effected in
accordance with the Operative Agreements, the Lessee, such approval not to be
unreasonably withheld or delayed by the Lessee and such approval to be deemed
given by the Lessee if no objection is received by the assigning Lender or
Holder and the Agent from the
Appendix A - 9
<PAGE> 112
Lessee within two Business Days after notice of such proposed assignment has
been provided by the assigning Lender or Holder to the Lessee; provided,
however, that neither the Lessee nor an Affiliate of the Lessee shall qualify
as an Eligible Assignee.
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan
(within the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue Service and the Department of Labor
in rules, regulations, releases or bulletins in effect on the Closing Date.
"Environmental Claims" shall mean any investigation, notice,
violation, demand, allegation, action, suit, injunction, judgment, order,
consent decree, penalty, fine, lien, proceeding, or claim (whether
administrative, judicial, or private in nature) arising (a) pursuant to, or in
connection with, an actual or alleged violation of, any Environmental Law, (b)
in connection with any Hazardous Substance, (c) from any abatement, removal,
remedial, corrective, or other response action in connection with a Hazardous
Substance, Environmental Law, or other order of a Tribunal or (d) from any
actual or alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"Environmental Laws" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Tribunal relating
to emissions, discharges, releases, threatened releases of any Hazardous
Substance into ambient air, surface water, ground water, publicly owned
treatment works, septic system, or land, or otherwise relating to the handling,
storage, treatment, generation, use, or disposal of Hazardous Substances,
pollution or to the protection of health or the environment, including without
limitation CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., and state statutes analogous thereto.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens (if the threat requires remediation under
any Environmental Law and is not remediated during any grace period allowed
under such Environmental Law) to violate or results in or threatens (if the
threat requires remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
"Equipment" shall mean equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired using the proceeds of the Loans or the Holder Advances by
the Lessee or the Lessor and all improvements and modifications thereto and
replacements thereof, whether or not now owned or hereafter acquired or now or
subsequently attached to, contained in or used or usable in any way in
connection with any operation of any Improvements, including but without
limiting the generality of the foregoing, all equipment described in the
Appraisal including without limitation all heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilation, air conditioning and
air-cooling apparatus, refrigerating, and incinerating equipment, escalators,
elevators, loading and unloading equipment and systems, cleaning systems
(including without limitation window cleaning apparatus), telephones,
communication systems (including without limitation satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
Appendix A - 10
<PAGE> 113
prevention and extinguishing apparatus and materials, security systems, motors,
engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and
fixtures of every kind and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached
to the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean each entity required to be aggregated
with the Lessee pursuant to the requirements of Section 414(b) or (c) of the
Code.
"Eurocurrency Reserve Requirements" shall mean for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed on eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank of the Federal
Reserve System.
"Eurodollar Holder Advance" shall mean a Holder Advance bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan or Eurodollar Holder
Advance comprising part of the same borrowing or advance (including without
limitation conversions, extensions and renewals), for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any
Eurodollar Loan or Eurodollar Holder Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). As
used herein, "Reuters Screen LIBO Page" means the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks) ("RMMRS"). In the event the RMMRS is
not then quoting such offered rates, "Eurodollar Rate" shall mean for the
Interest Period for each Eurodollar Loan or
Appendix A - 11
<PAGE> 114
Eurodollar Holder Advance comprising part of the same borrowing or advance
(including without limitation conversions, extensions and renewals), the
average (rounded upward to the nearest one sixteenth (1/16) of one percent
(1%)) per annum rate of interest determined by the office of the Agent (each
such determination to be conclusive and binding) as of two (2) Business Days
prior to the first day of such Interest Period, as the effective rate at which
deposits in immediately available funds in U.S. dollars are being, have been,
or would be offered or quoted by the Agent to major banks in the applicable
interbank market for Eurodollar deposits at any time during the Business Day
which is the second Business Day immediately preceding the first day of such
Interest Period, for a term comparable to such Interest Period and in the
amount of the requested Eurodollar Loan and/or Eurodollar Holder Advance. If no
such offers or quotes are generally available for such amount, then the Agent
shall be entitled to determine the Eurodollar Rate by estimating in its
reasonable judgment the per annum rate (as described above) that would be
applicable if such quote or offers were generally available.
"Event of Default" shall mean a Lease Event of Default or a Credit
Agreement Event of Default.
"Excepted Payments" shall mean: (a) all indemnity payments (including
without limitation indemnity payments made pursuant to Section 11 of the
Participation Agreement), whether made by adjustment to Basic Rent or
otherwise, to which the Owner Trustee, any Holder or any of their respective
Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value)
payable under any Operative Agreement to reimburse the Owner Trustee,
any Holder or any of their respective Affiliates (including without
limitation the reasonable expenses of the Owner Trustee, the Trust
Company and the Holders incurred in connection with any such payment)
for performing or complying with any of the obligations of any Credit
Party under and as permitted by any Operative Agreement;
(c) any amount payable to a Holder by any transferee of such
interest of a Holder as the purchase price of such Holder's interest
in the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other
than such proceeds or payments payable to the Agent or any Lender;
(e) any insurance proceeds under policies maintained by the
Owner Trustee or any Holder;
(f) Transaction Expenses or other amounts, fees,
disbursements or expenses paid or payable to or for the benefit of the
Owner Trustee or any Holder;
(g) all right, title and interest of any Holder or the Owner
Trustee to the Property or any portion thereof or any other property
to the extent any of the foregoing
Appendix A - 12
<PAGE> 115
has been released from the Liens of the Security Documents and the
Lease pursuant to the terms thereof;
(h) upon termination of the Credit Agreement pursuant to the
terms thereof, all remaining property covered by the Lease or Security
Documents;
(i) all payments in respect of the Holder Yield;
(j) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (i) above;
and
(k) any rights of either the Owner Trustee or the Trust
Company to demand, collect, sue for or otherwise receive and enforce
payment of any of the foregoing amounts, provided that such rights
shall not include the right to terminate the Lease.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Excluded Taxes" shall have the meaning given to such term in Section
11.2(b) of the Participation Agreement.
"Exculpated Persons" shall mean the Trust Company (except with respect
to the representations and warranties and the other obligations of the Trust
Company pursuant to the Operative Agreements expressly undertaken in its
individual capacity, including without limitation the representations and
warranties of the Trust Company pursuant to Section 6.1 of the Participation
Agreement, the obligations of the Trust Company pursuant to Section 8.2 of the
Participation Agreement and the obligations of the Trust Company pursuant to
the Trust Agreement), the Holders (except with respect to the obligations of
the Holders pursuant to the Participation Agreement and the Trust Agreement
expressly undertaken in their respective individual capacities) and the Owner
Trustee, their officers, directors, shareholders, partners and members.
"Exempt Payments" shall have the meaning specified in Section 11.2(e)
of the Participation Agreement.
"Expiration Date" shall mean either (a) the Basic Term Expiration Date
or (b) the last day of the applicable Renewal Term; provided, in no event shall
the Expiration Date be later than the annual anniversary of the Closing Date
occurring in the year 2020, unless such later date has been expressly agreed to
in writing by each of the Lessor, the Lessee, the Agent, the Lenders and the
Holders.
"Fair Market Sales Value" shall mean, with respect to the Property,
the amount, which in any event, shall not be less than zero (0), that would be
paid in cash in an arms-length transaction between an informed and willing
purchaser and an informed and willing seller, neither of whom
Appendix A - 13
<PAGE> 116
is under any compulsion to purchase or sell, respectively, such Property. Fair
Market Sales Value of the Property shall be determined based on the assumption
that, except for purposes of Section 17 of the Lease, such Property is in the
condition and state of repair required under Section 10.1 of the Lease and each
Credit Party is in compliance with the other requirements of the Operative
Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such
term in the definition of ABR.
"Financing Parties" shall mean the Lessor, the Owner Trustee, in its
trust capacity, the Agent, the Holders and the Lenders.
"Fixtures" shall mean all fixtures relating to the Improvements,
including without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Lessee, other than a Casualty or Condemnation, including without limitation
strikes or lockouts (but only when the Lessee is legally prevented from
securing replacement labor or materials as a result thereof), adverse soil
conditions, acts of God, adverse weather conditions, inability to obtain labor
or materials after all possible efforts have been expended by the Lessee,
governmental activities, civil commotion and enemy action; but excluding any
event, cause or condition that results from the Lessee's financial condition.
"Form 1001" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Form 4224" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Four-Quarter Period" means a period of four full consecutive fiscal
quarters of the Lessee and its Subsidiaries, taken together as one accounting
period.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set forth
in pronouncements of the Financial Accounting Standards Board, the American
Institute of Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of the date of
a report.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions,
publications, filings, notices to and declarations of or with, or required by,
any Governmental Authority, or required by any Legal Requirement, and shall
include, without limitation, all environmental and operating permits and
licenses that are required for the full use, occupancy, zoning and operating of
the Property.
Appendix A - 14
<PAGE> 117
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" means all obligations of the Guarantor or any of its
Subsidiaries directly or indirectly, or in effect, guaranteeing, any
Indebtedness or other obligation to pay money of any other Person.
"Guarantor" shall mean Catalina Marketing Corporation, a Delaware
corporation.
"Hazardous Substance" shall mean any of the following: (a) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (b) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety as determined in accordance with
any Environmental Law; or (c) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
"Holder Advance" shall mean any advance made by any Holder to the
Owner Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Advances made by each Holder to the Trust Estate pursuant to Section 2
of the Participation Agreement and Section 3.1 of the Trust Agreement less any
payments of any Holder Advances received by the Holders pursuant to Section 3.4
of the Trust Agreement.
"Holder Commitments" shall mean $780,000, as such amount may be
increased or reduced from time to time in accordance with the provisions of the
Operative Agreements; provided, if there shall be more than one (1) Holder, the
Holder Commitment of each Holder shall be as set forth in Schedule I to the
Trust Agreement as such Schedule I may be amended and replaced from time to
time.
"Holder Overdue Rate" shall mean the lesser of (a) the then current
rate of Holder Yield respecting the particular amount in question plus two
percent (2%) and (b) the highest rate permitted by applicable law.
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Advances with respect thereto.
"Holder Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
Appendix A - 15
<PAGE> 118
"Holder Yield" shall mean with respect to Holder Advances from time to
time either the Eurodollar Rate plus the Applicable Percentage or the ABR as
elected by the Owner Trustee from time to time with respect to such Holder
Advances in accordance with the terms of the Trust Agreement; provided,
however, (a) upon delivery of the notice described in Section 3.7(c) of the
Trust Agreement, the outstanding Holder Advances of each Holder shall bear a
yield at the ABR applicable from time to time from and after the dates and
during the periods specified in Section 3.7(c) of the Trust Agreement, and (b)
upon the delivery by a Holder of the notice described in Section 11.3(f) of the
Participation Agreement, the Holder Advances of such Holder shall bear a yield
at the ABR plus the Applicable Percentage applicable from time to time after
the dates and during the periods specified in Section 11.3(f) of the
Participation Agreement.
"Holders" shall mean First Union National Bank and shall include the
other banks and financial institutions which may be from time to time holders
of Certificates in connection with the Dolphin Realty Trust 1999-1.
"Impositions" shall mean any and all liabilities, losses, expenses,
costs, charges and Liens of any kind whatsoever for fees, taxes, levies,
imposts, duties, charges, assessments or withholdings ("Taxes") including but
not limited to (i) real and personal property taxes, including without
limitation personal property taxes on the Property covered by the Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes
and other similar taxes (including rent taxes and intangibles taxes); (iii)
excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes
and documentary recording taxes and fees; (v) taxes that are or are in the
nature of franchise, income, value added, privilege and doing business taxes,
license and registration fees; (vi) assessments on the Property, including
without limitation all assessments for public Improvements or benefits, whether
or not such improvements are commenced or completed within the Term; and (vii)
taxes, Liens, assessments or charges asserted, imposed or assessed by the PBGC
or any governmental authority succeeding to or performing functions similar to,
the PBGC; and in each case all interest, additions to tax and penalties
thereon, which at any time prior to, during or with respect to the Term or in
respect of any period for which the Lessee shall be obligated to pay
Supplemental Rent, may be levied, assessed or imposed by any Governmental
Authority upon or with respect to (a) the Property or any part thereof or
interest therein; (b) the leasing, financing, refinancing, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, sale, transfer of title, return or other disposition of
such Property or any part thereof or interest therein; (c) the Notes, other
indebtedness with respect to the Property, or the Certificates, or any part
thereof or interest therein; (d) the rentals, receipts or earnings arising from
the Property or any part thereof or interest therein; (e) the Operative
Agreements, the performance thereof, or any payment made or accrued pursuant
thereto; (f) the income or other proceeds received with respect to the Property
or any part thereof or interest therein upon the sale or disposition thereof;
(g) any contract relating to the acquisition or delivery of the Improvements or
any part thereof or interest therein; (h) the issuance of the Notes or the
Certificates; (i) the Owner Trustee, the Trust or the Trust Estate; or (j)
otherwise in connection with the transactions contemplated by the Operative
Agreements.
Appendix A - 16
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"Improvements" shall mean, with respect to the construction,
renovations and/or Modifications on any Land, all buildings, structures,
Fixtures, and other improvements of every kind existing at any time and from
time to time on or under the Land purchased or otherwise acquired using the
proceeds of the Loans or the Holder Advances, together with any and all
appurtenances to such buildings, structures or improvements, including without
limitation sidewalks, utility pipes, conduits and lines, parking areas and
roadways, and including without limitation all Modifications and other
additions to or changes in the Improvements at any time, including without
limitation any Improvements existing as of the Property Closing Date as such
Improvements may be referenced on the applicable Requisition.
"Incorporated Covenants" shall have the meaning given to such term in
Section 28.1 of the Lease.
"Incorporated Representations and Warranties" shall have the meaning
given to such term in Section 28.1 of the Lease.
"Indebtedness" means with respect to any Person, without duplication,
all Indebtedness for Money Borrowed, all indebtedness of such Person for the
acquisition of property or arising under Rate Hedging Obligations, all
indebtedness secured by any Lien on the property of such Person whether or not
such indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary course of
business), all Contingent Obligations, all Guaranties, that portion of
obligations with respect to Capital Leases and other items which in accordance
with GAAP is required to be classified as a liability on a balance sheet; but
excluding all accounts payable in the ordinary course of business so long as
payment therefor is due within one year; provided that in no event shall the
term Indebtedness include surplus and retained earnings, lease obligations
(other than pursuant to Capital Leases), reserves for deferred income taxes and
investment credits, other deferred credits or reserves.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed, including
without limitation all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or similar
written obligation for the payment of money (including conditional sales or
similar title retention agreements), other than trade payables incurred in the
ordinary course of business.
"Indemnified Person" shall mean the Lessor, the Owner Trustee, in its
individual and its trust capacity, the Trust, the Trust Company, the Agent, the
Holders, the Lenders and their respective successors, assigns, directors,
shareholders, partners, officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean, respecting the Property, the Lessee.
"Instruments" shall have the meaning given to such term in Section 1
of the Security Agreement.
Appendix A - 17
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"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee,
and all requirements of the issuer of any such policy and, regarding self
insurance, any other requirements of the Lessee.
"Interest Period" shall mean as to any Eurodollar Loan or Eurodollar
Holder Advance (i) with respect to the initial Interest Period, the period
beginning on the date of the first Eurodollar Loan and Eurodollar Holder
Advance and ending one (1) month, two (2) months, three (3) months or (to the
extent available to all Lenders and all Holders) six (6) months thereafter, as
selected by the Lessor (in the case of a Eurodollar Loan) or the Owner Trustee
(in the case of a Eurodollar Holder Advance) in its applicable notice given
with respect thereto and (ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar Loan or
Eurodollar Holder Advance and ending one (1) month, two (2) months, three (3)
months or (to the extent available to all Lenders and all Holders) six (6)
months thereafter, as selected by the Lessor by irrevocable notice to the Agent
(in the case of a Eurodollar Loan) or by the Owner Trustee (in the case of a
Eurodollar Holder Advance) in each case not less than three (3) Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided, however, that all of the foregoing provisions relating to Interest
Periods are subject to the following: (A) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business
Day falls in the next succeeding calendar month, then on the next preceding
Business Day), (B) no Interest Period shall extend beyond the Maturity Date or
the Expiration Date, as the case may be, (C) where an Interest Period begins on
a day for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall end on the
last Business Day of such calendar month, (D) there shall not be more than four
(4) Interest Periods outstanding at any one (1) time.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, together with the rules and regulations promulgated
thereunder.
"Issuing Bank" means initially NationsBank and thereafter any lender
which is successor to NationsBank as issuer of Letters of Credit under Article
III of the Lessee Credit Agreement.
"Land" shall mean a parcel of real property described on (a) the
Requisition issued by the Lessee in connection with the Property Closing Date
relating to such parcel and (b) the schedules to each applicable Lease
Supplement executed and delivered in accordance with the requirements of
Section 2.4 of the Lease.
"Law" shall mean any statute, law, ordinance, regulation, rule,
directive, order, writ, injunction or decree of any Tribunal.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated on
or about the Closing Date, between the Lessor and the Lessee, together with any
Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the
lapse of time or the giving of notice, or both, would constitute a Lease Event
of Default.
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"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all foreign, federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, any
Holder, the Lessor, any Credit Party, the Agent, any Lender or the Property,
Land, Improvement, Equipment or the taxation or use of such Improvements,
whether now or hereafter enacted and in force, including without limitation any
that require repairs, modifications or alterations in or to the Property or in
any way limit the use and enjoyment thereof (including without limitation all
building, zoning and fire codes and the Americans with Disabilities Act of
1990, 42 U.S.C. ss. 12101 et. seq., and any other similar federal, state or
local laws or ordinances and the regulations promulgated thereunder) and any
that may relate to environmental requirements (including without limitation all
Environmental Laws), and all permits, certificates of occupancy, licenses,
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments which are either of
record or known to any Credit Party affecting the Property or the Appurtenant
Rights.
"Lender Commitments" shall mean $25,220,000, as such amount may be
increased or reduced from time to time in accordance with the provisions of the
Operative Agreements; provided, if there shall be more than one (1) Lender, the
Lender Commitment of each Lender shall be as set forth in Schedule 2.1 to the
Credit Agreement as such Schedule 2.1 may be amended and replaced from time to
time.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to procure a security interest in favor of the
Agent in the Collateral subject to the Security Documents.
"Lender Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Lenders" shall mean First Union National Bank and shall include the
other banks and financial institutions which may be from time to time party to
the Participation Agreement and the Credit Agreement.
"Lessee" shall have the meaning set forth in the Lease.
"Lessee Credit Agreement" shall mean that certain Credit Agreement
dated as of September 30, 1997 among the Guarantor and NationsBank, as agent
and as a lender, and the lenders parties thereto from time to time, as such may
hereafter be amended, modified, supplemented, restated and/or replaced from
time to time.
"Lessee Credit Agreement Event of Default" shall mean an Event of
Default as defined in Section 10.1 of the Lessee Credit Agreement.
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"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as the Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (a) any such scheduled Holder Yield
due on the Holder Advances prior to the Rent Commencement Date with respect to
the Property to which such Holder Advances relate or (b) overdue amounts under
the Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor,
the Owner Trustee or the Trust Company, in its individual capacity, not
resulting from the transactions contemplated by the Operative Agreements, (b)
any act or omission of the Lessor, the Owner Trustee or the Trust Company, in
its individual capacity, which is not required by the Operative Agreements or
is in violation of any of the terms of the Operative Agreements, (c) any claim
against the Lessor, the Owner Trustee or the Trust Company, in its individual
capacity, with respect to Taxes or Transaction Expenses against which the
Lessee is not required to indemnify the Lessor or the Trust Company, in its
individual capacity, pursuant to Section 11 of the Participation Agreement or
(d) any claim against the Lessor arising out of any transfer by the Lessor of
all or any portion of the interest of the Lessor in the Property, the Trust
Estate or the Operative Agreements other than the transfer of title to or
possession of the Property by the Lessor pursuant to and in accordance with the
Lease, the Credit Agreement, the Security Agreement or the Participation
Agreement or pursuant to the exercise of the remedies set forth in Article XVII
of the Lease.
"Letter of Credit" means a standby or commercial letter of credit
issued by the Issuing Bank for the account of the Guarantor in favor of a
Person advancing credit or securing an obligation on behalf of the Guarantor.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, option or charge of any kind.
"Limited Recourse Amount" shall mean with respect to all the Property
on an aggregate basis, an amount equal to the sum of the Termination Values
with respect to all the Property on an aggregate basis on each Payment Date,
less the Maximum Residual Guarantee Amount as of such date with respect to all
the Property on an aggregate basis.
"Line of Credit Facility" means the facility described in Section
2.1(b) of the Lessee Credit Agreement providing for Line of Credit Loans to the
Guarantor by the lenders in the original principal amount of the Total Line of
Credit Commitment.
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"Line of Credit Loan" means a loan made pursuant to the Line of Credit
Facility in accordance with Section 2.1(b) of the Lessee Credit Agreement.
"Line of Credit Notes" means, collectively, the promissory notes of
the Guarantor evidencing Line of Credit Loans executed and delivered to the
lenders as provided in Section 2.5(b) of the Lessee Credit Agreement.
"Loan Basic Rent" shall mean the scheduled interest due on the Loans
on any Scheduled Interest Payment Date pursuant to the Credit Agreement but not
including any overdue amounts under Section 2.8(b) of the Credit Agreement or
otherwise).
"Loan Property Cost" shall mean, with respect to the Property at any
date of determination, an amount equal to the aggregate principal amount all
Loans outstanding with respect to the Property.
"Loans" shall mean the loans extended pursuant to the Credit Agreement
and shall include both the Tranche A Loans and the Tranche B Loans.
"Majority Holders" shall mean at any time, Holders whose Holder
Advances outstanding represent at least fifty-one percent (51%) of (a) the
aggregate Holder Advances outstanding or (b) to the extent there are no Holder
Advances outstanding, the aggregate Holder Commitments.
"Majority Lenders" shall mean at any time, Lenders whose Loans
outstanding represent at least fifty-one percent (51%)of (a) the aggregate
Loans outstanding or (b) to the extent there are no Loans outstanding, the
aggregate of the Lender Commitments.
"Majority Secured Parties" shall mean at any time, Lenders and Holders
whose Loans and Holder Advances outstanding represent at least fifty-one
percent (51%) of (a) the aggregate Advances outstanding or (b) to the extent
there are no Advances outstanding, the sum of the aggregate Holder Commitments
plus the aggregate Lender Commitments.
"Marketing Period" shall mean, if the Lessee has given a Sale Notice
in accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the Expiration Date.
"Master Indenture Default" shall have the meaning set forth therefor
in Section 17.1(e) of the Lease.
"Material Adverse Effect" shall, mean a material adverse effect on (a)
the business, condition (financial or otherwise), assets, liabilities or
operations of the Credit Parties (on a consolidated basis), which has caused or
could reasonably be expected to cause the consolidated net worth of the
Guarantor to fall by ten percent (10%) or more from the then-current book net
worth, in each case determined in accordance with GAAP, (b) the ability of any
Credit Party to perform its respective obligations under any Operative
Agreement to which it is a party, (c) the validity or enforceability of any
Operative Agreement or the rights and remedies of the Agent, the Lenders, the
Holders, or the Lessor thereunder, (d) the validity, priority or enforceability
of
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any Lien on the Property created by any of the Operative Agreements, or (e) the
value, utility or useful life of the Property, which has caused or could
reasonably be expected to cause a diminution of the fair market value of any
such Property of ten percent (10%) or more from the then-current fair market
value of such Property, or the use, or ability of the Lessee to use, the
Property for the purpose for which it was intended.
"Maturity Date" shall mean the Expiration Date.
"Maximum Residual Guarantee Amount" shall mean an amount equal to the
product of the aggregate Property Cost for all of Property times eighty-four
percent (84%).
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee and the Lessee in favor of the
Agent (for the benefit of the Lenders and the Holders) and evidencing a Lien on
the Property, in form and substance reasonably acceptable to the Agent.
"Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or required by
any Credit Party or any of its Subsidiaries or ERISA Affiliates.
"Multiple Employer Plan" shall mean a plan to which any Credit Party
or any ERISA Affiliate and at least one (1) other employer other than an ERISA
Affiliate is making or accruing an obligation to make, or has made or accrued
an obligation to make, contributions.
"NationsBank" means NationsBank, National Association.
"New Facility" shall have the meaning given to such term in Section
28.1 of the Lease.
"Notes" shall mean those notes issued to the Lenders pursuant to the
Credit Agreement and shall include both the Tranche A Notes and the Tranche B
Notes.
"Obligations" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Officer's Certificate" with respect to any person shall mean a
certificate executed on behalf of such person by a Responsible Officer who has
made or caused to be made such examination or investigation as is necessary to
enable such Responsible Officer to express an informed opinion with respect to
the subject matter of such Officer's Certificate.
"Operative Agreements" shall mean the following: the Participation
Agreement, the Trust Agreement, the Certificates, the Credit Agreement, the
Notes, the Lease, the Lease Supplements (and memoranda of the Lease and each
Lease Supplement in a form reasonably acceptable to the Agent), the Security
Agreement, the Mortgage Instruments, the other Security Documents, the
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Purchase Agreement, the Deeds and the Bills of Sale and any and all other
agreements, documents and instruments executed in connection with any of the
foregoing.
"Original Executed Counterpart" shall have the meaning given to such
term in Section 5 of Exhibit A to the Lease.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Credit Agreement.
"Overdue Rate" shall mean (a) with respect to the Loan , and any other
amount owed under or with respect to the Credit Agreement or the Security
Documents, the rate specified in Section 2.5(b) of the Credit Agreement, (b)
with respect to the Holder Advances, the Holder Yield and any other amount owed
under or with respect to the Trust Agreement, the Holder Overdue Rate, and (c)
with respect to any other amount, the amount referred to in clause (y) of
Section 2.5(b) of the Credit Agreement.
"Owner Trustee," "Borrower" or "Lessor" shall mean First Security
Bank, National Association, not individually, except as expressly stated in the
various Operative Agreements, but solely as the Owner Trustee under the Dolphin
Realty Trust 1999-1, and any successor, replacement and/or additional Owner
Trustee expressly permitted under the Operative Agreements.
"Participant" shall have the meaning given to such term in Section 9.7
of the Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated
on or about the Closing Date, among the Lessee, the Guarantor, the Owner
Trustee, not in its individual capacity except as expressly stated therein, the
Holders, the Lenders and the Agent.
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Advances is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Pension Plan" shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
Multiemployer Plan), and to which any Credit Party or any ERISA Affiliate may
have any liability, including without limitation any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five (5) years, or by reason of being deemed
to be a contributing sponsor under section 4069 of ERISA.
"Permitted Facility" shall mean a headquarters building to be
selected, used and operated by the Lessee in its ordinary course of business as
of the Closing Date.
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"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
(b) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease for no
longer than the duration of the Lease;
(c) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 13.1 of the
Lease;
(d) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of
the Improvements or in connection with any Modifications or arising in
the ordinary course of business for amounts that either are not more
than thirty (30) days past due or are being diligently contested in
good faith by appropriate proceedings, so long as such proceedings
satisfy the conditions for the continuation of proceedings to contest
Taxes set forth in Section 13.1 of the Lease;
(e) Liens of any of the types referred to in clause (d) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor and
the Agent have been made), which bonding (or arrangements) shall
comply with applicable Legal Requirements, and shall have effectively
stayed any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
13.1 of the Lease; and
(g) Liens in favor of municipalities to the extent agreed to
by the Lessor.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements already existing, as such
Plans and Specifications may be amended, modified or supplemented from time to
time in accordance with the terms of the Operative Agreements.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
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"Property" shall mean the Permitted Facility described on the
schedules to the Lease Supplement and in the attachments to the Mortgage
Instrument (including, without limitation, all Improvements and Equipment
related thereto).
"Property Closing Date" shall mean the date on which the Lessor
purchases the Property.
"Property Cost" shall mean with respect to the Property the aggregate
amount of the Loan Property Cost plus the Holder Property Cost for the
Property.
"Purchase Agreement" shall mean that certain Purchase and Sales
Agreement dated on or about October 21, 1999 between Echelon International
Corporation and the Guarantor.
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"Rate Hedging Obligations" means any and all obligations of the
Guarantor or any Subsidiary, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all agreements, devices or arrangements designed to protect at least one of
the parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts, warrants and those commonly known as
interest rate "swap" agreements; and (ii) any and all cancellations, buybacks,
reversals, terminations or assignments of any of the foregoing.
"Register" shall have the meaning given to such term in Section 9.9(a)
of the Credit Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Renewal Term" shall have the meaning specified in Section 2.2 of the
Lease.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
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"Reportable Event" shall have the meaning specified in ERISA.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chairman or Vice Chairman of the Executive Committee of
the Board of Directors, the President, any Senior Vice President or Executive
Vice President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer, except that when used with respect to
the Trust Company or the Owner Trustee, "Responsible Officer" shall also
include the Cashier, any Assistant Cashier, any Trust Officer or Assistant
Trust Officer, the Controller and any Assistant Controller or any other officer
of the Trust Company or the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.
"Revolver Notes" means, collectively, the Line of Credit Notes, the
Revolving Notes, and the Swing Line Note.
"Revolving Credit Facility" means the facility described in Section
2.1(a) of the Lessee Credit Agreement providing for loans to the Guarantor by
the lenders in the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Loan" means any borrowing pursuant to an advance under the
Revolving Credit Facility in accordance with Section 2.1(a) of the Lessee
Credit Agreement.
"Revolving Notes" means, collectively, the promissory notes of the
Guarantor evidencing Revolving Loans executed and delivered to the lenders as
provided in Section 2.5(a) of the Lessee Credit Agreement.
"Sale Date" shall have the meaning given to such term in Section
20.3(a) of the Lease.
"Sale Notice" shall mean a notice given to the Lessor in connection
with the election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Sale Proceeds Shortfall" shall mean the amount by which the proceeds
of a sale described in Section 22.1 of the Lease are less than the Limited
Recourse Amount with respect to the Property if it has been determined that the
Fair Market Sales Value of the Property at the expiration of the term of the
Lease has been impaired by greater than ordinary wear and tear during the Term
of the Lease.
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"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan or Eurodollar Holder Advance, the last day of the Interest Period
applicable to such Eurodollar Loan or Eurodollar Holder Advance (or respecting
any Eurodollar Loan or Eurodollar Holder Advance having an Interest Period of
six (6) months, the three (3) month anniversary of such Interest Period), (b)
as to any ABR Loan or any ABR Holder Advance, the fifteenth day of each month,
unless such day is not a Business Day and in such case on the next occurring
Business Day and (c) as to all Loans and Holder Advances, the date of any
voluntary or involuntary payment, prepayment, return or redemption, and the
Maturity Date or the Expiration Date, as the case may be.
"Secured Parties" shall have the meaning given to such term in the
Security Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement dated on or
about the Closing Date between the Lessor and the Agent, for the benefit of the
Secured Parties, and accepted and agreed to by the Lessee.
"Security Documents" shall mean the collective reference to the
Security Agreement, the Mortgage Instruments, (to the extent the Lease is
construed as a security instrument) the Lease, the UCC Financing Statements and
all other security documents hereafter delivered to the Agent granting a lien
on any asset or assets of any Person to secure the obligations and liabilities
of the Lessor under the Credit Agreement and/or under any of the other Credit
Documents or to secure any guarantee of any such obligations and liabilities.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition of the Property other than hard costs,
including without limitation structuring fees, administrative fees, legal fees,
upfront fees, fees and expenses related to appraisals, title examinations,
title insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, fees and expenses of the
Owner Trustee payable or reimbursable under the Operative Agreements and costs
and expenses incurred pursuant to Sections 7.3(a) and 7.3(b) of the
Participation Agreement.
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding voting stock or more than 50% of all equity interests is
owned directly or indirectly by a Person and/or by one or more of such Person's
Subsidiaries.
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Credit Agreement.
"Supplemental Rent" shall mean all amounts, liabilities and
obligations (other than Basic Rent) which the Lessee assumes or agrees to pay
to the Lessor, the Trust Company, the Holders, the Agent, the Lenders or any
other Person under the Lease or under any of the other Operative Agreements
including without limitation payments of the Termination Value and the Maximum
Residual Guarantee Amount and all indemnification amounts, liabilities and
obligations.
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"Swap Agreement" means one or more agreements between the Guarantor
and any lender with respect to Indebtedness evidenced by any or all of the
Revolver Notes, on terms mutually acceptable to the Guarantor and such lender,
which agreements create Rate Hedging Obligations.
"Swing Line Loans" means loans made by NationsBank to the Guarantor
pursuant to Section 2.14 of the Lessee Credit Agreement.
"Swing Line Note" means the promissory note of the Guarantor
evidencing Swing Line Loans executed and delivered to NationsBank as provided
in Section 2.5(c) of the Lessee Credit Agreement.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Term" shall mean the Basic Term and each Renewal Term, if any.
"Termination Date" shall have the meaning specified in Section 16.2(a)
of the Lease.
"Termination Event" shall mean (a) with respect to any Pension Plan,
the occurrence of a Reportable Event or an event described in Section 4062(e)
of ERISA, (b) the withdrawal of any Credit Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan, (c) the distribution of a notice of
intent to terminate a Plan or Multiemployer Plan pursuant to Section 4041(a)(2)
or 4041A of ERISA, (d) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC under Section 4042 of ERISA, (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (f) the complete or partial withdrawal of any Credit
Party or any ERISA Affiliate from a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
"Termination Value" shall mean the sum of (a) the aggregate
outstanding Property Cost for the Property plus (b) any and all accrued but
unpaid interest on the Loans and any and all Holder Yield on the Holder
Advances plus (c) to the extent the same is not duplicative of the amounts
payable under clause (b) above, all other Rent and other amounts then due and
payable or accrued under Lease and/or under any other Operative Agreement
(including without limitation amounts under Sections 11.1 and 11.2 of the
Participation Agreement and all costs and expenses referred to in clause FIRST
of Section 22.2 of the Lease).
"Total Line of Credit Commitment" means a principal amount equal to
$50,000,000, as reduced from time to time in accordance with Section 2.7 of the
Lessee Credit Agreement.
"Total Revolving Credit Commitment" means a principal amount equal to
$100,000,000, as reduced from time to time in accordance with Section 2.7 of
the Lessee Credit Agreement.
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"Tranche A Commitments" shall mean the obligation of the Tranche A
Lenders to make the Tranche A Loans to the Borrower in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche A Lender's name on Schedule 2.1 to the
Credit Agreement, provided, no Tranche A Lender shall be obligated to make
Tranche A Loans in excess of such Tranche A Lender's share of the Tranche A
Commitments as set forth adjacent to such Tranche A Lender's name on Schedule
2.1 to Credit Agreement.
"Tranche A Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Credit Agreement that commit to make the Tranche A Loans.
"Tranche A Loans" shall mean the Loans made pursuant to the Tranche A
Commitment.
"Tranche A Note" shall have the meaning given to it in Section 2.2 of
the Credit Agreement.
"Tranche B Commitments" shall mean the obligation of the Tranche B
Lenders to make the Tranche B Loans to the Borrower in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche B Lender's name on Schedule 2.1 to the
Credit Agreement, provided, no Tranche B Lender shall be obligated to make
Tranche B Loans in excess of such Tranche B Lender's share of the Tranche B
Commitments as set forth adjacent to such Tranche B Lender's name on Schedule
2.1 to Credit Agreement.
"Tranche B Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Credit Agreement that commit to make the Tranche B Loans.
"Tranche B Loan" shall mean the Loans made pursuant to the Tranche B
Commitment.
"Tranche B Note" shall have the meaning given to it in Section 2.2 of
the Credit Agreement.
"Transaction Expenses" shall mean all Soft Costs and all other costs
and expenses incurred in connection with the preparation, execution and
delivery of the Operative Agreements and the transactions contemplated by the
Operative Agreements including without limitation all costs and expenses
described in Section 7.1 of the Participation Agreement and the following:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
Appendix A - 29
<PAGE> 132
(b) the reasonable fees, out-of-pocket expenses and
disbursements of accountants for any Credit Party in connection with
the transaction contemplated by the Operative Agreements;
(c) any and all other reasonable fees, charges or other
amounts payable to the Lenders, the Agent, the Holders, the Owner
Trustee or any broker which arises under any of the Operative
Agreements;
(d) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any
of the other transaction documents; and
(e) any and all Taxes and fees incurred in recording or
filing any Operative Agreement or any other transaction document, any
deed, declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreement.
"Tribunal" shall mean any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision agency, department,
commission, board, bureau or instrumentality of a governmental body.
"Trust" shall mean the Dolphin Realty Trust 1999-1.
"Trust Agreement" shall mean the Trust Agreement dated on or about the
Closing Date between the Holders and the Owner Trustee.
"Trust Company" shall mean First Security Bank, National Association,
in its individual capacity, and any successor owner trustee under the Trust
Agreement in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the
Trust Agreement.
"Type" shall mean, as to any Loan, whether it is an ABR Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender
Financing Statements and the Lessor Financing Statements.
"Unanimous Vote Matters" shall have the meaning given it in Section
12.4 of the Participation Agreement.
"Unfunded Liability" shall mean, with respect to any Plan, at any
time, the amount (if any) by which (a) the present value of all benefits under
such Plan exceeds (b) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of the Company or any member of the Controlled Group to the PBGC or
such Plan under Title IV of ERISA.
Appendix A - 30
<PAGE> 133
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, collectively, the Holder Unused Fee and the
Lender Unused Fee.
"Unused Fee Payment Date" shall mean the last Business Day of each
March, April, September and December and the last Business Day of the
Commitment Period.
"U.S. Person" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Wholly-Owned Entity" shall mean a Person, all of the shares of
Capital Stock or other ownership interest of which are owned by the Guarantor
and/or one of its wholly-owned Subsidiaries or other wholly-owned entities.
"Withholdings" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Year 2000" shall mean the calendar year beginning January 1, 2000 and
ending December 31, 2000.
Appendix A - 31
<PAGE> 1
EXHIBIT 10.29
PURCHASE AND SALE AGREEMENT
by and among
200 CARILLON, L.L.C.,
as Seller,
ECHELON INTERNATIONAL CORPORATION,
as a Developer,
and
CATALINA MARKETING SALES CORPORATION,
as Buyer
October 21, 1999
Property: Pinellas County, Florida
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. DEFINITIONS................................................................2
1.1 DEAL TERMS AND DEADLINES..............................................2
1.2 STANDARD DEFINED TERMS; DEVELOPMENT AGREEMENT TERMS...................3
2. DEVELOPMENT, PURCHASE AND SALE.............................................3
3. SELLER DELIVERABLES........................................................4
A. GEOTECHNICAL REPORT................................................4
B. ENVIRONMENTAL REPORT...............................................4
C. SURVEY.............................................................4
D. TITLE COMMITMENT...................................................4
4. DESIGN AND CONSTRUCTION OF BUILDING AND IMPROVEMENTS.......................4
4.1 DESIGN-BUILD TURNKEY PROJECT..........................................4
A. DEVELOPER ACKNOWLEDGMENT...........................................4
4.2 PLANS AND SPECIFICATIONS FOR PROJECT..................................5
A. LEGAL REQUIREMENTS.................................................5
B. CERTIFICATIONS.....................................................5
4.3 CLAIMS................................................................5
A. FORCE MAJEURE......................................................5
B. DUTY TO PROCEED/RESOLUTION.........................................5
4.4 MISCELLANEOUS DESIGN/CONSTRUCTION ISSUES..............................6
5. PURCHASE PRICE AND PAYMENT.................................................6
5.1 PURCHASE PRICE........................................................6
A. LAND AND BASE BUILDING.............................................7
B. TENANT IMPROVEMENTS................................................7
C. FINANCING COSTS....................................................7
D. BUYER-DIRECTED CHANGE ORDERS.......................................8
5.2 PAYMENT...............................................................8
6. CONDITIONS TO CLOSING......................................................9
6.1 BUYER'S OBLIGATION: CONDITIONS PRECEDENT.............................9
</TABLE>
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<TABLE>
<S> <C> <C>
A. ACCURACY OF REPRESENTATIONS........................................9
B ENVIRONMENTAL CONDITION............................................9
C TITLE AND SURVEY UPDATES...........................................9
i. MARKED TITLE COMMITMENT............................................9
ii. UPDATED SURVEY...................................................10
iii. CURRENT UCC SEARCHES............................................10
D. ASSUMPTION OF LEASES..............................................10
E. OTHER CONDITIONS..................................................10
6.2 SELLER'S OBLIGATION: CONDITIONS PRECEDENT...........................10
A. ACCURACY OF REPRESENTATIONS.......................................10
B. OTHER CONDITIONS..................................................10
6.3 NON-SATISFACTION OF CONDITIONS.......................................10
7. CLOSING...................................................................11
8. PRORATIONS, CREDITS, CLOSING COSTS, AND CLOSING DELIVERIES................11
8.1 PRORATION ITEMS......................................................11
A. REAL ESTATE TAXES AND ASSESSMENTS.................................11
B. UTILITY EXPENSES AND PAYMENTS.....................................12
C. UTILITY DEPOSITS..................................................12
8.2 CLOSING STATEMENT AND SCHEDULES......................................12
8.3 REPRORATION AFTER CLOSING............................................12
8.4 SELLER'S CLOSING COSTS...............................................13
8.5 BUYER'S CLOSING COSTS................................................13
8.6 SELLER'S DELIVERIES..................................................13
A. DEED..............................................................13
B. BILL OF SALE......................................................14
C. ASSIGNMENT OF WARRANTIES AND OTHER INTERESTS......................14
D. WARRANTY AND OTHER ESTOPPELS......................................14
E. DELIVERY OF KEYS AND PROPERTY DOCUMENTS...........................15
F. AFFIDAVIT OF TITLE................................................15
G. AFFIDAVIT OF TITLE................................................15
</TABLE>
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<TABLE>
<S> <C> <C>
H. CLOSING STATEMENT.................................................15
I. EVIDENCE OF AUTHORITY................................................15
J. REAFFIRMATION........................................................16
K. COMPLIANCE WITH LAND USE REQUIREMENTS.............................16
(i) CERTIFICATE OF OCCUPANCY.......................................16
(ii) LAND USE AFFIDAVIT.............................................16
(iii) ZONING LETTER..................................................16
(iv) ARCHITECT/ENGINEER CERTIFICATE.................................17
(v) CONTRACTOR CERTIFICATE.........................................17
L. TRANSFER OF PERMITS...............................................17
M. DEVELOPER'S WARRANTY..............................................17
N. OPERATIONS AND MAINTENANCE MANUALS................................17
O. LEASE TERMINATION AGREEMENT.......................................17
P. OTHER INSTRUMENTS.................................................17
Q. TITLE AND SURVEY UPDATES..........................................18
R. AS BUILT DRAWINGS.................................................18
S. ASSUMPTION OF LEASES..............................................18
T. OPTION AGREEMENT..................................................18
U. PROPERTY MANAGEMENT AGREEMENT.....................................18
8.7 BUYER'S DELIVERIES...................................................18
A. NET PURCHASE PRICE................................................18
B. CLOSING DOCUMENT COUNTERPARTS.....................................18
C. LEASE TERMINATION AGREEMENT.......................................18
D. OTHER INSTRUMENTS.................................................19
9. REPRESENTATIONS AND WARRANTIES............................................19
9.1 SELLER'S REPRESENTATIONS AND WARRANTIES..............................19
A. TITLE TO REAL PROPERTY............................................19
B. TITLE TO PERSONAL PROPERTY........................................19
C. ORGANIZATION, POWER AND AUTHORITY.................................19
D. NO UNDISCLOSED CONTRACTS..........................................20
E. ACCURACY AND COMPLETENESS OF OTHER PROPERTY DOCUMENTS.............20
</TABLE>
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<TABLE>
<S> <C> <C>
F. COMPLIANCE OF REAL PROPERTY AND IMPROVEMENTS......................20
G. FLOOD, WETLANDS AND OTHER DISTRICTS...............................20
H. ENVIRONMENTAL MATTERS.............................................20
I. TAXES AND ASSESSMENTS.............................................21
J. CONDEMNATION PROCEEDINGS..........................................21
K. LITIGATION PROCEEDINGS............................................21
L. BANKRUPTCY........................................................21
M. AVAILABILITY OF UTILITIES.........................................22
N. DISCLOSURE........................................................22
9.2 REAFFIRMATION AT CLOSING.............................................22
9.3 SURVIVAL.............................................................22
9.4 REMEDIES PRIOR TO CLOSING............................................22
9.5 REMEDIES AFTER CLOSING...............................................23
9.6 BUYER'S REPRESENTATIONS AND WARRANTIES...............................24
A. ORGANIZATION, POWER AND AUTHORITY.................................24
B. NO BANKRUPTCY.....................................................24
10. SELLER'S COVENANTS........................................................24
10.1 NO ALTERATION OF TITLE............................................24
10.2 NO ALTERATION OF SITE CONDITIONS..................................25
10.3 COMPLIANCE WITH LAWS, LEASES, CONTRACTS...........................25
10.4 REPRESENTATIONS AND WARRANTIES....................................25
10.5 PERSONAL PROPERTY.................................................25
10.6 PERMITS AND ZONING................................................26
11. NOTICES...................................................................26
12. CASUALTY AND CONDEMNATION.................................................26
12.1 CASUALTY..........................................................26
A. MAJOR CASUALTY....................................................26
B. MINOR CASUALTY....................................................27
12.2 CONDEMNATION......................................................27
A. MAJOR CONDEMNATION................................................27
</TABLE>
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<TABLE>
<S> <C> <C>
B. MINOR CONDEMNATION................................................28
13. ADVISORS..................................................................28
14. INDEMNITY.................................................................28
A. ENVIRONMENTAL INDEMNIFICATION.....................................29
B. MECHANIC'S LIENS..................................................30
15. DEFAULT...................................................................30
15.1 BUYER DEFAULT.....................................................30
15.2 SELLER DEFAULT....................................................30
16. GENERAL PROVISIONS........................................................31
16.1 TERMINATION.......................................................31
16.2 EXECUTION NECESSARY...............................................31
16.3 COUNTERPARTS......................................................32
16.4 SUCCESSORS AND ASSIGNS............................................32
16.5 ENTIRE AGREEMENT..................................................33
16.6 TIME IS OF THE ESSENCE............................................33
16.7 GOVERNING LAW.....................................................33
16.8 SURVIVAL..........................................................33
16.8 FURTHER ASSURANCES................................................33
16.10 EXCLUSIVE APPLICATION.............................................33
16.11 PARTIAL INVALIDITY................................................34
16.12 INTERPRETATION....................................................34
A. DEFINED TERMS.....................................................34
B. PRONOUNS..........................................................34
16.13 WAIVER RIGHTS.....................................................34
16.14 NO IMPLIED WAIVER.................................................35
16.15 RIGHTS CUMULATIVE.................................................35
16.16 ATTORNEY'S FEES...................................................35
16.17 EXHIBITS AND SCHEDULES............................................35
16.18 CONFIDENTIALITY...................................................36
16.19 FACSIMILE AS WRITING..............................................36
</TABLE>
6
<PAGE> 7
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered into as
of October 21, 1999, by and between 200 CARILLON L.L.C., a Delaware limited
liability company ("SELLER"), ECHELON INTERNATIONAL CORPORATION, a Florida
corporation ("ECHELON INTERNATIONAL" or "DEVELOPER"), and CATALINA MARKETING
SALES CORPORATION, a Delaware corporation ("BUYER").
R E C I T A L S:
WHEREAS, Seller owns a certain tract or parcel of land described on
EXHIBIT A, attached hereto and made a part hereof (the "LAND") containing
approximately 6.29 acres, which Land was formerly owned by Gateway Joint
Venture, a Florida general partnership ("GATEWAY"), of which Echelon
International was a general partner; and
WHEREAS, Gateway and Echelon International, together as Landlord, and
Buyer as Tenant, entered into a Lease Agreement ("LEASE"), and Echelon
International and Buyer entered into a Development Agreement ("LEASE DEVELOPMENT
AGREEMENT"), both dated as of July 13, 1999, pertaining to the Land and
Developer's obligations to design, construct and complete (or cause to be
designed, constructed and completed) on the Land a five (5) story office
building with approximately 142,857 rentable square feet (as measured by BOMA
1996 measurement standards for multi-tenant buildings), constructed of
structural steel frame with an architectural pre-cast concrete exterior, with
interior tenant improvements and surface and structured parking for
approximately 670 automobiles (a ratio of approximately 4.7 spaces per 1,000
rentable square feet), and other amenities and improvements as hereinafter set
forth, which development shall be known as the Catalina Marketing Building or
such other name as may be selected by Buyer ("PROJECT" or "IMPROVEMENTS"); and
WHEREAS, Seller and Buyer have agreed that upon Developer's completion
of the Improvements, Seller and Developer shall sell to Buyer, and Buyer shall
purchase from Seller and Developer, the Land and Improvements (together, the
"Property") in accordance with the terms and provisions of this Agreement. In
contemplation of the transaction governed hereby (the "TRANSACTION"), Buyer has
also requested Developer to enter into an agreement substantially identical to
the terms and conditions of the Lease Development Agreement ("SALE DEVELOPMENT
AGREEMENT") to govern the rights, liabilities and obligations of Buyer and
Developer with respect to the design and construction of the Improvements, which
Sale Development Agreement shall conditionally control over and supersede the
rights, terms and conditions of the Lease Development Agreement until such time
that this Agreement (together with the Sale Development Agreement) is
7
<PAGE> 8
terminated, and Developer has agreed to enter into the Sale Development
Agreement subject to such terms and understandings; and
WHEREAS, Seller and Echelon International are affiliated entities, and
as an inducement to Buyer to purchase the Property, Seller has caused Echelon
International to enter into the Sale Development Agreement with Buyer for the
development of the Project, and the parties understand, conform, and agree that
credits and other adjustments under the Sale Development Agreement will be
adjustments to the Purchase Price paid to Seller hereunder; and
WHEREAS, Buyer and Seller each acknowledge and agree that the terms and
conditions of the Lease shall continue to run and be binding upon Buyer and
Seller, even in the event of the termination of this Agreement for any reason
whatsoever, until such time that the Transaction contemplated by this Agreement
closes, whereupon Buyer, Developer and Seller shall cause the Lease (and the
Lease Development Agreement) to be terminated;
NOW, THEREFORE, for and in consideration of the promises, covenants,
representations and warranties hereinafter set forth, the sum of One Hundred
Dollars ($100.00) and other good and valuable consideration in hand paid by
Seller and Developer to Buyer and by Buyer to Seller and Developer upon the
execution of this Agreement, the receipt and sufficiency of which are hereby
acknowledged by each of Seller, Developer, and Buyer, Buyer, Developer, and
Seller hereby agree as follows:
1. DEFINITIONS. Wherever used in this Agreement, the following
terms shall have the meanings set forth below:
1.1 DEAL TERMS AND DEADLINES.
"ADVISOR" shall mean Cushman & Wakefield of Florida,
Inc., which Advisor has been retained by Buyer.
"CLOSING DEADLINE" shall mean the date of February 7,
2001, subject to the same adjustments of time as are made to the
Completion Deadline and the Substantial Completion Date.
"CLOSING DATE" shall mean the date selected by
Developer upon no less than ten (10) days' prior notice to Buyer, but
in no event later than sixty (60) days after the Substantial Completion
of all construction of the Improvements in accordance with this
Agreement and the Sale Development Agreement (including the receipt of
certificates of occupancy from appropriate governmental authorities
which permit occupation of the Improvements); in no event shall the
Closing Date be after the Closing Deadline unless
8
<PAGE> 9
extended by Buyer. Developer shall use commercially reasonable, good
faith, diligent efforts to reduce the time between Substantial
Completion and the Closing Date, including without limitation,
satisfying all prerequisites to Closing as quickly as possible
following Substantial Completion.
"COMPLETION DEADLINE" or "SUBSTANTIAL COMPLETION
DATE" shall mean July 7, 2000, subject to adjustment of time as
provided herein, in the Development Agreement, or as mutually agreed by
Developer and Buyer.
"PROJECT BUDGET" shall mean the development and
construction budget for the Property set forth on EXHIBIT B, as the
same may be amended from time to time only in accordance with this
Agreement.
"PROJECT NAME" shall mean Catalina Marketing
Building.
"SALE DEVELOPMENT AGREEMENT" has the meaning set
forth in Section 4 of this Agreement.
"PROPERTY" shall mean the Land and Improvements.
"TITLE COMPANY" shall mean Lawyers Title Insurance
Company or such other title insurance company reasonable acceptable to
Buyer to insure Buyer's title to the Real Property.
1.2 STANDARD DEFINED TERMS; DEVELOPMENT AGREEMENT TERMS.
Other terms not defined herein shall have the meanings ascribed to such terms by
the Sale Development Agreement. Such terms include, but are not limited to,
"SUBSTANTIAL COMPLETION", "BASE BUILDING ARCHITECT", "BASE BUILDING CONTRACTOR",
"COST OF CONSTRUCTION", "TENANT IMPROVEMENTS ARCHITECT", "TENANT IMPROVEMENTS
CONTRACTOR", "BUYER DELAYS", "FINAL BASE BUILDING DESIGN", and "FINAL TI
DESIGN".
2. DEVELOPMENT, PURCHASE AND SALE. Developer agrees to develop
the Property as described herein, and Seller agrees to sell, transfer and assign
the Property to Buyer on the terms, conditions and provisions set forth in this
Agreement. Upon completion of the development of the Property, as described
below, Buyer agrees to purchase, accept and assume the Property on the terms,
conditions and provisions set forth in this Agreement.
3. SELLER DELIVERABLES. Buyer acknowledges that it has received
from Seller copies of the following:
A. GEOTECHNICAL REPORT. Subsurface
investigation geotechnical reports.
9
<PAGE> 10
B. ENVIRONMENTAL REPORT. Environmental reports
including, but not limited to, the following documents prepared by
Dames & Moore, dated July 30, 1999.
C. SURVEY. Survey of the Land, prepared by
Polaris, Inc., bearing Job No. 001-236, last revision date August 26,
1999.
D. TITLE COMMITMENT. ALTA Commitment for Title
Insurance, prepared by Lawyers Title Insurance Corporation, Commitment
No. 99-06268 pertaining to the Real Property, dated September 1, 1999.
4. DESIGN AND CONSTRUCTION OF BUILDING AND IMPROVEMENTS.
4.1 DESIGN-BUILD TURNKEY PROJECT. To conform the
obligations of Buyer and Developer under the Lease Development Agreement to the
Transaction contemplated by this Agreement, Buyer and Developer have entered
into the development agreement attached hereto as EXHIBIT C (the "SALE
DEVELOPMENT AGREEMENT"). The terms and conditions, rights and liabilities
arising under the Sale Development Agreement shall control over and supersede
the Lease Development Agreement until such time that this Agreement is
terminated. Developer's use of separate entities to perform design and
construction work in no way relieves Seller of its design/build delivery
obligations.
A. DEVELOPER ACKNOWLEDGMENT. Developer
acknowledges its obligation to provide a complete and fully constructed
Project on a turnkey delivery basis and that it is required to provide
all items (labor, material, equipment) necessary to complete the
Project. Omissions from the documents provided by Buyer to Developer or
inadequate descriptions of details of the Project in such documents
which are manifestly necessary or which are customarily performed,
shall not release the Developer from performing such necessary or
customary details of the Project. Developer acknowledges that the
Project is a turnkey project and represents that it has experience with
such project deliveries. Developer represents that it fully understands
the general scope of work required to be performed.
Developer further acknowledges its obligation to coordinate the design
and construction work of each member of the Design and Construction
Team so that all design details, plans, drawings and specifications
adequately describe and depict the construction work. Buyer shall not
be responsible for any changes, increased costs, claims or delays,
except as expressly provided in the Sale Development Agreement. Buyer
reserves the right to employ an architect and consultant of its own
choosing to review all aspects of the Work under the Sale Development
Agreement, including, but not limited to, the determination of
Punchlist work.
10
<PAGE> 11
4.2 PLANS AND SPECIFICATIONS FOR PROJECT.
A. LEGAL REQUIREMENTS. Developer shall be
responsible for ensuring that the Base Building Conceptual Design and
the Final Base Building Design (the "BASE BUILDING DESIGN DOCUMENTS")
comply in all material respects with all applicable federal, state, and
local laws, codes, ordinances, regulations and orders in effect at the
date of the issuance of the permit for the construction of the
Improvements, including, but not limited to, The Americans With
Disabilities Act ("LEGAL REQUIREMENTS"), and with any Legal
Requirements adopted subsequent to such date to the extent necessary to
obtain final certificates of occupancy for the Improvements.
B. CERTIFICATIONS. Within five (5) days after
receipt of the Final Base Building Design, Buyer may request
certifications in the form of EXHIBIT D attached hereto from any or all
members of the Design and Construction Team (or, where applicable,
Developer's civil engineer). Developer shall use good faith, diligent
efforts to cause the execution and delivery to Buyer of Certifications
within twenty (20) days of Buyer's request.
4.3 CLAIMS
A. FORCE MAJEURE. The provisions of the Sale
Development Agreement shall govern with respect to any and all claims
by Developer (or any member of the Design and Construction Team) of
Force Majeure delay, Buyer Delay, Buyer - Directed Change Orders, and
any other demand or assertion by such parties seeking an adjustment to
the Substantial Completion Date, the Outside Delay Date, or the
Purchase Price (a "CLAIM").
B. DUTY TO PROCEED/RESOLUTION. Pending final
resolution of a Claim, unless otherwise agreed to in writing, Developer
shall proceed diligently with the design and construction of the
Project.
4.4 MISCELLANEOUS DESIGN/CONSTRUCTION ISSUES. Buyer, in
its sole discretion, shall have the right to require changes to the Tenant
Improvement design documents. Subject to Developer's approval, which approval
shall not be unreasonably withheld or delayed, Buyer shall have the right to
direct changes to the final Base Building design documents, and to any aspect of
the Project design and construction so long as such changes do not result in a
cardinal change. Such changes shall only be valid if issued by Buyer in writing
as a Buyer-directed change order (a "BUYER-DIRECTED CHANGE ORDER"). At Closing,
Buyer will pay Developer any direct cost increases reasonably incurred as a
result of a Buyer-Directed
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<PAGE> 12
Change Order. In the event this Agreement is terminated prior to Closing, Buyer
shall cause the Tenant under the Lease to pay such amount together with the rent
payment next due and owing. To the extent such Buyer-Directed Change Order
results in delay to critical path of the Detailed Critical Path Method Schedule,
it shall constitute a "Buyer Delay" under the Sale Development Agreement.
Seller and Developer shall convey to Buyer all of their respective right, title
and interest in and to the Final Base Building Design, including all copyrights
thereto. Developer is entitled only to provide copies thereof to the Base
Building Contractor (and such other Design and Construction Team members as
necessary to cause the completion of the Improvements in accordance with this
Agreement) as defined below for the sole purpose of constructing the Base
Building.
After the Final Base Building Design has been approved by Buyer, Developer may
not make any changes to it without Buyer's written approval, which approval may
be given or withheld in Buyer's sole discretion (except that Developer shall be
permitted to make changes not deemed to be material changes resulting from a
governmental official's code interpretation without the Buyer's written
approval).
In performing the Base Building construction work, Developer shall assume an
agency role, on behalf of Buyer, and act in the best interests of Buyer in
performing all Base Building-related work.
5. PURCHASE PRICE AND PAYMENT. The Purchase Price, subject to the
prorations and credits set forth herein, shall be due and payable as follows:
5.1 PURCHASE PRICE. The purchase price of the Property is
as set forth herein, subject to adjustment for unused or unauthorized
allowances. No costs, other than those set forth herein, shall be due and owing
to Seller. Any Tenant Improvements Allowance not used or authorized by Buyer
shall be deducted from the Purchase Price. The Purchase Price shall be deemed to
include the Land and Base Building, the cost of the Tenant Improvements,
Buyer-Directed Change Orders, all costs of managing the Tenant Improvements, all
costs of financing inclusive of lender's fees, appraisal, interest rate
fluctuations, lender engineering review, and all other related costs.
A. LAND AND BASE BUILDING. Buyer shall pay
Seller a lump sum, fixed price of Twenty Four Million Five Hundred
Thousand Five Hundred Eighty Three and No/100 Dollars ($24,500,583.00)
for the Land, and the design, construction and completion of the Base
Building and all Base Building Systems. Except to the extent expressly
provided elsewhere, this price includes all costs associated therewith
including, but not limited to (1) all Land acquisition costs, (2) all
environmental, soil, geotechnical investigations and reports, (3) all
architect fees and design work, (4) all
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permits, licenses, and insurance (including, without limitation,
Buyer's owner's policy of title insurance, to be issued at closing, in
the amount of the purchase price), (5) general and administrative
overhead, (6) profit, (7) the Base Building construction work and
Building Systems, (8) a reduction of $290,000.00 as consideration for
Buyer's execution of the Property Management Agreement described in
Section 8.6U below, and (9) all other obligations under this Agreement.
B. TENANT IMPROVEMENTS. As part of the Purchase
Price, Buyer shall pay Seller for the Tenant Improvement Work as
follows: the cost to design and construct all Tenant Improvement Work
calculated in accordance with Section 9 of the Sale Development
Agreement, management fee equal to 3.5% of the total cost to design and
construct the Tenant Improvements ("MANAGEMENT FEE"); actual
out-of-pocket interest costs paid by Developer in connection with that
portion of the Cost of Construction, if any, incurred after
disbursement of the entire Tenant Improvement Allowance; and the Tenant
Improvement Contractor Mark-Up as set forth herein. Provided, however,
that Seller shall provide Buyer with a Tenant Improvements Allowance in
an amount of Three Million Eight Hundred Fifty Seven Thousand One
Hundred Thirty Nine and No/100 Dollars ($3,857,139.00) ("TENANT
IMPROVEMENTS ALLOWANCE"). Developer shall act as Buyer's agent in
managing the Tenant Improvements and processing invoices for the Tenant
Improvement Architect and the Tenant Improvements Contractor, and Buyer
shall compensate Seller with the Management Fee for such services.
C. FINANCING COSTS. Developer shall provide all
project financing through the turnover of the Project up to and
including Closing. Except as provided in Section 5.1B above, Seller and
Developer acknowledge and represent that the lump sum, fixed price
stated above is the sole and exclusive compensation for all financing
costs including, but not limited to, lenders fees, appraisal costs,
interest rate fluctuation, lender engineering review, and all other
costs and risks of increased costs associated with project financing.
D. BUYER-DIRECTED CHANGE ORDERS. As part of the
Purchase Price, Buyer shall pay Seller any direct cost increases
(netted out against any direct cost reductions resulting from
Buyer-Directed Change Orders) reasonably incurred by Developer as a
result of Buyer-Directed Change Orders.
5.2 PAYMENT. At Closing, Buyer shall pay to Seller the
Purchase Price, subject to the credits, prorations and adjustments set forth
herein, in cash by federal reserve bank wire transfer to such account and bank
as Seller shall
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designate in writing to Buyer at or prior to Closing to be confirmed received in
Seller's account on or before 12:00 Noon, Tampa, Florida time on the Closing
Date, or, if no such notice is delivered by Seller to Buyer, by Federal Reserve
Funds check drawn for value received on an account in the metropolitan area in
which the Closing is to take place and dated no earlier than the day prior to
the Closing Date. Seller shall deliver to Buyer wire instructions at least 48
hours prior to closing. In addition, the amount of liquidated delay damages owed
to Buyer may be withheld.
At Closing only minor Punchlist items shall remain, none of which shall
materially affect Buyer's ability to use any portion of the Improvements for its
intended uses. Two Hundred Percent (200%) of the value of the uncompleted work
on the Punchlist shall be escrowed at Closing. Developer shall have forty-five
(45) days after issuance of the Punchlist to complete the Punchlist Work (except
those items which reasonably require more than 45 days to complete, shall be
completed in diligent fashion, but no later than 120 days after the date the
Punchlist is issued). At the end of such cure period, Buyer shall pay Seller the
funds retained for the Punchlist Work performed (being the funds equal to 200%
of the value of the previously uncompleted work) and Seller shall forfeit the
remaining withheld funds for Punchlist Work not performed or completed, unless
Developer in good faith disputes Buyer's rejection of Punchlist Work, in which
event such funds shall continue to remain in escrow pending resolution of such
dispute.
The parties expressly agree that if issuance of a final occupancy
permit is delayed, but that all other requirements for Substantial Completion
have been met (including without limitation that Buyer may occupy the Real
Property for the use for which it is intended under a temporary certificate of
occupancy), and Buyer has no reason to believe that the final occupancy permit
will not promptly issue upon completion of the Punchlist items, then the Closing
shall nevertheless proceed; provided that Developer's obligations under this
Agreement and the Sale Development Agreement to complete the Project and deliver
a final, unconditional certificate of occupancy, shall survive closing and be in
full force and effect. The sum of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) shall be deducted from the Purchase Price to be paid to Seller at
Closing and escrowed at Closing until issuance of the final occupancy
certificate.
6. CONDITIONS TO CLOSING.
6.1 BUYER'S OBLIGATION: CONDITIONS PRECEDENT. The
obligation of the Buyer to consummate the Closing hereunder shall be subject to
the satisfaction at or prior to Closing of the following conditions precedent:
A. ACCURACY OF REPRESENTATIONS. All of the
warranties and representations of Seller and Developer contained in this
Agreement shall be true in all material respects, in each case as of the date of
this Agreement and as of
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the Closing Date except (i) for changes specifically permitted by this Agreement
and (ii) for those representations and warranties which expressly address
matters only as of a particular date, which representations and warranties shall
remain true and correct in all material respects as of such date.
B. ENVIRONMENTAL CONDITION. On the Closing
Date, the Property shall be free of any and all Hazardous Substances either
within the Improvements or on or under the surface of the Property, except for
Hazardous Substances used in the ordinary course of Seller's construction in
strict compliance with all Environmental Laws.
C. TITLE AND SURVEY UPDATES. At the time of
Closing, Seller shall possess title to the Real Property free and clear of all
encumbrances except for the Permitted Title Exceptions. In addition, at time of
Closing, Seller shall have delivered, or cause to be delivered to Buyer:
i. MARKED TITLE COMMITMENT. A "marked"
Title Commitment, endorsed by the Title Company to (i) remove all
references to payment of premium and charges for the policy and all
references to expiration of the Title Commitment; (ii) indicate that
all requirements to be performed on the part of Seller or others have
been satisfied; (iii) delete any general survey exception (and replace
with a reference to the specific matters shown on the Survey, as
updated by Buyer), any exception relating to rights of parties in
possession, and easements, liens, taxes or assessments not shown by the
public records; and (iv) delete any exception for any matters first
appearing of record after the date of the Commitment and prior to the
effective date of the final policy;
ii. UPDATED SURVEY. An "as-built"
Survey showing no matters which are not Permitted Title Exceptions.
iii. CURRENT UCC SEARCHES. All
applicable UCC searches, dated no more than thirty (30) days prior to
Closing, showing no matters which are not Permitted Title Exceptions
(except for liens securing construction financing to be satisfied at
Closing).
D. ASSUMPTION OF LEASES. On or before
Substantial Completion and effective on the earlier of the commencement of the
Lease Term or Closing, Echelon Gateway, Inc. shall have assumed the existing
leasehold obligations at these certain two facilities of Buyer located on Ninth
Street, St. Petersburg, Florida, which assumption shall be guaranteed by Echelon
International or the Assignee (as defined in Section 16.4, below), and Echelon
International shall have fully cooperated with Buyer in Buyer's efforts to
obtain all required landlord and other consents in connection therewith. Echelon
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International's obligation to cooperate shall not include any obligation to pay
money or other consideration to obtain such consents.
E. OTHER CONDITIONS. Seller and Developer shall
comply with all other conditions to closing set forth elsewhere in this
Agreement.
6.2 SELLER'S OBLIGATION: CONDITIONS PRECEDENT. The
obligation of Seller to consummate the Closing hereunder shall be subject to the
satisfaction at or prior to Closing of the following conditions precedent:
A. ACCURACY OF REPRESENTATIONS. All of the
warranties and representations of Buyer contained in this Agreement shall be
true in all material respects, in each case of the date of this Agreement and as
of the Closing Date except (i) for changes specifically permitted by this
Agreement and (ii) for those representations and warranties which expressly
address matters only as of a particular date, which representations and
warranties shall remain true and correct in all material respects as of such
date.
B. OTHER CONDITIONS. Buyer shall comply with
all other conditions to closing set forth elsewhere in this Agreement.
6.3 NON-SATISFACTION OF CONDITIONS. If any condition set
forth in this Section 6 is not satisfied as of the date specified for
satisfaction, the party whose obligation to close is conditioned thereon may
either (a) waive satisfaction of such condition and proceed to Closing; (b)
following notice of such unsatisfied condition the other party's failure to
satisfy such condition within fifteen (15) days after such notice, elect to
terminate this Agreement and the Sale Development Agreement; or (c) if
appropriate or applicable, declare that the failure of such condition to be a
default by the other party, and, in the event of the failure of Subsections
6.1.A or 6.2.A, proceed in accordance with Section 9.4 or 9.5 hereof as
applicable, or in the event of the failure of any other condition, proceed in
accordance with the applicable provisions of Section 15.
7. CLOSING. Closing shall be held at 9:00 a.m. local Tampa,
Florida time, on the Closing Date at the offices of Holland & Knight LLP, 400
North Ashley, Suite 2300, Tampa, Florida 33602. Seller, Developer, and Buyer
shall conduct a "pre-closing" on the day preceding the Closing Date, in order to
finalize and execute (but not deliver, pending the Closing) the documents to be
executed and delivered at Closing. At Closing, Seller and Developer shall
deliver to Buyer the items required of such person as elsewhere set forth herein
and Buyer shall deliver to Seller the Purchase Price and the other items
required of Buyer as elsewhere set forth herein. Seller shall deliver possession
of the Property, subject only to Permitted Title Exceptions, to Buyer at the
time of Closing. The parties agree to execute and deliver into escrow the day
prior to the Closing Date all documents required for
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Closing with funding and release of the escrow to occur on the Closing Date. If
the Transaction is not closed on or before the Closing Deadline, then either
Seller or Buyer may terminate this Agreement by written notice to the other
party; provided, however, that neither party shall have the right to terminate
this Agreement if the Closing has not occurred by the Closing Deadline as a
result of the default of the party seeking to terminate.
8. PRORATIONS, CREDITS, CLOSING COSTS, AND CLOSING DELIVERIES.
8.1 PRORATION ITEMS. In each such proration set forth
below, the portion thereof allocable to periods beginning as of the Closing
Proration Time shall be credited to Buyer, or charged to Buyer, as applicable,
and the portion thereof allocable to periods ending as of the Closing Proration
Time shall be credited to Seller, or charged to Seller, as applicable, all of
which prorations shall be made at Closing or, in the case of allocations to be
made after Closing, upon receipt of such payments or payment of such expenses.
The following items shall be prorated between Buyer and Seller or credited to
Buyer or Seller:
A. REAL ESTATE TAXES AND ASSESSMENTS. All ad
valorem real estate taxes, personal property taxes, and Carillon
Property Owners Association assessments with respect to the Property
for the current calendar year shall be prorated as of the Closing
Proration Time, with due allowance for the full discount, as provided
by law. Seller shall pay all installments for all certified and
confirmed assessments levied upon the Property prior to Closing. In the
event that tax bills for the current year's taxes are not available on
the Closing Date, taxes shall be prorated based upon the tax bills for
the previous year, or, if available, based upon the current assessed
valuation and current millage rates, and, in such event, Seller and
Buyer shall reprorate the taxes when actual tax bills for the current
year are available.
B. UTILITY EXPENSES AND PAYMENTS. Water, sewer,
gas, waste fee, fire protection, electric and all other utility
expenses and payments due or made with respect to the Property shall be
prorated as of the Closing Proration Time, based upon the utility bills
for the preceding period. Unless sooner transferred under the Lease,
all such utility accounts shall be transferred to new accounts in
Buyer's name or in the name of Buyer's designated management agent as
of the Closing Date. Seller shall cooperate with Buyer's efforts to
transfer such accounts and continue uninterrupted utility service to
the Property.
C. UTILITY DEPOSITS. Seller shall receive a
credit at Closing for the amount of any utility deposits made by Seller
and which deposits are transferred to Buyer at Closing and are
documented to Buyer by the holder
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thereof.
8.2 CLOSING STATEMENT AND SCHEDULES. On or before five
(5) days prior to the Closing Date, Buyer shall prepare and deliver to Seller a
draft Closing Statement for the Transaction, and Seller shall deliver to Buyer a
current schedule of the items and amounts to be prorated or credited as set
forth in this Section 8, including, but not limited to, ad valorem real estate
taxes and assessments (together with copies of the current or most recent
bills), all water, sewer, gas, waste fee, fire protection, electric and all
other utility expenses and payments (together with copies of the current or most
recent bills), and any utility deposits.
8.3 REPRORATION AFTER CLOSING. The provisions of this
Paragraph shall survive the Closing. In the event that the actual amounts of any
of the aforesaid proration items are unavailable as of the Closing Date, then
such proration shall be made on the basis of an amount reasonably estimated by
Buyer and Seller at Closing and Buyer and Seller shall thereupon reprorate such
items at such times as the exact amounts for such proration items become
available (but such prorations will be made within one year after the Closing
Date or upon such earlier date as the exact amounts for such proration become
available); provided however, that no reproration adjustment shall be made if
the net amount due is $100 or less.
8.4 SELLER'S CLOSING COSTS. Seller shall pay all costs
and expenses in connection with: any transfer, stamp or recording tax due in
connection with the Transaction, all reasonable title examinations and
promulgated premiums for owner's title insurance, one-half of any escrow agent
fees (if any are charged in connection with this Transaction), and the fees and
expenses of Seller's attorneys. Seller shall also be responsible for all
brokerage fees, including fees owed to Cushman & Wakefield of Florida, Inc. and
in connection therewith, Seller agrees to indemnify Buyer against any and all
claims for brokerage fees that arise by and/or through Seller from any other
entity.
8.5 BUYER'S CLOSING COSTS. Buyer shall pay for all
recording charges due on recordation of any documents executed in connection
with the Transaction, for the Surveys (other than the Survey previously
delivered by Seller to Buyer), and one-half of any escrow agent fees and the
fees and expenses of Buyer's attorneys.
8.6 SELLER'S DELIVERIES. At the Closing, Seller shall
deliver or cause to be delivered to Buyer the following (which, as to documents
to be executed by Seller or members, affiliates, or subsidiaries of Seller,
shall be duly executed and delivered):
A. DEED. A Special Warranty Deed in the form of
EXHIBIT E, containing the following:
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"For the period ending twenty (20) years following the date of
the Deed: (i) The development, use and occupation of the Real
Property, and any portion thereof, shall be limited to general
office uses and related uses (including, without limitation,
training facilities, cafeteria, testing facilities, printing
and copying facilities, and software and hardware development
and assembly), (ii) all improvements located on the Real
Property shall not exceed in the aggregate a maximum building
area of 150,000 square feet of gross buildable area (as such
area may be increased by grantee's exercise of its expansion
option evidenced by that certain option agreement recorded of
even date); and (iii) maximum parking density located on the
Real Property shall not exceed five (5) parking spaces per
1000 square feet of gross buildable area actually constructed
(collectively, the "Restrictions"). The Restrictions shall be
binding on Buyer, its successors, successors-in-title and
assigns and its and their tenants, agents, employees, guests
and invitees, and shall run with the Real Property for a
period of twenty (20) years following the Date of the Deed.
The Restrictions are for the benefit of, and may be modified
or waived by an instrument executed solely by the owner of the
Real Property or portion thereof and by the grantor under the
deed or its successors or assigns, and in the event of any
violation or threatened violation by any owner, tenant,
occupant, or other person or entity having an interest in any
portion of the Real Property of any of the foregoing terms,
covenants, or Restrictions, then, in addition to all other
remedies provided in the deed or available by law or in
equity, the grantor or its successors or assigns shall have
the right to enjoin such violation or threatened violation."
B. BILL OF SALE. A Bill of Sale (with a limited
warranty of title from Seller and Developer), in the form of EXHIBIT F,
subject only to the Permitted Title Exceptions, to which shall be
attached a current inventory of all Personal Property, if any, owned by
Seller or Developer and used solely in connection with the Real
Property or the operation thereof.
C. ASSIGNMENT OF WARRANTIES AND OTHER
INTERESTS. An Assignment and Assumption of Warranties and Other
Interests from Seller and Developer, in the form of EXHIBIT "G" (the
"ASSIGNMENT OF WARRANTIES AND INTERESTS") with respect to Seller's and
Developer's interests in Warranties and Other Interests to be assigned
at Closing or which will be binding on Buyer or the Property, reserving
unto Seller or Developer, as
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appropriate, the non-exclusive right to pursue claims under the
Warranties and Other Interests for incomplete or defective work or
materials, to the extent that a claim is made against such person under
the one-year warranty in favor of Buyer or for defective or incomplete
work or materials that may be described on Buyer's Punchlist.
D. WARRANTY AND OTHER ESTOPPELS. Developer
shall use good faith efforts to deliver to Buyer at or prior to Closing
(i) estoppel certificates executed by Base Building Contractor, Tenant
Improvement Contractor and their respective mechanical, electrical,
plumbing subcontractors, and the roofing manufacturer, which estoppel
certificates shall be substantially in the form of EXHIBIT H (a
"WARRANTY ESTOPPEL"), and (ii) such other estoppel certificates
requested by Buyer, in a form and substance approved by Buyer, in
connection with covenants, conditions and restrictions, reciprocal
easement agreements encumbering the Property and other contracts to be
assumed by Buyer (a "COVENANT ESTOPPEL"). Notwithstanding anything
herein to the contrary, in the event Developer is unable to obtain a
Covenant Estoppel from the third party from whom such Estoppel has been
requested, Developer may, at Developer's election, satisfy the
requirement of this Paragraph D by delivering a Developer's Estoppel to
Buyer in lieu of an estoppel signed by such third party.
E. DELIVERY OF KEYS AND PROPERTY DOCUMENTS. The
Property Documents and all keys to the Property or any portion thereof.
F. NON-FOREIGN AFFIDAVIT. A certificate in the
form of EXHIBIT I with respect to Section 1445 of the Internal Revenue
Code stating whether or not Seller is a foreign person as defined in
said Section 1445 and applicable regulations thereunder. Seller shall
otherwise comply with all requirements under Section 1445 of the
Internal Revenue Code and related provisions with respect to sales of
real property.
G. AFFIDAVIT OF TITLE. An Affidavit of Title
with respect to liens and title matters in substantially the form of
EXHIBIT J or otherwise as may be reasonably required by the Title
Company.
H. CLOSING STATEMENT. A Closing Statement (the
"CLOSING STATEMENT") which shall, among other items, set forth the
Purchase Price, all credits against the Purchase Price, the amounts of
all prorations and other adjustments to the Purchase Price and all
disbursements made at Closing on behalf of Buyer and Seller.
I. EVIDENCE OF AUTHORITY. Evidence that Seller
and Developer have the requisite power and authority to execute and
deliver, and
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perform under, this Agreement and all documents to be signed by such
persons in connection herewith, including, but not limited to, the
following: (i) if such person (or any general partner or member
thereof) is a limited liability company, a certificate duly executed by
the members and managers of the company with respect to the offices or
titles held by the persons who at Closing execute documents on behalf
of such company and a certificate (duly certified by the members and
managers of such company) with respect to the resolution of the members
and managers of such company authorizing the company to enter into this
Transaction, which certificate shall also recite that the resolution
has been duly and unanimously adopted by the company and remains in
full force and effect; (ii) if such person (or any general partner or
member thereof) is a corporation, an incumbency certificate duly
executed by the secretary or assistant secretary of the corporation
with respect to the offices held by the persons who at Closing execute
documents on behalf of such corporation and a certificate (duly
certified by the secretary or assistant secretary of such corporation)
with respect to the resolution of the Board of Directors of such
corporation authorizing the corporation to enter into this Transaction,
which certificate shall also recite that the resolution has been duly
and unanimously adopted by the Board of Directors and remains in full
force and effect; and (iii) if such person (or any general partner or
member thereof) is a partnership, such person shall deliver to Buyer a
certified copy of the partnership agreement and partnership
certificate, together with all amendments and modifications thereof, of
any partnership which is the person or a general partner of the person,
together with duly executed and delivered consents of the partners
thereof with respect to the Transaction, to the extent such consents
are or may be necessary under such agreements.
J. REAFFIRMATION. A reaffirmation of the
representations, warranties and covenants set forth in Section 9 hereof
in the form of EXHIBIT K and made a part hereof, subject to the
limitations on survival as provided hereinafter; and in the event a
change in facts and circumstances requires a change in any such
representation or warranty, the certificate shall specify any such
changes in reasonable detail.
K. COMPLIANCE WITH LAND USE REQUIREMENTS. The
originals (or, to the extent originals are not available, copies) of
all of the Land Use Compliance Documents, to the extent in Seller's or
Developer's possession and not theretofore delivered to Buyer. Seller
and Developer shall use commercially reasonable efforts to obtain the
following items prior to Closing, all of which shall be subject to the
reasonable approval of Buyer in all respects (collectively referred to
as the "LAND USE COMPLIANCE DOCUMENTS"):
(i) CERTIFICATE OF OCCUPANCY. Final
certificate of
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completion and occupancy (as applicable) from the governmental
authorities administering compliance with Land Use
Requirements which permits occupancy of the Improvements. To
the extent only conditional certificates of completion or
occupancy (as applicable) are available as of the Closing
Date, Developer shall deliver to Buyer final certificates of
completion or occupancy (as applicable), as and when the same
are issued.
(ii) LAND USE AFFIDAVIT. An affidavit
from officers of Developer familiar with the Property in the
form of EXHIBIT L, stating that to such persons' Knowledge all
of the Property and Improvements comply with all Land Use
Requirements.
(iii) ZONING LETTER. Certificates of
compliance, in the form of EXHIBIT M, or such other form as
customarily delivered by the governmental agency having
jurisdiction thereover.
(iv) ARCHITECT/ENGINEER CERTIFICATE. A
certificate from an architect and an engineer (if Developer
has employed an engineer with respect to the Property)
licensed to practice in the State in which the Property is
located in the form of EXHIBIT N.
(v) CONTRACTOR CERTIFICATE. A
certificate from both the Base Building Contractor and the
Tenant Improvement Contractor, in the form of EXHIBIT O.
Land Use Compliance Documents submitted to Buyer prior to execution of
this Agreement shall be updated to a date not earlier than forty five
(45) days prior to Closing.
L. TRANSFER OF PERMITS. If applicable, Seller
and Developer shall execute all applications and instruments required in
connection with the transfer of all Permits, to the extent transferable, and to
the extent applicable to the Real Property, only, in order to transfer the
benefits of each such Permit to the Buyer. To the extent any Permit pertains to
land in addition to the Real Property, Seller or Developer, as appropriate,
shall use commercially reasonable efforts to obtain a modification of such
Permit, in form and substance reasonably acceptable to Buyer or as otherwise
mandated by the agency issuing the permit, running solely to the Real Property.
M. DEVELOPER'S WARRANTY. At Closing, Developer
shall execute and deliver to Buyer a warranty in the form of EXHIBIT P attached
hereto and made a part hereof, which warranty shall warrant and guarantee
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the Improvements for a period of one (1) year from the date of Closing.
N. OPERATIONS AND MAINTENANCE MANUALS. At
closing, Seller or Developer shall deliver three (3) bound copies of
the Operations and Maintenance Manuals for all major items in the
Building, including systems and equipment, and the originals of all
manufacturers', suppliers' and other third party warranties and
guarantees for any Project item.
O. LEASE TERMINATION AGREEMENT At Closing
Developer shall execute, and cause Gateway Joint Venture to execute, an
agreement terminating the Lease and the Lease Development Agreement.
P. OTHER INSTRUMENTS Such other instruments or
documents as may be reasonably requested by Buyer or the Title Company,
or reasonably necessary, to effect or carry out the purposes of this
Agreement (which funds, instruments or documents shall be subject to
Seller's or Developer's prior approval thereof, as appropriate, which
approval shall not be unreasonably withheld or delayed).
Q. TITLE AND SURVEY UPDATES. Updates of the
Title Commitment and survey in accordance with Section of 6.3A.
R. AS BUILT DRAWINGS. All as-built drawings for
the Base Building and the Tenant Improvements.
S. ASSUMPTION OF LEASES. The Assumption of
Leases in the form of EXHIBIT Q.
T. RESTRICTION MODIFICATION OPTION AGREEMENT.
An agreement granting Buyer or its successors or assigns the option to purchase
the right to construct up to 100,000 square feet of additional development on
the Property at the price of $12.00 per square foot, which agreement shall be in
the form provided by Developer and reasonably acceptable to Buyer.
U. PROPERTY MANAGEMENT AGREEMENT. A property
management agreement providing for Developer's management of the Property with
service commensurate with other Class "A" office buildings in the
Gateway/Westshore office markets, for a term of five (5) years, noncancellable
absent cause, for a fee of Ninety Thousand and No/100 Dollars ($90,000.00) for
the first year, increasing three percent (3%) per year, otherwise in form and
substance satisfactory to Seller, Developer, and Buyer.
8.7 BUYER'S DELIVERIES. At the Closing, Buyer shall
deliver or cause to be delivered to Seller the following:
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A. NET PURCHASE PRICE. The Purchase Price due
at Closing under this Agreement, subject to the right to withhold
monies for Punchlist Work and liquidated delay damages as provided in
Section 4 of this Agreement or the Sale Development Agreement.
B. CLOSING DOCUMENT COUNTERPARTS. Executed
counterparts of the Closing Statement.
C. LEASE TERMINATION AGREEMENT. Buyer shall
execute an agreement terminating the Lease and Lease Development
Agreement.
D. OTHER INSTRUMENTS. Such other funds,
instruments or documents as may be reasonably requested by Seller,
Developer, or the Title Company, or reasonably necessary, to effect or
carry out the purposes of this Agreement (which funds, instruments or
documents shall be subject to Buyer's prior approval thereof, which
approval shall not be unreasonably withheld or delayed).
9. REPRESENTATIONS AND WARRANTIES.
9.1 SELLER'S AND DEVELOPER'S REPRESENTATIONS AND
WARRANTIES. Seller and Developer, as of the date of the execution of this
Agreement by such person (or such other date as may be specified hereinafter),
and as of Closing, represent and warrant to Buyer, and covenant with Buyer,
subject to the matters on the Representation Exception Schedule, as follows:
A. TITLE TO REAL PROPERTY. To Seller's and
Developer's Knowledge, there are no other encumbrances to the title of
the Real Property other than the Lease and other than as described in
the Title Commitment.
B. TITLE TO PERSONAL PROPERTY. Seller or
Developer is the owner of the Personal Property free and clear of all
encumbrances except for the Permitted Title Exceptions.
C. ORGANIZATION, POWER AND AUTHORITY. Echelon
International is a Florida corporation, duly organized, validly
existing and in good standing under the laws of the State of Florida
and has all necessary power to execute and deliver this Agreement and
perform all its obligations hereunder. 200 Carillon L.L.C. is a Florida
limited liability company, duly organized, validly existing and in good
standing under the laws of the State of Florida. Each of Seller and
Developer has the full power and authority to enter into and perform
this Agreement, and the execution, delivery and performance of this
Agreement by such persons (i) has been duly and validly
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authorized by all necessary action on the part of such persons, (ii)
does not conflict with or result in a violation of such person's
articles of organization (or by-laws), or any judgment, order or decree
of any court or arbiter in any proceeding to which such person is a
party, and (iii) does not conflict with or constitute a material breach
of, or constitute a material default under, any contract, agreement or
other instrument by which such person is bound or to which it is a
party. This Agreement is the valid and legally binding obligation of
Seller and Developer enforceable in accordance with its terms.
D. NO UNDISCLOSED CONTRACTS. As of Closing,
there shall be no management, real estate, leasing or rental
commission, service, maintenance, employment, union or other service
contracts of any kind or description in existence relating to the
Property and binding on Buyer, except for service contracts for
elevators and other necessary services under terms reasonably
acceptable to Buyer.
E. ACCURACY AND COMPLETENESS OF OTHER PROPERTY
DOCUMENTS. Developer has furnished Buyer with complete copies of the
following documents: (1) soils reports, and (2) geotechnical report
dated May 21, 1999, prepared by Ardaman & Associates, Inc. ("Property
Documents"), and all modifications, additions and deletions to any of
the foregoing; with respect to each, to Seller's or Developer's
Knowledge they have not been changed, further assigned or further
amended except for amendments, if any, copies of which have been
provided to Buyer.
F. COMPLIANCE OF REAL PROPERTY AND
IMPROVEMENTS. The Property is in compliance in all material respects
with all existing fire, health, building, handicapped persons,
environmental, sanitation, use and occupancy or zoning laws and all
other Legal Requirements applicable to the Property. Developer has
obtained all Permits required for the construction of the Improvements.
The Property is not dependent upon any other parcel of real property
for parking or open space in compliance with any code, law, ordinance,
statute, rule or regulation. The Improvements, when completed, will
require no more than 660 parking spaces in order to meet all parking
requirements of the governmental authority having jurisdiction over the
Property.
G. FLOOD, WETLANDS AND OTHER DISTRICTS. The
Land (i) lies within special flood hazard areas "A" and "V" as
determined by the United States Department of Housing and Urban
Development and FEMA, and (ii) does not contain a wetlands area as
determined by the Army Corps of Engineers, or any other area or
designation by any other governmental or quasi-governmental authority
as an area subject to environmental, archeological or other regulation
that would materially affect the current or
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proposed use of the Property.
H. ENVIRONMENTAL MATTERS. Developer has
delivered to Buyer a copy of that certain Environmental Report
performed by Dames & Moore dated July 30, 1999 (the "ENVIRONMENTAL
REPORTS"). There are no existing violations of federal, state or local
laws, regulations, ordinances or orders related to environmental
matters relating to the ownership, use, condition, or operation of the
Real Property. No written or oral notice from any court or governmental
agency, official or instrumentality, of any alleged violation of any
ordinance, law, decree, order, code, or governmental rule or regulation
relating to environmental matters has been filed or communicated to
Seller with respect to the ownership, use, condition, or operation of
the Real Property or any part thereof. No release, discharge, spillage
or disposal of any Hazardous Substance has occurred or is occurring on
the Real Property and no soil or water in or under any of the Real
Property has been contaminated by any Hazardous Substance (except for
contamination which may occur during construction but which has been
fully remediated in accordance with all Legal Requirements prior to
Closing).
I. TAXES AND ASSESSMENTS. The Property is
separately assessed for real property tax assessment purposes and is
not combined with any other real property for such tax assessment
purposes. Seller has received no written notice of any contemplated or
actual re-assessments of the Property or any part thereof for general
real estate tax purposes. To Seller's or Developer's Knowledge, no
assessments for public improvements, impact fees or similar exactions
have been made against the Property which remain unpaid as of Closing.
J. CONDEMNATION PROCEEDINGS. There are no
pending or threatened Condemnation Proceedings which would affect the
Property, or any part thereof.
K. LITIGATION PROCEEDINGS. There are no
judgments unsatisfied against Seller or the Property or consent decrees
or injunctions to which the Property is subject, and there is no
litigation, claim or proceeding pending or, to Seller's or Developer's
Knowledge, threatened against or relating to the Property, nor does
Seller or Developer know of any basis for any such action or of any
governmental investigation relative to the Property. Seller and
Developer have no knowledge of the existence of criminal investigation
concerning Seller or Developer which will have a material adverse
affect on its ability to perform under this Agreement, the Property or
the use and operation of the Property.
L. BANKRUPTCY. Neither Seller nor Developer
have
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(A) commenced a voluntary case, or had entered against it a petition,
for relief under any federal bankruptcy act or any similar petition,
order or decree under any federal or state law or statute relative to
bankruptcy, insolvency or other relief for debtors, (B) caused,
suffered or consented to the appointment of a receiver, trustee,
administrator, conservator, liquidator or similar official in any
federal, state or foreign judicial or non-judicial proceeding, to hold,
administer and/or liquidate all or substantially all of its assets, (C)
made an assignment for the benefit of creditors.
M. AVAILABILITY OF UTILITIES. As of Closing,
all public utilities (sanitary sewer, storm sewer, electricity, water
and telephone) required for the operation of the proposed Improvements
to the Property will be installed and operating, and all installation
and connection charges and all tap-on, permit or other fees required as
a precondition to such utility service will be paid in full. Neither
Seller nor Developer have received any notice of a claim with respect
to storm water flow from any owner of adjacent property or otherwise.
All such public utilities either enter the Land through adjoining
public streets or, if they pass through adjoining private land, do so
in accordance with valid and recorded public easements or private
easements which will inure to the benefit of Buyer.
N. DISCLOSURE. No statement, warranty or
representation by Seller or Developer herein contains an untrue
statement of material fact, or omits to state a true statement of
material fact necessary in order to make such statement, warranty or
representation not misleading in light of the circumstances under which
such statement, warranty or representation is made.
9.2 REAFFIRMATION AT CLOSING. All of the foregoing
representations, warranties and covenants of Seller and Developer shall be
reaffirmed by such persons in writing at Closing subject to the Survival Period,
to the extent the facts and circumstances in existence as of Closing permit such
reaffirmation, and in the event a change in facts and circumstances requires a
change in any such representation or warranty, the certificate shall specify any
such changes in reasonable detail.
9.3 SURVIVAL. The representations, warranties and
covenants set forth above shall survive Closing hereunder for a period of one
(1) year (the "SURVIVAL PERIOD"), provided claims are asserted against Seller or
Developer within such one (1) year period.
9.4 REMEDIES PRIOR TO CLOSING. If it is determined at any time
prior to Closing that any of the foregoing representations and warranties of
Seller or Developer were not accurate in any material respect either as of the
date made or
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as of the Closing Date, then, unless Seller or Developer cures such inaccuracy
to Buyer's reasonable satisfaction (by paying money and performing any act or
acts necessary to do so) on or before thirty (30) days after written notice from
Buyer to Seller or Developer of such inaccuracy (but in no event later than the
Closing Deadline), then Buyer shall elect either of the following remedies,
which shall be Buyer's sole and exclusive remedies: (i) the Purchase Price shall
be reduced by an amount equal to the cost to cure the impact of such inaccuracy,
or if not curable, equal to the diminution in the Property's value resulting
from such inaccuracy, as determined by: (a) mutual agreement of Buyer, Seller,
and Developer, or (b) if Buyer and Seller fail to agree within ten (10) days
after notice from one party to the other of such inaccuracy of any
representation or warranty, by arbitration in accordance with Section 13 of the
Sales Development Agreement, except that the "ADR Arbiter" shall be a Florida
certified appraiser who is a member of the Appraisal Institute, with at least
ten (10) years experience in appraising office properties in the Tampa Bay area;
or, alternatively, and provided the inaccuracy materially reduces the usefulness
of the Property to Buyer, but in no event shall such reduction of the Purchase
Price under this Section 9.4(i) exceed One Hundred Fifty Thousand and No/100
Dollars ($150,000.00) in the aggregate, or (ii) Buyer shall have the right to
terminate this Agreement and the Sale Development Agreement by delivery of
written notice to Seller and seek reimbursement from Seller of Buyer's
reasonable actual out-of-pocket expenses incurred in connection with the
Transaction up to a maximum amount of One Hundred Fifty Thousand and No/100
Dollars ($150,000.00), prior to the date of such termination. Notwithstanding
the foregoing, the above limitations of damages shall not be applicable to any
contribution rights under state or federally mandated environmental remediation.
9.5 REMEDIES AFTER CLOSING. If it is determined at any
time after Closing and prior to expiration of the Survival Period that any of
the foregoing representations and warranties of Seller or Developer were not
accurate in any material respect either as of the date made or as of the Closing
Date (or as reaffirmed at Closing), then, provided that Buyer has delivered
written notice to Seller or Developer of such inaccuracy prior to the expiration
of the Survival Period, unless Seller or Developer cures such inaccuracy to
Buyer's reasonable satisfaction (by paying money and, as applicable, performing
any act or acts necessary to do so) on or before thirty (30) days after such
written notice from Buyer of such inaccuracy (or provided Seller or Developer
have commenced such cure and are diligently prosecuting the same to completion,
such additional to as is reasonably necessary to complete such cure, not to
exceed ninety (90) days), Seller and Developer shall be liable to Buyer with
respect to such inaccuracy in such representations and warranties to the extent
the same has a material adverse impact on the value, ownership, or use of the
Property, and Buyer shall be entitled to seek a claim for Buyer's actual damages
(including without limitation, any increased costs in financing the purchase of
the Property), but otherwise excluding consequential
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damages, incurred on account of such inaccuracy, not to exceed the sum of One
Hundred Fifty Thousand and No/100 Dollars ($150,000.00) in the aggregate.
Notwithstanding the foregoing, the above limitation of damages shall not be
applicable to any contribution rights under state or federally mandated
environmental remediation.
9.6 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer, as of
the date of the execution of this Agreement by Buyer, represents and warrants to
Seller as follows, and as a condition precedent to Seller's obligation to sell
the Property to Buyer at Closing under this Agreement, the following
representations of Buyer shall be true and correct in all material respects as
of the Closing Date:
A. ORGANIZATION, POWER AND AUTHORITY. Buyer is
a corporation and is duly organized and validly existing and in good
standing under the laws of Delaware, and has the power and authority to
enter into and perform its obligations under this Agreement. Buyer has
the full power and authority to enter into this Agreement and the
execution and delivery of this Agreement by Buyer (i) has been duly and
validly authorized by all necessary action on the part of Buyer, and
(ii) to the knowledge of the officer of Buyer signing this Agreement,
does not conflict with or result in a violation of Buyer's Articles of
Incorporation or By-Laws or any judgment, order or decree of any court
or arbiter in any proceeding to which Buyer is a party, and (iii) to
the knowledge of the officer of Buyer signing this Agreement, does not
conflict with or constitute a material breach of, or constitute a
material default under, any contract, agreement or other instrument by
which Buyer is bound or to which it is a party.
B. NO BANKRUPTCY. Buyer has not (A) commenced a
voluntary case, or had entered against it a petition, for relief under
any federal bankruptcy act or any similar petition, order or decree
under any federal or state law or statute relative to bankruptcy,
insolvency or other relief for debtors, (B) caused, suffered or
consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator or similar official in any federal, state or
foreign judicial or non-judicial proceeding, to hold, administer and/or
liquidate all or substantially all of its assets, or (C) made an
assignment for the benefit of creditors.
10. SELLER'S AND DEVELOPER'S COVENANTS. Seller and Developer agree
that between the date hereof and the Closing Date:
10.1 NO ALTERATION OF TITLE. Except as provided
hereinafter, Seller shall not, so long as this Agreement remains in effect,
permit further encumbrance of title to the Property after the date hereof
without the prior written consent of Buyer, which consent shall not be
unreasonably withheld. Without limiting the
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foregoing, Seller shall permit the encumbrance of the Property, or any portion
thereof or any interest therein, except as follows: Seller shall be permitted to
make the following conveyances: (a) encumbrances in accordance with the Plans
and Specifications of utility easements to utility companies, which utility
easements shall serve only the Property, but provided that all such easements
affecting the Property shall be submitted to Buyer for approval, which approval
shall not be unreasonably withheld or delayed, prior to the execution thereof by
Seller, accompanied by a survey showing the location thereof; (b) a deed of
trust or mortgage and security agreement to secure the Construction Loan from
Construction Lender to Developer or Seller (and any amendments, modifications,
or renewals thereof), which indebtedness shall in no event exceed the Purchase
Price Limit; (c) any claim of lien, notice of commencement or judgment provided
Seller causes such encumbrance to be terminated or bonded off prior to Closing;
or (d) any amendment to the restrictions, covenants and conditions described in
Item 9, Schedule B, Section 2 of the Title Commitment appointing a successor
developer or clarifying the legal description of an existing easement not
encumbering the Property.
10.2 NO ALTERATION OF SITE CONDITIONS. Seller covenants
that, other than as expressly contemplated under the Lease Development
Agreement, the Sale Development Agreement and this Agreement, Seller will not
permit any material adverse change to the condition at the Project site
including, but not limited to, environmental conditions.
10.3 COMPLIANCE WITH LAWS, LEASES, CONTRACTS. Seller shall
comply in all material aspects with, make all payments required to be paid
under, and suffer no default under: (i) all laws, ordinances, regulations and
orders relating to the Property, and (ii) all Record Exceptions.
10.4 REPRESENTATIONS AND WARRANTIES. Seller and Developer
shall not take any action which could make any of the representations and
warranties of Seller or Developer under this Agreement untrue or inaccurate in
any material respect or fail to take any action necessary to prevent any of the
representations and warranties of Seller or Developer from becoming untrue or
inaccurate in any material respect. Seller or Developer, as applicable, shall
notify Buyer promptly in writing if prior to the Closing Date such person has
knowledge of (within the definition of "SELLER'S OR DEVELOPER'S KNOWLEDGE") any
fact, transaction, event or occurrence which could make any of the
representations and warranties of Seller or Developer under this Agreement not
true and correct (without regard to any knowledge qualification set forth with
respect thereto) in all material respects.
10.5 PERSONAL PROPERTY. Seller and Developer shall not
remove any of the Property, including Personal Property, from the Real Property
or the Improvements nor use any of the Personal Property prior to the Closing
Date except
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such use thereof as is normal and customary in the operation and maintenance of
the Property. Seller and Developer covenants that items of Personal Property
which consist of inventory and maintenance items shall be maintained at the
customary level for Class A operations and will be available and conveyed to
Buyer on the Closing Date.
10.6 PERMITS AND ZONING. Developer shall use its
commercially reasonable efforts to preserve in force all existing Permits and to
renew all Permits expiring prior to the Closing Date on terms reasonably
acceptable to Buyer. If any such Permit shall be suspended or revoked, Developer
shall promptly notify Buyer and shall diligently take all measures reasonably
necessary to cause the reinstatement of such Permit without any additional
limitation or condition. Developer shall not seek or allow any amendment to any
Permit which would alter the existing permissible uses of the Property or any
part thereof. Without the prior written consent of Buyer, which consent may be
withheld in Buyer's sole discretion reasonably exercised, Seller and Developer
shall not apply for, consent to, promote or acquiesce in any modification of any
zoning restrictions or other restrictions or regulations of governmental or
quasi-governmental authorities with respect to the Property.
11. NOTICES. All notices, consents, approvals and other
communications which may be or are required to be given by either Seller,
Developer or Buyer under this Agreement shall be given in the manner provided in
the Sale Development Agreement.
12. CASUALTY AND CONDEMNATION.
12.1 CASUALTY. In the event that prior to the Closing Date
any portion of the Improvements is damaged or destroyed by fire or other
casualty, then Seller shall immediately deliver written notice to Buyer of such
casualty (hereinafter referred to as "SELLER'S CASUALTY NOTICE") and the
following provisions shall apply with respect to such casualty:
A. MAJOR CASUALTY. If such damage or
destruction results in a casualty loss in an amount exceeding One
Million and No/100 Dollars ($1,000,000) (the "DAMAGE LIMIT"), then,
Buyer shall have the right to terminate this Agreement and the Sale
Development Agreement unless prior to Closing the damaged or destroyed
improvements have been restored or replaced in a manner that meets or
exceeds the original Plans and Specifications and is otherwise in full
compliance with this Agreement or, at Buyer's option, Buyer and Seller
shall use good faith efforts to enter into contractual arrangements for
such restoration or replacement. Any such termination shall be effected
by written notice to Seller received within ten (10) days after Buyer
has received Seller's Casualty Notice, in which event
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thereafter neither party hereto shall have any further rights,
obligations or liabilities hereunder except to the extent that any
right, obligation or liability set forth herein expressly survives
termination of this Agreement. In the event that this Agreement and the
Sale Development Agreement are not terminated pursuant to this
Subparagraph A, Developer shall use due diligence and good faith to
repair such damage and complete construction of the Improvements as
quickly as possible.
B. MINOR CASUALTY. If such damage or
destruction results in a casualty loss in an amount not exceeding the
Damage Limit, (i) Buyer shall have no right to terminate this Agreement
or the Sale Development Agreement on account thereof, and (ii)
Developer shall use due diligence and good faith to repair such damage
and complete construction of the Improvements as quickly as possible.
12.2 CONDEMNATION. In the event that prior to the Closing
Date there shall be commenced or instituted against the Property any
Condemnation Proceeding, Seller shall immediately give written notice
(hereinafter referred to as "SELLER'S CONDEMNATION NOTICE") of such Condemnation
Proceeding to Buyer, and:
A. MAJOR CONDEMNATION. In the event that such
Condemnation Proceeding would result in the taking of any portion of
any Improvement (other than taking of paving or curbing, so long as
such taking of paving or curbing does not limit access to the
Property), or any other taking which materially affects the Property in
Buyer's reasonable opinion, or any portion of the Property worth in
excess of Five Hundred Thousand and No/100 Dollars ($500,000), then
Buyer shall have the right to terminate this Agreement and the Sale
Development Agreement by written notice to Seller and Developer
received within ten (10) days after the receipt of Seller's
Condemnation Notice, in which event thereafter neither party hereto
shall have any further rights, obligations or liabilities hereunder
except to the extent that any right, obligation or liability set forth
herein expressly survives termination of this Agreement. In the event
that Buyer shall not elect to terminate this Agreement and the Sale
Development Agreement pursuant to this Subparagraph A: (i) the
conveyance of the Property shall be less such portion of the Property
so taken (or shall be subject to, as applicable) said Condemnation
Proceeding without adjustment of the Purchase Price, (ii) Seller shall
assign or pay to Buyer at Closing all of such person's right, title and
interest, if any, in any award payable on account of such Condemnation
Proceeding or pay to Buyer all such awards previously paid, and (iii)
neither Seller nor Developer shall be obligated to repair or restore
the damage to the Property arising on account of said Condemnation
Proceeding.
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B. MINOR CONDEMNATION. In the event that such
Condemnation Proceeding would not involve the taking of any portion of
any Improvement described in subparagraph A above: (i) Buyer shall have
no right to terminate this Agreement and the Sale Development Agreement
on account thereof, (ii) the conveyance of the Property shall be less
such portion of the Property so taken (or shall be subject to, as
applicable) said Condemnation Proceeding without adjustment of the
Purchase Price, (iii) Seller shall assign to Buyer at Closing all of
Seller's right, title and interest, if any, in any award payable, and
pay to Buyer all such awards previously paid, on account of such
Condemnation Proceeding, and (iv) neither Seller nor Developer shall be
obligated to repair or restore the damage to the Property arising on
account of said Condemnation Proceeding.
13. ADVISORS. Each party represents to the other that such party
has not incurred any obligation to any broker or real estate agent with respect
to the purchase or sale of the Property except for the Advisor defined above and
Echelon Real Estate Services, Inc. ("ERES"), which obligation has been incurred
by [SELLER] pursuant to a separate agreement with the Advisor and ERES executed
in connection with the sale/lease of the Property. Seller shall, upon the
Closing of this Transaction and receipt by Seller of the Purchase Price, pay to
Advisor and ERES the appropriate sales commission pursuant to the terms of the
brokerage agreement with Advisor and ERES. Except for Advisor and such
commission payable as set forth above, Seller, Developer, and Buyer each hereby
(a) represent and warrant to the other that it has not employed, retained or
consulted any broker, agent, or finder in carrying on a negotiation in
connection with this Agreement or the Transaction, and (b) indemnify and agree
to hold the other harmless from and against any and all claims, demands, causes
of action, debts, liabilities, judgments and damages (including costs and
reasonable attorneys' fees actually incurred in connection with the enforcement
of this indemnity) which may be asserted or recovered against the indemnified
party on account of any brokerage fee, commission or other compensation arising
by reason of the indemnitor's breach of this representation and warranty.
Advisor is being paid a real estate brokerage commission pursuant to a separate
agreement between Seller and Advisor. This Paragraph shall survive the Closing
or any termination of this Agreement.
14. INDEMNITY. Each of Seller and Developer shall and does
protect, defend, indemnify and save Buyer harmless for, from and against all
Loss imposed upon or asserted against Buyer by reason of: (a) any claim by a
third party against Buyer arising out of any activity, construction,
development, occupancy, use or non-use of the Property arising or occurring
before the Closing (other than any activity, construction, development,
occupancy, and use of the Property by Buyer or buyer's agents, employees or
contractors) or in any way related to or arising out of any act, omission,
contract or commitment of Seller or Developer, or its agents,
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employees or contractors, at any time before or after the Closing; (b) any
accident, injury to or death of person (including workmen) or loss or damage to
property occurring on or about the Property arising or accruing before the
Closing, unless due to the negligence or willful acts of Buyer or Buyer's
agents, employees or contractors; and (c) subject to the limitations on remedies
in favor of Buyer as may be specified in this Agreement, any loss or damage to
Buyer resulting from any material breach or default by Seller or Developer of
any obligation or covenant of Seller under this Agreement or under any document,
instrument or agreement delivered pursuant to this Agreement. In the event Buyer
shall be made a defendant in any action, suit or proceeding brought by reason of
any such occurrence, Seller and Developer, at such parties' own expense, shall
defend or cause to be defended such action, suit, or proceeding or cause the
same to be resisted and defended by counsel designated by such parties or its
insurer and reasonably approved by Buyer. If any such action, suit or
proceedings should result in final judgment against Buyer, Seller, and Developer
shall promptly satisfy and discharge such judgment or cause such judgment to be
promptly satisfied and discharged. The obligations of Seller and Developer under
subsection (a) of this Paragraph shall survive the Closing, and the obligations
of Seller and Developer under subsections (a) and (c) shall survive the Closing
for a period of one (1) year provided any claim under those subsections are
asserted against Seller or Developer within such one (1) year period.
A. ENVIRONMENTAL INDEMNIFICATION. In addition
to other obligations hereunder, each of Seller and Developer agrees to
indemnify Buyer and its lender, consultants, officers, and employees,
successors and assigns from and against all demands, claims, civil or
criminal actions or causes of action, liens, assessments, penalties, or
fines, losses, damages, liabilities, or obligations, costs,
disbursements, expenses or fees of any nature (including without
limitation clean up costs, attorneys fees, paralegal fees, consultant
fees or expert fees and disbursements and costs of litigation at trial
and appellate levels) which may at any time be imposed upon, incurred
by, asserted or awarded against Buyer directly or indirectly related to
or resulting from all conditions (including those caused during
construction) which existed at the Property site prior to the date on
which the Buyer occupies the completed Improvements on the site. This
environmental indemnification shall be in full force and effect until
one (1) year after Substantial Completion of the entire Project. Seller
and Developer shall provide a separately executed document evidencing
its agreement to this environmental indemnification.
B. MECHANIC'S LIENS. Each of Seller and
Developer agrees to indemnify and to hold Buyer harmless from and
against all loss, claims, resulting from, in whole or in part failure
to comply with requirements of Fla. Statute ss.713.23 including but not
limited to Notice of Commencement and
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Bond. After closing, each of Seller and Developer shall and does
protect, defend and indemnify and hold Buyer harmless for, from and
against all loss, claims, liens, causes of actions, proceedings,
liabilities, fees (including attorneys fees), judgment, executions,
claims and demands of whatever nature from the Base Building Contractor
or the Tenant Improvement Contractor or their subcontractors,
sub-subcontractors or anyone claiming through, or as a result of, a
contract or agreement with the Base Building Contractor or the Tenant
Improvement Contractor for the performance of work or furnishing of
services, materials or equipment of any kind for the project.
15. DEFAULT.
15.1 BUYER DEFAULT. In the event that Buyer defaults in
the observance or performance of its covenants and obligations hereunder, and
such default continues for ten (10) consecutive days after the date of receipt
of written notice from Seller demanding cure of such default, or such longer
period as may be reasonably required to effect a cure (but in no event to exceed
a total of ninety (90) days), Seller shall be entitled, as its sole remedy, if
Seller has theretofore complied with Seller's obligations under this Agreement,
to terminate this Agreement and the Sale Development Agreement by written notice
to Buyer of such termination. Seller's agreement to limit its remedy for Buyer's
default to termination of this Agreement is a material inducement to Buyer's
execution of this Agreement. Seller and Developer hereby waive, relinquish and
release any and all other rights and remedies for Buyer's default under this
Agreement, including, but not limited to: (1) any right to sue Buyer for
damages, or (2) any other right or remedy which Seller or Developer may
otherwise have against Buyer, either at law, or equity or otherwise. [
15.2 SELLER OR DEVELOPER DEFAULT. In the event that Seller
or Developer defaults in the observance or performance of a material covenant or
material obligation hereunder and the liability of such party for failing to
observe such covenant or obligation is not addressed or otherwise governed by
the terms of the Sale Development Agreement or by the terms of Sections 6 and 9
of this Agreement, and furthermore, such default continues for six (6)
consecutive calendar days after the date of receipt of written notice from Buyer
demanding cure of such default, or such longer period as may be reasonably
required to effect a cure (but in no event to exceed a total of ninety (90)
days), Buyer shall be entitled either, at Buyer's option, (i) if Buyer has
theretofore complied with Buyer's obligations under this Agreement, to sue
Seller or Developer, as appropriate, for specific performance of this Agreement,
or (ii) to terminate this Agreement and the Sale Development Agreement (except
to the extent that any right, obligation or liability set forth herein expressly
survives termination of this Agreement) by the delivery to Seller and Developer
of notice of such termination, which termination shall be effective
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the fifth (5th) consecutive calendar day after the date of receipt of such
notice unless such default is earlier cured. In the event that Buyer has elected
to terminate this Agreement and the Sale Development Agreement, Buyer shall be
entitled to pursue a claim against Seller and Developer for Buyer's actual
damages (including without limitation, the increase in aggregate costs incurred
by Buyer under the Lease compared to Buyer's aggregate costs under this
Agreement) incurred as a result of such default, but otherwise excluding
consequential damages, not to exceed One Hundred Fifty Thousand and No/100
Dollars ($150,000.00). The foregoing shall be Buyer's sole remedies in the event
of Seller's or Developer's default under this Agreement, except as may be
provided in Section 16.1 hereof, and Seller and Developer shall not have any
further liability to Buyer for liquidated or actual damages or otherwise. The
parties acknowledge that the Property is unique because of its location and
because the Improvements have been custom designed for Buyer. Seller's and
Developer's failure to perform under this Agreement, including but not limited
to the conveyance of the Property to Buyer, would cause Buyer to suffer
irreparable harm, and such failure could not be remedied by the payment of
monetary damages. The parties accordingly agree that Buyer shall be entitled to
the remedy of specific performance for nonperformance of this Agreement by
Seller or Developer. Seller and Developer waive any right they might otherwise
have to object to the remedy of specific performance, and agree that they will
not assert that specific performance is not an available remedy.
16. GENERAL PROVISIONS.
16.1 TERMINATION If this Agreement is terminated or the
Property is otherwise not conveyed to Buyer under any circumstances, except
where Seller and Developer have complied with all of their obligations under
this Agreement and Buyer has defaulted under this Agreement, Seller shall pay to
Buyer the sum of One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) on
or before the commencement date of the Lease (or on the due date of the next due
rental payment if the Lease has previously commenced). Seller's agreement to pay
such amount is a material inducement to Buyer's execution of this Agreement.
16.2 EXECUTION NECESSARY. This Agreement shall not be
binding upon Seller and Developer until fully executed and delivered by proper
officials of Seller and Developer, and no action taken by Seller's or
Developer's corporate executives shall be deemed an acceptance of this Agreement
until this Agreement has been so executed by Seller and Developer and delivered
to Buyer.
16.3 COUNTERPARTS. This Agreement may be executed in
separate counterparts. It shall be fully executed when each party whose
signature is required has signed at least one counterpart even though no one
counterpart contains the signatures of all of the parties to this Agreement.
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16.4 SUCCESSORS AND ASSIGNS. Seller and Developer hereby
agree that Buyer may freely and unilaterally assign in its sole discretion,
without the need for cause to be given and without prior notice to or consent of
the Seller or Developer or any surety required, Buyer's duties, rights and
interests under this Agreement to any Buyer-affiliated entity or to an
owner-trustee pursuant to a synthetic lease financing entered into by Buyer or
its Affiliate for the Property. Neither the Seller's or Developer's obligations
hereunder nor the Seller's or Developer's right to receive payments under this
Agreement nor any other interest, right or duty of such party under this
Agreement may be assigned without the prior written consent of Buyer, which
consent may not be unreasonably withheld for any reason. Notwithstanding the
foregoing, in connection with the sale, transfer, assignment, conveyance or
other disposition of all or substantially all of the real property assets of
Developer or any of its subsidiaries (the "RE Assets"), Developer may assign,
with notice to Buyer but without Buyer's consent, its interest and obligations
under this Agreement, the Sale Development Agreement, and the Lease Development
Agreement, and may delegate or cause the assumption of its obligations and
responsibilities thereunder to the entity (the "Assignee") that acquires
(directly or indirectly through wholly-owned entities) the RE Assets, provided
that: (i) Assignee, at the time of such assignment or transfer, on a
consolidated basis with its wholly-owned entities, has (a) a total asset value
of at least $200,000,000.00 and (b) a net worth of at least $50,000,000.00; (ii)
W. Michael Doramus or Darryl A. LeClair are senior or executive management
personnel of Assignee at the time of such assignment or transfer; and (iii) such
Assignee assumes all of Seller's and Developer's obligations and
responsibilities under this Agreement, the Sale Development Agreement, and the
Lease Development Agreement. Upon such assignment or transfer, Seller and
Developer will be released from their respective liabilities under this
Agreement and the Sale Development Agreement. Developer may also delegate its
obligations under the Sale Development Agreement and the Lease Development
Agreement to a wholly-owned subsidiary of Developer or Assignee, but shall not
be released from liability thereunder due solely to such delegation. Seller may
assign its interest under this Agreement to Assignee or any wholly-owned
subsidiary of Assignee. Transfer of any membership interest in Seller shall not
violate this Section. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Seller expressly acknowledges that, at Closing, Buyer may direct Seller to
transfer the Property to a synthetic lease owner-trustee, in which event Seller
acknowledges that the owner-trustee shall have no liability under this
Agreement.
16.5 ENTIRE AGREEMENT. This Agreement and the Sale
Development Agreement and all the exhibits referenced herein and annexed hereto
and thereto contain the entire agreement of the parties hereto with respect to
the matters contained therein, and no prior agreement or understanding
pertaining to any of the matters connected with this Transaction shall be
effective for any
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purpose. Except as may be otherwise provided herein, the agreements embodied
herein may not be amended except by an agreement in writing signed by the
parties hereto.
16.6 TIME IS OF THE ESSENCE. Time is of the essence of
this Agreement. Anywhere a day certain is stated for payment or for performance
of any obligation, the day certain so stated enters into and becomes a part of
the consideration for this Agreement. If any date set forth in this Agreement
shall fall on, or any time period set forth in this Agreement shall expire on, a
day which is a Saturday, Sunday, federal or state holiday, or other non-business
day, such date shall automatically be extended to, and the expiration of such
time period shall automatically to be extended to, the next day which is not a
Saturday, Sunday, federal or state holiday or other non-business day. The final
day of any time period under this Agreement or any deadline under this Agreement
shall be the specified day or date, and shall include the period of time through
and including such specified day or date.
16.7 GOVERNING LAW. This Agreement shall be governed by
the laws of the state in which the Land is located.
16.8 SURVIVAL. All covenants, agreements, indemnities,
representations and warranties contained herein shall survive the Closing Date
for one (1) year and no longer (provided claims are asserted against Seller or
Developer within such one (1) year period), except for those covenants and
agreements which are actually performed at Closing and except as may be
otherwise specifically provided in this Agreement.
16.9 FURTHER ASSURANCES. Each party agrees to execute and
deliver to the other such further documents or instruments as may be reasonable
and necessary in furtherance of the performance of the terms, covenants and
conditions of the within Agreement. This covenant shall survive the Closing.
16.10 EXCLUSIVE APPLICATION. Nothing in this Agreement is
intended or shall be construed to confer upon or to give to any person, firm or
corporation other than Buyer and Seller hereto any right, remedy or claim under
or by reason of this Agreement. All terms and conditions of this Agreement shall
be for the sole and exclusive benefit of the parties hereto and may not be
assigned.
16.11 PARTIAL INVALIDITY. If all or any portion of any of
the provisions of this Agreement shall be declared invalid by laws applicable
thereto, then the performance of said offending provision shall be excused by
the parties hereto; provided, however, that, if the performance of such excused
provision materially affects any material aspect of this Transaction and if
either party does not upon demand from the other enter into a modification or
separate agreement which sets
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forth in valid fashion the covenants of such offending provision, then the party
hereto for whose benefit such excused provision was inserted in this Agreement
shall have the right, exercisable by written notice given to the other party
within ten (10) days after such provision is so declared invalid, to terminate
this Agreement; thereupon this Agreement shall be null and void.
16.12 INTERPRETATION. The titles, captions and paragraph
headings are inserted for convenience only and are in no way intended to
interpret, define, limit or expand the scope or content of this Agreement or any
provision hereof. If any party to this Agreement is made up of more than one
person or entity, then all such persons and entities shall be included jointly
and severally, even though the defined term for such party is used in the
singular in this Agreement. If any time period under this Agreement ends on a
day other than a Business Day, then the time period shall be extended until the
next Business Day. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted. If any words or phrases in this Agreement shall have
been stricken out or otherwise eliminated, whether or not any other words or
phrases have been added, this Agreement shall be construed as if the words or
phrases so stricken out or otherwise eliminated were never included in this
Agreement and no implication or inference shall be drawn from the fact that said
words or phrases were so stricken out or otherwise eliminated.
A. DEFINED TERMS. Capitalized terms used in
this Agreement shall have the meanings ascribed to them at the point
where first defined, irrespective of where their use occurs, with the
same effect as if the definitions of such terms were set forth in full
and at length every time such terms are used.
B. PRONOUNS. Wherever appropriate in this
Agreement, personal pronouns shall be deemed to include the other
genders and the singular to include the plural.
16.13 WAIVER RIGHTS. Buyer reserves the right to waive, in
whole or in part, any provision hereof which is for the benefit of Buyer. Each
of Seller and Developer reserves the right to waive, in whole or in part, any
provision hereof which is for the benefit of such party.
16.14 NO IMPLIED WAIVER. Unless otherwise expressly
provided herein, no waiver by Seller or Buyer of any provision hereof shall be
deemed to have been made unless expressed in writing and signed by such party.
No delay or omission in the exercise of any right or remedy accruing to Seller,
Developer, or Buyer upon any breach under this Agreement shall impair such right
or remedy or be construed as a waiver of any such breach theretofore or
thereafter occurring. The waiver by Seller, Developer, or Buyer of any breach of
any term, covenant or
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condition herein stated shall not be deemed to be a waiver of any other breach,
or of a subsequent breach of the same or any other term, covenant or condition
herein contained.
16.15 RIGHTS CUMULATIVE. All rights, powers, options or
remedies afforded to Seller, Developer, or Buyer either hereunder or by law
shall be cumulative and not alternative, and the exercise of one right, power,
option or remedy shall not bar other rights, powers, options or remedies allowed
herein or by law, unless expressly provided to the contrary herein. Without
limiting the generality of the foregoing, the provisions under this Agreement
and under the Sale Development Agreement shall be cumulative, except in the case
of irreconcilable inconsistency, in which case the provisions of the Development
Agreement shall govern. So long as both this Agreement and the Lease remain in
effect, the rights, powers, options or remedies afforded to Seller, Developer,
or Buyer under this Agreement and under the Lease shall be cumulative, except
that: (i) any damages (including liquidated damages) awarded to non-defaulting
party under this Agreement shall offset and be credited against the
non-defaulting party's claim for damages or liquidated damages for the same
breach or default under the Lease, and (ii) any damages (including liquidated
damages) awarded to non-defaulting party under the Lease shall offset and be
credited against the non-defaulting party's claim for damages or liquidated
damages for the same breach or default under this Agreement.
16.16 ATTORNEY'S FEES. Should either party employ an
attorney or attorneys to enforce any of the provisions hereof or to protect its
interest in any manner arising under this Agreement, or to recover damages for
breach of this Agreement, the non-prevailing party in any action pursued in
arbitration or in a court of competent jurisdiction (the finality of which is
not legally contested) agrees to pay to the prevailing party all reasonable
costs, damages and expenses, including reasonable attorney's fees actually
incurred, expended or incurred in connection therewith.
16.17 EXHIBITS AND SCHEDULES. All exhibits and schedules
referred to in, and attached to, this Agreement are hereby incorporated herein
in full by this reference.
16.18 CONFIDENTIALITY. Other than the Seller's and
Developer's disclosure to its lenders and bonding companies of the existence of
this Agreement and the value of the work-in-process and any other disclosures
made to third parties prior to the date of this Agreement, none of the parties
shall, without the prior written consent of the other parties, disclose or make
available to any person, or use, directly or indirectly, except for the
performance and implementation of the Project work, any confidential information
in connection with the Project, including this Agreement and the work
thereunder.
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As used herein, the term "confidential information" shall mean any
information, written or oral, concerning the Project, relating to or consisting
of processes, techniques, procedures, designs, drawings, plans, diagrams,
specifications, computer programs, systems, know-how, trade secrets and other
technical data, Project information, policies and contracts, including this
Agreement.
Buyer, Seller, and Developer each further agree that it shall not make
any announcements or release any information or photographs concerning this
Agreement, or the Project or any part thereof, to any member of the public or
press or any official body, unless prior written consent is obtained from the
other parties.
Each party shall take all steps which may be necessary or appropriate
in order that its respective officers, members, directors, agents, consultants
and employees and all subcontractors and suppliers, adhere to the provisions of
these conditions. Appropriate clauses to carry out the purpose and intent hereof
shall be included in all subcontracts, purchase orders and contracts entered
into by each party. Any material breach of this confidentiality provision shall
be an event of default upon which the non-defaulting party, in its sole
discretion, without notice and cure rights to Seller or Developer, may
immediately terminate this Agreement. This "confidential information" provision
shall survive termination of this Agreement.
16.19 FACSIMILE AS WRITING. The parties expressly
acknowledge and agree that, notwithstanding any statutory or decisional law to
the contrary, the printed product of a facsimile transmittal shall be deemed to
be "written" and a "writing" for all purposes of this Agreement, however,
facsimiles may not be used to provide any notice for this Agreement.
[EXECUTION PAGE FOLLOWS]
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IN WITNESS WHEREOF, Buyer, Seller, and Developer have executed this
Agreement under seal as of the day and year first above written.
SELLER:
200 CARILLON L.L.C.,
a Delaware limited liability company
By:
Name:
Title:
DEVELOPER:
ECHELON INTERNATIONAL CORPORATION,
a Florida corporation
By:
Name:
Title:
BUYER:
CATALINA MARKETING SALES
CORPORATION, a Florida corporation
By:
Name:
Title:
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SCHEDULE 1.2: STANDARD DEFINED TERMS
(ATTACHED TO AND MADE A PART OF THAT CERTAIN
PURCHASE AND SALE AGREEMENT BY AND BETWEEN
ECHELON AT CARILLON TWO, INC., AS SELLER,
ECHELON INTERNATIONAL CORPORATION, AS A DEVELOPER, AND
CATALINA MARKETING CORPORATION, AS BUYER,
DATED AS OF _____________, 1999)
"AFFILIATE" shall mean: (a) as to Seller, (i) a corporation,
partnership, limited liability company, individual or other entity owned (in
whole or in part) or controlled by Seller or any of the officers, members or
partners of Seller, or (ii) a corporation, partnership, limited liability
company, individual or other entity owning or controlling, or under common
ownership or control with, Seller, or any of the officers, members or partners
of Seller, or otherwise affiliated with Seller or any of the officers, members
or partners of Seller; (b) as to Echelon International, (i) a corporation,
partnership, limited liability company, individual or other entity owned (in
whole or in part) or controlled by Echelon International or any of the officers,
members or partners of Echelon International, or (ii) a corporation,
partnership, limited liability company, individual or other entity owning or
controlling, or under common ownership or control with, Echelon International,
or any of the officers, members or partners of Echelon International, or
otherwise affiliated with Echelon International or any of the officers, members
or partners of Echelon International; (c) as to Assignee, (i) a corporation,
partnership, limited liability company, individual or other entity owned (in
whole or in part) or controlled by Assignee or any of the officers, members or
partners of Assignee, or (ii) a corporation, partnership, limited liability
company, individual or other entity owning or controlling, or under common
ownership or control with, Assignee, or any of the officers, members or partners
of Assignee, or otherwise affiliated with Assignee or any of the officers,
members or partners of Assignee; and (d) as to Buyer: (i) a corporation,
partnership, limited liability company, individual or other entity owned (in
whole or in part) or controlled by Buyer or any of the officers, members or
partners of Buyer, or (ii) a corporation, partnership, limited liability
company, individual or other entity owning or controlling, or under common
ownership or control with, Buyer or any of the officers, members or partners of
Buyer, or persons otherwise affiliated with Buyer or any of the officers,
members or partners of Buyer.
"AGREEMENT" shall mean this Purchase And Sale Agreement between Seller,
Developer, and Buyer with respect to the Property.
"BUSINESS DAY" shall mean Monday through Friday excluding holidays
recognized by the state government of the State in which the Property is
located.
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"BUILDING SYSTEMS" shall mean systems and facilities with respect to
the Property, including, but not limited to, elevators, security systems, HVAC,
utilities, telephone service (including any cellular or digital facilities),
Internet access, and common area amenities.
"BUYER" shall mean the buyer referenced in the first paragraph of this
Agreement. This definition shall be subject to Buyer's right of assignment of
this Agreement, and right to require that title to the Improvements pass to an
Affiliate of Buyer or a financing owner-trustee at Closing.
"CLAIM" has the meaning contained in Section 4.3 A hereof.
"CLOSING" shall mean the consummation and closing of the Transaction.
"CLOSING PRORATION TIME" shall mean (a) if the Purchase Price is
received by Seller for investment credit (or by the closing agent, along with
authorization from Buyer to release such proceeds) prior to 2:00 P.M. local
Tampa, Florida time on the Closing Date, as of 11:59 P.M. local Tampa, Florida
time on the day prior to the Closing Date, in which event the day of Closing
shall belong to Buyer, and (b) if the Purchase Price is received by Seller (or
by the closing agent as aforesaid) at or after 2:00 P.M. local Tampa, Florida
time on the Closing Date, 11:59 P.M. local Tampa, Florida time on the Closing
Date, in which event the day of Closing shall belong to Seller.
"CONDEMNATION PROCEEDING" shall mean any proceeding in condemnation,
eminent domain or any written request for a conveyance in lieu thereof, or any
notice that such proceedings have been or will be commenced against any portion
of the Property.
"DESIGN AND CONSTRUCTION CONTRACTS" shall mean all contracts between
Seller or Developer and any third party relative to the design, engineering,
construction, operation and/or maintenance of the Improvements on the Real
Property or related to the Personal Property, including, but not limited to the
contracts between Developer and the members of the Design and Construction Team.
"DESIGN AND CONSTRUCTION CONTRACTS" shall also include the contract between the
Base Building Contractor and the Base Building Architect.
"DESIGN AND CONSTRUCTION TEAM" means the Base Building Architect, the
Base Building Contractor, and the Tenant Improvements Contractor (but shall
exclude the Tenant Improvement Architect).
"DEVELOPER" shall mean the entities referenced in the first paragraph
of this Agreement. All obligations of Developer under this Agreement shall be
joint and several.
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"ECHELON INTERNATIONAL" has the meaning contained in the first
paragraph hereof.
"EFFECTIVE DATE" shall mean the date on which the last to sign of
Seller, Developer, and Buyer executes this Agreement.
"ENVIRONMENTAL MATTER" shall mean any matter related in any manner
whatsoever to (i) the disposal or release of solid, liquid or gaseous waste into
the environment, (ii) the treatment, storage or other handling of any Hazardous
Substance, (iii) the placement of structures or materials into waters of the
United States, or (iv) the presence of any Hazardous Substance in any building,
structure or workplace.
"ENVIRONMENTAL LAWS" shall mean any applicable local, state or federal
law with respect to the release of Hazardous Substances, the regulation of the
discharge of solid, liquid or gaseous waste into the environment or the
placement of structures or materials into the waters of the United States,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. ss.9601
et seq.; the Resource Conservation and Recovery Act, as amended ("RCRA") 42 USC
ss.6901 et seq.; the Hazardous MaterialS Transportation Act, as amended, 49
U.S.C. ss.1801, et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. ss.1251, et seq.; and any other applicable law or regulation.
"ENVIRONMENTAL LITIGATION" shall mean any claims, actions, suits,
proceedings or investigations related to Environmental Matters pending or
threatened against Seller or any predecessors interest with respect to the
ownership, use, condition, or operation of the Property in any court or before
or by any federal, state or other governmental agency or private arbitration
tribunal.
"GATEWAY" has the meaning contained in the Recitals hereto.
"HAZARDOUS SUBSTANCE" shall mean any hazardous or toxic substance or
waste as those terms are defined by any applicable Environmental Law, together
with (if not so defined by such Environmental Laws), petroleum, petroleum
products, oil, PCBs and asbestos.
"IMPROVEMENTS" shall mean the buildings, structures (surface and
subsurface), interior tenant improvements and other improvements and fixtures
now or hereafter situated on or attached to any parcel of the Land, which
Improvements shall consist of a five (5) story office building with
approximately 142,857 rentable square feet, constructed of a structured steel
frame with an architectural pre-cast concrete exterior, with interior tenant
improvements and surface and structural parking for approximately 670
automobiles (a ratio of
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approximately 4.7 spaces per 1,000 rentable square feet), together with other
amenities and improvements, to be constructed and completed by Developer in
accordance with the terms of this Agreement and the Sale Development Agreement.
"LAND" shall mean that certain tract or parcel of land, more
particularly described on EXHIBIT A.
"LAND USE COMPLIANCE DOCUMENTS" has the meaning contained in Paragraph
[8.6K].
"LAND USE REQUIREMENTS" shall mean all deed restrictions, restrictive
covenants, building codes, zoning restrictions and Environmental Laws, and any
other law, ordinance, covenant, restriction or regulation affecting the Real
Property or Improvements.
"LEGAL REQUIREMENTS" has the meaning contained in Paragraph 4.2 A
hereof.
"LIEN" shall mean any mortgage, deed of trust, security deed, lien,
judgment, pledge, conditional sales contract, security interest, past-due taxes,
past-due assessments, contractor's lien, materialmen's lien, judgment or similar
encumbrance against the Property of a monetary nature.
"LIQUIDATED DAMAGE AMOUNT" shall have the meaning contained in Section
15.1 hereof.
"LOSS" shall mean any and all direct or indirect demands, claims,
payments, obligations, actions or causes of action, assessments, losses,
liabilities, costs and expenses, including, without limitation, penalties,
interest on any amount payable to a third party as a result of the foregoing,
lost income and profits, and any legal or other expenses (including, without
limitation, reasonable attorneys' fees and expenses) reasonably and actually
incurred in connection with investigating or defending any claims or actions,
whether or not resulting in any liability.
"OTHER INTERESTS" shall mean any other interests of Seller or Developer
in and to the Real Property and the Improvements or pertaining thereto,
including, without limitation, all of the right, title and interest of the
Seller or Developer in and to:
(i) All Property Documents;
(ii) All entitlements of the Seller or Developer in and to
any award made or to be made in lieu of any of the interests to be
conveyed hereunder, including any award or payment made or to be made
(a) for any taking in any Condemnation Proceeding of land lying in the
bed of any street, road,
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highway or avenue, open or proposed, in front of or adjoining all or
any part of the Land, (b) for damage to the Property or any part
thereof by reason of change of grade or closing of any such street,
road, highway or avenue, and (c) for any taking in a Condemnation
Proceeding of any part of the Property;
(iii) Any name or trade name by which the Improvements or
the Real Property or any part thereof may be known, if any, including,
but not limited to the Project Name and all other fictitious names used
on the date hereof in connection with the ownership and operation of
the Property and all registrations for such names, but expressly
excluding any rights to the use of the names "Echelon" or "Carillon" or
the business or corporate name of Assignee;
(iv) The right to the use of any telephone number located
under the Project Name and the right to list telephone numbers under
the Project Name;
(v) The Base Building Design Documents and the copyrights
therein; and
(vi) All permits.
"PERMITS" shall mean all licenses, certificates (including certificates
of occupancy), consents, variances, waivers, authorizations, permits and similar
approvals required for the construction, ownership, operation or occupancy of
the Property by Buyer and issued by governmental authorities having jurisdiction
over the Property or by private parties or associations pursuant to any of the
Permitted Title Exceptions or otherwise in connection with any Land Use
Requirement.
"PERMITTED TITLE EXCEPTIONS" shall mean the following:
(a) All real estate taxes not yet due and payable as of
the Closing Date. Seller shall pay any special assessments (to the
extent payable in installments and due prior to Closing) in full prior
to Closing;
(b) Any existing utility easements serving only the Real
Property and no other land;
(c) The state of facts disclosed by the Survey updated
August 19, 1999, prepared by Polaris Associates, Inc., Job No.
001-2365, previously delivered to Buyer by Seller or Developer and
disclosed by a current Survey of the Land obtained by Buyer, provided
such state of facts does not, in Buyer's reasonable judgment,
materially interfere with (i) the current use, or the use contemplated
by Buyer as disclosed to Seller, of any portion of the Land or the
Improvements, (ii) the performance of any covenant, obligation,
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representation or warranty of the owner of the Property under any
Permitted Title Exceptions, (iii) the maintenance and operation of the
Improvements or the continued use thereof for the same purposes as
presently used, (d) the meeting of the normal requirements of a
mortgage lender, or (e) Buyer's obtaining title insurance (including
insurance of marketability) satisfactory to Buyer; and
(d) All matters of record as reflected in the Title
Commitment, and any other matters approved as Permitted Title
Exceptions in writing by Buyer prior to Closing or deemed approved as
Permitted Title Exceptions pursuant to this Agreement.
"PERSONAL PROPERTY" shall mean all personal property owned by Seller or
Developer but only if used or usable in connection with any present or future
occupation or operation of all or any part of the Real Property or the
Improvements or both, together with (to the extent not constituting a portion of
the Real Property) all fixtures, furniture, furnishings, carpeting, draperies,
fittings, equipment, machinery, apparatus, building materials, appliances and
articles, whether located on or off the Real Property and used or usable in
connection with any present or future occupation or operation of all or any part
of the Real Property or the Improvements or both, including, without limitation,
all elevators, escalators, boilers, furnaces, heating, ventilating and
air-conditioning systems, office furnishings and equipment, building drawings,
plans and specifications, building materials and wall partitions, sprinkler and
well systems, sewerage systems, electrical equipment, fire prevention and
extinguishing apparatus, engineering, maintenance and supplies and materials,
fuel and other supplies of all kinds whether used, unused or in stock for future
use in connection with the maintenance and operation of the Property, which are
on hand on the date hereof, subject to such depletion and including such
resupplying as shall occur and be made in the normal course of business.
"PLANS AND SPECIFICATIONS" shall mean the final plans and
specifications for construction of the Improvements, as prepared by the Base
Building Architect and the Tenant Improvements Architect, and all amendments and
supplements thereto, including site plans, elevation renderings and landscaping
plans, including full architectural and engineering review.
"PROJECT" means the Improvements or the design, construction, and
completion thereof, as appropriate for the context in which such term is used.
"PROPERTY" shall mean the Real Property, the Improvements, the Personal
Property and the Other Interests.
"PROPERTY DOCUMENTS" has the meaning contained in Paragraph [9.1G]
hereof.
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"REAL PROPERTY" shall mean the Land, including, without limitation, (a)
any and all buildings located on the Land and all other Improvements, (b) all
easements appurtenant to the Land and other easements, grants of right,
licenses, privileges or other agreements for the benefit of, belonging to or
appurtenant to the Land whether or not situate upon the Land, all whether or not
specifically referenced on EXHIBIT A, (c) all mineral, oil and gas rights,
riparian rights, water rights, sewer rights and other utility rights allocated
to the Land, (d) all right, title and interest of the owner of the Land in and
to any roads, streets and ways, public or private, open or proposed, in front of
or adjoining all or any part of the Land and serving the Land, (e) all rights to
development of the Land granted by governmental entities having jurisdiction
over the Land, subject to the restrictions on development as provided on the
Deed.
"SELLER" shall mean the seller referenced in the first paragraph of
this Agreement.
"SELLER'S OR DEVELOPER'S KNOWLEDGE" shall mean (i) the actual knowledge
of the following individuals: Julio Maggi and Daryl LeClair (the "KNOWLEDGEABLE
PARTIES"), (ii) any written notice with respect to an item or condition
delivered to a Knowledgeable Party (but not including such notices delivered to
the predecessors of such Knowledgeable Parties in their respective positions
with Seller or Developer or any notices delivered to the Knowledgeable Parties
as a transfer of files and other data upon their assumption of responsibility
with respect to the Property), or (iii) any oral communication by any third
party with a Knowledgeable Party.
"SURVEY" shall mean a current as-built plat of survey of the Land
prepared for and certified by Polaris, Inc. or other registered land surveyor
licensed as such in the state in which the Property is located. The Survey (a)
shall be prepared for and certified by a registered land surveyor licensed as
such in the State in which the Property is located, (b) sufficiently current so
as to permit deletion of the standard survey exception on the Title Policy, (c)
shall be coordinated with Buyer's title examination (and shall show the location
of all easements and other encumbrances referenced therein), and (d) shall
comply with the Florida Minimum Technical Standards. The Survey shall show the
following items, whether covered by the foregoing minimum detail requirements or
not:
(i) All courses and distances referred to in the
description of the Land.
(ii) The location of all Improvements on the Land with the
dimensions thereof. If deed restrictions, recorded plats or zoning
ordinances require a building to be set back specified distances from
street or property lines, the Survey must show measured distances from
said building to said lines. The Survey must contain a certification
from the Surveyor that the
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Improvements and any other items on the Land do not encroach over any
boundary line of the Land, any set-back or buffer line or any easement
boundary; any exceptions to this certification must be set forth in the
certification and are subject to Buyer's approval in Buyer's sole
discretion.
(iii) Location of all record exceptions and any other
visible easements, rights-of-way, water courses, drains, sewers,
encroachments, driveways or roads which serve the Land and to which the
Land is subject (excluding any easements not located on the Property
which are uniform to and run throughout all of plat of Carillon Park),
including references to the recording data of the instruments creating
such easements, rights-of-way, drains, sewers, courses, driveways or
roads, if such instruments are recorded.
(iv) The names and widths of the rights-of-way of streets
adjacent to or serving the Land with the distance from the nearest
corner to the beginning point of the Land surveyed; the extent and
location of any limitation of access or development, together with a
reference to the instrument limiting such access, and the extent and
location of any permitted access points within any limited access area,
together with a reference to the permit or other instrument permitting
such access.
(v) The total acreage or square foot area of the Land.
(vii) The boundary lines of each portion of the Land
encumbered by any recorded lease, if applicable.
(viii) Interior lines and facts sufficient to insure full
contiguity of each parcel if the Land is composed of more than one
parcel, together with the surveyor's certification of such contiguity.
(ix) The surveyor shall note the applicable flood zone
classification in the surveyor's certification.
(ix) The political subdivision and county in which the
Land is located and such other notations as will accurately describe
and depict the location of the Land surveyed.
The Survey and the surveyor's certifications should be addressed to Buyer,
Seller and the Title Company. The Survey must be dated as of the date the Survey
was made on the ground, signed and sealed by the surveyor and certified (or
re-certified) by the surveyor that the Survey was actually made on the ground
and is correct.
"TITLE COMMITMENT" shall mean the commitment of the Title Company to
issue the Title Policy.
50
<PAGE> 51
"TITLE POLICY" shall mean the full coverage, revised ALTA 1992 form
title policy with Florida modifications issued by the Title Company in the
amount of the Purchase Price, and containing, unless prohibited by applicable
statutes or regulations, the following endorsements: (a) "same land as survey"
(Survey legal matches title legal); and (b) such other endorsements as are
reasonably required by Buyer. The Title Policy shall insure as separate insured
parcels any easement rights running to the benefit of the Property, including,
without limitation, easements for storm and sewer lines, storm drainage and
detention, and other utilities which are required in connection with the
operation of the Property.
"TRANSACTION" shall mean the purchase and sale transaction contemplated
by this Agreement.
"UCC SEARCHES" shall mean Uniform Commercial Code and other relevant
searches from the State and County in which the Land is located, and in which
the Seller or Developer maintains its chief executive office or its principal
business office, which shall show that there exist no UCC financing statements
or other Liens against Seller or Developer or with respect to the Property,
except the Permitted Title Exceptions.
"WARRANTIES" shall mean each and every now existing and outstanding
bond and warranty concerning the Real Property, the Improvements located thereon
or the Personal Property, including, but not limited to, any and all bonds and
warranties, if any, now or hereafter in effect, arising out of, made, given or
issued, whether express or implied, in conjunction with any construction
contracts and any other contracts between Seller or Developer (or any
predecessors in title thereto) and any third party relative to the construction,
operation and/or maintenance of the Improvements on the Real Property or related
to the Personal Property, or otherwise arising out of, made, given or issued by
any such third party under each of the construction contracts (or by a
subcontractor performing any of the work which inures to the benefit of Seller
or Developer), all in conjunction with the construction, operation and/or
maintenance of the Improvements made pursuant to the construction contracts, or
arising out of, made, given or issued, by manufacturers or suppliers, in
conjunction with the Improvements or the Personal Property, together with all
claims in contract or quasi-contract and any similar chose-in-action arising out
of or resulting therefrom; the Warranties shall include, without limitation, any
roofing, air conditioning, heating, elevator or other bond or warranty relating
to construction of the Improvements, subject to any applicable express
limitations contained in each such bond or warranty.
"WARRANTY ESTOPPEL" has the meaning contained in Paragraph [8.6D].
51
<PAGE> 1
EXHIBIT 15
November 12, 1999
Catalina Marketing Corporation
11300 9th Street North
St. Petersburg, Florida 33716
Catalina Marketing Corporation:
We are aware that Catalina Marketing Corporation has incorporated by reference
in its Registration Statement Nos. 33-46793, 33-77100, 33-82456, 333-07525,
333-13335 and 333-86905, its Form 10-Q for the quarter ended September 30,
1999, which includes our report dated October 13, 1999, covering the unaudited
interim financial information contained therein. Pursuant to Regulation C of
the Securities Act of 1933 (the Act), that report is not considered a part of
the registration statement prepared or certified by our firm or a report
prepared or certified by our firm within the meaning of Sections 7 and 11 of
the Act.
Very truly yours,
/s/ Arthur Andersen LLP
- -----------------------
<PAGE> 1
EXHIBIT 19
REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To Catalina Marketing Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of
Catalina Marketing Corporation (a Delaware corporation) and subsidiaries as of
September 30, 1999, and the related condensed consolidated statements of income
for the three-month and six-month periods ended September 30, 1999 and 1998,
and the condensed consolidated statements of cash flow for the six-month
periods ended September 30, 1999 and 1998. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Catalina Marketing Corporation and
subsidiaries as of March 31, 1999, and the related consolidated statements of
income, stockholders' equity and cash flows for the year then ended (not
presented herein), and, in our report dated April 29, 1999, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of March 31, 1999, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
Tampa, Florida
October 13, 1999
/s/ Arthur Andersen LLP
- -----------------------
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<FISCAL-YEAR-END> MAR-31-1999
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0
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