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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 25, 1999
COMMISSION FILE NUMBER: 0-22511
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RF MICRO DEVICES, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
NORTH CAROLINA 56-1733461
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
7625 THORNDIKE ROAD
GREENSBORO, NORTH CAROLINA 27409-9421
(Address of principal executive offices, including zip code)
(336) 664-1233
(Registrant's telephone number, including area code)
Indicate by check mark whether the 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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of November 3, 1999, there were 79,369,927 shares of the registrant's
common stock outstanding.
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RF MICRO DEVICES, INC.
INDEX
<TABLE>
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PAGE
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.............................. 1
Condensed Statements of Income -- Three months ended
September 30, 1999 and 1998........................... 1
Condensed Statements of Income -- Six months ended
September 30, 1999 and 1998........................... 2
Condensed Balance Sheets -- September 30, 1999 and
March 31, 1999........................................ 3
Condensed Statements of Cash Flows -- Six months ended
September 30, 1999 and 1998........................... 4
Notes to Condensed Financial Statements................ 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 7
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders................................................ 13
Item 6. Exhibits and Reports on Form 8-K.................. 14
</TABLE>
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RF MICRO DEVICES, INC.
CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
Revenues:
Product sales............................................. $68,859 $31,415
Engineering revenue....................................... 62 --
------- -------
Total revenues.................................... 68,921 31,415
Operating costs and expenses:
Cost of goods sold........................................ 36,827 21,690
Research and development.................................. 7,371 3,224
Marketing and selling..................................... 4,641 2,520
General and administrative................................ 2,008 1,122
------- -------
Total operating costs and expenses................ 50,847 28,556
------- -------
Income from operations...................................... 18,074 2,859
Other income (expense), net................................. 1,110 (183)
------- -------
Income before income taxes.................................. 19,184 2,676
------- -------
Income tax expense.......................................... 6,714 321
------- -------
Net income........................................ $12,470 $ 2,355
======= =======
Earnings per share:
Basic..................................................... $ .16 $ .04
Diluted................................................... $ .15 $ .03
Shares used in per share calculation:
Basic..................................................... 79,218 65,244
Diluted................................................... 85,401 69,292
</TABLE>
See accompanying notes to Condensed Financial Statements.
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RF MICRO DEVICES, INC.
CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
Revenues:
Product sales............................................. $130,740 $ 54,667
Engineering revenue....................................... 229 189
-------- --------
Total revenues.................................... 130,969 54,856
Operating costs and expenses:
Cost of goods sold........................................ 72,472 37,293
Research and development.................................. 13,409 6,000
Marketing and selling..................................... 8,273 4,696
General and administrative................................ 3,915 1,991
-------- --------
Total operating costs and expenses................ 98,069 49,980
-------- --------
Income from operations...................................... 32,900 4,876
Other income, net........................................... 2,312 (28)
-------- --------
Income before income taxes.................................. 35,212 4,848
-------- --------
Income tax expense.......................................... 12,324 821
-------- --------
Net income........................................ $ 22,888 $ 4,027
======== ========
Earnings per share:
Basic..................................................... $ .29 $ .06
Diluted................................................... $ .27 $ .06
Shares used in per share calculation:
Basic..................................................... 79,079 64,888
Diluted................................................... 85,046 68,800
</TABLE>
See accompanying notes to Condensed Financial Statements.
2
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RF MICRO DEVICES, INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1999 1999
------------- ---------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 43,116 $147,545
Short-term investments.................................... 45,204 --
Accounts receivable, net.................................. 38,310 23,697
Inventories............................................... 31,532 27,335
Current deferred tax asset................................ 900 898
Other current assets...................................... 476 243
-------- --------
Total current assets.............................. 159,538 199,718
Property and equipment, net................................. 115,018 67,431
Technology licenses, net.................................... 3,964 3,078
Restricted cash............................................. 7,187 3,860
Non-current deferred tax asset.............................. 1,088 1,088
Other assets................................................ 4,000 583
-------- --------
Total assets...................................... $290,795 $275,758
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities.................. $ 21,020 $ 24,700
Income taxes payable...................................... -- 2,854
Current obligations under capital leases.................. 4,316 4,246
-------- --------
Total current liabilities......................... 25,336 31,800
Obligations under capital leases, less current maturities... 10,496 12,587
Non-current deferred tax liability.......................... 465 465
-------- --------
Total liabilities................................. 36,297 44,852
Shareholders' equity:
Preferred stock, no par value; 5,000,000 shares
authorized; no shares issued and outstanding........... -- --
Common stock, no par value; 150,000,000 shares authorized;
79,292,862 shares and 78,753,952 issued and outstanding
at September 30, 1999 and March 31, 1999,
respectively........................................... 225,420 224,746
Deferred compensation....................................... (135) (165)
Retained earnings........................................... 29,213 6,325
-------- --------
Total shareholders' equity........................ 254,498 230,906
-------- --------
Total liabilities and shareholders' equity........ $290,795 $275,758
======== ========
</TABLE>
See accompanying notes to Condensed Financial Statements.
3
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RF MICRO DEVICES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
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<CAPTION>
SIX MONTHS ENDED
-----------------------------
SEPTEMBER 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................. $ 22,888 $ 4,027
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 6,060 1,071
Amortization of deferred compensation..................... 30
Change in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable.................................... (14,613) (7,915)
Inventories............................................ (4,197) (2,031)
Current deferred tax asset............................. (2) --
Non-current deferred tax asset......................... -- --
Other assets........................................... (262) (791)
Accounts payable....................................... (3,757) 6,914
Accrued liabilities.................................... 77 --
Deferred revenue....................................... -- 247
Income taxes payable................................... (2,854) 828
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Net cash provided by operating activities......... 3,370 2,350
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of capital equipment/leasehold improvements...... (53,532) (3,359)
Capitalization of fabrication facility construction
costs.................................................. -- (5,645)
Purchase of short-term investments........................ (48,592) --
Purchase of technology license............................ (1,000) --
--------- -------
Net cash used in investing activities............. (103,124) (9,004)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options......................... 674 31
Exercise of warrant....................................... -- 10,000
Increase in restricted cash............................... (3,327) --
Repayment of capital lease obligations.................... (2,022) (2,893)
--------- -------
Net cash provided by (used in) financing
activities...................................... (4,675) 7,138
--------- -------
Net increase (decrease) in cash and cash
equivalents..................................... (104,429) 484
Cash and cash equivalents at the beginning of the period.... 147,545 16,360
--------- -------
Cash and cash equivalents at the end of the period.......... $ 43,116 $16,844
========= =======
</TABLE>
See accompanying notes to Condensed Financial Statements.
4
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RF MICRO DEVICES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles. However, certain information or
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed, or
omitted, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, the statements include all adjustments
(which are of a normal and recurring nature) necessary for the fair presentation
of the results of the interim periods presented. These financial statements
should be read in conjunction with the Company's audited financial statements
for the year ended March 31, 1999.
The Company uses a 52- or 53-week fiscal year ending on the last Saturday
prior to March 31 of each year. The Company's other fiscal quarters end on the
last Saturday prior to June 30, September 30, and December 31 of each year. For
purposes of this report (including the Unaudited Condensed Financial Statements
included herein), each fiscal year is described as having ended on March 31, and
each of the first three quarters of each fiscal year is described as having
ended on June 30, September 30 and December 31.
On March 31, 1999, the Company effected a two-for-one stock split by means
of a 100% stock dividend pursuant to which the Company's shareholders of record
on March 17, 1999 were issued a certificate representing one additional share of
the Company's common stock for each existing share. On August 18, 1999, the
Company effected a two-for-one split of its common stock by means of a 100%
stock dividend pursuant to which the Company's shareholders of record on August
2, 1999 were issued a certificate representing one additional share of the
Company's common stock for each existing share. All earnings per share and share
count information has been restated to reflect the impact of these stock splits.
2. RESEARCH AND DEVELOPMENT COSTS
The Company charges all research and development costs to expense as
incurred.
3. INCOME TAXES
The provision for income taxes has been recorded based on the current
estimate of the Company's annual effective tax rate. For periods with taxable
income, this rate differs from the federal statutory rate primarily because of
the utilization of net operating loss carryforwards.
4. INVENTORIES
The components of inventories are as follows (in thousands):
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<CAPTION>
SEPTEMBER 30, MARCH 31,
1999 1999
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Raw materials............................................... $10,127 $ 6,628
Work in process............................................. 19,514 18,118
Finished goods.............................................. 10,682 6,975
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40,323 31,721
Inventory allowances........................................ (8,791) (4,386)
------- -------
Total inventory................................... $31,532 $27,335
======= =======
</TABLE>
5. NET INCOME PER SHARE
In 1997, the Financial Accounting Standards Board ("FASB") issued Statement
No. 128, "Earnings Per Share" ("SFAS 128"). SFAS 128 replaced the calculation of
primary and diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants, and convertible securities, and only
reflects actual common shares
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RF MICRO DEVICES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
outstanding. Diluted earnings per share is similar to the previously reported
fully diluted earnings per share. All earnings per share amounts for all periods
have been presented, and where appropriate, restated to conform to SFAS 128
requirements.
The following table sets forth the computation of basic and diluted net
income per share (in thousands, except per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- -----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Numerator for basic and diluted net income
per share:
Net income................................. $12,470 $ 2,355 $22,888 $ 4,027
Denominator:
Denominator for basic net income per
share -- Weighted average shares........ 79,218 65,244 79,079 64,888
Effect of dilutive securities:
Employee stock options..................... 6,183 4,048 5,967 3,912
Denominator for diluted net income per
share -- adjusted weighted average
shares and assumed conversions.......... 85,401 69,292 85,046 68,800
Basic net income per share................. $ 0.16 $ 0.04 $ 0.29 $ 0.06
Diluted net income per share............... $ 0.15 $ 0.03 $ 0.27 $ 0.06
</TABLE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
We design, develop, manufacture and market proprietary radio frequency
integrated circuits, or RFICs, for wireless communications applications such as
cellular and personal communication services, cordless telephony, wireless local
area networks, wireless local loop, industrial radios, wireless security and
remote meter reading. We offer a broad array of products -- including
amplifiers, mixers, modulators/demodulators and single chip transmitters,
receivers and transceivers -- that represent a substantial majority of the RFICs
required in wireless subscriber equipment. We design and offer products using
three distinct process technologies: gallium arsenide heterojunction bipolar
transistor, or GaAs HBT; silicon bipolar transistor; and, to a lesser extent,
gallium arsenide metal semiconductor field effect transistor, or GaAs MESFET. We
have also recently begun to design products using the silicon germanium process
technology.
We began manufacturing our own GaAs HBT products at our new wafer
fabrication facility in September 1998, and we are now concentrating our efforts
on increasing our manufacturing capacity to satisfy customer demand for GaAs HBT
products, which is currently greater than we can meet. In September 1999 we
began construction on a second wafer fabrication facility. Before September
1998, TRW Inc., which is our largest shareholder, manufactured all of our GaAs
HBT products. TRW has granted us a perpetual non-royalty bearing license to use
its GaAs HBT process to design and manufacture products for commercial wireless
applications. Our GaAs HBT power amplifiers and small signal devices have been
designed into advanced subscriber equipment made by leading original equipment
manufacturers, or OEMs, such as Nokia Mobile Phones Ltd., LG Information and
Communications, Ltd., Hyundai Electronics Industries Co. Ltd., Samsung
Electronics Co., Ltd., and Motorola, Inc. Through a delivery strategy called
Optimum Technology Matching(R), we also offer silicon and GaAs MESFET components
to complement our GaAs HBT products. Optimum Technology Matching(R) allows us to
offer RFIC solutions, on a component-by-component basis, that best fulfill OEMs'
performance, cost and time-to-market requirements.
RESULTS OF OPERATIONS
The following table sets forth our statement of operations data expressed
as a percentage of total revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- -----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues............................. 100.0% 100.0% 100.0% 100.0%
Operating costs and expenses:
Cost of goods sold................. 53.4 69.0 55.3 68.0
Research and development........... 10.7 10.3 10.2 10.9
Marketing and selling.............. 6.7 8.0 6.4 8.6
General and administrative......... 2.9 3.6 3.0 3.6
----- ----- ----- -----
Total operating costs and
expenses................. 73.7 90.9 74.9 91.1
Income from operations............... 26.2 9.1 25.1 8.9
Other income (expense), net.......... 1.6 (0.6) 1.8 (0.1)
----- ----- ----- -----
Income before income taxes........... 27.8 8.5 26.9 8.8
Income tax expense................... (9.7) (1.0) (9.4) (1.5)
----- ----- ----- -----
Net income................. 18.1% 7.5% 17.5% 7.3%
===== ===== ===== =====
</TABLE>
REVENUES
Revenues increased 119.4% to $68.9 million for the three months ended
September 30, 1999 from $31.4 million for the three months ended September 30,
1998. The increase in revenues during the three months ended September 30, 1999
reflected strong growth in both the GaAs HBT product line (a 117% increase over
the second quarter of fiscal 1999) and the silicon product line (a 146% increase
over the second quarter of
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fiscal 1999). One sales representative firm, Jittek, accounted for 22.0% of our
revenue during the second quarter of fiscal 2000. For the six-month period ended
September 30, 1999, revenues increased 138.8% from $54.9 million in the same
period in fiscal 1999 to $131.0 million. This increase was primarily
attributable to increased shipments as the result of our capacity expansion
efforts for three-volt HBT power amplifiers to be used in a variety of
applications.
International shipments accounted for $38.5 million, or 55.8% revenues, for
the three months ended September 30, 1999, compared to $18.8 million, or 60%,
for the three months ended September 30, 1998. Sales to South Korean customers
totaled $15.1 million, or 22% of revenues, compared to $3.8 million, or 12.1% of
revenues, for the quarter ended September 30, 1998. Although we experienced an
increase in sales to South Korean customers in our second quarter, this market
remains unstable and there is no assurance that this trend will continue or that
economic instability in Asia will not have a material adverse effect on our
business, financial condition, or results of operations.
GROSS PROFIT
The gross profit margin was 46.6% for the three months ended September 30,
1999 compared to 31.0% for the three months ended September 30, 1998. For the
six-months ended September 30, 1999, the gross profit margin increased to 44.7%
compared to 32.0% for the six months ended September 30, 1998. The increase in
the gross profit margin in both periods is primarily attributable to lower cost
output from our GaAs HBT wafer fabrication facility and lower costs on purchased
wafers under supply agreements providing for annual price reductions.
We have historically experienced significant fluctuations in gross profit
margins. In certain cases, we believe that our gross profit margins have been
significantly affected by low manufacturing, assembly and test yields, and there
can be no assurance that future operating results will not be similarly
affected. We currently expect our gross profit margins to continue to improve as
an increasing percentage of our GaAs HBT products are fabricated at our wafer
fabrication facility, where production costs per wafer are anticipated to be
lower; however, there can be no assurance that this will be the case. Further,
we sell products in intensely competitive markets, and we believe that downward
pressure on average selling prices will continue to occur in the future.
RESEARCH AND DEVELOPMENT
Research and development expenses for the three months ended September 30,
1999 increased 128.6% to $7.4 million, compared to $3.2 million for the three
months ended September 30, 1998. For the six months ended September 30, 1999,
research and development expenses increased 123.5% to $13.4 million, compared to
$6.0 million for the six months ended September 30, 1998. These increases were
primarily attributable to increased salaries and benefits and recruiting
expenses related to increased headcount and increased software expenses related
to software used in the development and design of standard and custom products.
Research and development expenses as a percentage of total revenues increased
slightly to 10.7% for the three months ended September 30, 1999 from 10.3% for
the three months ended September 30, 1998. For the six-month period ended
September 30, 1999, research and development expenses as a percent of revenue
declined to 10.2% from 10.9% for the six months ended September 30, 1998. We
plan to continue to make substantial investments in research and development and
expect that such expenses will continue to increase in absolute dollar amounts
in future periods.
MARKETING AND SELLING
Marketing and selling expenses for the three months ended September 30,
1999 were $4.6 million, compared to $2.5 million for the three months ended
September 30, 1998, an increase of 84.2%. For the six months ended September 30,
1999, marketing and selling expenses increased 76.2% to $8.3 million, compared
to $4.7 million for the six months ended September 30, 1998. These increases
were primarily attributable to increased salaries and benefits related to
increased headcount and to increases in commissions expense. Marketing and
selling expenses as a percentage of revenue for the three months ended September
30, 1999 decreased to 6.7% from 8.0% for the three months ended September 30,
1998. For the six-month period ended September 30, 1999, sales and marketing
expenses as a percent of revenue declined to 6.4% from 8.6% for the
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six months ended September 30, 1998. We plan to continue to make substantial
investments in marketing and selling and expect that such expenses will continue
to increase in absolute dollar amounts in future periods.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the three months ended September
30, 1999 were $2.0 million compared to $1.1 million for the three months ended
September 30, 1998, an increase of 79.0%. For the six months ended September 30,
1999, general and administrative expenses increased 96.6% to $3.9 million,
compared to $2.0 million for the six months ended September 30, 1998. These
increases were attributable primarily to increased salaries and benefits related
to headcount increases, and to increased costs associated with being a public
company. General and administrative expenses as a percentage of revenues
decreased to 2.9% for the three months ended September 30, 1999 from 3.6% for
the three months ended September 30, 1998. For the six-month period ended
September 30, 1999, sales and marketing expenses as a percent of revenue
declined to 3.0% from 3.6% for the six months ended September 30, 1998.
OTHER INCOME (EXPENSE), NET
Other income (expense), net, for the three months ended September 30, 1999
reflected a net income of $1.1 million compared to net expense of $183,000 for
the three months ended September 30, 1998. For the six months ended September
30, 1999 other income (expense), net, reflected net income of $2.3 million
compared to net expense of $28,000 for the six months ended September 30, 1998.
The increase in other income during these periods is attributable to increased
interest income resulting from the investment of the proceeds of our secondary
stock offering completed in January 1999.
INCOME TAX EXPENSE
The effective tax rate was 35% for the three-month period ended September
30, 1999. The effective rate is less than the combined federal and state
statutory rate of approximately 40% due to the use of net operating loss
carryforwards. Income tax expense for the three months ended September 30, 1999
was approximately $6.7 million as compared to $0.3 million for the corresponding
period ended September 30, 1998 when the effective rate was 12.0%. Income tax
expense for the six months ended September 30, 1999 was approximately $12.3
million as compared to $0.8 million for the corresponding period ended September
30, 1998, when the effective rate was 17.0%.
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations to date through sales of equity and debt
securities, bank borrowings, capital equipment leases and revenues from product
sales. We completed our initial public offering in September 1997, and raised
approximately $37.6 million, net of offering expenses. In January 1999, we
completed a secondary public offering and raised approximately $133.4 million,
net of offering expenses. As of September 30, 1999, we had working capital of
approximately $134.2 million, including $43.1 million in cash and cash
equivalents. Operating activities generated $3.4 million in cash for the
six-month period ended September 30, 1999. This was primarily attributable to
net income of $22.9 million, partially offset by increases in accounts
receivable of $14.6 million, in inventories of $4.2 million, a decrease in
accounts payable of $3.8 million, and a decrease in taxes payable of $3.2
million. Cash provided by operating activities for the six months ended
September 30, 1998 was $2.4 million. The cash provided by operating activities
during this period was primarily attributable to an increase in accounts payable
of $6.9 million, increases in taxes payable of $0.8 million, and net income of
$4.0 million. These increases were partially offset by increases in accounts
receivable of $7.9 million and inventories of $2.0 million.
The $103.1 million of cash used by investing activities for the six months
ended September 30, 1999 was substantially related to the purchase of $24.6
million of capital equipment, primarily for use in our wafer fabrication
facility, $23.9 million for the construction and outfitting of our new facility
housing molecular beam epitaxy (MBE) wafer fabrication equipment, $5.0 million
capitalized for the construction of our new corporate headquarters, $48.6
million in the purchase of short-term investments, and $1.0 million for the
purchase of a technology license for silicon germanium from IBM. The $9.0
million of cash used by investing
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activities for the six months ended September 30, 1998 was primarily related to
expenditures associated with the construction of our first GaAs HBT wafer
fabrication facility and general corporate capital equipment requirements.
The $4.7 million of cash used by financing activities for the six-month
period ended September 30, 1999 related primarily to the repayments of capital
lease obligations and increases in restricted cash associated with the financing
of our new wafer fabrication facility. The $7.1 million of cash provided by
financing activities for the six-month period ended September 30, 1998 related
primarily to the receipt of proceeds from the exercise by TRW of a warrant
covering 4,000,000 shares of common stock of $10.0 million, partially offset by
$2.9 million in repayments of capital lease obligations.
At September 30, 1999, we had total long-term capital commitments of $38.6
million, with $17.1 million relating to expansion of our first wafer fabrication
facility and $21.5 million for general corporate requirements. The $17.1 million
in long-term capital commitments relating to the wafer fabrication facility
represents continued investment in the second phase expansion, as well as a
portion of an expected additional $48.3 million investment to increase further
wafer fabrication capacity that will consist of moving our MBE wafer starting
equipment out of the facility to a new leased location, reconfiguring the space
currently occupied by this equipment with additional wafer production equipment
and hiring additional production personnel. We believe this additional
investment in wafer fabrication capacity, which is expected to be completed by
mid-2000, will bring our total wafer production capacity to approximately 50,000
wafers per year. We expect to fund this investment through a combination of
existing cash on hand and capital leases.
During the quarter ended September 30, 1999, we began construction of a
second wafer fabrication facility. The full capacity output of the first phase
of this facility is anticipated to be the equivalent of approximately 60,000
four-inch wafers and is projected to be completed and begin production-level
wafer output in late 2000. An anticipated second phase of construction, which is
expected to be completed near the end of 2001, would increase the facility's
total output to the equivalent of 210,000 four-inch wafers per year. The
projected cost for this facility is approximately $110 million for the first
phase and $140 million for the second phase. The funding for the first phase
will come primarily from a synthetic lease arrangement that we entered into on
August 13, 1999. A synthetic lease is an asset-based financing structured to be
treated as an operating lease for accounting purposes but as a loan for tax
purposes. At present, the synthetic lease transaction is largely secured by cash
collateral. The lease has a base term of five years and three months. At the end
of the base term, the lease can be extended upon the agreement of the parties,
or we may buy out the lease. The interest rates or yield rates embedded in the
lease (and used to calculate lease payments) are either
- the Eurodollar Rate plus margins varying from 25 basis points to 100
basis points per annum (depending on whether the underlying source of
funding is in the form of a promissory note or an equity certificate),
or
- at our election and under certain circumstances where funding based on
the Eurodollar Rate is not available, the ABR Rate plus margins varying
from zero basis points to 75 basis points per annum (again depending on
whether the underlying source of funding is in the form of a promissory
note or an equity certificate).
The Eurodollar Rate is a rate of interest determined under the lease documents
by reference to one or more sources for the London interbank offered rate, or
LIBOR. The ABR Rate is a rate of interest determined under the lease documents
equal to the greater of (a) the prime lending rate of the lead lender or its
successor (as determined under the lease documents) or (b) the federal funds
effective rate (as determined under the lease documents) plus 0.5%.
We anticipate that the synthetic lease transaction documents will be
modified during the third quarter of fiscal 2000 to bring in other financial
institutions to participate in the financing vehicle and to modify some of the
existing covenants and add some new financial covenants. At the same time, we
anticipate that all or most of the cash collateral will be released and replaced
with other collateral consisting of substantially all of our other assets, and
that the underlying interest rates or yield rates embedded in the lease and used
to calculate lease payments will be increased to either
10
<PAGE> 13
- the Eurodollar Rate plus margins varying from 150 basis points to 300
basis points per annum (based on certain quarterly financial covenant
testing and depending on whether the underlying source of funding is in
the form of a promissory note or an equity certificate), or
- at our election and under certain circumstances where funding based on
the Eurodollar Rate is not available, the ABR Rate plus margins per
annum to be determined (and likely based on certain quarterly financial
covenant testing and depending on whether the underlying source of
funding is in the form of a promissory note or an equity certificate).
Additionally, state and local governments have awarded us a series of
incentives in connection with our investment in wafer fabrication capacity that
approximate $5.5 million payable over a one- to four-year period. We expect to
use these incentives to fund future capital investment.
We currently have eight capital lease facilities with four equipment
financing companies under which we have financed the cost of capital equipment
and leasehold improvements associated with our first wafer fabrication facility.
We have financed an aggregate of $23.4 million of leased property under these
facilities. Lease terms range from 36 months to 60 months with effective
interest factors ranging from 8.6% to 11.1%. At September 30, 1999, the minimum
future lease payments under these leases (excluding interest) were $14.8
million.
We believe that the aggregate net proceeds from the follow-on public
offering, along with cash generated from operations and new financing
arrangements as described above, will be sufficient to meet our capital
requirements for at least the next 12 months. Nonetheless, we may elect to sell
additional equity securities or to obtain additional credit facilities. Our
future capital requirements may differ materially from those currently
anticipated and will depend on many factors, including, but not limited to,
market acceptance of our products, volume pricing concessions, capital
improvements to new and existing facilities, technological advances and our
relationships with suppliers and customers. In addition, we may require
increased working capital to accommodate planned growth. In the event that the
funds generated by the follow-on offering, together with existing resources and
cash from operations, are not sufficient to meet our future requirements, we may
seek additional debt or equity financing. There can be no assurance that any
additional equity financing will not be dilutive to the holders of our common
stock. Further, there can be no assurance that additional equity or debt
financing, if required, will be available on acceptable terms or at all.
YEAR 2000 ISSUES
We have evaluated all of our internal software and current products against
Year 2000 concerns, and believe that our products and business will not be
substantially affected by the advent of the year 2000 and that we have no
significant exposure to liabilities related to the Year 2000 issue for the
products we have sold. We have also completed a project to upgrade all internal
software and to conduct testing on both our information technology systems and
our other equipment and machinery to further ensure that all aspects of our
business will be Year 2000 compliant. These procedures have not had any material
effect on our customers and have not required any material expenditure or other
material diversion of resources.
We have contacted substantially all parties with which we have material
relationships, including TRW and Nokia and our other material customers and
suppliers, to try to determine their Year 2000 preparedness and to analyze the
risk to us if they have significant business interruptions because of Year 2000
noncompliance. Based on this survey, we believe that these parties either are
substantially Year 2000 compliant or that any noncompliance will not have a
material effect on our operations. We intend to continue analyzing third-party
preparedness and the need for any related contingency planning as we enter into
new third-party relationships.
In addition to taking the steps described above, we have attempted to
analyze the reasonably likely worst-case Year 2000 scenarios. Although we are
relying on assurances from the third parties with which we do business as to
their Year 2000 readiness, we recognize that it is possible that one or more of
them will experience Year 2000 disruptions which will affect our business.
Similarly, we recognize that despite the measures we have taken with respect to
our own information technology and other systems that have date-
11
<PAGE> 14
sensitive functions, some elements of our own equipment may experience adverse
Year 2000-related effects. However, our analysis of the likelihood that any
disruptions of these kinds will be of a nature to materially affect our overall
business, financial condition or results of operations has not indicated that
there is any need for significant contingency planning specifically to mitigate
these risks.
Although we believe our planning efforts are adequate to address our Year
2000 concerns, we cannot be sure that we will not experience negative
consequences and material costs caused by undetected errors or defects in the
technology used in our internal systems, or that the systems of other parties on
which we rely will be made compliant on a timely basis and will not have any
material adverse effect on us.
The total cost related to the Year 2000 issue is approximately $150,000,
which has been included in our information technology expense budget. As of
September 30, 1999, this project is essentially complete, except as noted above.
To date, there have been no material deferments of other information technology
projects resulting from the work taking place on our Year 2000 program.
RISKS AND UNCERTAINTIES
The preceding Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that relate to our future plans, objectives, estimates and
goals. Words such as "expects," "anticipates," "intends," "plans," "believes,"
and "estimates," and variations of such words and similar expressions identify
such forward-looking statements. Our business is subject to numerous risks and
uncertainties, including probable variability in our quarterly operating
results, manufacturing capacity constraints, risks associated with our operation
of our current wafer fabrication facility and the construction of an additional
facility, dependence on a limited number of customers, variability in production
yields, our ability to manage rapid growth, dependence on third parties and
risks associated with doing business in Asia and other areas of the world. These
and other risks and uncertainties, which are described in more detail in our
Annual Report on Form 10-K filed with the Securities and Exchange Commission,
could cause actual results and developments to be materially different from
those expressed or implied by any of these forward-looking statements.
12
<PAGE> 15
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
We held our annual shareholder's meeting on July 27, 1999. At the meeting,
our shareholders (1) elected Erik H. van der Kaay, David A. Norbury, Albert E.
Paladino, William J. Pratt, Walter H. Wilkinson, Jr. and Terri D. Zinkiewicz to
our board of directors for one-year terms expiring in 2000; (2) approved
amending and restating our articles of incorporation to increase our authorized
common stock from 50,000,000 shares to 150,000,000 shares; (3) adopted the 1999
Stock Incentive Plan of RF Micro Devices, Inc.; and (4) ratified the appointment
of Ernst & Young LLP as our independent auditors for the fiscal year ending
March 31, 2000. Shareholders also voted on the administrative matter of changing
the location of the meeting to accommodate the greater-than-expected number of
attendees. Votes cast by our shareholders at the meeting are as follows (share
numbers have been adjusted to reflect a 2-for-1 stock split on August 18, 1999):
<TABLE>
<CAPTION>
SHARES VOTED BROKER
NOMINEES FOR DIRECTOR IN FAVOR SHARES WITHHELD NON-VOTES
- --------------------- ------------ --------------- ---------
<S> <C> <C> <C>
Erik H. van der Kaay.............................. 66,347,794 127,810 --
David A. Norbury.................................. 66,253,544 222,060 --
Albert E. Paladino................................ 66,347,604 128,000 --
William J. Pratt.................................. 66,253,544 222,060 --
Walter H. Wilkinson, Jr........................... 66,347,604 128,000 --
Terri D. Zinkiewicz............................... 66,252,894 222,710 --
</TABLE>
Amendment and restatement of articles of incorporation to increase
authorized common stock from 50,000,000 shares to 150,000,000 shares:
<TABLE>
<CAPTION>
BROKER
SHARES VOTED IN FAVOR SHARES VOTED AGAINST SHARES ABSTAINING NON-VOTES
--------------------- -------------------- ----------------- ---------
<S> <C> <C> <C> <C>
56,335,656 10,112,070 27,878 --
</TABLE>
Adoption of 1999 Stock Incentive Plan:
<TABLE>
<CAPTION>
BROKER
SHARES VOTED IN FAVOR SHARES VOTED AGAINST SHARES ABSTAINING NON-VOTES
--------------------- -------------------- ----------------- ---------
<S> <C> <C> <C> <C>
40,008,796 16,391,290 258,622 9,816,896
</TABLE>
Ratification of selection of Ernst & Young LLP:
<TABLE>
<CAPTION>
BROKER
SHARES VOTED IN FAVOR SHARES VOTED AGAINST SHARES ABSTAINING NON-VOTES
--------------------- -------------------- ----------------- ---------
<S> <C> <C> <C> <C>
66,442,656 2,480 30,468 --
</TABLE>
Change in meeting location:
<TABLE>
<CAPTION>
BROKER
SHARES VOTED IN FAVOR SHARES VOTED AGAINST SHARES ABSTAINING NON-VOTES
--------------------- -------------------- ----------------- ---------
<S> <C> <C> <C> <C>
47,725,814 9,154,606 9,593,984 --
</TABLE>
13
<PAGE> 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C> <C>
Exhibit 10.1 -- Participation Agreement, dated as of August 13, 1999, among
RF Micro Devices, Inc., as the Construction Agent and as the
Lessee; First Security Bank, National Association, not
individually, except as expressly stated therein, but solely
as the Owner Trustee under the RFMD Real Estate 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 the Holders, to the extent of their interests
Exhibit 10.2 -- Lease Agreement, dated as of August 13, 1999, between First
Security Bank, National Association, not individually, but
solely as the Owner Trustee under the RFMD Real Estate Trust
1999-1, as Lessor, and RF Micro Devices, Inc., as Lessee
Exhibit 10.3 -- Credit Agreement, dated as of August 13, 1999, among First
Security Bank, National Association, not individually,
except as expressly stated therein, but solely as the Owner
Trustee under the RFMD Real Estate Trust 1999-1, as the
Borrower; the Several Lenders from Time to Time Parties
thereto; and First Union National Bank, as the Agent
Exhibit 27.1 -- Financial Data Schedule (for SEC use only)
</TABLE>
(b) Report on Form 8-K
We filed a Current Report on Form 8-K on July 23, 1999 to disclose that we
announced on July 20, 1999 that our board of directors had approved, subject to
shareholder approval of a proposal to increase our authorized common stock, a
two-for-one stock split of our common stock to be effected by a 100% share
dividend payable on or around August 18, 1999 to shareholders of record on
August 2, 1999.
14
<PAGE> 17
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 thereunto duly authorized.
RF Micro Devices, Inc.
/s/ DAVID A. NORBURY
--------------------------------------
David A. Norbury
President and Chief Executive Officer
(Principal Executive Officer)
Dated: November 9, 1999
/s/ WILLIAM A. PRIDDY, JR.
--------------------------------------
William A. Priddy, Jr.
Vice President, Finance and
Administration
and Chief Financial Officer
(Principal Financial and Accounting
Officer)
Dated: November 9, 1999
15
<PAGE> 1
Exhibit 10.1
- --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Dated as of August 13, 1999
among
RF MICRO DEVICES, INC.,
as the Construction Agent and as the Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Holders,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Lenders,
and
FIRST UNION NATIONAL BANK,
as the Agent for the Lenders
and respecting the Security Documents,
as the Agent for the Lenders and the Holders,
to the extent of their interests
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1A. INITIAL LENDER AND INITIAL HOLDER.....................................................................1
SECTION 1. THE LOANS.............................................................................................1
SECTION 2. HOLDER ADVANCES.......................................................................................2
SECTION 3. SUMMARY OF TRANSACTIONS...............................................................................2
3.1. Operative Agreements............................................................................2
3.2. Property Purchase...............................................................................2
3.3. Construction of Improvements; Commencement of Basic Rent........................................3
3.4. Ratable Interests of the Holders and the Lenders................................................3
SECTION 4. THE CLOSINGS..........................................................................................3
4.1. Initial Closing Date............................................................................3
4.2. Initial Closing Date; Property Closing Dates; Acquisition
Advances; Construction Advances.................................................................3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION DATE; THE LESSEE'S
DELIVERY OF NOTICES; RESTRICTIONS ON LIENS............................................................4
5.1. General.........................................................................................4
5.2. Procedures for Funding..........................................................................4
5.3. Conditions Precedent for the Lessor, the Agent, the Lenders and the Holders Relating to the
Initial Closing Date and the Advance of Funds for the Acquisition of a Property.................6
5.4. Conditions Precedent for the Lessor, the Agent, the Lenders and the
Holders Relating to the Advance of Funds after the Acquisition Advance.........................11
5.5. Additional Reporting and Delivery Requirements on Completion Date
and on Construction Period Termination Date....................................................13
5.6. The Construction Agent Delivery of Construction Budget Modifications...........................13
5.7. Restrictions on Liens..........................................................................14
5.8. Payments.......................................................................................14
5.9. Cash Collateral Account........................................................................14
SECTION 6. REPRESENTATIONS AND WARRANTIES.......................................................................14
6.1 Representations and Warranties of the Borrower.................................................14
6.2. Representations and Warranties of the Construction Agent and the Lessee........................17
6.3. Representations and Warranties of the Lenders and the Holders..................................22
SECTION 7. PAYMENT OF CERTAIN EXPENSES..........................................................................22
7.1. Transaction Expenses...........................................................................22
7.2. Brokers' Fees..................................................................................23
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
7.3. Certain Fees and Expenses......................................................................24
7.4. Unused Fee.....................................................................................24
7.5. Other Fees.....................................................................................24
SECTION 8. OTHER COVENANTS AND AGREEMENTS.......................................................................25
8.1. Cooperation with the Construction Agent or the Lessee..........................................25
8.2. Covenants of the Owner Trustee and the Holders.................................................25
8.3. The Lessee Covenants, Consent and Acknowledgment...............................................27
8.3.A Additional Affirmative Covenants of the Lessee.................................................30
8.4. Sharing of Certain Payments....................................................................31
8.5. Grant of Easements, etc........................................................................31
8.6. Appointment by the Agent, the Lenders, the Holders and the Owner Trustee.......................32
8.7. Collection and Allocation of Payments and Other Amounts........................................32
8.8. Release of Properties, etc.....................................................................35
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.................................................................36
9.1. The Construction Agent's and the Lessee's Credit Agreement Rights..............................36
9.2. The Construction Agent's and the Lessee's Trust Agreement Rights...............................37
SECTION 10. TRANSFER OF INTEREST.................................................................................37
10.1. Restrictions on Transfer.......................................................................37
10.2. Effect of Transfer.............................................................................38
SECTION 11. INDEMNIFICATION......................................................................................38
11.1. General Indemnity..............................................................................38
11.2. General Tax Indemnity..........................................................................41
11.3. Increased Costs, Illegality, etc...............................................................45
11.4. Funding/Contribution Indemnity.................................................................47
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.........................48
11.6. Indemnity Prior to Completion Date / Construction Period Termination Date......................48
SECTION 12. MISCELLANEOUS.......................................................................................49
12.1. Survival of Agreements.........................................................................49
12.2. Notices........................................................................................49
12.3. Counterparts...................................................................................50
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters................................51
12.5. Headings, etc..................................................................................52
12.6. Parties in Interest............................................................................52
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE; ARBITRATION............53
12.8. Severability...................................................................................54
12.9. Liability Limited..............................................................................54
12.10. Rights of the Lessee...........................................................................56
12.11. Further Assurances.............................................................................56
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
12.12. Calculations under Operative Agreements........................................................56
12.13. Confidentiality................................................................................56
12.14. Financial Reporting/Tax Characterization.......................................................58
12.15. Set-off........................................................................................58
</TABLE>
EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Officer's Certificate - Section 5.3(z)
D - Form of Secretary's Certificate - Section 5.3(aa)
E - Form of Officer's Certificate - Section 5.3(bb)
F - Form of Secretary's Certificate - Section 5.3(cc)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(dd)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(ee)
I - Form of Officer's Certificate - Section 5.5
J - Description of Material Litigation - Section 6.2(d)
K - Form of Officer's Financial Compliance Certificate
Appendix A - Rules of Usage and Definitions
iii
<PAGE> 5
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of August 13, 1999 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Agreement") is by and among RF MICRO DEVICES, INC., a North Carolina
corporation (the "Lessee" or the "Construction Agent"); 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 RFMD Real Estate 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 RFMD Real Estate 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.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, the Lenders
have agreed to make Loans to the Lessor from time to time in an aggregate
principal amount of up to the aggregate amount of the Commitments of the Lenders
in order for the Lessor to acquire the Properties and certain Improvements, to
develop and construct certain Improvements in accordance with the Agency
Agreement and the terms and provisions hereof and for the other purposes
described herein, and in consideration of the receipt of proceeds of the Loans,
the Lessor will issue the Notes. The Loans shall be made and the Notes shall be
issued pursuant to the Credit Agreement. Pursuant to
<PAGE> 6
Section 5 of this Agreement and Section 2 of the Credit Agreement, the Loans
will be made to the Lessor from time to time at the request of the Construction
Agent in consideration for the Construction Agent agreeing for the benefit of
the Lessor, pursuant to the Agency Agreement, to acquire the Properties, to
acquire the Equipment, to construct certain Improvements and to cause the Lessee
to lease the Properties, each in accordance with the Agency Agreement and the
other Operative Agreements. The Loans and the obligations of the Lessor under
the Credit Agreement shall be secured by the Collateral.
SECTION 2. HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, on each
date Advances are requested to be made in accordance with Section 5 hereof, each
Holder shall make a Holder Advance on a pro rata basis to the Lessor with
respect to the RFMD Real Estate Trust 1999-1 based on its Holder Commitment in
an amount in immediately available funds such that the aggregate of all Holder
Advances on such date shall be three percent (3%) of the amount of the Requested
Funds on such date; provided, that no Holder shall be obligated for any Holder
Advance in excess of its pro rata share of the Available Holder Commitment. The
aggregate amount of Holder Advances shall be up to the aggregate amount of the
Holder Commitments. No prepayment or any other payment with respect to any
Advance shall be permitted such that the Holder Advance with respect to such
Advance is less than three percent (3%) of the outstanding amount of such
Advance, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default. The representations, warranties, covenants and agreements of
the Holders herein and in the other Operative Agreements are several, and not
joint or joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS.
On the date hereof, each of the respective parties hereto and thereto
shall execute and deliver this Agreement, the Lease, each applicable Ground
Lease, the Agency Agreement, the Credit Agreement, the Notes, the Trust
Agreement, the Certificates, the Security Agreement, each applicable Mortgage
Instrument and such other documents, instruments, certificates and opinions of
counsel as agreed to by the parties hereto.
3.2. PROPERTY PURCHASE.
On each Property Closing Date and subject to the terms and conditions
of this Agreement (a) the Holders will each make a Holder Advance in accordance
with Sections 2 and 5 of this Agreement and the terms and provisions of the
Trust Agreement, (b) the Lenders will each make Loans in accordance with
Sections 1 and 5 of this Agreement and the terms and provisions of the Credit
Agreement, (c) the Lessor will purchase and acquire good and marketable title to
or ground lease pursuant to a Ground Lease, the applicable Property, each to be
within an Approved
2
<PAGE> 7
State, identified by the Construction Agent, in each case pursuant to a Deed,
Bill of Sale or Ground Lease, as the case may be, and grant the Agent a lien on
such Property by execution of the required Security Documents, (d) the Agent,
the Lessee and the Lessor shall execute and deliver a Lease Supplement relating
to such Property and (e) the Term shall commence with respect to such Property.
3.3. CONSTRUCTION OF IMPROVEMENTS; COMMENCEMENT OF BASIC RENT.
Construction Advances will be made with respect to particular
Improvements to be constructed and with respect to ongoing Work regarding the
Equipment and construction of particular Improvements, in each case, pursuant to
the terms and conditions of this Agreement and the Agency Agreement. The
Construction Agent will act as a construction agent on behalf of the Lessor
respecting the Work regarding the Equipment, the construction of such
Improvements and the expenditures of the Construction Advances related to the
foregoing. The Construction Agent shall promptly notify the Lessor upon
Completion of the Improvements and the Lessee shall commence to pay Basic Rent
as of the Rent Commencement Date.
3.4. RATABLE INTERESTS OF THE HOLDERS AND THE LENDERS.
Each Holder and Lender agrees at all times (a) 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 and
(b) to make advances consistent with such committed amounts referenced in
Section 3.4(a) in accordance with the requirements of the Operative Agreements.
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE.
All documents and instruments required to be delivered on the Initial
Closing Date shall be delivered at the offices of Moore & Van Allen, PLLC,
Charlotte, North Carolina, or at such other location as may be determined by the
Lessor, the Agent and the Lessee.
4.2. INITIAL CLOSING DATE; PROPERTY CLOSING DATES; ACQUISITION
ADVANCES; CONSTRUCTION ADVANCES.
The Construction Agent shall deliver to the Agent a requisition (a
"Requisition"), in the form attached hereto as Exhibit A or in such other form
as is satisfactory to the Agent, in its reasonable discretion, in connection
with (a) the Transaction Expenses and other fees, expenses and disbursements
payable, pursuant to Section 7.1, by the Lessor and (b) each Acquisition Advance
pursuant to Section 5.3 and (c) each Construction Advance pursuant to Section
5.4.
3
<PAGE> 8
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT;
REPORTING REQUIREMENTS ON COMPLETION DATE;
THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS.
5.1. GENERAL.
(a) To the extent funds have been advanced to the Lessor as
Loans by the Lenders and to the Lessor as Holder Advances by the
Holders, the Lessor will use such funds from time to time in accordance
with the terms and conditions of this Agreement and the other Operative
Agreements (i) at the direction of the Construction Agent to acquire
the Properties in accordance with the terms of this Agreement, the
Agency Agreement and the other Operative Agreements, (ii) to make
Advances to the Construction Agent to permit the acquisition, testing,
engineering, installation, development, construction, modification,
design, and renovation, as applicable, of the Properties (or components
thereof) in accordance with the terms of the Agency Agreement and the
other Operative Agreements, and (iii) to pay Transaction Expenses,
fees, expenses and other disbursements payable by the Lessor under
Sections 7.1(a) and 7.1(b).
(b) In lieu of the payment of interest on the Loans and Holder
Yield on the Holder Advances on any Scheduled Interest Payment Date
with respect to any Property during the period prior to the Rent
Commencement Date with respect to such Property, (i) each Lender's Loan
shall automatically be increased by the amount of interest accrued and
unpaid on such Loan for such period (except to the extent that at any
time such increase would cause such Lender's Loan to exceed such
Lender's Available Commitment, in which case the Lessee shall pay such
excess amount to such Lender in immediately available funds on the date
such Lender's Available Commitment was exceeded), and (ii) each
Holder's Holder Advance shall automatically be increased by the amount
of Holder Yield accrued and unpaid on such Holder Advance for such
period (except to the extent that at any time such increase would cause
the Holder Advance of such Holder to exceed such Holder's Available
Holder Commitment, in which case the Lessee shall pay such excess
amount to such Holder in immediately available funds on the date the
Available Holder Commitment of such Holder was exceeded). Such
increases in a Lender's Loan and a Holder's Holder Advance shall occur
without any disbursement of funds by any Person.
5.2. PROCEDURES FOR FUNDING.
(a) The Construction Agent shall designate the date for
Advances hereunder in accordance with the terms and provisions hereof;
provided, however, it is understood and agreed that no more than two
(2) Advances (excluding any conversion and/or continuation of any Loans
or Holder Advances) may be requested during any calendar month. Not
less than (i) three (3) Business Days prior to the Initial Closing Date
and (ii) three (3) Business Days prior to the date on which any
Acquisition Advance or Construction Advance is to be made, the
Construction Agent shall deliver to the Agent,
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(A) with respect to the Initial Closing Date and each Acquisition
Advance, a Requisition as described in Section 4.2 hereof (including
without limitation a legal description of the Land, if any, a schedule
of the Improvements, if any, and a schedule of the Equipment, if any,
acquired or to be acquired on such date, and a schedule of the Work, if
any, to be performed, each of the foregoing in a form reasonably
acceptable to the Agent) and (B) with respect to each Construction
Advance, a Requisition identifying (among other things) the Property to
which such Construction Advance relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request
funds in an amount that is not in excess of the total aggregate of the
Available Commitments plus the Available Holder Commitments at such
time, and (iii) request that the Holders make Holder Advances and that
the Lenders make Loans to the Lessor for the payment of Transaction
Expenses, Property Acquisition Costs (in the case of an Acquisition
Advance) or other Property Costs (in the case of a Construction
Advance) that have previously been incurred or are to be incurred on
the date of such Advance to the extent such were not subject to a prior
Requisition, in each case as specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent
set forth in Sections 5.3 or 5.4, as applicable, on each Property
Closing Date or the date on which the Construction Advance is to be
made, as applicable, (i) the Lenders shall make Loans based on their
respective Lender Commitments to the Lessor in an aggregate amount
equal to ninety-seven percent (97%) of the Requested Funds specified in
any Requisition (ratably between the Tranche A Lenders and the Tranche
B Lenders with the Tranche A Lenders funding eighty-five percent (85%)
of the Requested Funds and the Tranche B Lenders funding twelve percent
(12%) of the Requested Funds), up to an aggregate principal amount
equal to the aggregate of the Available Commitments, (ii) each Holder
shall make a Holder Advance based on its Holder Commitment in an amount
such that the aggregate of all Holder Advances at such time shall be
three percent (3%) of the balance of the Requested Funds specified in
such Requisition, up to the aggregate advanced amount equal to the
aggregate of the Available Holder Commitments; and (iii) the total
amount of such Loans and Holder Advances made on such date shall (x) be
used by the Lessor to pay Property Costs including Transaction Expenses
within three (3) Business Days of the receipt by the Lessor of such
Advance or (y) be advanced by the Lessor on the date of such Advance to
the Construction Agent or the Lessee to pay Property Costs, as
applicable. Notwithstanding that the Operative Agreements state that
Advances shall be directed to the Lessor, each Advance shall in fact be
directed to the Construction Agent (for the benefit of the Lessor) and
applied by the Construction Agent (for the benefit of the Lessor)
pursuant to the requirements imposed on the Lessor under the Operative
Agreements.
(d) With respect to an Advance obtained by the Lessor to pay
for Property Costs and/or Transaction Expenses or other costs payable
under Section 7.1 hereof and not expended by the Lessor for such
purpose on the date of such Advance, such amounts shall be held by the
Lessor (or the Agent on behalf of the Lessor) until the applicable
closing date or, if such closing date does not occur within three (3)
Business Days of the
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date of the Lessor's receipt of such Advance, shall be applied
regarding the applicable Advance to repay the Lenders and the Holders
and, subject to the terms hereof, and of the Credit Agreement and the
Trust Agreement, shall remain available for future Advances. Any such
amounts held by the Lessor (or the Agent on behalf of the Lessor) shall
be subject to the lien of the Security Agreement.
(e) All Operative Agreements which are to be delivered to the
Lessor, the Agent, the Lenders or the Holders shall be delivered to the
Agent, on behalf of the Lessor, the Agent, the Lenders or the Holders,
and such items (except for Notes, Certificates, Bills of Sale, the
Ground Leases and chattel paper originals, with respect to which in
each case there shall be only one original) shall be delivered with
originals sufficient for the Lessor, the Agent, each Lender and each
Holder. All other items which are to be delivered to the Lessor, the
Agent, the Lenders or the Holders shall be delivered to the Agent, on
behalf of the Lessor, the Agent, the Lenders or the Holders, and such
other items shall be held by the Agent. To the extent any such other
items are requested in writing from time to time by the Lessor, any
Lender or any Holder, the Agent shall provide a copy of such item to
the party requesting it.
(f) Notwithstanding the completion of any closing under this
Agreement pursuant to Sections 5.3 or 5.4, each condition precedent in
connection with any such closing may be subsequently enforced by the
Agent (unless such has previously been expressly waived in writing by
the Agent).
5.3. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS
AND THE HOLDERS RELATING TO THE INITIAL CLOSING DATE AND THE
ADVANCE OF FUNDS FOR THE ACQUISITION OF A PROPERTY.
The obligations (i) on the Initial Closing Date of the Lessor, the
Agent, the Lenders and the Holders to enter into the transactions contemplated
by this Agreement, including without limitation the obligation to execute and
deliver the applicable Operative Agreements to which each is a party on the
Initial Closing Date, (ii) on the Initial Closing Date of the Holders to make
Holder Advances, and of the Lenders to make Loans in order to pay Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1(a) of this Agreement and (iii) on a Property Closing Date for the
purpose of providing funds to the Lessor necessary to pay the Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1(b) of this Agreement and to acquire or ground lease a Property (an
"Acquisition Advance"), in each case (with regard to the foregoing Sections
5.3(i), (ii) and (iii)) are subject to the satisfaction or waiver of the
following conditions precedent on or prior to the Initial Closing Date or the
applicable Property Closing Date, as the case may be (to the extent such
conditions precedent require the delivery of any agreement, certificate,
instrument, memorandum, legal or other opinion, appraisal, commitment, title
insurance commitment, lien report or any other document of any kind or type,
such shall be in form and substance satisfactory to the Agent, in its reasonable
discretion; notwithstanding the foregoing, the
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obligations of each party shall not be subject to any conditions contained in
this Section 5.3 which are required to be performed by such party):
(a) the correctness of the representations and warranties of
the parties to this Agreement contained herein, in each of the other
Operative Agreements and each certificate delivered pursuant to any
Operative Agreement on each such date;
(b) the performance by the parties to this Agreement of 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 (along with the
appropriate schedules which shall be appropriately completed in all
material respects);
(d) title to each such Property shall conform to the
representations and warranties set forth in Section 6.2(l) hereof;
(e) the Construction Agent shall have delivered to the Agent a
good standing certificate for the Construction Agent in the state where
each such Property is located, the Deed with respect to the Land and
existing Improvements (if any), a copy of the Ground Lease (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 or ground leased
on each such date with the proceeds of the Loans and Holder Advances or
which have been previously acquired or ground leased with the proceeds
of the Loans and Holder Advances and such Land, existing Improvements
(if any) and Equipment (if any) shall be located in an Approved State;
(f) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Advance requested by each
such Requisition;
(g) the Construction Agent shall have delivered to the Agent
title insurance commitments to issue policies respecting each such
Property, with such endorsements as the Agent deems reasonably
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) [Intentionally Reserved];
(i) the Construction Agent shall have delivered to the Agent a
survey (with a flood hazard certification) respecting each such
Property prepared by (i) an independent recognized professional
acceptable to the Agent and (ii) in a manner and including such
information as is required by the Agent;
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(j) unless such an opinion has previously been delivered with
respect to a particular state, the Construction Agent shall have caused
to be delivered to the Agent a legal opinion in the form attached
hereto as Exhibit B or in such other form as is acceptable to the Agent
with respect to local law real property issues respecting the state in
which each such Property is located addressed to the Lessor, the Agent,
the Lenders and the Holders, from counsel located in the state where
each such Property is located, prepared by counsel acceptable to the
Agent;
(k) the Agent shall be satisfied that the acquisition, ground
leasing and/or holding of each such Property and the execution of the
Mortgage Instrument and the other Security Documents will not
materially and adversely affect the rights of the Lessor, the Agent,
the Holders or the Lenders under or with respect to the Operative
Agreements;
(l) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, the various
Transaction Expenses and other fees, expenses and disbursements
referenced in Sections 7.1(a) or 7.1(b) of this Agreement, as
appropriate;
(m) the Construction Agent shall have caused to be delivered
to the Agent a Mortgage Instrument (in such form as is 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) the Lessee shall have delivered to the Agent with respect
to each such Property a Lease Supplement and a memorandum (or short
form lease) regarding the Lease and such Lease Supplement (such
memorandum or short form lease to be in the form attached to the Lease
as Exhibit B or in such other form as is acceptable to the Agent, with
modifications as necessary to conform to applicable state law, and in
form suitable for recording);
(o) with respect to each Acquisition Advance, the aggregate
Available Commitment for all Lenders plus the Available Holder
Commitment (after deducting the Unfunded Amount, if any, and after
giving effect to the Acquisition Advance for such other Properties) the
amount remaining will be sufficient to pay all amounts payable
therefrom;
(p) if any such Property is subject to a Ground Lease, the
Construction Agent shall have caused a lease memorandum (or short form
lease) to be delivered to the Agent for such Ground Lease and, if
requested by the Agent, a landlord waiver and a mortgagee waiver (in
each case, in such form as is acceptable to the Agent);
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(q) counsel (acceptable to the Agent) for the ground lessor of
each such Property subject to a Ground Lease shall have issued to the
Lessor, the Agent, the Lenders and the Holders, its opinion;
(r) the Construction Agent shall have delivered to the Agent a
preliminary Construction Budget for each such Property, if applicable;
(s) the Construction Agent shall have provided evidence to the
Agent of insurance with respect to each such Property as provided in
the Lease;
(t) [Intentionally Reserved];
(u) the Construction Agent shall cause (i) Uniform Commercial
Code lien searches, tax lien searches and judgment lien searches
regarding the Lessee to be conducted (and copies thereof to be
delivered to the Agent) in such jurisdictions as determined by the
Agent by a nationally recognized search company 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;
(v) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements and/or documents related thereto shall have been
paid or provisions for such payment shall have been made to the
satisfaction of the Agent;
(w) in the opinion of the Agent and its respective counsel,
the transactions contemplated by the Operative Agreements do not and
will not subject the Lessor, the Lenders, the Agent or the Holders to
any adverse regulatory prohibitions, constraints, penalties or fines;
(x) each of the Operative Agreements to be entered into on
such date shall have been duly authorized, executed and delivered by
the parties thereto, and shall be in full force and effect, and the
Agent shall have received a fully executed copy of each of the
Operative Agreements;
(y) since the date of the most recent audited financial
statements 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;
(z) as of the Initial Closing Date only, the Agent shall have
received an Officer's Certificate, dated as of the Initial Closing
Date, of the Lessee in the form attached hereto as Exhibit C or in such
other form as is acceptable to the Agent stating that (i) each and
every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct on and
as of the Initial Closing Date; (ii) no Default or Event of Default has
occurred and is continuing under
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any Operative Agreement; (iii) each Operative Agreement to which the
Lessee is a party is in full force and effect with respect to it; and
(iv) the Lessee has duly performed and complied with all covenants,
agreements and conditions contained herein or in any Operative
Agreement required to be performed or complied with by it on or prior
to the Initial Closing Date;
(aa) as of the Initial Closing Date only, the Agent shall have
received (i) a certificate of the Secretary or an Assistant Secretary
of the Lessee, dated as of the Initial Closing Date, in the form
attached hereto as Exhibit D or in such other form as is acceptable to
the Agent attaching and certifying as to (1) the resolutions of its
Board of Directors duly authorizing the execution, delivery and
performance by the Lessee of each of the Operative Agreements to which
it is or will be a party, (2) its articles of incorporation certified
as of a recent date by the Secretary of State of its state of
incorporation and its by-laws and (3) the incumbency and signature of
persons authorized to execute and deliver on its behalf the Operative
Agreements to which it is or will be a party and (ii) a good standing
certificate (or local equivalent) from the appropriate office of the
respective states where the Lessee is incorporated and where the
principal place of business of the Lessee is located as to its good
standing in each such state. To the extent the Lessee is a partnership,
a limited liability company or is otherwise organized, such Person
shall deliver to the Agent (in form and substance satisfactory to the
Agent) as of the Initial 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 the
foregoing as applicable;
(bb) as of the Initial Closing Date only, the Agent shall have
received an Officer's Certificate of the Lessor dated as of the Initial
Closing Date in the form attached hereto as Exhibit E or in such other
form as is acceptable to the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Initial Closing Date, (ii) each Operative Agreement to which the Lessor
is a party is in full force and effect with respect to it and (iii) the
Lessor has duly performed and complied with all covenants, agreements
and conditions contained herein or in any Operative Agreement required
to be performed or complied with by it on or prior to the Initial
Closing Date;
(cc) as of the Initial Closing Date only, the Agent shall have
received (i) a certificate of the Secretary, an Assistant Secretary,
Trust Officer or Vice President of the Trust Company in the form
attached hereto as Exhibit F or in such other form as is acceptable to
the Agent, attaching and certifying as to (A) the signing resolutions
duly authorizing the execution, delivery and performance by the Lessor
of each of the Operative Agreements to which it is or will be a party,
(B) its articles of association or 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
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Agreements to which it is a party and (ii) a good standing certificate
from the Office of the Comptroller of the Currency;
(dd) as of the Initial Closing Date only, counsel for the
Lessor acceptable to the Agent shall have issued to the Lessee, the
Holders, the Lenders and the Agent its opinion in the form attached
hereto as Exhibit G or in such other form as is reasonably acceptable
to the Agent;
(ee) as of the Initial Closing Date only, the Construction
Agent shall have caused to be delivered to the Agent a legal opinion in
the form attached hereto as Exhibit H or in such other form as is
acceptable to the Agent, addressed to the Lessor, the Agent, the
Lenders and the Holders, from counsel acceptable to the Agent; and
(ff) the Construction Agent shall have deposited good and
immediately available funds, in U.S. dollars, into the Cash Collateral
Account in a sufficient amount so that after giving effect to the
requested Advance the Construction Agent is in compliance with Section
5.9 hereof.
5.4. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS
AND THE HOLDERS RELATING TO THE ADVANCE OF FUNDS AFTER THE
ACQUISITION ADVANCE.
The obligations of the Holders to make Holder Advances, and the Lenders
to make Loans in connection with all requests for Advances subsequent to the
acquisition of a Property (and to pay the Transaction Expenses, fees, expenses
and other disbursements payable by the Lessor under Section 7.1 of this
Agreement in connection therewith) are subject to the satisfaction or waiver of
the following conditions precedent (to the extent such conditions precedent
require the delivery of any agreement, certificate, instrument, memorandum,
legal or other opinion, appraisal, commitment, title insurance commitment, lien
report or any other document of any kind or type, such shall be in form and
substance satisfactory to the Agent, in its reasonable discretion;
notwithstanding the foregoing, the obligations of each party shall not be
subject to any conditions contained in this Section 5.4 which are required to be
performed by such party):
(a) the correctness on such date of the representations and
warranties of the parties to this Agreement contained herein, in each
of the other Operative Agreements and in each certificate delivered
pursuant to any Operative Agreement;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart
of the Requisition, appropriately completed;
(d) based upon the applicable Construction Budget which shall
satisfy the requirements of this Agreement, the Available Commitments
and the Available Holder
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Commitment (after deducting the Unfunded Amount) will be sufficient to
complete the Improvements;
(e) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Construction Advance
requested by the applicable Requisition;
(f) the title insurance policy delivered in connection with
the requirements of Section 5.3(g) shall provide for (or shall be
endorsed to provide for) insurance in an amount at least equal to the
maximum total Property Cost indicated by the Construction Budget
referred to in subparagraph (d) above and there shall be no title
change or exception objectionable to the Agent;
(g) the Construction Agent shall have delivered to the Agent
copies of the Plans and Specifications for the applicable Improvements;
(h) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, any
Transaction Expenses and other fees, expenses and disbursements
referenced in Section 7.1(b) that are to be paid with the Advance;
(i) the Construction Agent shall have delivered, or caused to
be delivered to the Agent, invoices, Bills of Sale or other documents
acceptable to the Agent, in each case with regard to any Equipment or
other components of such Property then being acquired with the proceeds
of the Loans and Holder Advances and naming the Lessor as purchaser and
transferee;
(j) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements shall have been paid or provisions for such
payment shall have been made to the satisfaction of the Agent;
(k) since the date of the most recent audited financial
statements of the Lessee, there shall not have occurred any event,
condition or state of facts which shall have or could reasonably be
expected to have a Material Adverse Effect, other than as specifically
contemplated by the Operative Agreements;
(l) 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
(m) the Construction Agent shall have deposited good and
immediately available funds, in U.S. dollars, into the Cash Collateral
Account in a sufficient amount
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so that after giving effect to the requested Advance the Construction
Agent is in compliance with Section 5.9 hereof.
5.5. ADDITIONAL REPORTING AND DELIVERY REQUIREMENTS ON COMPLETION
DATE AND ON CONSTRUCTION PERIOD TERMINATION DATE.
On or prior to the Completion Date for each Property, the Construction
Agent shall deliver to the Agent an Officer's Certificate in the form attached
hereto as Exhibit I or in such other form as is acceptable to the Agent
specifying (a) the address for such Property, (b) the Completion Date for such
Property, (c) the aggregate Property Cost for such Property, (d) detailed,
itemized documentation supporting the asserted Property Cost figures and (e)
that all representations and warranties of the Construction Agent and Lessee in
each of the Operative Agreements and each certificate delivered pursuant thereto
are true and correct as of the Completion Date. The Agent shall have the right
to contest the information contained in such Officer's Certificate. Furthermore,
on or prior to the Completion Date for each Property, the Construction Agent
shall deliver or cause to be delivered to the Agent (unless previously delivered
to the Agent) originals of the following, each of which shall be in form and
substance acceptable to the Agent, in its reasonable discretion: (v) a title
insurance endorsement regarding the title insurance policy delivered in
connection with the requirements of Section 5.3(g), but only to the extent such
endorsement is necessary to provide for insurance in an amount at least equal to
the maximum total Property Cost and, if endorsed, the endorsement shall not
include a title change or exception objectionable to the Agent; (w) an as-built
survey for such Property, (x) insurance certificates respecting such Property as
required hereunder and under the Lease Agreement, (y) if requested by the Agent,
amendments to the Lessor Financing Statements executed by the appropriate
parties and (z) an Appraisal regarding such Property; provided, however, such an
Appraisal shall not be required if, as of such Completion Date, the Agent has
previously received Appraisal(s) pursuant to Section 5.1(f) of the Agency
Agreement for Properties that are then subject to the Lease and that have an
aggregate value (as established by such Appraisal(s)) of at least
$11,250,000.00. In addition, on the Completion Date for such Property the
Construction Agent covenants and agrees that the recording fees, documentary
stamp taxes or similar amounts required to be paid in connection with the
related Mortgage Instrument shall have been paid in an amount required by
applicable law, subject, however, to the obligations of the Lenders and the
Holders to fund such costs to the extent required pursuant to Section 7.1.
5.6. THE CONSTRUCTION AGENT DELIVERY OF CONSTRUCTION BUDGET
MODIFICATIONS.
The Construction Agent covenants and agrees to deliver to the Agent
each month notification of any modification to any Construction Budget regarding
any Property if such modification increases the cost to construct such Property;
provided no Construction Budget may be increased unless (a) the title insurance
policies referenced in Section 5.3(g) are also modified or endorsed, if
necessary, to provide for insurance in an amount that satisfies the requirements
of Section 5.4(f) of this Agreement and (b) after giving effect to any such
amendment, the
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Construction Budget remains in compliance with the requirements of Section
5.4(d) of this Agreement.
5.7. RESTRICTIONS ON LIENS.
On each Property Closing Date, the Construction Agent shall cause each
Property acquired by the Lessor on such date to be free and clear of all Liens
except those referenced in Sections 6.2(r)(i) and 6.2(r)(ii). On each date a
Property is either sold to a third party in accordance with the terms of the
Operative Agreements or, pursuant to Section 22.1(a) of the Lease Agreement,
retained by the Lessor, the Lessee shall cause such Property to be free and
clear of all Liens (other than Lessor Liens and such other Liens that are
expressly set forth as title exceptions on the title commitment issued under
Section 5.3(g) with respect to such Property, to the extent such title
commitment has been approved by the Agent).
5.8. PAYMENTS.
All payments of principal, interest, Holder Advances, Holder Yield and
other amounts to be made by the Construction Agent or the Lessee under this
Agreement or any other Operative Agreements (excluding Excepted Payments which
shall be paid directly to the party to whom such payments are owed) shall be
made to the Agent at the office designated by the Agent from time to time in
Dollars and in immediately available funds, without setoff, deduction, or
counterclaim. Subject to the definition of "Interest Period" in Appendix A
attached hereto, whenever any payment under this Agreement or any other
Operative Agreements shall be stated to be due on a day that is not a Business
Day, such payment may be made on the next succeeding Business Day, and such
extension of time in such case shall be included in the computation of interest,
Holder Yield and fees payable pursuant to the Operative Agreements, as
applicable and as the case may be.
5.9 CASH COLLATERAL ACCOUNT.
The Construction Agent shall make cash deposits in U.S. Dollars into
the Cash Collateral Account from time to time so that (i) at all points in time
prior to or on the Construction Period Termination Date for all Properties, the
amount on deposit in the Cash Collateral Account equals or exceeds the aggregate
Property Cost for all of the Properties times eighty-nine and nine tenths
percent (89.9%) and (ii) at all points in time after the Construction Period
Termination Date for all Properties the amount on deposit in the Cash Collateral
Account equals or exceeds the Maximum Residual Guarantee Amount.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
Effective as of the Initial Closing Date and the date of each Advance,
the Trust Company in its individual capacity and as the Borrower, as indicated,
represents and warrants to each of the
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other parties hereto as follows, provided, that the representations in the
following paragraphs (h), (j) and (k) are made solely in its capacity as the
Borrower:
(a) It is a national banking association and is duly organized
and validly existing and in good standing under the laws of the United
States of America and has the power and authority to enter into and
perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the
Holders) has the corporate and trust power and authority to act as the
Owner Trustee and to enter into and perform the obligations under each
of the other Operative Agreements to which the Trust Company or the
Owner Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before such Closing Date in connection with or as contemplated by
each such Operative Agreement to which the Trust Company or the Owner
Trustee, as the case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) does or will require any approval or
consent of any trustee or holders of any of its indebtedness or
obligations, (ii) does or will contravene any Legal Requirement
relating to its banking or trust powers, (iii) does or will contravene
or result in any breach of or constitute any default under, or result
in the creation of any Lien upon any of its property under, (A) its
charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected, which
contravention, breach, default or Lien under clause (B) would
materially and adversely affect its ability, in its individual capacity
or as the Owner Trustee, to perform its obligations under the Operative
Agreements to which it is a party or (iv) does or will require any
Governmental Action by any Governmental Authority regulating its
banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as
the case may be, is or will be a party have been, or on or before such
Closing Date will be, duly executed and delivered by the Trust Company
or the Owner Trustee, as the case may be, and the Trust Agreement and
each such other Operative Agreement to which the Trust Company or the
Owner Trustee, as the case may be, is a party constitutes, or upon
execution and delivery will constitute, a legal, valid and binding
obligation enforceable against the Trust Company or the Owner Trustee,
as the case may be, in accordance with the terms thereof;
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(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability, in its individual capacity or as the Owner Trustee,
to perform its obligations under the Operative Agreements to which it
is a party or would question the validity or enforceability of any of
the Operative Agreements to which it is or will become a party;
(e) It, either in its individual capacity or as the Owner
Trustee, has not assigned or transferred any of its right, title or
interest in or under the Lease, the Agency Agreement or its interest in
any Property or any portion thereof, except in accordance with the
Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative
Agreements, the proceeds of the Loans and Holder Advances shall not be
applied by the Owner Trustee, either in its individual capacity or as
the Owner Trustee, for any purpose other than the purchase and/or lease
of the Properties, the acquisition, installation and testing of the
Equipment, the construction of Improvements and the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Sections 7.1(a) and 7.1(b) of this Agreement, in each
case which accrue prior to the Rent Commencement Date with respect to a
particular Property;
(h) Neither the Owner Trustee nor any Person authorized by the
Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to a
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Agent, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take
any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the
Notes to the provisions of Section 5 of the Securities Act or require
the qualification of any Operative Agreement under the Trust Indenture
Act of 1939, as amended;
(i) The Owner Trustee's principal place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are located at 79 South Main Street,
Salt Lake City, Utah 84111;
(j) The Owner Trustee is not engaged principally in, and does
not have as one (1) of its important activities, the business of
extending credit for the purpose of purchasing or carrying any margin
stock (within the meaning of Regulation U of the
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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;
(k) The Owner Trustee is not an "investment company" or a
company controlled by an "investment company" within the meaning of the
Investment Company Act;
(l) Each Property is free and clear of all Lessor Liens
attributable to the Owner Trustee, either in its individual capacity or
as the Owner Trustee; and
(m) The Owner Trustee, in its trust capacity, is not a party
to any documents, instruments or agreements other than the Operative
Agreements executed by the Owner Trustee, in its trust capacity.
6.2. REPRESENTATIONS AND WARRANTIES OF THE CONSTRUCTION AGENT AND
THE LESSEE.
Effective as of the Initial Closing Date, the date of each Advance and
the Rent Commencement Date, the Construction Agent and the Lessee represent and
warrant to each of the other parties hereto that:
(a) [INTENTIONALLY RESERVED];
(b) The execution and delivery by each of the Construction
Agent and the Lessee of this Agreement and the other applicable
Operative Agreements as of such date and the performance by each of the
Construction Agent and the Lessee 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 of the Construction Agent and the Lessee, have
been duly authorized by all necessary corporate, partnership or limited
liability company (as the case may be) action on the part of each of
the Construction Agent and the Lessee (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 the
Construction Agent, the Lessee or any of their 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 of the Construction Agent, the Lessee or any of their
Subsidiaries or of any agreement, indenture, instrument or other
document which is binding on any of the Construction Agent, the Lessee
or any of their 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 of the Construction
Agent, the Lessee or any of their Subsidiaries;
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(c) This Agreement and the other applicable Operative
Agreements to which the Construction Agent or the Lessee are parties,
executed prior to and as of such date, constitute the legal, valid and
binding obligation of the Construction Agent or the Lessee, as
applicable, enforceable against the Construction Agent or the Lessee,
as applicable, in accordance with their terms. The Construction Agent
and the Lessee have each executed the various Operative Agreements
required to be executed as of such date;
(d) There are no material actions, suits or proceedings
pending or, to our knowledge, threatened against either the
Construction Agent or the Lessee in any court or before any
Governmental Authority (nor shall any order, judgment or decree have
been issued or proposed to be issued by any Governmental Authority to
set aside, restrain, enjoin or prevent the full performance of any
Operative Agreement or any transaction contemplated thereby) that (i)
concern any Property or the Lessee'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 Construction Agent and the
Lessee have described the litigation set forth on Exhibit J;
(e) No Governmental Action by any Governmental Authority or
other authorization, registration, consent, approval, waiver, notice or
other action by, to or of any other Person pursuant to any Legal
Requirement, contract, indenture, instrument or agreement or for any
other reason is required to authorize or is required in connection with
(i) the execution, delivery or performance of any Operative Agreement,
(ii) the legality, validity, binding effect or enforceability of any
Operative Agreement, (iii) the acquisition, ownership, construction,
completion, occupancy, operation, leasing or subleasing of any Property
or (iv) any Advance, in each case, except those which have been
obtained and are in full force and effect or will be obtained prior to
the time required to be in place;
(f) Upon the execution and delivery of each Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in such Property, subject only to the
Permitted Liens, and (ii) no offset will exist with respect to any Rent
or other sums payable under the Lease;
(g) Except as otherwise contemplated by the Operative
Agreements, the Construction Agent shall not use the proceeds of any
Holder Advance or Loan for any purpose other than the purchase and/or
lease of the Properties, the acquisition, installation and testing of
the Equipment, the construction of Improvements and the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Sections 7.1(a) and 7.1(b) of this Agreement, in each
case which accrue prior to the Rent Commencement Date with respect to a
particular Property;
(h) All information heretofore or contemporaneously herewith
furnished by either the Construction Agent or the Lessee or any of
their Subsidiaries to the Agent, the
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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 the
Construction Agent, the Lessee or any of their Subsidiaries to the
Agent, the Owner Trustee, any Lender or any Holder pursuant hereto or
in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified,
and such information, taken as a whole, does not and will not omit to
state any material fact necessary to make such information, taken as a
whole, not misleading;
(i) The principal place of business, chief executive office
and office of the Construction Agent and the Lessee where the
documents, accounts and records relating to the transactions
contemplated by this Agreement and each other Operative Agreement are
kept are located at 7625 Thorndike Road, Greensboro, NC 27409-9421;
(j) The representations and warranties of the Construction
Agent and the Lessee set forth in any of the Operative Agreements are
true and correct in all material respects on and as of each such date
as if made on and as of such date. The Construction Agent and the
Lessee are in all material respects in compliance with their respective
obligations under the Operative Agreements and there exists no Default
or Event of Default under any of the Operative Agreements which is
continuing and which has not been cured within any cure period
expressly granted under the terms of the applicable Operative Agreement
or otherwise waived in accordance with the applicable Operative
Agreement. No Default or Event of Default will occur under any of the
Operative Agreements as a result of, or after giving effect to, the
Advance requested by the Requisition on the date of each Advance;
(k) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
then being financed consists of (i) unimproved Land or (ii) Land and
existing Improvements thereon which Improvements are either suitable
for occupancy at the time of acquisition or ground leasing or will be
renovated and/or modified in accordance with the terms of this
Agreement. Each Property then being financed is located at the location
set forth on the applicable Requisition, each of which is in one (1) of
the Approved States;
(l) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, the Lessor has
good and marketable fee simple title to each Property, or, if any
Property is the subject of a Ground Lease, the Lessor will have a valid
ground leasehold interest enforceable against the ground lessor of such
Property in accordance with the terms of such Ground Lease, subject
only to (i) such Liens referenced in Sections 6.2(r)(i) and 6.2(r)(ii)
on the applicable Property Closing Date and (ii) subject to Section
5.7, Permitted Liens after the applicable Property Closing Date;
(m) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, no portion of
any Property is located in an area
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identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, or if any such Property
is located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency, then
flood insurance has been obtained for such Property in accordance with
Section 14.2(b) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended;
(n) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
complies with all Insurance Requirements and all standards of Lessee
with respect to similar properties owned by Lessee;
(o) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
complies with all Legal Requirements as of such date (including without
limitation all zoning and land use laws and Environmental Laws), except
to the extent that failure to comply therewith, individually or in the
aggregate, shall not have and could not reasonably be expected to have
a Material Adverse Effect;
(p) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, all utility
services and facilities necessary for the construction and operation of
the Improvements and the installation and operation of the Equipment
regarding each Property (including without limitation gas, electrical,
water and sewage services and facilities) are available at the
applicable Land and will be constructed prior to the Completion Date
for such Property;
(q) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, acquisition,
installation and testing of the Equipment (if any) and construction of
the Improvements (if any) to such date shall have been performed in a
good and workmanlike manner, substantially in accordance with the
applicable Plans and Specifications;
(r) (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 (including without limitation,
the Cash Collateral Account), in favor of the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements, and
such security interests and Liens are subject to no other
Liens other than Liens that are expressly set forth as title
exceptions on the title commitment issued under Section 5.3(g)
with respect to the applicable Property, to the extent such
title commitment has been approved by the Agent. Upon
recordation of the Mortgage Instrument in the real estate
recording office in the applicable Approved State identified
by the Construction Agent or the Lessee, the Lien created by
the Mortgage Instrument in the real property described therein
shall be a perfected first priority mortgage Lien on such real
property (or, in the
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case of a Ground Lease, the leasehold estate under such Ground
Lease) in favor of the Agent, for the ratable benefit of the
Lenders and the Holders, as their respective interests appear
in the Operative Agreements. To the extent that the security
interests in the portion of the Collateral comprised of
personal property can be perfected by filing in the filing
offices in the applicable Approved States or elsewhere
identified by the Construction Agent or the Lessee, upon
filing of the Lender Financing Statements in such filing
offices, the security interests created by the Security
Agreement shall be perfected first priority security interests
in such personal property in favor of the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements;
(ii) The Lease Agreement creates, as security for the
obligations of the Lessee under the Lease Agreement, valid and
enforceable security interests in, and Liens on, each Property
leased thereunder, in favor of the Lessor, and such security
interests and Liens are subject to no other Liens other than
Liens that are expressly set forth as title exceptions on the
title commitment issued under Section 5.3(g) with respect to
the applicable Property, to the extent such title commitment
has been approved by the Agent. Upon recordation of the
memorandum of the Lease Agreement and the memorandum of a
Ground Lease (or, in either case, a short form lease) in the
real estate recording office in the applicable Approved State
identified by the Construction Agent or the Lessee, the Lien
created by the Lease Agreement in the real property described
therein shall be a perfected first priority mortgage Lien on
such real property (or, in the case of a Ground Lease, on the
leasehold estate under such Ground Lease) in favor of the
Agent, for the ratable benefit of the Lenders and the Holders,
as their respective interests appear in the Operative
Agreements. To the extent that the security interests in the
portion of any Property comprised of personal property can be
perfected by the filing in the filing offices in the
applicable Approved State or elsewhere identified by the
Construction Agent or the Lessee upon filing of the Lessor
Financing Statements in such filing offices, a security
interest created by the Lease Agreement shall be perfected
first priority security interests in such personal property in
favor of the Lessor, which rights pursuant to the Lessor
Financing Statements are assigned to the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements;
(s) The Plans and Specifications for each Property will be
prepared prior to the commencement of construction in accordance with
all applicable Legal Requirements (including without limitation all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith,
individually or in the aggregate, shall not have and could not
reasonably be expected to have a Material Adverse Effect. Upon
completion of the Improvements for each Property in accordance with the
applicable Plans and Specifications, such Improvements will be within
any building restriction lines and will not encroach in any manner onto
any
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adjoining land (except as permitted by express written easements, which
have been approved by the Agent);
(t) As of the Rent Commencement Date only, each Property shall
be improved in accordance with the applicable Plans and Specifications
in a good and workmanlike manner and shall be operational; and
(u) [Intentionally Reserved]
6.3. REPRESENTATIONS AND WARRANTIES OF THE LENDERS AND THE HOLDERS.
Each of the Lenders, with respect to the Notes, and each of the
Holders, with respect to the Certificates, represents and warrants that such
party (a) understands that the offer and sale of the Notes and the Certificates
has not been, and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), or under any state securities laws, and that the
Notes and the Certificates, to the extent they may be deemed to be "securities,"
are being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering; (b) is an "accredited investor"
as defined in Rule 501(a) promulgated under the Securities Act; (c) is acquiring
the Notes or Certificates, as the case may be, solely for its own account for
investment purposes and not with a view to the distribution of such Notes or
Certificates, and will not transfer such Notes or Certificates without
compliance with all applicable securities laws; (d) is a sophisticated investor
with sufficient knowledge and experience in financial, investment and business
affairs to permit it to evaluate the merits and risks involved in purchasing
such Notes or Certificates and is able to bear the economic risk and lack of
liquidity inherent in holding such Notes or Certificates for an indefinite
period of time; and (e) has received information concerning the issuer of such
Notes or Certificates and has had the opportunity to ask questions of, and
receive answers from, such issuer and its representatives concerning the
business of such issuer and the terms of such Notes or Certificates and to
obtain additional information as desired in order to evaluate the merits and
risks inherent in acquiring and holding such Notes or Certificates.
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. TRANSACTION EXPENSES.
(a) The Lessor agrees on the Initial Closing Date, to pay, or
cause to be paid, all Transaction Expenses arising from the Initial
Closing Date, including without limitation all reasonable fees,
expenses and disbursements of the various legal counsels for the Lessor
and the Agent in connection with the transactions contemplated by the
Operative Agreements and incurred in connection with such Initial
Closing Date, the initial fees and expenses of the Owner Trustee due
and payable on such Initial Closing Date, all fees, taxes and expenses
for the recording, registration and filing of documents and all other
reasonable fees, expenses and disbursements incurred in connection with
such Initial Closing Date; provided, however, the Lessor shall pay such
amounts described in this Section 7.1(a) only if (i) such amounts are
properly described in a
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Requisition delivered on or before the Initial Closing Date, and (ii)
funds are made available by the Lenders and the Holders in connection
with such Requisition in an amount sufficient to allow such payment. On
the Initial Closing Date after delivery and receipt of the Requisition
referenced in Section 4.2(a) hereof and satisfaction of the other
conditions precedent for such date, the Holders shall make Holder
Advances and the Lenders shall make Loans to the Lessor to pay for the
Transaction Expenses, fees, expenses and other disbursements referenced
in this Section 7.1(a). The Lessee agrees to timely pay all amounts
referred to in this Section 7.1(a) to the extent not paid by the
Lessor.
(b) Assuming no Default or Event of Default shall have
occurred and be continuing and only for the period prior to the Rent
Commencement Date, the Lessor agrees on each Property Closing Date, on
the date of any Construction Advance and on the Completion Date to pay,
or cause to be paid, all Transaction Expenses including without
limitation all reasonable fees, expenses and disbursements of the
various legal counsels for the Lessor and the Agent in connection with
the transactions contemplated by the Operative Agreements and billed in
connection with such Advance or such Completion Date, all amounts
described in Section 7.1(a) of this Agreement which have not been
previously paid, the annual fees and reasonable out-of-pocket expenses
of the Owner Trustee, all fees, expenses and disbursements incurred
with respect to the various items referenced in Sections 5.3, 5.4
and/or 5.5 (including without limitation any premiums for title
insurance policies and charges for any updates to such policies) and
all other reasonable fees, expenses and disbursements in connection
with such Advance or such Completion Date including without limitation
all expenses relating to and all fees, taxes and expenses for the
recording, registration and filing of documents and during the
Commitment Period, all fees, expenses and costs referenced in Sections
7.3(a), 7.3(b), 7.3(d) and 7.4; provided, however, the Lessor shall pay
such amounts described in this Section 7.1(b) only if (i) such amounts
are properly described in a Requisition delivered on the applicable
date and (ii) funds are made available by the Lenders and the Holders
in connection with such Requisition in an amount sufficient to allow
such payment. On each Property Closing Date, on the date of any
Construction Advance or any Completion Date, after delivery of the
applicable Requisition and satisfaction of the other conditions
precedent for such date, the Holders shall make a Holder Advance and
the Lenders shall make Loans to the Lessor to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in this
Section 7.1(b). The Lessee agrees to timely pay all amounts referred to
in this Section 7.1(b) to the extent not paid by the Lessor.
(c) All fees payable pursuant to the Operative Agreements
shall be calculated on the basis of a year of three hundred sixty (360)
days for the actual days elapsed.
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.
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7.3. CERTAIN FEES AND EXPENSES.
The Lessee agrees to pay or cause to be paid (a) the initial and annual
Owner Trustee's fee and all reasonable expenses of the Owner Trustee and any
co-trustees (including without limitation reasonable counsel fees and expenses)
or any successor owner trustee and/or co-trustee, for acting as the owner
trustee under the Trust Agreement, (b) all reasonable costs and expenses
incurred by the Construction Agent, the Lessee, 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 the Construction Agent,
the Lessee, the Agent, the Lenders, the Holders or the Lessor, (c) all
reasonable costs and expenses incurred by the Construction Agent, the Lessee,
the Agent, the Lenders, the Holders or the Lessor in connection with any
exercise of remedies under any Operative Agreement or any purchase of any
Property by the Construction Agent, the Lessee or any third party and (d) all
reasonable costs and expenses incurred by the Construction Agent, the Lessee,
the Agent, the Lenders, the Holders or the Lessor in connection with any
transfer or conveyance of any Property, whether or not such transfer or
conveyance is ultimately accomplished.
7.4. UNUSED FEE.
During the Commitment Period, the Lessee agrees to pay or to cause to
be paid to the Agent for the account of (a) the Lenders, respectively, an unused
fee (the "Lender Unused Fee") equal to the product of the average daily
Available Commitment of each Lender during the Commitment Period multiplied by
the rate per annum set forth as the Unused Fee in the definition of Applicable
Percentage 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 during the Commitment Period multiplied by the rate per annum set
forth as the Unused Fee in the definition of Applicable Percentage. 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 plus the Applicable Percentage (or in the case of Holder Yield,
the ABR plus the Applicable Percentage for ABR 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).
7.5. OTHER FEES.
The Lessee shall pay or cause to paid such other fees as set forth and
on the terms and conditions provided in the engagement letter dated July 22,
1999 addressed to Mr. Dean Priddy, Chief Financial Officer & Vice President of
Administration at RF Micro Devices, Inc. 7625 Thorndike Road Greensboro, NC
27409-9421 from Peter M. Budko, Director, Corporate Real Estate & Asset Finance.
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SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. COOPERATION WITH THE CONSTRUCTION AGENT OR THE LESSEE.
The Holders, the Lenders, the Lessor (at the direction of the Majority
Secured Parties) and the Agent shall, at the expense of and to the extent
reasonably requested by the Construction Agent or the Lessee (but without
assuming additional liabilities on account thereof and only to the extent such
is acceptable to the Holders, the Lenders, the Lessor (at the direction of the
Majority Secured Parties) and the Agent in their reasonable discretion),
cooperate with the Construction Agent or the Lessee in connection with the
Construction Agent or the Lessee satisfying its covenant obligations contained
in the Operative Agreements including without limitation at any time and from
time to time, promptly and duly executing and delivering any and all such
further instruments, documents and financing statements (and continuation
statements related thereto).
8.2. COVENANTS OF THE OWNER TRUSTEE AND THE HOLDERS.
Each of the Owner Trustee and the Holders hereby agrees that so long as
this Agreement is in effect:
(a) Neither the Owner Trustee (in its trust capacity or in its
individual capacity) nor any Holder will create or permit to exist at
any time, and each of them will, at its own cost and expense, promptly
take such action as may be necessary duly to discharge, or to cause to
be discharged, all Lessor Liens on the Properties attributable to it;
provided, however, that the Owner Trustee and the Holders shall not be
required to so discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently
prosecuted so long as such proceedings shall not materially and
adversely affect the rights of the Lessee under the Lease and the other
Operative Agreements or involve any material danger of impairment of
the Liens of the Security Documents or of the sale, forfeiture or loss
of, and shall not interfere with the use or disposition of, any
Property or title thereto or any interest therein or the payment of
Rent;
(b) Without prejudice to any right under the Trust Agreement
of the Owner Trustee to resign (subject to 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
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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 substantial benefit of the
creditors of the Owner Trustee; and neither any Holder nor the Owner
Trustee shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee,
the Holders and the Agent if the Owner Trustee's principal place of
business or chief executive office, or the office where the records
concerning the accounts or contract rights relating to any Property are
kept, shall cease to be located at 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 any Property in each
case as directed in writing by the Agent (until such time as the Loans
are paid in full, and then by the Majority Holders) or, in connection
with Sections 8.5 and 9.2 hereof, the Lessee; provided, however, that
notwithstanding the foregoing provisions of this subparagraph (h) the
Owner Trustee, the Agent, the Lenders and the Holders each acknowledge,
covenant and agree that neither the Owner Trustee nor the Agent shall
act or refrain from acting, regarding each Unanimous Vote Matter, until
such party has received the approval of each Lender and each Holder
affected by such matter.
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8.3. THE LESSEE COVENANTS, CONSENT AND ACKNOWLEDGMENT.
(a) The Lessee 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. The Lessee hereby irrevocably consents to the
creation, perfection and maintenance of such Liens. Each of the
Construction Agent and the Lessee 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 the Lessee, and the Lessee
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) the
Lessee shall cause all notices, certificates, financial statements,
communications and other information which are delivered, or are
required to be delivered, to the Lessor, to also be delivered at the
same time to the Agent.
(c) The Lessee shall not consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement except in accordance with Section 12.4 of this
Agreement.
(d) The Lessee hereby covenants and agrees to cause an
Appraisal or reappraisal (in form and substance satisfactory to the
Agent and from an appraiser selected by the Agent) to be issued
respecting any Property as requested by the Agent from time to time (i)
at each and every time as such shall be required to satisfy any
regulatory requirements imposed on the Agent, the Lessor, the Trust
Company, any Lender and/or any Holder and (ii) after the occurrence of
an Event of Default.
(e) The Lessee hereby covenants and agrees that, except for
amounts payable as Basic Rent, any and all payment obligations owing
from time to time under the Operative Agreements by any Person to the
Agent, any Lender, any Holder or any other Person shall (without
further action) be deemed to be Supplemental Rent obligations payable
by the Lessee. Without limitation, such obligations of the Lessee shall
include, without duplication, the Supplemental Rent obligations
pursuant to this Section 8.3(e),
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Section 3.3 of the Lease, arrangement fees, administrative fees,
participation fees, commitment fees, unused fees, prepayment penalties,
breakage costs, indemnities, trustee fees and transaction expenses
incurred by the parties hereto in connection with the transactions
contemplated by the Operative Agreements.
(f) At any time the Lessor or the Agent is entitled under the
Operative Agreements to possession of a Property or any component
thereof, each of the Construction Agent and the Lessee hereby covenants
and agrees, at its own cost and expense, to assemble and make the same
available to the Agent (on behalf of the Lessor).
(g) [INTENTIONALLY RESERVED]
(h) [INTENTIONALLY RESERVED]
(i) The Lessee hereby covenants and agrees that it shall give
prompt notice to the Agent if the Lessee's principal place of business
or chief executive office, or the office where the records concerning
the accounts or contract rights relating to any Property are kept,
shall cease to be located at 7625 Thorndike Road, Greensboro, NC
27409-9421 or if it shall change its name.
(j) [INTENTIONALLY RESERVED]
(k) [INTENTIONALLY RESERVED]
(l) The Lessee hereby covenants and agrees that the rights of
the Lessee under this Agreement and the Lease shall not impair or in
any way diminish the obligations of the Construction Agent and/or the
rights of the Lessor under the Agency Agreement.
(m) The Lessee shall promptly notify the Agent, or cause the
Agent to be promptly notified, upon the Lessee 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 the Lessee gains such knowledge.
(n) Until all of the obligations under the Operative
Agreements have been finally and indefeasibly paid and satisfied in
full and the Commitments and the Holder Commitments terminated unless
consent has been obtained from the Majority Secured Parties, the Lessee
will:
(i) except as permitted by the express provisions of
the Operative Agreements, 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;
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(ii) pay and perform all obligations of the Lessee
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 the Lessee 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.
(o) 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.
(p) Lessee shall perform any and all obligations of Lessor
under, and cause Lessor to otherwise remain in full compliance with,
the terms and provisions of each Ground Lease, if any.
(q) Promptly after obtaining any required architectural
approvals by any business park or any other applicable entity with
oversight responsibility for the applicable Improvements, the
Construction Agent shall deliver to the Agent copies of the same.
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8.3.A ADDITIONAL AFFIRMATIVE COVENANTS OF THE LESSEE.
Lessee hereby covenants and agrees that, so long as any Operative
Agreement is in effect or any amounts payable under any Operative Agreement
shall remain outstanding, and until all of the Commitments and Holder
Commitments shall have terminated, Lessee will furnish, or cause to be
furnished, to the Agent, the Lenders and the Holders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Lessee, a consolidated balance sheet and income statement of the Lessee
as of the end of such fiscal year, together with related consolidated
statements of operations and retained earnings and of cash flows for
such fiscal year, in each case setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Agent, and whose opinion
shall be to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the
audit or qualified as to the status of the Lessee as a going concern or
any other material qualifications or exceptions.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Lessee (other than the fourth fiscal quarter, in which case 90 days
after the end thereof) a consolidated balance sheet and income
statement of the Lessee as of the end of such fiscal quarter, together
with related consolidated statements of operations and retained
earnings and of cash flows for such fiscal quarter, in each case
setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
a Responsible Officer of Lessee to the effect that such quarterly
financial statements fairly present in all material respects the
financial condition of the Lessee and have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
audit adjustments.
(c) Officer's Financial Compliance Certificate. At the time of
delivery of the financial statements provided for in Sections 8.3.A(a)
and (b) Financial Compliance above, a certificate of a Responsible
Officer of Lessee substantially in the form of Exhibit K, stating that
no Default or Event of Default exists, or if any Default or Event of
Default does exist, specifying the nature and extent thereof and what
action Lessee proposes to take with respect thereto.
(d) Annual Business Plan and Budgets. At least 30 days prior
to the end of each fiscal year of the Lessee, an annual business plan
and budget of the Lessee containing, among other things, pro forma
financial statements for the next fiscal year.
(e) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 8.3.A(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed the Operative Agreements and stating further
whether, in the course of their audit, they have become aware of any
Default or Event of Default and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
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(f) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to any member of the Lessee in connection with any annual,
interim or special audit of the books of such Person.
(g) Reports. Promptly upon transmission or receipt thereof,
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as Lessee shall send to its shareholders or to a holder of any
Indebtedness owed by Lessee in its capacity as such a holder.
(h) Cash Collateral Account Statements. As soon as available,
and in any event within ten (10) days of receipt of each statement or
any correspondence regarding the Cash Collateral Account, Lessee shall
deliver to the Agent a copy of such statement or correspondence.
(i) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of any member of the Lessee as the Agent may
reasonably request.
8.4. SHARING OF CERTAIN PAYMENTS.
Except for Excepted Payments, the parties hereto acknowledge and agree
that all payments due and owing by the Lessee to the Lessor under the Lease or
any of the other Operative Agreements shall be made by the Lessee directly to
the Agent as more particularly provided in Section 8.3 hereof. The Lessor, the
Holders, the Agent, the Lenders and the Lessee 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 Agency
Agreement, the Lease or the other Operative Agreements, (i) grant easements and
other rights in the nature of easements with respect to any Property, (ii)
release existing easements or other rights in the nature of easements which are
for the benefit of any Property, (iii) execute and deliver to any Person any
instrument appropriate to confirm or effect such grants or releases, and (iv)
execute and deliver to any Person such other documents or materials in
connection with the acquisition, development, construction, testing or operation
of any Property, including without limitation reciprocal easement agreements,
construction contracts, operating agreements, development agreements, plats,
replats or subdivision documents; provided, that each of the agreements referred
to in this Section 8.5 shall be of the type normally executed by the Lessee in
the ordinary course of the Lessee's business and shall be
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on commercially reasonable terms so as not to diminish the value of any Property
in any material respect.
8.6. APPOINTMENT BY THE AGENT, THE LENDERS, THE HOLDERS AND THE
OWNER TRUSTEE.
The Holders hereby appoint the Agent to act as collateral agent for the
Holders in connection with the Lien granted by the Security Documents to secure
the Holder Amount. The Lenders and the Holders acknowledge and agree and direct
that the rights and remedies of the beneficiaries of the Lien of the Security
Documents shall be exercised by the Agent on behalf of the Lenders and the
Holders as directed from time to time by the Majority Secured Parties or,
pursuant to Sections 8.2(h) and 12.4, all of the Lenders and the Holders, as the
case may be; provided, in all cases, the Agent shall allocate payments and other
amounts received in accordance with Section 8.7. The Agent is further appointed
to provide notices under the Operative Agreements on behalf of the Owner Trustee
(as determined by the Agent, in its reasonable discretion), to receive notices
under the Operative Agreements on behalf of the Owner Trustee and (subject to
Sections 8.5 and 9.2) to take such other action under the Operative 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) The Lessee and the Construction Agent have 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 the Lessee or the
Construction Agent and all other payments, receipts and other
consideration of any kind whatsoever received by the Agent pursuant to
the Security Agreement or otherwise received by the Agent, the Holders
or any of the Lenders in connection with the Collateral, the Security
Documents or any of the other Operative Agreements. Ratable
distributions among the Lenders and the Holders under this Section 8.7
shall be made based on (in the case of the Lenders) the ratio of the
outstanding Loans to the aggregate Property Cost and (in the case of
the
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Holders) the ratio of the outstanding Holder Advances to the aggregate
Property Cost. Ratable distributions among the Tranche A Lenders under
this Section 8.7 shall be made based on the ratio of the individual
Tranche A Lender's Commitment for Tranche A Loans to the aggregate of
all the Tranche A Lenders' Commitments for Tranche A Loans. Ratable
distributions among the Tranche B Lenders under this Section 8.7 shall
be made based on the ratio of the individual Tranche B Lender's
Commitment for Tranche B Loans to the aggregate of all the Tranche B
Lenders' Commitments for Tranche B Loans. Ratable distributions among
the Lenders (in situations where the Tranche A Lenders are not
differentiated from the Tranche B Lenders) shall be made based on the
ratio of the individual Lender's Commitment to the aggregate of all the
Lenders' Commitments. Ratable distributions among the Holders under
this Section 8.7 shall be based on the ratio of the individual Holder's
Holder Commitment to the aggregate of all the Holders' Holder
Commitments.
(b) Payments and other amounts received by the Agent from time
to time in accordance with the terms of subparagraph (a) shall be
applied and allocated as follows (subject in all cases to Section
8.7(c)):
(i) Any such payment or amount identified as or
deemed to be Basic Rent shall be applied and allocated by the
Agent first, ratably to the Lenders and the Holders for
application and allocation to the payment of interest on the
Loans and thereafter the principal of the Loans which is due
and payable on such date and to the payment of accrued Holder
Yield with respect to the Holder Advances and thereafter the
portion of the Holder Advances which is due on such date; and
second, if no Default or Event of Default is in effect, any
excess shall be paid to such Person or Persons as the Lessee
may designate; provided, that if a Default or Event of Default
is in effect, such excess (if any) shall instead be held by
the Agent until the earlier of (I) the first date thereafter
on which no Default or Event of Default shall be in effect (in
which case such payments or returns shall then be made to such
other Person or Persons as the Lessee may designate) and (II)
the Maturity Date or the Expiration Date, as the case may be
(or, if earlier, the date of any Acceleration), in which case
such amounts shall be applied and allocated in the manner
contemplated by Section 8.7(b)(iv).
(ii) If on any date the Agent or the Lessor shall
receive any amount in respect of (A) any Casualty or
Condemnation pursuant to Sections 15.1(a) or 15.1(g) of the
Lease (excluding any payments in respect thereof which are
payable to the Lessee in accordance with the Lease), or (B)
the Termination Value in connection with the delivery of a
Termination Notice pursuant to Article XVI of the Lease, or
(C) the Termination Value in connection with the exercise of
the Purchase Option under Section 20.1 of the Lease or the
exercise of the option of the Lessor to transfer the
Properties to the Lessee pursuant to Section 20.3 of the
Lease, or (D) any payment required to be made or elected to be
made by the Construction Agent to the Lessor pursuant to the
terms of the Agency Agreement, then in each case, the Lessor
shall be required to pay such amount received (1) if
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no Acceleration has occurred, to prepay the principal balance
of the Loans and the Holder Advances, on a pro rata basis, a
portion of such amount to be distributed to the Lenders and
the Holders or (2) if an Acceleration has occurred, to apply
and allocate the proceeds respecting Sections 8.7(b)(ii)(A)
through 8.7(b)(ii)(D) in accordance with Section 8.7(b)(iii)
hereof.
(iii) An amount equal to any payment identified as
proceeds of the sale or other disposition (or lease upon the
exercise of remedies) of the Properties or any portion
thereof, whether pursuant to Article XXII of the Lease or the
exercise of remedies under the Security Documents or
otherwise, the execution of remedies set forth in the Lease
and any payment in respect of excess wear and tear pursuant to
Section 22.3 of the Lease (whether such payment relates to a
period before or after the Construction Period Termination
Date) shall be applied and allocated by the Agent first,
ratably to the payment of the principal and interest of the
Tranche B Loans then outstanding, second, ratably to the
payment to the Holders of the outstanding principal balance of
all Holder Advances plus all outstanding Holder Yield with
respect to such outstanding Holder Advances, third, to the
extent such amount exceeds the maximum amount to be returned
pursuant to the foregoing provisions of this paragraph (iii),
ratably to the payment of the principal and interest of the
Tranche A Loans then outstanding, fourth, to any and all other
amounts owing under the Operative Agreements to the Lenders
under the Tranche B Loans, fifth, to any and all other amounts
owing under the Operative Agreements to the Holders, sixth, to
any and all other amounts owing under the Operative Agreements
to the Lenders under the Tranche A Loans, and seventh, to the
extent moneys remain after application and allocation pursuant
to clauses first through sixth above, to the Owner Trustee for
application and allocation to any and all other amounts owing
to the Holders or the Owner Trustee 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 Properties and any
such payment which derives from the Cash Collateral Account
and (B) any other amount payable upon any exercise of remedies
after the occurrence of an Event of Default not covered by
Sections 8.7(b)(i) or 8.7(b)(iii) above (including without
limitation any amount received in connection with an
Acceleration which does not represent proceeds from the sale
or liquidation of the Properties), 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
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payment of the principal balance of all Holder Advances plus
all outstanding Holder Yield with respect to such outstanding
Holder Advances, fourth, to the payment of any other amounts
owing to the Lenders hereunder or under any of the other
Operative Agreement, and fifth, to the extent moneys remain
after application and allocation pursuant to clauses first
through fourth above, to the Owner Trustee for application and
allocation to Holder Advances and Holder Yield and any other
amounts owing to the Holders or the Owner Trustee as the
Holders shall determine.
(v) An amount equal to any such payment identified as
Supplemental Rent shall be applied and allocated by the Agent
to the payment of any amounts then owing to the Agent, the
Lenders, the Holders and the other parties to the Operative
Agreements (or any of them) (other than any such amounts
payable pursuant to the preceding provisions of this Section
8.7(b)) as shall be determined by the Agent in its reasonable
discretion; provided, however, that Supplemental Rent received
upon the exercise of remedies after the occurrence and
continuance of an Event of Default in lieu of or in
substitution of the Maximum Residual Guarantee Amount or as a
partial payment thereon shall be applied and allocated as set
forth in Section 8.7(b)(iv).
(vi) The Agent in its reasonable judgment shall
identify the nature of each payment or amount received by the
Agent and apply and allocate each such amount in the manner
specified above.
(c) Upon the payment in full of the Loans, the Holder Advances
and all other amounts then due and owing by the Owner Trustee hereunder
or under any Credit Document and the payment in full of all other
amounts then due and owing to the Lenders, the Holders, the Agent, the
Owner Trustee and the other Financing Parties pursuant to the Operative
Agreements, any moneys remaining with the Agent shall be returned to
the Lessee. In the event of an Acceleration it is agreed that, prior to
the application and allocation of amounts received by the Agent in the
order described in Section 8.7(b) above or any distribution of money to
the Lessee, any such amounts shall first be applied and allocated to
the payment of (i) any and all sums advanced by the Agent in order to
preserve the Collateral or to preserve its Lien thereon, (ii) the
expenses of retaking, holding, preparing for sale or lease, selling or
otherwise disposing or realizing on the Collateral, or of any exercise
by the Agent of its rights under the Security Documents, together with
reasonable attorneys' fees and expenses and court costs and (iii) any
and all other amounts reasonably owed to the Agent under or in
connection with the transactions contemplated by the Operative
Agreements (including without limitation any accrued and unpaid
administration fees).
8.8. RELEASE OF PROPERTIES, ETC.
If the Lessee shall at any time purchase any Property pursuant to the
Lease, or the Construction Agent shall purchase any Property pursuant to the
Agency Agreement, or if any
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Property shall be sold in accordance with Article XXII of the Lease, then, upon
satisfaction by the Owner Trustee of its obligation to prepay the Loans, Holder
Advances and all other amounts owing to the Lenders and the Holders under the
Operative Agreements, the Agent is hereby authorized and directed to release
such Properties from the Liens created by the Security Documents to the extent
of its interest therein. In addition, upon the termination of the Commitments
and the Holder Commitments and the payment in full of the Loans, the Holder
Advances and all other amounts owing by the Owner Trustee and the Lessee
hereunder or under any other Operative Agreement the Agent is hereby authorized
and directed to release all of the Properties from the Liens created by the
Security Documents to the extent of its interest therein. Upon request of the
Owner Trustee following any such release, the Agent shall, at the sole cost and
expense of the Lessee, execute and deliver to the Owner Trustee and the Lessee
such documents as the Owner Trustee or the Lessee shall reasonably request to
evidence such release.
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
9.1. THE CONSTRUCTION AGENT'S AND THE LESSEE'S CREDIT AGREEMENT RIGHTS.
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Agent, the Lenders, the Holders, the Construction Agent, the
Lessee and the Owner Trustee hereby agree that, prior to the occurrence and
continuation of any Default or Event of Default, the Construction Agent or the
Lessee, as the case may be, shall have the following rights:
(a) the right to designate an account to which amounts funded
under the Operative Agreements shall be credited pursuant to Section
2.3(a) of the Credit Agreement;
(b) the right to terminate or reduce the Commitments pursuant
to Section 2.5(a) of the Credit Agreement;
(c) the right to exercise the conversion and continuation
options pursuant to Section 2.7 of the Credit Agreement;
(d) the right to receive any notice and any certificate, in
each case issued pursuant to Section 2.11(a) of the Credit Agreement;
(e) the right to replace any Lender pursuant to Section
2.11(b) of the Credit Agreement;
(f) the right to approve any successor agent pursuant to
Section 7.9 of the Credit Agreement; and
(g) the right to consent to any assignment by a Lender to
which the Lessor has the right to consent pursuant to Section 9.8 of
the Credit Agreement.
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9.2. THE CONSTRUCTION AGENT'S AND THE LESSEE'S TRUST AGREEMENT
RIGHTS.
Notwithstanding anything to the contrary contained in the Trust
Agreement, the Construction Agent, the Lessee, the Owner Trustee and the Holders
hereby agree that, prior to the occurrence and continuation of any Default or
Event of Default, the Construction Agent or the Lessee, as the case may be,
shall have the following rights:
(a) the right to exercise the conversion and continuation
options pursuant to Section 3.8 of the Trust Agreement;
(b) the right to receive any notice and any certificate, in
each case issued pursuant to Section 3.9(a) of the Trust Agreement;
(c) the right to replace any Holder pursuant to Section 3.9(b)
of the Trust Agreement;
(d) the right to exercise the removal options contained in
Section 9.1 of the Trust Agreement; provided, however, that no removal
of the Owner Trustee and appointment of a successor Owner Trustee by
the Holders pursuant to Section 9.1 of the Trust Agreement shall be
made without the prior written consent (not to be unreasonably withheld
or delayed) of the Lessee.
SECTION 10. TRANSFER OF INTEREST.
10.1. RESTRICTIONS ON TRANSFER.
Each Lender may participate, assign or transfer all or a portion of its
interest hereunder and under the other Operative Agreements in accordance with
Sections 9.7 and 9.8 of the Credit Agreement; provided, each participant,
assignee or transferee must obtain the same ratable interest in Tranche A Loans,
Tranche A Commitments, Tranche B Loans, Tranche B Commitments (and to the extent
the selling Lender is also a Holder (or an Affiliate of a Holder), each such
participant, assignor or transferee must also obtain the same ratable interest
in and to the Holder Advances, Holder Commitments and the Trust Estate);
provided, further, that each Lender that participates, assigns or transfers all
or a portion of its interest hereunder and under the other Operative Agreements
shall deliver to the Agent a copy of each Assignment and Acceptance (as
referenced in Section 9.8 of the Credit Agreement) for purposes of maintaining
the Register. The Holders may, directly or indirectly, assign, convey or
otherwise transfer any of their right, title or interest in or to the Trust
Estate or the Trust Agreement with the prior written consent of the Agent and
the Lessee (which consent shall not be unreasonably withheld or delayed) and in
accordance with the terms of Section 11.8(b) of the Trust Agreement; provided,
to the extent the selling Holder is also a Lender (or an Affiliate of a Lender),
each such assignee, receiver of a conveyance or other transferee must also
obtain the same ratable interest in and to the Tranche A Loans, Tranche A
Commitments, Tranche B Loans and Tranche B Commitments. The Owner Trustee may,
subject to the rights of the Lessee under the Lease and the other Operative
Agreements and to the Lien of the applicable Security Documents but only with
the
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prior written consent of the Agent (which consent may be withheld by the Agent
in its sole discretion) and (provided, no Default or Event of Default has
occurred and is continuing) with the consent of the Lessee, directly or
indirectly, assign, convey, appoint an agent with respect to enforcement of, or
otherwise transfer any of its right, title or interest in or to any Property,
the Lease, the Trust Agreement and the other Operative Agreements (including
without limitation any right to indemnification thereunder), or any other
document relating to a Property or any interest in a Property as provided in the
Trust Agreement and the Lease. The provisions of the immediately preceding
sentence shall not apply to the obligations of the Owner Trustee to transfer
Property to the Lessee or a third party purchaser pursuant to Article XXII of
the Lease upon payment for such Property in accordance with the terms and
conditions of the Lease. Neither the Lessee nor the Construction Agent may
assign any of the Operative Agreements or any of their respective rights or
obligations thereunder or with respect to any Property in whole or in part to
any Person without the prior written consent of the Agent, the Lenders, the
Holders and the Lessor.
10.2. EFFECT OF TRANSFER.
From and after any transfer effected in accordance with this Section
10, the transferor shall be released, to the extent of such transfer, from its
liability hereunder and under the other documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer;
provided, however, that any transferor shall remain liable hereunder and under
such other documents to the extent that the transferee shall not have assumed
the obligations of the transferor thereunder. Upon any transfer by the Owner
Trustee, a Holder or a Lender as above provided, any such transferee shall
assume the obligations of the Owner Trustee, the Holder or the Lender, as the
case may be, and shall be deemed an "Owner Trustee", "Holder", or "Lender", as
the case may be, for all purposes of such documents and each reference herein to
the transferor shall thereafter be deemed a reference to such transferee for all
purposes, except as provided in the preceding sentence. Notwithstanding any
transfer of all or a portion of the transferor's interest as provided in this
Section 10, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer including without limitation rights to
indemnification under any such document.
SECTION 11. INDEMNIFICATION.
11.1. GENERAL INDEMNITY.
Whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims, which may be imposed on, incurred by or
asserted against an Indemnified Person by any third party, including without
limitation Claims arising from the negligence of an Indemnified Person (but not
to the extent such Claims arise from the gross negligence or willful misconduct
of such Indemnified Person 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
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Agreement, the Lease or any other Operative Agreement or on or with respect to
any Property or any component thereof, including without limitation Claims in
any way relating to or arising or alleged to arise out of (a) the financing,
refinancing, purchase, acceptance, rejection, ownership, design, construction,
refurbishment, development, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, occupancy, operation, maintenance repair,
modification, transportation, condition, sale, return, repossession (whether by
summary proceedings or otherwise), or any other disposition of any Property or
any part thereof, including without limitation the acquisition, holding or
disposition of any interest in the Property, lease or agreement comprising a
portion of any thereof; (b) any latent or other defects in any Property or any
portion thereof whether or not discoverable by an Indemnified Person or the
Indemnity Provider; (c) a violation of Environmental Laws, Environmental Claims
or other loss of or damage to any property or the environment relating to the
Property, the Lease, the Agency Agreement or the Indemnity Provider; (d) the
Operative Agreements, or any transaction contemplated thereby; (e) any breach by
the Indemnity Provider of any of its representations or warranties under the
Operative Agreements to which the Indemnity Provider is a party or failure by
the Indemnity Provider to perform or observe any covenant or agreement to be
performed by it under any of the Operative Agreements; (f) the transactions
contemplated hereby or by any other Operative Agreement, in respect of the
application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) personal
injury, death or property damage, including without limitation Claims based on
strict or absolute liability in tort; and (h) any fees, expenses and/or other
assessments by any business park or any other applicable entity with oversight
responsibility for the applicable Property.
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including without
limitation a written notice of such proceeding), for any Claim, such Indemnified
Person shall promptly notify the Indemnity Provider in writing and shall not
take action with respect to such Claim without the consent of the Indemnity
Provider for thirty (30) days after the receipt of such notice by the Indemnity
Provider; provided, however, that in the case of any such Claim, if action shall
be required by law or regulation to be taken prior to the end of such period of
thirty (30) days, such Indemnified Person shall endeavor to, in such notice to
the Indemnity Provider, inform the Indemnity Provider of such shorter period,
and no action shall be taken with respect to such Claim without the consent of
the Indemnity Provider before seven (7) days before the end of such shorter
period; provided, further, that the failure of such Indemnified Person to give
the notices referred to in this sentence shall not diminish the Indemnity
Provider's obligation hereunder except to the extent such failure precludes in
all respects the Indemnity Provider from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim, in the Indemnity
Provider's reasonable discretion, can be pursued by the Indemnity Provider on
behalf of or in the name of such Indemnified Person, the Indemnified Person, at
the Indemnity
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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 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
$15,000 (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
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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 each Property
and all Indemnified Persons, and hold them harmless against, all
Impositions on an After Tax Basis, and all payments pursuant to the
Operative Agreements shall be made free and clear of and without
deduction for any and all present and future Impositions.
(b) Notwithstanding anything to the contrary in Section
11.2(a) hereof, the following shall be excluded from the indemnity
required by Section 11.2(a):
(i) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on a Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
the United States federal government 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
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Indemnified Person (other than the Lessor, the Owner Trustee
and the Trust) by any state or local jurisdiction or taxing
authority within any state or local jurisdiction and that are
based upon or measured by the net income (including without
limitation taxes based on capital gains and minimum taxes) of
such Person; provided that such Taxes shall not be excluded
under this subparagraph (ii) to the extent such Taxes would
have been imposed had the location, possession or use of any
Property in, the location or the operation of the Lessee in,
or the Lessee's making payments under the Operative Agreements
from, the jurisdiction imposing such Taxes been the sole
connection between such Indemnified Person and the
jurisdiction imposing such Taxes; provided, further, that this
clause (ii) shall not be interpreted to prevent a payment from
being made on an After Tax Basis if such payment is otherwise
required to be so made;
(iii) any Tax to the extent it relates to any act,
event or omission that occurs after the termination of the
Lease and redelivery or sale of the Property in accordance
with the terms of the Lease (but not any Tax that relates to
such termination, redelivery or sale and/or to any period
prior to such termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified
Person as a result of the gross negligence or willful
misconduct of such Indemnified Person itself, as determined by
a court of competent jurisdiction (as opposed to gross
negligence or willful misconduct imputed to such Indemnified
Person), but not Taxes imposed as a result of ordinary
negligence of such Indemnified Person.
(c) (i) Subject to the terms of Section 11.2(f), the Indemnity
Provider shall pay or cause to be paid all Impositions
directly to the taxing authorities where feasible and
otherwise to the Indemnified Person, as appropriate, and the
Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest
is conducted pursuant to Section 11.2(f) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including
without limitation the computation of the amount payable),
accompanied by receipts or other reasonable evidence of such
demand. In the case of Impositions for which a contest is
conducted pursuant to Section 11.2(f), the Indemnity Provider
shall pay such Impositions or reimburse such Indemnified
Person for such Impositions, to the extent not previously paid
or reimbursed
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pursuant to subsection (a), prior to the latest time permitted
by the relevant taxing authority for timely payment after
conclusion of all contests under Section 11.2(f).
(iii) At the Indemnity Provider's request, the amount
of any indemnification payment by the Indemnity Provider
pursuant to subsection (a) shall be verified and certified by
an independent public accounting firm mutually acceptable to
the Indemnity Provider and the Indemnified Person. The fees
and expenses of such independent public accounting firm shall
be paid by the Indemnity Provider unless such verification
shall result in an adjustment in the Indemnity Provider's
favor of fifteen percent (15%) or more of the payment as
computed by the Indemnified Person, in which case such fee
shall be paid by the Indemnified Person.
(d) The Indemnity Provider shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns in
respect of each Property and any other tax returns required for the
Owner Trustee respecting the transactions described in the Operative
Agreements. In case any other report or tax return shall be required to
be made with respect to any obligations of the Indemnity Provider under
or arising out of subsection (a) and of which the Indemnity Provider
has knowledge or should have knowledge, the Indemnity Provider, at its
sole cost and expense, shall notify the relevant Indemnified Person of
such requirement and (except if such Indemnified Person notifies the
Indemnity Provider that such Indemnified Person intends to prepare and
file such report or return) (A) to the extent required or permitted by
and consistent with Legal Requirements, make and file in the Indemnity
Provider's name such return, statement or report; and (B) in the case
of any other such return, statement or report required to be made in
the name of such Indemnified Person, advise such Indemnified Person of
such fact and prepare such return, statement or report for filing by
such Indemnified Person or, where such return, statement or report
shall be required to reflect items in addition to any obligations of
the Indemnity Provider under or arising out of subsection (a), provide
such Indemnified Person at the Indemnity Provider's expense with
information sufficient to permit such return, statement or report to be
properly made with respect to any obligations of the Indemnity Provider
under or arising out of subsection (a). Such Indemnified Person shall,
upon the Indemnity Provider's request and at the Indemnity Provider's
expense, provide any data maintained by such Indemnified Person (and
not otherwise available to or within the control of the Indemnity
Provider) with respect to each Property which the Indemnity Provider
may reasonably require to prepare any required tax returns or reports.
(e) As between the Indemnity Provider on one hand, and each
Financing Party on the other hand, the Indemnity Provider shall be
responsible for, and the Indemnity Provider shall indemnify and hold
harmless each Financing Party (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis
against, any obligation for United States or foreign withholding taxes
or similar levies, imposts, charges, fees, deductions or withholdings
(collectively, "Withholdings") imposed in respect of the interest
payable on the Notes, Holder Yield payable on the Certificates or
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with respect to any other payments under the Operative Agreement (all
such payments being referred to herein as "Exempt Payments" to be made
without deduction, withholding or set off) (and, if any Financing Party
receives a demand for such payment from any taxing authority or a
Withholding is otherwise required with respect to any Exempt Payment,
the Indemnity Provider shall discharge such demand on behalf of such
Financing Party); provided, however, that the obligation of the
Indemnity Provider under this Section 11.2(e) shall not apply to:
(i) Withholdings on any Exempt Payment to any
Financing Party which is a non-U.S. Person unless such
Financing Party is, on the date hereof (or on the date it
becomes a Financing Party hereunder) and on the date of any
change in the principal place of business or the lending
office of such Financing Party, entitled to submit a Form 1001
(relating to such Financing Party and entitling it to a
complete exemption from Withholding on such Exempt Payment) or
Form 4224 or is otherwise subject to exemption from
Withholding with respect to such Exempt Payment (except where
the failure of the exemption results from a change in the
principal place of business of the Lessee; provided if a
failure of exemption for any Financing Party results from a
change in the principal place of business or lending office of
any other Financing Party, then such other Financing Party
shall be liable for any Withholding or indemnity with respect
thereto), or
(ii) Any U.S. Taxes imposed solely by reason of the
failure by a non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Taxes.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean
a citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or
under any laws of the United States of America or any State thereof, or
any estate or trust that is subject to Federal income taxation
regardless of the source of its income, (B) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or
on behalf of the United States of America or any taxing authority
thereof or therein, (C) "Form 1001" shall mean Form 1001 (Ownership,
Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America and (D) "Form 4224" shall mean
Form 4224 (Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United States)
of the Department of Treasury of the United States of America (or in
relation to either such Form such successor and related forms as may
from time to time be adopted by the relevant taxing authorities of the
United States of America to document a claim to which such Form
relates). Each of the Forms referred to in the foregoing clauses (C)
and (D) shall include such successor and related forms as may from time
to time be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates.
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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 Borrower any information regarding its tax
affairs or tax computations.
Each non-U.S. Person that shall become a Financing Party after
the date hereof shall, upon the effectiveness of the related transfer
or otherwise upon becoming a Financing Party hereunder, be required to
provide all of the forms and statements referenced above or other
evidences of exemption from Withholdings.
(f) If a written Claim is made against any Indemnified Person
or if any proceeding shall be commenced against such Indemnified Person
(including without limitation a written notice of such proceeding), for
any Impositions, the provisions in Section 11.1 relating to
notification and rights to contest shall apply; provided, however, that
the Indemnity Provider shall have the right to conduct and control such
contest only if such contest involves a Tax other than a Tax on net
income of the Indemnified Person and can be pursued independently from
any other proceeding involving a Tax liability of such Indemnified
Person.
11.3. INCREASED COSTS, ILLEGALITY, ETC.
(a) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request hereafter adopted, promulgated
or made by any central bank or other governmental authority (whether or
not having the force of law), there shall be any increase in the cost
to any Financing Party of agreeing to make or making, funding or
maintaining Advances, then the Lessee shall from time to time, upon
demand by such Financing Party (with a copy of such demand to the Agent
but subject to the terms of Section 2.11 of the Credit Agreement and
3.9 of the Trust Agreement, as the case may be), pay to the Agent for
the account of such Financing Party additional amounts sufficient to
compensate such Financing Party for such increased cost. A certificate
as to the amount of such increased cost, submitted to the Lessee and
the Agent by such Financing Party, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any Financing Party determines that compliance with any
law or regulation or any guideline or request from any central bank or
other governmental
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authority (whether or not having the force of law, but in each case
promulgated or made after the date hereof) affects or would affect the
amount of capital required or expected to be maintained by such
Financing Party or any corporation controlling such Financing Party and
that the amount of such capital is increased by or based upon the
existence of such Financing Party's commitment to make Advances and
other commitments of this type or upon the Advances, then, upon demand
by such Financing Party (with a copy of such demand to the Agent but
subject to the terms of Section 2.11 of the Credit Agreement and 3.9 of
the Trust Agreement), the Lessee shall pay to the Agent for the account
of such Financing Party, from time to time as specified by such
Financing Party, additional amounts sufficient to compensate such
Financing Party or such corporation in the light of such circumstances,
to the extent that such Financing Party reasonably determines such
increase in capital to be allocable to the existence of such Financing
Party's commitment to make such Advances. A certificate as to such
amounts submitted to the Lessee and the Agent by such Financing Party
shall be conclusive and binding for all purposes, absent manifest
error.
(c) Without limiting the effect of the foregoing, the Lessee
shall pay to each Financing Party on the last day of the Interest
Period therefor so long as such Financing Party is maintaining reserves
against "Eurocurrency liabilities" under Regulation D an additional
amount (determined by such Financing Party and notified to the Lessee
through the Agent) equal to the product of the following for each
Eurodollar Loan or Eurodollar Holder Advance, as the case may be, for
each day during such Interest Period:
(i) the principal amount of such Eurodollar Loan or
Eurodollar Holder Advance, as the case may be, outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan or Eurodollar Holder Advance,
as the case may be, for such Interest Period as provided in
the Credit Agreement or the Trust Agreement, as the case may
be (less the Applicable Percentage), and the denominator of
which is one (1) minus the effective rate (expressed as a
decimal) at which such reserve requirements are imposed on
such Financing Party on such day minus (y) such numerator; and
(iii) 1/360.
(d) Without affecting its rights under Sections 11.3(a),
11.3(b) or 11.3(c) or any other provision of any Operative Agreement,
each Financing Party agrees that if there is any increase in any cost
to or reduction in any amount receivable by such Financing Party with
respect to which the Lessee would be obligated to compensate such
Financing Party pursuant to Sections 11.3(a) or 11.3(b), such Financing
Party shall use reasonable efforts to select an alternative office for
Advances which would not result in any such increase in any cost to or
reduction in any amount receivable by such Financing Party; provided,
however, that no Financing Party shall be obligated to select an
alternative office for Advances if such Financing Party determines that
(i) as a result of such
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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 hundred eighty (180)
days 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 2.11(a) of the Credit Agreement
and 3.9(a) of the Trust Agreement, as the case may be, the Lessee agrees to
indemnify each Financing Party and to hold each Financing Party harmless from
any loss or reasonable expense which such Financing Party may sustain or incur
as a consequence of (a) any default in connection with the drawing of funds for
any Advance, (b) any default in making any prepayment after a notice thereof has
been given in accordance with the provisions of the Operative Agreements or (c)
the making of a voluntary or involuntary payment of Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be in
an amount equal to the excess, if any, of (x) the amount of interest or Holder
Yield, as the case may be, which would have accrued on the amount so paid, or
not so borrowed, accepted, converted or continued for the period from the date
of such payment or of 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
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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 thereunder for the period prior to the earlier to occur of the
applicable Completion Date and the Construction Period Termination Date related
to the applicable Property. 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 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, prior to the
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earlier to occur of the applicable Completion Date or Construction Period
Termination 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.
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 any Property to the Owner Trustee, the
acquisition of any Property (or any of its components), the construction of any
Improvements, the Completion of any Property, any disposition of any interest of
the Owner Trustee in any Property or any interest of the Holders in the Trust
Estate, the payment of the Notes and any disposition thereof and shall be and
continue in effect notwithstanding any investigation made by any party and the
fact that any party may waive compliance with any of the other terms, provisions
or conditions of any of the Operative Agreements. Except as otherwise expressly
set forth herein or in other Operative Agreements, the indemnities of the
parties provided for in the Operative Agreements shall survive the expiration or
termination of any thereof.
12.2. NOTICES.
All notices required or permitted to be given under any Operative
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage paid with return receipt requested; by private courier, prepaid;
by telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or acknowledged by the
addressee or its office. Personal delivery shall be effective when accomplished
or if the addressee refuses delivery, when presented for delivery
notwithstanding such refusal. 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:
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If to the Construction Agent or the Lessee, to such entity at
the following address:
7625 Thorndike Road
Greensboro, NC 27409-9421
Attention: William A. Priddy
Telephone: 336-931-7063
Telecopy: 336-664-0839
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
79 South Main Street
Third Floor
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.
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.
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.
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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 the Lessee and/or the Construction Agent (to the extent the
Lessee and/or the Construction Agent 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 the Lessee and/or the Construction Agent without the prior
written consent (not to be unreasonably withheld or delayed) of the Lessee
and/or the Construction Agent. 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 Lender Commitments and/or the Holder
Commitments except as otherwise provided in Section 2.5 of the Credit Agreement
and Section 3.1(e) of the Trust Agreement, extend the scheduled date of maturity
of any Note, extend the scheduled Expiration Date, extend any payment date of
any Note or Certificate, reduce the stated rate of interest payable on any Note,
reduce the stated Holder Yield payable on any Certificate (other than as a
result of waiving the applicability of any post-default increase in interest
rates or Holder Yields), modify the priority of any Lien in favor of the Agent
under any Security Document, subordinate any obligation owed to such Lender or
Holder, reduce any Lender Unused Fees or any Holder Unused Fees payable to such
Lender or Holder (as the case may be) under the Participation Agreement, extend
the scheduled date of payment of any Lender Unused Fees or any Holder Unused
Fees payable to such Lender or Holder (as the case may be) or extend the
expiration date of such Lender's Commitment or the Holder Commitment of such
Holder, or (ii) terminate, amend, supplement, waive or modify any provision of
this Section 12.4 or reduce the percentages specified in the definitions of
Majority Lenders, Majority Holders or Majority Secured Parties, or consent to
the assignment or transfer by the Owner Trustee of any of its rights and
obligations under any Credit Document or release a material portion of the
Collateral (except in accordance with Section 8.8) or release the Lessee from
its obligations under any Operative Agreement or otherwise alter any payment
obligations of the Lessee to the Lessor or any Financing Party under the
Operative Agreements, or (iii) terminate, amend, supplement, waive or modify any
provision of Section 7 of the Credit Agreement, or (iv) permit Advances for Work
in excess of the Construction Budget, or (v) eliminate the automatic option
under Section 5.3(b) of the Agency Agreement requiring that the Construction
Agent pay certain liquidated damages in exchange for the conveyance of a
Property to the Construction Agent. Any such termination, amendment, supplement,
waiver or modification shall apply equally to each of the Lenders and the
Holders and shall be binding upon all the parties to this Agreement. In the case
of any waiver, each party to this Agreement
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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. The
parties to this Agreement agree that any increase in the Lender Commitment of
any Lender and/or any increase in the Holder Commitment of any Holder shall be a
matter decided by the Majority Secured Parties and not as a Unanimous Vote
Matter.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Loan are, in the opinion of the Majority Lenders, satisfied,
any Lender shall fail to fulfill its obligations to make such Loan (any such
Lender, a "Defaulting Lender") then, for so long as such failure shall continue,
the Defaulting Lender shall (unless the Lessee and the Majority Lenders,
determined as if the Defaulting Lender were not a "Lender", shall otherwise
consent in writing) be deemed for all purposes relating to terminations,
amendments, supplements, waivers or modifications under the Operative Agreements
to have no Loans, shall not be treated as a "Lender" when performing the
computation of Majority Lenders or Majority Secured Parties, and shall have no
rights under this Section 12.4; provided that any action taken pursuant to the
second paragraph of this Section 12.4 shall not be effective as against the
Defaulting Lender.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Holder Advance are, in the opinion of the Majority Holders,
satisfied, any Holder shall fail to fulfill its obligations to make such Holder
Advance (any such Holder, a "Defaulting Holder") then, for so long as such
failure shall continue, the Defaulting Holder shall (unless the Lessee and the
Majority Holders, determined as if the Defaulting Holder were not a "Holder",
shall otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Holder Advances, shall not be treated as a
"Holder" when performing the computation of Majority Holders or Majority Secured
Parties, and shall have no rights under this Section 12.4; provided that any
action taken pursuant to the second paragraph of this Section 12.4 shall not be
effective as against the Defaulting Holder.
12.5. HEADINGS, ETC.
The Table of Contents and headings of the various Articles and Sections
of this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof.
12.6. PARTIES IN INTEREST.
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
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12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; VENUE; ARBITRATION.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
Any legal action or proceeding with respect to this Agreement or any
other Operative Agreement may be brought in the courts of the State of
North Carolina in Mecklenburg County or of the United States for the
Western District of North Carolina, and, by execution and delivery of
this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the parties to this Agreement further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the
address set out for notices pursuant to Section 12.2, such service to
become effective three (3) days after such mailing. Nothing herein
shall affect the right of any party to serve process in any other
manner permitted by Law or to commence legal proceedings or to
otherwise proceed against any party in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY
DISPUTE OR THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement or any other Operative Agreement
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(d) Notwithstanding the provisions of Section 12.7(a) or of
any other Operative Agreement to the contrary, upon demand of any party
to this Agreement and/or any other Operative Agreement, upon demand of
any party hereto, whether made before or after institution of any
judicial proceeding, any claim or controversy arising out of, or
relating to the Operative Agreements between or among the parties
hereto (a "Dispute") shall be resolved by binding arbitration conducted
under and governed by the Commercial Financial Disputes Arbitration
Rules (the "Arbitration Rules") of the American Arbitration Association
(the "AAA") and the Federal Arbitration Act. Disputes may include
without limitation tort claims, counterclaims, disputes as to whether a
matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon
the award
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may be entered in any court having jurisdiction. Notwithstanding the
foregoing, this arbitration provision does not apply to disputes under
or related to swap agreements.
All arbitration hearings shall be conducted in the city in which the
office of the Agent (referenced pursuant to Section 12.2 of this Agreement) is
located. A hearing shall begin within ninety (90) days of demand for arbitration
and all hearings shall be concluded within one hundred and twenty (120) days of
demand for arbitration. These time limitations may not be extended unless a
party shows cause for extension and then for no more than a total of sixty (60)
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000. Arbitrators shall
be licensed attorneys selected from the Commercial Financial Dispute Arbitration
Panel of the AAA. The parties do not waive applicable federal or state
substantive law except as provided herein.
Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any real or personal property or other security
by exercising a power of sale or under applicable law by judicial foreclosure
including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceedings; and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's entitlement to such remedies is
a Dispute.
Each party to this Agreement agrees that it shall not have a remedy of
punitive or exemplary damages against any other party in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or which
may arise in the future in connection with any Dispute, whether the Dispute is
resolved by arbitration or judicially.
12.8. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12.9. LIABILITY LIMITED.
(a) The Lenders, the Agent, the Lessee, 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
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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 Lessee (with respect
to the Lessee's obligations under the Operative Agreements); but
nothing contained herein shall be taken to prevent recourse against or
the enforcement of remedies against the Trust Estate (excluding
Excepted Payments) in respect of any and all liabilities, obligations
and undertakings contained herein and/or in any other Operative
Agreement. Notwithstanding the provisions of this Section, nothing in
any Operative Agreement shall: (i) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Notes
and/or the Certificates arising under any Operative Agreement or
secured by any Operative Agreement, but the same shall continue until
paid or discharged; (ii) relieve any Exculpated Person from liability
and responsibility for (but only to the extent of the damages arising
by reason of): active waste knowingly committed by any Exculpated
Person with respect to any Property, any fraud, gross negligence or
willful misconduct on the part of any Exculpated Person; (iii) relieve
any Exculpated Person from liability and responsibility for (but only
to the extent of the moneys misappropriated, misapplied or not turned
over) (A) except for Excepted Payments, misappropriation or
misapplication by the Lessor (i.e., application in a manner contrary to
any of the Operative Agreements) of any insurance proceeds or
condemnation award paid or delivered to the Lessor by any Person other
than the Agent, (B) except for Excepted Payments, any deposits or any
escrows or amounts owed by the Construction Agent under the Agency
Agreement held by the Lessor or (C) except for Excepted Payments, any
rent or other income received by the Lessor from the Lessee that is not
turned over to the Agent; or (iv) affect or in any way limit the
Agent's rights and remedies under any Operative Agreement with respect
to the Rents and rights and powers of the Agent under the Operative
Agreements or to obtain a judgment against the Lessee's interest in the
Properties or the Agent's rights and powers to obtain a judgment
against the Lessor (provided, that no deficiency judgment or other
money judgment shall
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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 LESSEE.
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 Lessee under the Operative Agreements have in each case been
satisfied or discharged in full, then the Lessee shall be entitled to (a)
terminate the Lease and (b) receive all amounts then held under the Operative
Agreements and all proceeds with respect to any of the Properties. Upon the
termination of the Lease pursuant to the foregoing clause (a), the Lessor shall
transfer to the Lessee all of its right, title and interest free and clear of
the Lien of the Lease, the Lien of the Security Documents and all Lessor Liens
in and to any Properties then subject to the Lease and any amounts or proceeds
referred to in the foregoing clause (b) shall be paid over to the Lessee.
12.11. FURTHER ASSURANCES.
The parties hereto shall promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of the Lessee, all such further
acts, conveyances, documents and assurances as the other parties may from time
to time reasonably request in order to carry out and effectuate the intent and
purposes of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including without limitation the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of Mortgage Instruments and other filings or
registrations which the parties hereto may from time to time request to be filed
or effected). The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or (if the Owner Trustee shall so request) as so requested, in order to maintain
and protect all security interests provided for hereunder or under any other
Operative Agreement. In addition, in connection with the sale or other
disposition of any Property or any portion thereof, the Lessee agrees to execute
such instruments of conveyance as may be reasonably required in connection
therewith.
12.12. CALCULATIONS UNDER OPERATIVE AGREEMENTS.
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Owner Trustee
shall be made by the Agent and that such calculations and determinations shall
be conclusive and binding on the parties hereto in the absence of manifest
error.
12.13. CONFIDENTIALITY.
Each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or any of its
Subsidiaries which is provided to it by the Lessee or any of its
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Subsidiaries and which an officer of the Lessee or any of its Subsidiaries has
requested in writing be kept confidential, and shall not intentionally disclose
such information to any Person except:
(a) to the extent such information is public when received by
such Person or becomes public thereafter due to the act or omission of
any party other than such Person;
(b) to the extent such information is independently obtained
from a source other than the Lessee or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
(c) to counsel, auditors or accountants retained by any such
Person or any Affiliates of any such Person (if such Affiliates are
permitted to receive such information pursuant to clause (f) or (g)
below), provided they agree to keep such information confidential as if
such Person or Affiliate were party to this Agreement and to financial
institution regulators, including examiners of any Financing Party or
any Affiliate thereof in the course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of any Financing Party under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person; provided, however,
that such Person shall endeavor (if not otherwise prohibited by Law) to
notify the Lessee prior to any disclosure made pursuant to this clause
(e), except that no such Person shall be subject to any liability
whatsoever for any failure to so notify the Lessee;
(f) any Financing Party may disclose such information to
another Financing Party or to any Affiliate of a Financing Party that
is a direct or indirect owner of any Financing Party;
(g) any Financing Party may disclose such information to an
Affiliate of any Financing Party to the extent required in connection
with the transactions contemplated hereby or to the extent such
Affiliate is involved in, or provides advice or assistance to such
Person with respect to, such transactions (provided, in each case that
such Affiliate has agreed in writing to maintain confidentiality as if
it were such Financing Party (as the case may be)); or
(h) to the extent disclosure to any other financial
institution or other Person is appropriate in connection with any
proposed or actual (i) assignment or grant of a participation by any of
the Lenders of interests in the Credit Agreement or any Note to such
other financial institution (who will in turn be required by the Agent
to agree in
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writing to maintain confidentiality as if it were a Lender originally
party to this Agreement) or (ii) assignment by any Holder of interests
in the Trust Agreement to another Person (who will in turn be required
by the transferring Holder to agree in writing to maintain
confidentiality as if it were a Holder originally party to this
Agreement).
Subject to the foregoing terms of Sections 12.13(a)-12.13(h), under the
terms of any one or more of which circumstances disclosure shall be permitted,
each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the financing structure
described in the unrecorded Operative Agreements.
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 Lessee at any time or from time to time,
without notice to the Lessee 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 the Lessee against and on
account of the obligations of the Lessee 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 the Lessee under the Operative Agreements to be
due and payable and although such obligations shall be contingent or unmatured.
Notwithstanding the foregoing, neither the Agent nor any other Financing Party
shall exercise, or attempt to exercise, any right of setoff, banker's lien, or
the like, against any deposit account or property of the Lessee 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 the Lessee.
58
<PAGE> 63
[signature pages follow]
59
<PAGE> 64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CONSTRUCTION AGENT
AND LESSEE: RF MICRO DEVICES, INC.,
as the Construction Agent and as the Lessee
By: /s/ William Priddy
------------------------------------
Name: William Priddy
Title: Chief Financial Officer
[signature pages continue]
<PAGE> 65
OWNER TRUSTEE
AND LESSOR: FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner
Trustee under the RFMD Real Estate Trust
1999-1
By: /s/ Val T. Orton
------------------------------------
Name: Val T. Orton
Title: Vice President
[signature pages continue]
<PAGE> 66
AGENT AND LENDERS: FIRST UNION NATIONAL BANK, as a Lender and
as the Agent
By: /s/ Jim Redman
------------------------------------
Name: Jim Redman
Title: Senior Vice President
[signature pages continue]
<PAGE> 67
HOLDERS: FIRST UNION NATIONAL BANK, as a Holder
By: /s/ Jim Redman
------------------------------------
Name: Jim Redman
Title: Senior Vice President
[signature pages continue]
<PAGE> 68
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2, 5.2, 5.3 and 5.4 of the Participation Agreement)
RF MICRO DEVICES, INC., a [__________] 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 [__________, 199__] (as amended, modified, extended, supplemented,
restated and/or replaced from time to time, the "Participation Agreement") among
the Company, in its capacity as the Lessee and as the Construction Agent, First
Security Bank, National Association, as the Owner Trustee, the various banks and
other lending institutions which are parties thereto from time to time, as
holders (the "Holders"), the various banks and other lending institutions which
are parties thereto from time to time, as lenders (the "Lenders"), and the
Agent. Capitalized terms used herein but not otherwise defined herein shall have
the meanings set forth therefor in the Participation Agreement.
Check one:
____ INITIAL CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance)
____ PROPERTY CLOSING DATE:_________________
(three (3) Business Days prior notice required for Advance)
____ CONSTRUCTION ADVANCE DATE:_____________
(three (3) Business Days prior notice required for Advance)
1. Transaction Expenses and other fees, expenses and disbursements under
Sections 7.1(a) or 7.1(b) of the Participation Agreement and any and
all other amounts contemplated to be financed under the Participation
Agreement including without limitation any Work, broker's fees, taxes,
recording fees and the like (with supporting invoices or closing
statement attached):
Party to Whom Amount Owed
Amount is Owed (in U.S. Dollars)
-------------- -----------------
______________ _________________
______________ _________________
______________ _________________
______________ _________________
______________ _________________
A-1
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2. Description of Land (which shall be a legal description of the Land in
connection with an Advance to pay Property Acquisition Costs): See
attached Schedule 1
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
5. Description of Work: See attached Schedule 4
6. Aggregate Loans and Holder Advances requested since the Initial Closing
Date with respect to each Property for which Advances are requested
under this Requisition (listed on a Property by Property basis),
including without limitation all amounts requested under this
Requisition: [IDENTIFY ON A PROPERTY BY PROPERTY BASIS]
$______________ [Property]
In connection with this Requisition, the Company hereby requests that
the Lenders make Loans to the Lessor in the amount of $______________ and that
the Holders make Holder Advances to the Lessor in the amount of
$________________. The Company hereby certifies (i) that the foregoing amounts
requested do not exceed the total aggregate of the Available Commitments plus
the Available Holder Commitments, (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 and (iii)
prior to the delivery of this Requisition, the Company has deposited into the
Cash Collateral Account an amount in accordance with the provisions of the
Operative Agreements (including without limitation Section 5.9 of the
Participation Agreement).
The Company requests the Loans be allocated as follows:
$______________ ABR Loans
$______________ Eurodollar Loans
The Company requests the Holder Advances be allocated as follows:
$______________ ABR Holder Advances
$______________ Eurodollar Holder Advances
A-2
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The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of __________, ______.
RF MICRO DEVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
A-3
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Schedule 1
Description of Land
(Legal Description and Street Address)
A-4
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Schedule 2
Description of Improvements
A-5
<PAGE> 73
Schedule 3
Description of Equipment
================================================================================
General Description Make Model Serial Number
------------------- ---- ----- -------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
================================================================================
A-6
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Schedule 4
Work
Work Performed for which the Advance is requested:
________________________________________________________
________________________________________________________
A-7
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EXHIBIT B
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(j) of the
Participation Agreement)
____________, ______
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of RF Micro Devices, Inc.
Dear Sirs:
We have acted as special counsel to [IF CREDIT SUPPORT FROM A PARTY OTHER THAN
THE LESSEE IS PART OF THE TRANSACTION, THIS OPINION MUST BE MODIFIED TO
REFERENCE SUCH PARTY AND THE DOCUMENTS TO WHICH IT IS A PARTY], RF Micro
Devices, Inc., a RF Micro Devices, Inc. (the "Lessee") in connection with
certain transactions contemplated by the Participation Agreement dated as of
[__________, 199__] (the "Participation Agreement"), among the Lessee, 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 EACH MORTGAGE INSTRUMENT, RELATED UCC FIXTURE FILINGS, ADDITIONAL UCCS
(HEREINAFTER DEFINED), DEEDS AND MEMORANDA OF LEASE] and such other corporate
documents and records of the Lessee, certificates of public officials and
representatives of the Lessee 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; (iii)
the genuineness of all signatures, 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 have all
B-1
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requisite corporate power and authority to execute, deliver and perform the
Operative Agreements; and (v) except as to the Lessee, the enforceability of the
Mortgage Instrument, the Memorandum of Lease and the UCC financing statements
against all parties thereto.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Mortgage Instrument and Memorandum of Lease are enforceable in
accordance with their respective terms, except as limited by laws generally
affecting the enforcement of creditors' rights, which laws will not materially
prevent the realization of the benefits intended by such documents.
(b) Each form of Mortgage Instrument and UCC fixture filing relating
thereto, attached hereto as Schedules 1 and 2, respectively, is in proper form
for filing and recording with the offices of [IDENTIFY THE RECORDING OFFICES OF
THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of each Mortgage Instrument and UCC fixture filing in [IDENTIFY THE
RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE
LOCATED], the Agent will have a valid, perfected lien and security interest in
that portion of the Collateral described in such Mortgage Instrument or UCC
fixture filing to the extent such Collateral is comprised of real property
and/or fixtures.
(c) The forms of UCC financing statements relating to the Security
Documents, attached hereto as Schedule 3 (the "Additional UCCs"), are in proper
form for filing and recording with the offices of [IDENTIFY (I) THE RECORDING
OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED
AND (II) THE SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of the Additional UCCs in [IDENTIFY (I) THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED AND (II) THE
SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED], the Agent will have
a valid, perfected lien and security interest in that portion of the Collateral
which can be perfected by filing UCC-1 financing statements under Article 9 of
the UCC.
(d) Each form of Deed and Memorandum of Lease is in appropriate form
for filing and recording with the [IDENTIFY THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS FOR THE COUNTIES WHERE THE PROPERTIES ARE TO BE
LOCATED].
(e) Each Memorandum of Lease, when filed and recorded with the
[IDENTIFY THE RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS FOR THE COUNTIES
WHERE THE PROPERTIES ARE TO BE LOCATED], will have been filed and recorded in
all public offices in the State of [__________] in which filing or recording is
necessary to provide constructive notice of the Lease to third Persons and to
establish of record the interest of the Lessor thereunder as to the Properties
described in each such Memorandum of Lease.
B-2
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(f) Title to the Properties located in the State of [___________] may
be held in the name of the Owner Trustee as follows: First Security Bank,
National Association, not individually, but solely as the Owner Trustee under
the RFMD Real Estate Trust 1999-1.
(g) The execution and delivery by First Security Bank, National
Association, individually or as the Owner Trustee, as the case may be, of the
Operative Agreements to which it is a party and compliance by First Security
Bank, National Association, individually or as the Owner Trustee, with all of
the provisions thereof do not and will not contravene any law, rule or
regulation of [IDENTIFY THE STATE].
(h) By reason of their participation in the transaction contemplated
under the Operative Agreements, none of the Agent, the Lenders, the Holders or
the Owner Trustee has to (a) qualify as a foreign corporation in [IDENTIFY THE
STATE], (b) file any application or any designation for service of process in
[IDENTIFY THE STATE] or (c) pay any franchise, income, sales, excise, stamp or
other taxes of any kind to [IDENTIFY THE STATE].
(i) The provisions in the Operative Agreements concerning Rent,
interest, fees, prepayment premiums and other similar charges do not violate the
usury laws or other similar laws regulating the use or forbearance of money of
[IDENTIFY THE STATE].
(j) If the transactions contemplated by the Operative Agreements are
characterized as a lease transaction by a court of competent jurisdiction, the
Lease and the applicable Lease Supplement shall demise to the Lessee a valid
leasehold interest in the Properties described in such Lease Supplement.
(k) If the transactions contemplated by the Operative Agreements are
characterized as a loan transaction by a court of competent jurisdiction, the
combination of the Mortgage Instruments, the Deeds, the Lease and the applicable
Lease Supplements (and the other Operative Agreements incorporated therein by
reference) are sufficient to create a valid, perfected lien or security interest
in the Properties therein described, enforceable as a mortgage in [IDENTIFY THE
STATE].
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the State of [___________] and the federal laws of
the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
B-3
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This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Owner Trustee, the Holders, the Lenders, the Agent and their respective
successors and assigns and may not be relied upon by any other person other than
such parties and their respective successors and assigns without the express
written consent of the undersigned. The opinions expressed herein are as of the
date hereof and we make no undertaking to amend or supplement such opinions if
facts come to our attention or changes in the current law of the jurisdictions
mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
B-4
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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
[_____________], as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the RFMD Real Estate Trust 1999-1
B-5
<PAGE> 80
Schedule 1
Form of Mortgage Instrument
B-6
<PAGE> 81
Schedule 2
Forms of UCC Fixture Filings
B-7
<PAGE> 82
Schedule 3
Forms of UCC Financing Statements
B-8
<PAGE> 83
EXHIBIT C
RF MICRO DEVICES, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
RF Micro Devices, Inc., a [__________] corporation (the "Company"),
DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Company
contained in the Operative Agreements to which it is a party
is true and correct on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing
under any Operative Agreement.
3. Each Operative Agreement to which the Company is a party is in
full force and effect with respect to it.
4. The Company has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of [__________, 199__] among the Company, as the Lessee and
as the Construction Agent, 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 __________, ______.
RF MICRO DEVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
C-1
<PAGE> 84
EXHIBIT D
RF MICRO DEVICES, INC.
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(aa) of the Participation Agreement)
RF Micro Devices, Inc., 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.
Name Office Signature
___________________ _______________________ _________________________
___________________ _______________________ _________________________
D-1
<PAGE> 85
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this _____ day of ___________, ______.
RF MICRO DEVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
D-2
<PAGE> 86
Schedule 1
Board Resolutions
D-3
<PAGE> 87
Schedule 2
Articles of Incorporation
D-4
<PAGE> 88
Schedule 3
Bylaws
D-5
<PAGE> 89
EXHIBIT E
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(bb) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (except with respect to paragraph 1 below, to the
extent any such representations and warranties are made in its individual
capacity) but solely as the owner trustee under the RFMD Real Estate 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 [__________, 199__] among RF Micro Devices, Inc., as the
Lessee and as the Construction Agent, 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> 90
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 RFMD Real Estate Trust
1999-1
By: ________________________________
Name: ________________________________
Title: ________________________________
E-2
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EXHIBIT F
FIRST SECURITY BANK, NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(cc) of the Participation Agreement)
CERTIFICATE OF ASSISTANT SECRETARY
I, ______________________, duly elected and qualified Assistant
Secretary of the Board of Directors of First Security Bank, National Association
(the "Association"), hereby certify as follows:
1. The Association is a National Banking Association duly organized,
validly existing and in good standing under the laws of the United States. With
respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as amended, 12
U.S.C. 1, et seq., the Comptroller of the Currency charters
and exercises regulatory and supervisory authority over all
National Banking Associations;
B. On December 9, 1881, the First National Bank of Ogden, Utah
was chartered as a National Banking Association under the laws
of the United States and under Charter No.
2597;
C. On October 2, 1922, in connection with a consolidation of The
First National Bank of Ogden, Ogden, Utah, and The Utah
National Bank of Ogden, Ogden, Utah, the title was changed to
"The First & Utah National Bank of Ogden"; on January 18,
1923, The First & Utah National Bank of Ogden changed its
title to "First Utah National Bank of Ogden"; on January 19,
1926, the title was changed to "First National Bank of Ogden";
on February 24, 1934, the title was changed to "First Security
Bank of Utah, National Association"; on June 21, 1996, the
title was changed to "First Security Bank, National
Association"; and
D. First Security Bank, National Association, Ogden, Utah,
continues to hold a valid certificate to do business as a
National Banking Association.
2. The Association's Articles of Association, as amended, are in full
force and effect, and a true, correct and complete copy is attached hereto as
Schedule A and incorporated herein by reference. Said Articles were last amended
October 20, 1975, as required by law on notice at a duly called special meeting
of the shareholders of the Association.
F-1
<PAGE> 92
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.
F-2
<PAGE> 93
7. A Resolution relating to the Designation of Officers and Employees
to Exercise Fiduciary Powers was adopted by the Trust Policy Committee at a
meeting held February 7, 1996 at which time a quorum was present; said
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Schedule D and is incorporated herein by
reference.
8. Attached hereto as Schedule E and incorporated herein by reference,
is a listing of facsimile signatures of persons authorized (herein "Authorized
Signatory or Signatories") on behalf of the Association and its Trust Group to
act in exercise of its fiduciary powers subject to the resolutions in Paragraphs
6 and 7, above.
9. The principal office of the First Security Bank, National
Association, Trust Group and of its departments, except for the St. 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
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Association this __________ day of ______________, ______.
(SEAL)
___________________________________
R. James Steenblik
Senior Vice President
Assistant Secretary
F-4
<PAGE> 95
Schedule A
Articles of Association
F-5
<PAGE> 96
Schedule B
Bylaws
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Schedule C
Resolution Relating to
Exercise of Fiduciary Powers
F-7
<PAGE> 98
Schedule D
Resolution Relating to the
Designation of Officers and Employees
to Exercise Fiduciary Powers
F-8
<PAGE> 99
Schedule E
Authorized Signatory or Signatories
F-9
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EXHIBIT G
[Outside Counsel Opinion for the Owner Trustee]
(Pursuant to Section 5.3(dd) of the
Participation Agreement)
____________, ______
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Trust Agreement dated as of [__________, 199__]
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 [__________, 199__] (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
[__________, 199__] (the "Participation Agreement") by and among RF Micro
Devices, Inc. (the "Lessee"), 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.
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3. The Trust Agreement has been duly authorized, executed and delivered
by one (1) of the officers of FSB and, assuming due authorization, execution and
delivery by the Holders, is a legal, valid and binding obligation of the Owner
Trustee (and to the extent set forth therein, against FSB), enforceable against
the Owner Trustee (and to the extent set forth therein, against FSB) in
accordance with its terms, and the Trust Agreement creates under the laws of the
State of Utah for the Holders the beneficial interest in the Trust Estate it
purports to create and is a valid trust under the laws of the State of Utah.
4. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by FSB, and, assuming due authorization,
execution and delivery by the other parties thereto, are legal, valid and
binding obligations of FSB, enforceable against FSB in accordance with their
respective terms.
5. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by the Owner Trustee, and, assuming due
authorization, execution and delivery by the other parties thereto, are legal,
valid and binding obligations of the Owner Trustee, enforceable against the
Owner Trustee in accordance with their respective terms. The Notes and
Certificates have been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and the Certificates
are entitled to the benefits and security afforded by the Trust Agreement in
accordance with its terms and the terms of the Trust Agreement.
6. The execution and delivery by each of FSB and the Owner Trustee of
the Trust Agreement and the Operative Agreements to which it is a party, and
compliance by FSB or the Owner Trustee, as the case may be, with all of the
provisions thereof do not and will not contravene any Laws applicable to or
binding on FSB, or as the Owner Trustee, or contravene the provisions of, or
constitute a default under, its charter documents or by-laws or, to our
knowledge after due inquiry, any indenture, mortgage contract or other agreement
or instrument to which FSB or Owner Trustee is a party or by which it or any of
its property may be bound or affected.
7. The execution and delivery of the Operative Agreements by each of
FSB and the Owner Trustee and the performance by each of FSB and the Owner
Trustee of their respective obligations thereunder does not require on or prior
to the date hereof the consent or approval of, the giving of notice to, the
registration or filing with, or the taking of any action in respect of any
Governmental Authority or any court.
8. Assuming that the trust created by the Trust Agreement is treated as
a grantor trust for federal income tax purposes within the contemplation of
Section 671 through 678 of the Internal Revenue Code of 1986, there are no fees,
taxes, or other charges (except taxes imposed on fees payable to the Owner
Trustee) payable to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance by the Owner Trustee, the
Agent, the Lenders, the Lessee or the Holders, as the case may be, of the
Operative Agreements or in connection with the acquisition of any Property by
the Owner Trustee or in connection with the making by any Holder of its
investment in the Trust or its acquisition of the beneficial
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interest in the Trust Estate or in connection with the issuance and acquisition
of the Certificates, or the Notes, and neither the Owner Trustee, the Trust
Estate nor the trust created by the Trust Agreement will be subject to any fee,
tax or other governmental charge (except taxes on fees payable to the Owner
Trustee) under the laws of the State of Utah or any political subdivision
thereof on, based on or measured by, directly or indirectly, the gross receipts,
net income or value of the Trust Estate by reason of the creation or continued
existence of the trust under the terms of the Trust Agreement pursuant to the
laws of the State of Utah or the Owner Trustee's performance of its duties under
the Trust Agreement.
9. There is no fee, tax or other governmental charge under the laws of
the State of Utah or any political subdivision thereof in existence on the date
hereof on, based on or measured by any payments under the Certificates, Notes or
the beneficial interest in the Trust Estate, by reason of the creation of the
trust under the Trust Agreement pursuant to the laws of the State of Utah or the
Owner Trustee's performance of its duties under the Trust Agreement within the
State of Utah.
10. Upon the filing of the financing statement on form UCC-1 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
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assumed that the laws of such state (as to which we express no opinion), are in
all material aspects identical to the laws of the State of Utah.
B. The opinions set forth in paragraphs 3, 4, and 5 above are subject
to the qualification that enforceability of the Trust Agreement and the other
Operative Agreements to which FSB and the Owner Trustee are parties, in
accordance with their respective terms, may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws affecting
enforcement of creditors' rights generally, and (ii) general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
C. As to the documents involved in these transactions, we have assumed
that each is a legal, valid and binding obligation of each party thereto, other
than FSB or the Owner Trustee, and is enforceable against each such party in
accordance with their respective terms.
D. We have assumed that all signatures, other than those of the Owner
Trustee or FSB, on documents and instruments involved in these transactions are
genuine, that all documents and instruments submitted to us as originals are
authentic, and that all documents and instruments submitted to us as copies
conform with the originals, which facts we have not independently verified.
E. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment or property involved in these transactions.
F. We have made no investigation of, and we express no opinion
concerning, the nature of the title to any part of the equipment or property
involved in these transactions or the priority of any mortgage or security
interest.
G. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section 406
of the Employee Retirement Income Security Act of 1974.
H. In addition to any other limitation by operation of law upon the
scope, meaning, or purpose of this opinion, the opinions expressed herein speak
only as of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) and make no undertaking to amend or supplement
such opinions if facts come to our attention or changes in the current law of
the jurisdictions mentioned herein occur which could affect such opinions the
legal analysis, a legal conclusion or any information confirmation herein.
I. This opinion is for the sole benefit of the Lessee, the Construction
Agent, the Owner Trustee, the Holders, the Lenders, the Agent and their
respective successors and assigns in matters directly related to the
Participation Agreement or the transaction contemplated thereunder and may not
be relied upon by any other person other than such parties and their respective
successors and assigns without the express written consent of the undersigned.
The
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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
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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
[_______________], as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the RFMD Real Estate Trust 1999-1
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Schedule 1
Form of UCC-1 to be Filed in Owner Trustee's Principal Place of Business
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EXHIBIT H
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(ee) of the Participation Agreement)
____________, ______
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of RF Micro Devices, Inc.
Dear Sirs:
We have acted as special counsel to [IF CREDIT SUPPORT FROM A PARTY OTHER THAN
THE LESSEE IS PART OF THE TRANSACTION, THIS OPINION MUST BE MODIFIED TO
REFERENCE SUCH PARTY AND THE DOCUMENTS TO WHICH IT IS A PARTY], RF Micro
Devices, Inc., a [__________] corporation (the "Lessee") in connection with
certain transactions contemplated by the Participation Agreement dated as of
[__________, 199__] (the "Participation Agreement"), among the Lessee, 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(ee) of the Participation Agreement. All capitalized
terms used herein, and not otherwise defined herein, shall have the meanings
assigned thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, 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
Lessee, certificates of public officials and representatives of the Lessee 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 Lessee; (iii) the genuineness
of all signatures (other than the signatures of persons signing on behalf of the
Lessee), 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 Lessee have all
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requisite corporate power and authority to execute, deliver and perform the
Operative Agreements; and (v) the enforceability of the Operative Agreements
against all parties thereto other than the Lessee 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) The Lessee is a [CORPORATION, PARTNERSHIP OR LIMITED LIABILITY
COMPANY] duly [INCORPORATED OR ORGANIZED], validly existing and in good standing
under the laws of [__________] and has the power and authority to conduct its
business as presently conducted and to execute, deliver and perform its
obligations under the Operative Agreements to which it is a party. The Lessee is
duly qualified to do business in all jurisdictions in which its failure to so
qualify would materially impair its ability to perform its obligations under the
Operative Agreements to which it is a party or its financial position or its
business as now and now proposed to be conducted.
(b) The execution, delivery and performance by the Lessee of the
Operative Agreements to which it is a party have been duly authorized by all
necessary corporate action on the part of the Lessee and the Operative
Agreements to which the Lessee is a party have been duly executed and delivered
by the Lessee.
(c) The Operative Agreements to which the Lessee is a party constitute
valid and binding obligations of the Lessee enforceable against the Lessee in
accordance with the terms thereof, subject to bankruptcy, insolvency,
liquidation, reorganization, fraudulent conveyance, and similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
(d) The execution and delivery by the Lessee of the Operative
Agreements to which it is a party and compliance by the Lessee 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 the
Lessee is a party or by which it or any of its property may be bound or
affected, or (ii) contravene any Laws or any order of any Governmental Authority
applicable to or binding on the Lessee.
(e) No Governmental Action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery or
performance by the Lessee of any of the
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Operative Agreements to which it is a party or for the acquisition, ownership,
construction and completion of the Properties, except for those which have been
obtained.
(f) Except as set forth on Schedule 1 hereto, there are no actions,
suits or proceedings pending or to our knowledge, threatened against the Lessee
in any court or before any Governmental Authority, that concern the Properties
or the Lessee's interest therein or that question the validity or enforceability
of any Operative Agreement to which the Lessee is a party or the overall
transaction described in the Operative Agreements to which the Lessee is a
party.
(g) Neither the nature of the Properties, nor any relationship between
the Lessee and any other Person, nor any circumstance in connection with the
execution, delivery and performance of the Operative Agreements to which the
Lessee is a party is such as to require any approval of stockholders of, or
approval or consent of any trustee or holders of indebtedness of, the Lessee,
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.
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This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Owner Trustee, the Holders, the Lenders, the Agent and their respective
successors and assigns and may not be relied upon by any other person other than
such parties and their respective successors and assigns without the express
written consent of the undersigned. The opinions expressed herein are as of the
date hereof and we make no undertaking to amend or supplement such opinions if
facts come to our attention or changes in the current law of the jurisdictions
mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
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Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
RF Micro Devices, Inc., as the Construction Agent and the Lessee
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
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the RFMD Real Estate Trust 1999-1
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Schedule 1
(Litigation)
H-6
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Schedule 2
(UCC-1 Financing Statements)
H-7
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EXHIBIT I
RF MICRO DEVICES, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.5 of the Participation Agreement)
RF Micro Devices, Inc., a [__________] corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. The address for the subject Property is _______________________________
_____________________________________.
2. The Completion Date for the construction of Improvements at the
Property occurred on ______________.
3. The aggregate Property Cost for the Property was $___________.
4. Attached hereto as Schedule 1 is the detailed, itemized documentation
supporting the asserted Property Cost figures.
5. All representations and warranties of the Company in each Operative
Agreement and in each certificate delivered pursuant thereto are true
and correct as of the Completion Date.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of __________, 199__ among the Company, as the Lessee and as the
Construction Agent, 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"), 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 remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this ____ day of ______________, ______.
RF MICRO DEVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
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Schedule I
(Itemized Documentation in Support of Asserted Property Cost)
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EXHIBIT J
[Description of Material Litigation]
(Pursuant to Section 6.2(d) of the Participation Agreement)
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Exhibit K
Form of Officer's Financial Compliance Certificate
This Certificate is delivered in accordance with the provisions of
Secton 8.3.A(c) of that Participation Agreement dated as of [_________], 1999
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time, the "Participation Agreement") among the various parties thereto
from time to time, as the Lessees and as the Construction Agents, 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 various banks and other lending institutions which are parties thereto from
time to time, as lenders, the Agent. Capitalized terms used herein but not
otherwise defined herein shall have the meanings set forth therefor in the
Participation Agreement.
The undersigned, being an Executive Officer of Lessee hereby certifies,
in my official capacity and not in my individual capacity, that to the best of
my knowledge and belief:
(a) the financial statements accompanying this Certificate fairly
present the financial condition of the parties covered by such financial
statements in all material respects;
(b) during the period covered by such financial statements, Lessee
observed or performed all of their covenants and other agreements in all
material respects, and satisfied in all material respects every material
condition, contained in the Operative Agreements to be observed, performed or
satisfied by them; and
(c) no Default or Event of Default exists.
This the _______________ day of ________________________, 199_.
RF MICRO DEVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
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- --------------------------------------------------------------------------------
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
<PAGE> 120
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those specifically
mentioned.
(i) [INTENTIONALLY RESERVED]
(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
"AAA" shall have the meaning given to such term in Section 12.7(d) of
the Participation Agreement.
"ABR" shall mean, for any day, a rate per annum equal to the greater of
(a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.5%). For
purposes hereof: "Prime Lending Rate" shall mean the rate announced by the Agent
from time to time as its prime lending rate as in effect from time to time. The
Prime Lending Rate is a reference rate and is one of several interest rate bases
used by the Agent and does not necessarily represent the lowest or most
favorable rate offered by the Agent actually charged to any customer. Any Lender
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate. The Prime Lending Rate shall change automatically and
without notice from time to time as and when the prime lending rate of the Agent
changes. "Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members or the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
(3) Federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Lending Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Lending Rate or the Federal Funds Effective Rate,
respectively.
"ABR Holder Advance" shall mean a Holder Advance bearing a Holder Yield
based on the ABR.
Appendix A-2
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"ABR Loans" shall mean Loans the rate of interest applicable to which
is based upon the ABR.
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
"Accounts" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Acquisition Advance" shall have the meaning given to such term in
Section 5.3 of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with an
Acquisition Advance.
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the then
maximum marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated on or about
the Initial Closing Date between the Construction Agent and the Lessor.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in Section 5.1 of the Agency Agreement.
"Agent" shall mean First Union National Bank, as agent for the Lenders
pursuant to the Credit Agreement, or any successor agent appointed in accordance
with the terms of the Credit Agreement and respecting the Security Documents,
for the Lenders and the Holders, to the extent of their interests.
"Applicable Percentage" shall mean for Eurodollar Loans, Eurodollar
Holder Advances, ABR Loans, ABR Holder Advances and the Unused Fee the
corresponding amount set forth as follows:
Appendix A-3
<PAGE> 122
<TABLE>
<CAPTION>
===============================================================================================
Applicable Applicable Applicable Applicable
Percentage for ABR Percentage for ABR Percentage Percentage for Unused Fee
Loans Holder Advances for Eurodollar
Eurodollar Loans Holder Advances
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.000% 0.750% 0.250% 1.000% 0.250%
===============================================================================================
</TABLE>
"Appraisal" shall mean, with respect to any Property, an appraisal to
be delivered in connection with the Participation Agreement or in accordance
with the terms of the Lease, in each case prepared by a reputable appraiser
reasonably acceptable to the Agent, which in the judgment of counsel to the
Agent, complies with all of the provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, the rules and regulations
adopted pursuant thereto, and all other applicable Legal Requirements.
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
"Approved State" shall mean each of the following: North Carolina and
any other state within the continental United States proposed by the Lessee and
consented to in writing by the Agent.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying the Improvements or the Improvements,
including without limitation the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (b)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land or the Improvements.
"Arbitration Rules" shall have the meaning given to such term in
Section 12.7(d) of the Participation Agreement.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached to the Credit Agreement as Exhibit B.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by such
Lender as of such date after giving effect to Section 5.2(d) of the
Participation Agreement (but without giving effect to any other repayments or
prepayments of any Loans hereunder).
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (a) the aggregate amount of the Holder Commitments over (b)
the aggregate amount of the Holder Advances made since the Initial Closing Date
after giving effect to Section 5.2(d) of the
Appendix A-4
<PAGE> 123
Participation Agreement (but without giving effect to any other repayments or
prepayments of any Holder Advances).
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Basic Documents" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease and the Security Agreement.
"Basic Rent" shall mean, the sum of (a) the Loan Basic Rent and (b) the
Lessor Basic Rent, calculated as of the applicable date on which Basic Rent is
due.
"BB&T" shall mean Branch Bank and Trust Company, a North Carolina
banking corporation..
"Benefitted 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 2.3 of the Credit Agreement as a date on which the
Lessor requests the Lenders to make Loans thereunder.
"Budgeted Total Property Cost" shall mean, at any date of determination
with respect to any Construction Period Property, an amount equal to the
aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in North Carolina 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.
Appendix A-5
<PAGE> 124
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Capital Stock" shall mean any nonredeemable capital stock of the
Lessee or any of its Subsidiaries, whether common or preferred.
"Cash Collateral" shall mean such cash and certificates of deposit
constituting part of the Collateral pledged by the Lessee and maintained with in
a trust account with BB&T as bailee for the Agent, all as referenced in the Cash
Collateral Agreement.
"Cash Collateral Account" shall mean the cash collateral account
(including without limitation the deposits and certificates of deposit in such
account) which is the subject of the Cash Collateral Agreement and held at
Branch Bank and Trust Company, a North Carolina banking corporation, as account
number 5812688547.
"Cash Collateral Agreement" shall mean the Assignment of Cash
Collateral Account dated on or about the Initial Closing Date executed by RF
Micro Devices, Inc. and agreed and accepted by First Union National Bank and
BB&T.
"Cash Collateral Agreement Event of Default" shall have the meaning
specified in Section 3.1 of the Cash Collateral Agreement.
"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
regarding the Holder Commitment of such 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 the Initial Closing Date and each Property
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986 together with rules
and regulations promulgated thereunder, as amended from time to time, or any
successor statute thereto.
Appendix A-6
<PAGE> 125
"Collateral" shall mean all assets of the Lessor, the Construction
Agent and the Lessee, now owned or hereafter acquired, upon which a Lien is
purported to be created by one or more of the Security Documents.
"Commencement Date" shall have the meaning specified in Section 2.2 of
the Lease.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make the portion of the Loans to the Lessor in an aggregate principal
amount at any time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 2.1 of the Credit Agreement, as such amount may be
increased or reduced from time to time in accordance with the provisions of the
Operative Agreements.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Loans then outstanding constitutes of the aggregate principal amount of all of
the Loans then outstanding), and such Commitment Percentage shall take into
account both the Lender's Tranche A Commitment and the Lender's Tranche B
Commitment.
"Commitment Period" shall mean the period from and including the
Initial Closing Date to and including the Construction Period Termination Date,
or such earlier date as the Commitments shall terminate as provided in the
Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
"Completion" shall mean, with respect to a Property, such time as the
acquisition, installation, testing and final completion of the Improvements on
such Property has been achieved in accordance with the Plans and Specifications,
the Agency Agreement and/or the Lease, and in compliance with all Legal
Requirements and Insurance Requirements and a certificate of occupancy has been
issued with respect to such Property by the appropriate governmental entity
(except if non-compliance, individually or in the aggregate, shall not have and
could not reasonably be expected to have a Material Adverse Effect). If the
Lessor purchases a Property that includes existing Improvements that are to be
immediately occupied by the Lessee without any improvements financed pursuant to
the Operative Agreements, the date of Completion for such Property shall be the
Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the date on
which Completion for such Property has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain (including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent to,
any Property or alter the pedestrian or vehicular traffic flow to any Property
so as to result in a
Appendix A-7
<PAGE> 126
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).
"Control Agreement" shall mean the Control Agreement dated as of the
Initial Closing Date among First Union National Bank, RF Micro Devices, Inc. and
Branch Bank and Trust Company.
"Consolidated Subsidiary" shall mean, as to any Person, any Subsidiary
of such Person which under the rules of GAAP consistently applied should have
its financial results consolidated with those of such Person for purposes of
financial accounting statements.
"Construction Advance" shall mean an advance of funds to pay Property
Costs pursuant to Section 5.4 of the Participation Agreement.
"Construction Agent" shall mean RF Micro Devices, Inc., a North
Carolina corporation, as the construction agent under the Agency Agreement.
"Construction Budget" shall mean the cost of acquisition, installation,
testing, constructing and developing any Property as determined by the
Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Contract" shall mean any contract entered into between
the Construction Agent or the Lessee with a Contractor for the construction of
Improvements or any portion thereof on the Property.
"Construction Loan" shall mean any Loan made in connection with a
Construction Advance.
"Construction Loan Property Cost" shall mean with respect to each
Construction Period Property at the date of determination, an amount equal to
(a) the aggregate principal amount of Construction Loans made on or prior to
such date with respect to the Property minus (b) the aggregate principal amount
of prepayments or repayments of the Loans allocated to reduce the Construction
Loan Property Cost of such Property pursuant to Section 2.6(c) of the Credit
Agreement.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement Date for such Property and
ending on the Completion Date for such Property.
"Construction Period Property" means, at any date of determination, any
Property as to which the Rent Commencement Date has not occurred on or prior to
such date.
Appendix A-8
<PAGE> 127
"Construction Period Termination Date" shall mean (a) the earlier of
(i) the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement, or (ii)
eighteen (18) months after the Initial Closing Date or (b) such later date as
shall be agreed to by the Majority Secured Parties.
"Contractor" shall mean each entity with whom the Construction Agent or
the Lessee contracts to construct any Improvements or any portion thereof on the
Property.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Lessee, are treated as a single employer
under Section 414 of the Code.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated on or about
the Initial Closing Date, among the Lessor, the Agent and the Lenders, as
specified therein.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Participation Agreement, the Credit
Agreement, the Notes and the Security Documents.
"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.
"Disputes" shall have the meaning given to such term in Section 12.7(d)
of the Participation Agreement.
Appendix A-9
<PAGE> 128
"Documents" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Election Date" shall have the meaning given to such term in Section
20.1 of the Lease.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan
(within the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue Service and the Department of Labor
in rules, regulations, releases or bulletins in effect on any Closing Date.
"Environmental Claims" shall mean any 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 Laws, (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 damage, injury, or harm
to 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
Construction Agent, the Lessee or the Lessor and all improvements and
modifications thereto and replacements thereof, whether or not now owned or
hereafter acquired or now or subsequently attached to, contained in or used or
usable in any way in connection with any operation of any Improvements,
including but without limiting the
Appendix A-10
<PAGE> 129
generality of the foregoing, all equipment described in the Appraisal including
without limitation all heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilation, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators, loading and
unloading equipment and systems, cleaning systems (including without limitation
window cleaning apparatus), telephones, communication systems (including without
limitation satellite dishes and antennae), televisions, computers, sprinkler
systems and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
appliances, fittings and fixtures of every kind and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"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" shall mean for the Interest Period for each
Eurodollar Loan or Eurodollar Holder Advance comprising part of the same
borrowing or advance (including without limitation conversions, extensions and
renewals), a per annum interest rate equal to the per annum rate determined by
the Agent on the basis of the offered rates for deposits in dollars for a period
of time corresponding to such Interest Period (and commencing on the first day
of such Interest Period), reported on Telerate page 3750 as of 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period. In the event no such offered rates appear on Telerate page 3750,
"Eurodollar Rate" shall mean for the Interest Period for each Eurodollar Loan or
Eurodollar Holder Advance comprising part of the same borrowing or advance
(including without limitation conversions, extensions and renewals), a per annum
interest rate equal to the per annum rate determined by the Agent on the basis
of the offered rates
Appendix A-11
<PAGE> 130
for deposits in dollars for a period of time corresponding to such Interest
Period (and commencing on the first day of such Interest Period), which appear
on the Reuters Screen LIBO Page as of 11:00 a.m. (London time) two (2) Business
Days before the first day of such Interest Period (provided that if at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate in
respect of such Interest Period will be the arithmetic mean of such offered
rates). As used herein, "Reuters Screen LIBO Page" means the display designated
as page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks) ("RMMRS"). In the event the RMMRS is not
then quoting such offered rates, "Eurodollar Rate" shall mean for the Interest
Period for each Eurodollar Loan or Eurodollar Holder Advance comprising part of
the same borrowing or advance (including without limitation conversions,
extensions and renewals), the average (rounded upward to the nearest
one-sixteenth (1/16) of one percent (1%)) per annum rate of interest determined
by the office of the Agent (each such determination to be conclusive and
binding) as of two (2) Business Days prior to the first day of such Interest
Period, as the effective rate at which deposits in immediately available funds
in U.S. dollars are being, have been, or would be offered or quoted by the Agent
to major banks in the applicable interbank market for Eurodollar deposits at any
time during the Business Day which is the second Business Day immediately
preceding the first day of such Interest Period, for a term comparable to such
Interest Period and in the amount of the requested Eurodollar Loan and/or
Eurodollar Holder Advance. If no such offers or quotes are generally available
for such amount, then the Agent shall be entitled to determine the Eurodollar
Rate from another recognized service or interbank quotation, or by estimating in
its reasonable judgment the per annum rate (as described above) that would be
applicable if such quote or offers were generally available.
"Event of Default" shall mean a Lease Event of Default, a Cash
Collateral Agreement Event of Default, an Agency Agreement Event of Default or a
Credit Agreement Event of Default.
"Excepted Payments" shall mean:
(a) all indemnity payments (including without limitation
indemnity payments made pursuant to Section 11 of the Participation
Agreement), whether made by adjustment to Basic Rent or otherwise, to
which the Owner Trustee, any Holder or any of their respective
Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value)
payable under any Operative Agreement to reimburse the Owner Trustee,
any Holder or any of their respective Affiliates (including without
limitation the reasonable expenses of the Owner Trustee, the Trust
Company and the Holders incurred in connection with any such payment)
for performing or complying with any of the obligations of the Lessee
under and as permitted by any Operative Agreement;
Appendix A-12
<PAGE> 131
(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;
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above;
and
(h) payment obligations arising from 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.
"Exculpated Persons" shall mean the Trust Company (except with respect
to the representations and warranties and the other obligations of the Trust
Company pursuant to the Operative Agreements expressly undertaken in its
individual capacity, including without limitation the representations and
warranties of the Trust Company pursuant to Section 6.1 of the Participation
Agreement, the obligations of the Trust Company pursuant to Section 8.2 of the
Participation Agreement and the obligations of the Trust Company pursuant to the
Trust Agreement), the Holders (except with respect to the obligations of the
Holders pursuant to the Participation Agreement and the Trust Agreement
expressly undertaken in their respective individual capacities), their officers,
directors, shareholders and partners.
"Exempt Payments" shall have the meaning specified in Section 11.2(e)
of the Participation Agreement.
"Expiration Date" shall mean the last day of the Term; provided, in no
event shall the Expiration Date be later than the fifth annual anniversary of
the Initial Closing Date, unless such later date has been expressly agreed to in
writing by each of the Lessor, the Lessee, the Agent, the Lenders and the
Holders.
Appendix A-13
<PAGE> 132
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero (0), that would be paid
in cash in an arms-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, such Property is in the condition and state of
repair required under Section 10.1 of the Lease and the Lessee is in compliance
with the other requirements of the Operative Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such
term in the definition of ABR.
"Financing Parties" shall mean the Lessor, the Owner Trustee, in its
trust capacity, the Agent, the Holders and the Lenders.
"Fixtures" shall mean all fixtures relating to the Improvements,
including without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including without
limitation strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, governmental
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition.
"Form 1001" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Form 4224" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the accounting principles board of the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operating of the Property.
Appendix A-14
<PAGE> 133
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Ground Lease" shall mean a ground lease (in form and substance
satisfactory to the Agent) respecting any Property (a) owned by the Lessee (or a
parent corporation or any Subsidiary of the Lessee) and leased to the Lessor
where such lease has at least a ninety-nine (99) year term and payments set at
no more than $1.00 per year, or (b) where such lease is subject to such other
terms and conditions as are satisfactory to the Agent.
"Hard Costs" shall mean all costs and expenses payable for supplies,
materials, labor and profit with respect to the Improvements under any
Construction Contract.
"Hazardous Substance" shall mean 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 defined by or listed pursuant
to any Environmental Laws.
"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 the aggregate amount set forth in
Schedule I to the Trust Agreement, as such amount may be increased or reduced
from time to time in accordance with the provisions of the Operative Agreements;
provided, if there shall be more than one (1) Holder, the Holder Commitment of
each Holder shall be as set forth in Schedule I to the Trust Agreement as such
Schedule I may be amended and replaced from time to time.
"Holder Construction Property Cost" shall mean, with respect to each
Construction Period Property, at any date of determination, an amount equal to
the outstanding Holder Advances made with respect thereto under the Trust
Agreement.
"Holder 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.
Appendix A-15
<PAGE> 134
"Holder Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Holder Yield" shall mean with respect to Holder Advances from time to
time either the Eurodollar Rate plus the Applicable Percentage or the ABR plus
the Applicable Percentage 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 plus the Applicable Percentage 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 RFMD Real Estate 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 any property covered by the Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes
and other similar taxes (including rent taxes and intangibles taxes); (iii)
excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes and
documentary recording taxes and fees; (v) taxes that are or are in the nature of
franchise, income, value added, privilege and doing business taxes, license and
registration fees; (vi) assessments on any Property, including without
limitation all assessments for public Improvements or benefits, whether or not
such improvements are commenced or completed within the Term; and (vii) taxes,
Liens, assessments or charges asserted, imposed or assessed by the PBGC or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and in each case all interest, additions to tax and penalties thereon,
which at any time prior to, during or with respect to the Term or in respect of
any period for which the Lessee shall be obligated to pay Supplemental Rent, may
be levied, assessed or imposed by any Governmental Authority upon or with
respect to (a) any Property or any part thereof or interest therein; (b) the
leasing, financing, refinancing, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, sale, transfer of title, return or other disposition of
such Property or any part thereof or interest therein; (c) the Notes, other
indebtedness with respect to any Property, or the Certificates, or any part
thereof or interest therein; (d) the rentals, receipts or earnings arising from
any Property or any part thereof or interest therein; (e) the Operative
Agreements, the performance thereof, or any payment made or accrued pursuant
thereto; (f) the income or other proceeds received with respect to any Property
or any part thereof or interest therein upon the sale or disposition thereof;
(g) any
Appendix A-16
<PAGE> 135
contract (including the Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Notes or the Certificates; (i) the Owner
Trustee, the Trust or the Trust Estate; or (j) otherwise in connection with the
transactions contemplated by the Operative Agreements.
"Improvements" shall mean, with respect to the construction,
renovations and/or Modifications on any Land, all buildings, structures,
Fixtures, and other improvements of every kind existing at any time and from
time to time on or under the Land purchased or otherwise acquired using the
proceeds of the Loans or the Holder Advances or which is subject to a Ground
Lease, together with any and all appurtenances to such buildings, structures or
improvements, including without limitation sidewalks, utility pipes, conduits
and lines, parking areas and roadways, and including without limitation all
Modifications and other additions to or changes in the Improvements at any time,
including without limitation (a) any Improvements existing as of the Property
Closing Date as such Improvements may be referenced on the applicable
Requisition and (b) any Improvements made subsequent to such Property Closing
Date.
"Indebtedness" of a Person shall mean, without duplication, such
Person's:
(a) obligations for borrowed money;
(b) obligations representing the deferred purchase price of
Property (whether real, personal, tangible, intangible or mixed) or
services (other than accounts payable arising in the ordinary course of
such Person's business payable on terms customary in the trade);
(c) obligations, whether or not assumed, secured by liens or
payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person;
(d) obligations which are evidenced by notes, acceptances or
other instruments;
(e) Capitalized Lease obligations;
(f) net liabilities under interest rate swap, exchange or cap
agreements; and
(g) contingent obligations.
"Indemnified Person" shall mean the Lessor, the Owner Trustee, in its
individual and its trust capacity, the Trust, the Trust Company, the Agent, the
Holders, the Lenders and their respective successors, assigns, directors,
shareholders, partners, officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the Lessee.
Appendix A-17
<PAGE> 136
"Initial Closing Date" shall mean August 13, 1999.
"Initial Construction Advance" shall mean any initial Advance to pay
for: (a) Property Costs for construction of any Improvements; and (b) the
Property Costs of restoring or repairing any Property which is required to be
restored or repaired in accordance with Section 15.1(e) of the Lease.
"Instruments" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
all requirements of the issuer of any such policy and, regarding self insurance,
any other requirements of the Lessee.
"Interest Period" shall mean during the Commitment Period and
thereafter as to any Eurodollar Loan or Eurodollar Holder Advance (i) with
respect to the initial Interest Period, the period beginning on the date of the
first Eurodollar Loan and Eurodollar Holder Advance and ending one (1) month,
two (2) months, three (3) months or (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, and (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.
"Land" shall mean a parcel of real property described on (a) the
Requisition issued by the Construction Agent on the Property Closing Date
relating to such parcel and (b) the schedules to each applicable Lease
Supplement executed and delivered in accordance with the requirements of Section
2.4 of the Lease.
Appendix A-18
<PAGE> 137
"Land Cost" shall have the meaning specified in Section 5.4 of the
Agency Agreement.
"Law" shall mean any statute, law, ordinance, regulation, rule,
directive, order, writ, injunction or decree of any Tribunal.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated on or
about the Initial Closing Date, between the Lessor and the Lessee, together with
any Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all 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, the Lessee, the Agent, any Lender or any Property, Land,
Improvement, Equipment or the taxation, demolition, construction, use or
alteration of such Improvements, whether now or hereafter enacted and in force,
including without limitation any that require repairs, modifications or
alterations in or to any Property or in any way limit the use and enjoyment
thereof (including without limitation all building, zoning and fire codes and
the Americans with Disabilities Act of 1990, 42 U.S.C. 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 the Lessee affecting
any Property or the Appurtenant Rights.
"Lender Commitments" shall mean the aggregate amount set forth in
Schedule 2.1 to the Credit Agreement, as such amount may be increased or reduced
from time to time in accordance with the provisions of the Operative Agreements;
provided, 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.
Appendix A-19
<PAGE> 138
"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.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as the Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (a) any such scheduled Holder Yield due
on the Holder Advances prior to the Rent Commencement Date with respect to the
Property to which such Holder Advances relate or (b) overdue amounts under the
Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor or
the Trust Company, in its individual capacity, not resulting from the
transactions contemplated by the Operative Agreements, (b) any act or omission
of the Lessor or the Trust Company, in its individual capacity, which is not
required by the Operative Agreements or is in violation of any of the terms of
the Operative Agreements, (c) any claim against the Lessor or the Trust Company,
in its individual capacity, with respect to Taxes or Transaction Expenses
against which the Lessee is not required to indemnify the Lessor or the Trust
Company, in its individual capacity, pursuant to Section 11 of the Participation
Agreement or (d) any claim against the Lessor arising out of any transfer by the
Lessor of all or any portion of the interest of the Lessor in the Properties,
the Trust Estate or the Operative Agreements other than the transfer of title to
or possession of any Properties by the Lessor pursuant to and in accordance with
the Lease, the Credit Agreement, the Security Agreement or the Participation
Agreement or pursuant to the exercise of the remedies set forth in Article XVII
of the Lease.
"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 Properties
on an aggregate basis, an amount equal to the sum of the Termination Values with
respect to all the Properties on an aggregate basis on each Payment Date, less
the Maximum Residual Guarantee Amount as of such date with respect to all the
Properties on an aggregate basis.
Appendix A-20
<PAGE> 139
"Loan Basic Rent" shall mean the scheduled interest due on the Loans on
any Scheduled Interest Payment Date pursuant to the Credit Agreement (but not
including interest on (a) any such Loan due prior to the Rent Commencement Date
with respect to the Property to which such Loan relates or (b) any overdue
amounts under Section 2.8(b) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) the aggregate principal amount all
Loans (including without limitation all Acquisition Loans and Construction
Loans) made on or prior to such date with respect to such Property minus (b) the
aggregate amount of prepayments or repayments as the case may be of the Loans
allocated to reduce the Loan Property Cost of such Property pursuant to Section
2.6(c) of the Credit Agreement.
"Loans" shall mean the loans extended pursuant to the Credit Agreement.
"Majority Holders" shall mean at any time, Holders whose Holder
Advances outstanding represent at least sixty-six and two thirds percent (66
2/3%) 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 sixty-six and two thirds percent (66 2/3%) 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 sixty-six and two
thirds percent (66 2/3%) 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.
"Material Adverse Effect" shall, mean a material adverse effect on (a)
the business, condition (financial or otherwise), assets, liabilities or
operations of the Lessee, (b) the ability of the Lessee to perform its
respective obligations under any Operative Agreement to which it is a party, (c)
the validity or enforceability of any Operative Agreement or the rights and
remedies of the Agent, the Lenders, the Holders, or the Lessor thereunder, (d)
the validity, priority or enforceability of any Lien on any Property created by
any of the Operative Agreements, or (e) the value, utility or useful life of any
Property or the use, or ability of the Lessee to use, any Property for the
purpose for which it was intended.
"Maturity Date" shall mean the Expiration Date.
Appendix A-21
<PAGE> 140
"Maximum Residual Guarantee Amount" shall mean an amount equal to the
product of the aggregate Property Cost for all of the Properties times
eighty-five percent (85%).
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee and the Lessee (or regarding any
Property subject to a Ground Lease, the applicable Affiliate of the Lessee) in
favor of the Agent (for the benefit of the Lenders and the Holders) and
evidencing a Lien on the Property, in form and substance reasonably acceptable
to the Agent.
"Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or required by
the Lessee or any of its Subsidiaries or ERISA Affiliates.
"Multiple Employer Plan" shall mean a plan to which the Lessee 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.
"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 Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease, the Lease Supplements (and memoranda of
the Lease and each Lease Supplement in a form reasonably acceptable to the
Agent), the Security Agreement, the Mortgage Instruments, the other Security
Documents, the Cash Collateral Agreement, the Control Agreement, the Ground
Leases, the Deeds and the Bills of Sale and any and all other agreements,
documents and instruments executed in connection with any of the foregoing.
"Original Executed Counterpart" shall have the meaning given to such
term in Section 5 of Exhibit A to the Lease.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Credit Agreement.
Appendix A-22
<PAGE> 141
"Overdue Rate" shall mean (a) with respect to the Loan Basic Rent, and
any other amount owed under or with respect to the Credit Agreement or the
Security Documents, the rate specified in Section 2.8(b) of the Credit
Agreement, (b) with respect to the Lessor Basic Rent, the Holder Yield and any
other amount owed under or with respect to the Trust Agreement, the Holder
Overdue Rate, and (c) with respect to any other amount, the amount referred to
in clause (y) of Section 2.8(b) of the Credit Agreement.
"Owner Trustee", "Borrower" or "Lessor" shall mean First Security Bank,
National Association, not individually, except as expressly stated in the
various Operative Agreements, but solely as the Owner Trustee under the RFMD
Real Estate 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 Initial Closing Date, among the Lessee, 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 the Lessee 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 wafer fabrication facility of the
type and size customarily used and operated by the Lessee in its ordinary course
of business as of the Initial Closing Date.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
Appendix A-23
<PAGE> 142
(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 to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Operative
Agreements.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Property" shall mean, with respect to each Permitted Facility that is
(or is to be) acquired, constructed and/or renovated pursuant to the terms of
the Operative Agreements, the Land and each item of Equipment and the various
Improvements, in each case located on such
Appendix A-24
<PAGE> 143
Land, including without limitation each Construction Period Property, each
Property subject to a Ground Lease and each Property for which the Term has
commenced.
"Property Acquisition Cost" shall mean the cost to the Lessor to
purchase a Property on a Property Closing Date.
"Property Closing Date" shall mean the date on which the Lessor
purchases a Property or, with respect to the first Advance, the date on which
the Lessor seeks reimbursement for Property previously purchased by the Lessor.
"Property Cost" shall mean with respect to a Property the aggregate
amount (and/or the various items and occurrences giving rise to such amounts) of
the Loan Property Cost plus the Holder Property Cost for such Property (as such
amounts shall be increased equally among all Properties respecting the Holder
Advances and the Loans extended from time to time to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in Sections 7.1(a)
and 7.1(b) of the Participation Agreement).
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"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.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Rent Commencement Date" shall mean, regarding each Property, the
Completion Date.
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
Appendix A-25
<PAGE> 144
"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.
"RF Micro" and "RF Micro Devices" shall mean RF Micro Devices, Inc., a
North Carolina corporation, and its successors and permitted assigns.
"RFMD Real Estate Trust 1999-1" shall mean the grantor trust created
pursuant to the terms and conditions of the Trust 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 Properties if it has been determined that
the Fair Market Sales Value of the Properties at the expiration of the term of
the Lease has been impaired by greater than ordinary wear and tear during the
Term of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan or Eurodollar Holder Advance, the last day of the Interest Period
applicable to such Eurodollar Loan or Eurodollar Holder Advance (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.
Appendix A-26
<PAGE> 145
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement dated on or
about the Initial Closing Date between the Lessor and the Agent, for the benefit
of the Secured Parties, and accepted and agreed to by the Lessee.
"Security Documents" shall mean the collective reference to the
Security Agreement, the Cash Collateral Agreement, the Mortgage Instruments, (to
the extent the Lease is construed as a security instrument) the Lease, the UCC
Financing Statements and all other security documents hereafter delivered to the
Agent granting a lien on any asset or assets of any Person to secure the
obligations and liabilities of the Lessor under the Credit Agreement and/or
under any of the other Credit Documents or to secure any guarantee of any such
obligations and liabilities.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition, development, installation,
construction, improvement and testing of the Properties other than Hard Costs,
including without limitation structuring fees, administrative fees, legal fees,
upfront fees, fees and expenses related to appraisals, title examinations, title
insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, the Lender Unused Fee, the
Holder Unused Fee, fees and expenses of the Owner Trustee payable or
reimbursable under the Operative Agreements and costs and expenses incurred
pursuant to Sections 7.3(a) and 7.3(b) of the Participation Agreement.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person, or by one (1)
or more Subsidiaries, or by such Person and one (1) or more Subsidiaries.
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Credit Agreement.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor,
the Trust Company, the Holders, the Agent, the Lenders or any other Person under
the Lease or under any of the other Operative Agreements including without
limitation payments of the Termination Value and the Maximum Residual Guarantee
Amount and all indemnification amounts, liabilities and obligations.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Term" shall have the meaning specified in Section 2.2 of the Lease.
Appendix A-27
<PAGE> 146
"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 the Lessee 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 the Lessee or any ERISA Affiliate from
a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
"Termination Value" shall mean the sum of (a) either (i) with respect
to all Properties, an amount equal to the aggregate outstanding Property Cost
for all the Properties, in each case as of the last occurring Payment Date, or
(ii) with respect to a particular Property, an amount equal to the Property Cost
allocable to such Property, plus (b) respecting the amounts described in each of
the foregoing subclause (i) or (ii), as applicable, any and all accrued but
unpaid interest on the Loans and any and all Holder Yield on the Holder Advances
related to the applicable Property Cost, plus (c) to the extent the same is not
duplicative of the amounts payable under clause (b) above, all other Rent and
other amounts then due and payable or accrued under the Agency Agreement, Lease
and/or under any other Operative Agreement (including without limitation amounts
under Sections 11.1 and 11.2 of the Participation Agreement and all costs and
expenses referred to in clause FIRST of Section 22.2 of the Lease).
"Tranche A Commitments" shall mean the obligation of the Tranche A
Lenders to make the Tranche A Loans to the Lessor in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche A Lender's name on Schedule 2.1 to the
Credit Agreement, as such amount may be increased or reduced from time to time
in accordance with the provisions of the Operative Agreements; provided, no
Tranche A Lender shall be obligated to make Tranche A Loans in excess of such
Tranche A Lender's share of the Tranche A Commitments as set forth adjacent to
such Tranche A Lender's name on Schedule 2.1 to Credit Agreement.
"Tranche A Lenders" shall mean 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.
Appendix A-28
<PAGE> 147
"Tranche B Commitments" shall mean the obligation of the Tranche B
Lenders to make the Tranche B Loans to the Lessor in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche B Lender's name on Schedule 2.1 to the
Credit Agreement, as such amount may be increased or reduced from time to time
in accordance with the provisions of the Operative Agreements; provided, no
Tranche B Lender shall be obligated to make Tranche B Loans in excess of such
Tranche B Lender's share of the Tranche B Commitments as set forth adjacent to
such Tranche B Lender's name on Schedule 2.1 to Credit Agreement.
"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;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of accountants for the Lessee or the Construction Agent
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 expense,
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
Appendix A-29
<PAGE> 148
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 RFMD Real Estate Trust 1999-1.
"Trust Agreement" shall mean the Trust Agreement dated on or about the
Initial 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 Amount" shall have the meaning specified in Section 3.2 of
the Agency Agreement.
"Unfunded Liability" shall mean, with respect to any Pension Plan, at
any time, the amount (if any) by which (a) the present value of all benefits
under such Pension Plan exceeds (b) the fair market value of all Pension Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Pension Plan, in accordance with the actuarial
assumptions then in effect with respect to such Pension Plan (such actuarial
assumptions shall be in compliance with all applicable Legal Requirements), 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 Pension Plan
under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, collectively, the Holder Unused Fee and the
Lender Unused Fee.
Appendix A-30
<PAGE> 149
"Unused Fee Payment Date" shall mean the last Business Day of each
September, December, March and June and the last Business Day of the Commitment
Period, or such earlier date as the Commitments shall terminate as provided in
the Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
"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.
"Withholdings" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods and/or services with respect to
any Property.
"Year 2000" shall mean the calendar year beginning January 1, 2000 and
ending December 31, 2000.
Appendix A-31
<PAGE> 1
Exhibit 10.2
- --------------------------------------------------------------------------------
LEASE AGREEMENT
Dated as of August 13, 1999
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1,
as Lessor
and
RF MICRO DEVICES, INC.,
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 August 13, 1999,
between First Security Bank, National Association, not individually, but solely
as the Owner Trustee under the RFMD Real Estate 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>
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 Properties.........................................................................6
ARTICLE VIII.......................................................................................................7
8.1 Condition of the Properties.........................................................................7
8.2 Possession and Use of the Properties................................................................8
8.3 Integrated Properties...............................................................................9
ARTICLE IX........................................................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements
and Manufacturer's Specifications and Standards....................................................10
ARTICLE X.........................................................................................................10
10.1 Maintenance and Repair; Return.....................................................................10
10.2 Environmental Inspection...........................................................................12
ARTICLE XI........................................................................................................12
11.1 Modifications......................................................................................12
ARTICLE XII.......................................................................................................13
12.1 Warranty of Title..................................................................................13
ARTICLE XIII......................................................................................................14
13.1 Permitted Contests Other Than in Respect of Indemnities............................................14
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal Requirements. ..................14
ARTICLE XIV.......................................................................................................15
14.1 Public Liability and Workers' Compensation Insurance...............................................15
14.2 Permanent Hazard and Other Insurance...............................................................15
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
14.3 Coverage...........................................................................................16
ARTICLE XV........................................................................................................17
15.1 Casualty and Condemnation..........................................................................17
15.2 Environmental Matters..............................................................................19
15.3 Notice of Environmental Matters....................................................................20
ARTICLE XVI.......................................................................................................20
16.1 Termination Upon Certain Events....................................................................20
16.2 Procedures.........................................................................................20
ARTICLE XVII......................................................................................................21
17.1 Lease Events of Default............................................................................21
17.2 Surrender of Possession............................................................................24
17.3 Reletting..........................................................................................24
17.4 Damages............................................................................................24
17.5 Power of Sale......................................................................................25
17.6 Final Liquidated Damages...........................................................................25
17.7 Environmental Costs................................................................................26
17.8 Waiver of Certain Rights...........................................................................26
17.9 Assignment of Rights Under Contracts...............................................................26
17.10 Remedies Cumulative................................................................................27
ARTICLE XVIII.....................................................................................................27
18.1 Lessor's Right to Cure Lessee's Lease Defaults.....................................................27
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 a Property.............................27
ARTICLE XX........................................................................................................28
20.1 Purchase Option or Sale Option-General Provisions..................................................28
20.2 Lessee Purchase Option.............................................................................28
20.3 Third Party Sale Option............................................................................29
ARTICLE XXI.......................................................................................................30
21.1 [Intentionally Reserved]...........................................................................30
ARTICLE XXII......................................................................................................30
22.1 Sale Procedure.....................................................................................30
22.2 Application of Proceeds of Sale....................................................................32
22.3 Indemnity for Excessive Wear.......................................................................33
22.4 Appraisal Procedure................................................................................33
22.5 Certain Obligations Continue.......................................................................34
ARTICLE XXIII.....................................................................................................34
23.1 Holding Over.......................................................................................34
ARTICLE XXIV......................................................................................................34
24.1 Risk of Loss.......................................................................................34
ARTICLE XXV.......................................................................................................35
25.1 Assignment.........................................................................................35
25.2 Subleases..........................................................................................35
ARTICLE XXVI......................................................................................................36
26.1 No Waiver..........................................................................................36
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE XXVII....................................................................................................36
27.1 Acceptance of Surrender...........................................................................36
27.2 No Merger of Title................................................................................36
ARTICLE XXVIII...................................................................................................36
28.1 [Intentionally Reserved]..........................................................................36
ARTICLE XXIX.....................................................................................................36
29.1 Notices...........................................................................................36
ARTICLE XXX......................................................................................................37
30.1 Miscellaneous.....................................................................................37
30.2 Amendments and Modifications......................................................................37
30.3 Successors and Assigns............................................................................37
30.4 Headings and Table of Contents....................................................................37
30.5 Counterparts......................................................................................37
30.6 GOVERNING LAW.....................................................................................37
30.7 Calculation of Rent...............................................................................37
30.8 Memoranda of Lease and Lease Supplements..........................................................38
30.9 Allocations between the Lenders and the Holders...................................................38
30.10 Limitations on Recourse...........................................................................38
30.11 WAIVERS OF JURY TRIAL.............................................................................38
30.12 Exercise of Lessor Rights.........................................................................38
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION....................................................39
30.14 USURY SAVINGS PROVISION...........................................................................39
</TABLE>
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
iii
<PAGE> 5
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of August 13, 1999 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at 79 South Main Street, Salt
Lake City, Utah 84111, not individually, but solely as the Owner Trustee under
the RFMD Real Estate Trust 1999-1, as lessor (the "Lessor"), and RF MICRO
DEVICES, INC., a North Carolina corporation, having its principal place of
business at 7625 Thorndike Road, Greensboro, North Carolina 27409-9421, as
lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one (1) or more third parties designated by Lessee
and (ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each Property upon
the Property Closing Date with respect thereto; provided, Basic Rent with
respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each 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 August 13, 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 Lessee, 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
<PAGE> 6
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.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
Subject to the terms and conditions hereinafter set forth and contained
in the respective Lease Supplement relating to each Property, Lessor hereby
leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
The term of this Lease with respect to each Property (the "Term") shall
begin upon the earlier of (i) the Completion Date for such Property or (ii) the
date any Agency Event of Default shall occur (in each case the "Commencement
Date") and shall end on the first date that is five years and three months after
the Initial Closing Date, unless the Term is earlier terminated. Notwithstanding
the foregoing, Lessee shall not be obligated to pay Basic Rent until the Rent
Commencement Date with respect to such Property.
2.3 TITLE.
Each 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 any
Property or any interest of Lessee therein other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS.
On or prior to each Commencement Date, Lessee and Lessor shall each
execute and deliver a Lease Supplement for the Property to be leased effective
as of such Commencement Date in substantially the form of Exhibit A hereto.
2
<PAGE> 7
ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent in arrears on each Payment
Date, and on any date on which this Lease shall terminate with respect
to any or all Properties during the Term; provided, however, with
respect to each individual Property Lessee shall have no obligation to
pay Basic Rent with respect to such Property until the Rent
Commencement Date with respect to such Property (notwithstanding that
Basic Rent for such Property shall accrue from and including the
Scheduled Interest Payment Date immediately preceding such Rent
Commencement Date).
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of 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 any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
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, New York 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
3
<PAGE> 8
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. It shall be an additional Supplemental Rent obligation
of Lessee to pay to the appropriate Person all rent and other amounts when such
become due and owing from time to time under each Ground Lease and without the
necessity of any notice from Lessor with regard thereto. The 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.
Lessee shall make payment of all Basic Rent and Supplemental Rent 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 Properties 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 any 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
4
<PAGE> 9
paid over to Lessee. All charges for Impositions or utilities imposed with
respect to any 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.
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 each 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 applicable 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 each 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 any Property or any part thereof; (b) any taking of any
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 any 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 any 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 any Property; (k) breach of any warranty or
representation with respect to any Property or any Operative Agreement; (l) any
defect in the condition, quality or fitness for use of any 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
5
<PAGE> 10
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 subject to negotiation.
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 PROPERTIES.
(a) Lessor and Lessee intend that (i) for financial accounting
purposes with respect to Lessee (A) this Lease will be treated as an
"operating lease" pursuant to Statement of Financial Accounting
Standards No. 13, as amended, (B) Lessor will be treated as the owner
and lessor of each Property and (C) Lessee will be treated as the
lessee of each Property, but (ii) for federal and all state and local
income tax purposes, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes and all other purposes (A) this
Lease will be treated as a financing arrangement and (B) Lessee will be
treated as the owner of the Properties and will be entitled to all tax
benefits ordinarily available to owners of property similar to the
Properties 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 each 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 other than as set forth in Section
7.1(a)(i), Lessor and Lessee intend this Lease to constitute a finance
lease and not a true lease. In order to
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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 all Properties, to the extent such is
personal property and irrevocably grants and conveys a lien and deed of
trust on all right, title and interest of Lessee (now owned or
hereafter acquired) in and to all Properties to the extent such is real
property. Lessor and Lessee further intend and agree that, for the
purpose of securing the obligations of Lessee and/or the Construction
Agent 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 each of the Properties 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, and deed of
trust on each of the Properties and all proceeds (including without
limitation insurance proceeds thereof) to the extent such is real
property; (ii) the acquisition of title by Lessor (or to the extent
applicable, a leasehold interest pursuant to a Ground Lease) in each
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 each 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 each 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 necessary (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 each 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 PROPERTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY "AS-IS
WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY
LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR OF LESSOR
LIENS) AND IN EACH CASE
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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 EACH PROPERTY FREE AND CLEAR OF LESSOR LIENS) OR SHALL BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY,
USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY
PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR
COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY 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 ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT.
LESSEE HAS OR PRIOR TO THE COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL
OPPORTUNITY TO INSPECT EACH 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 PROPERTIES.
(a) At all times during the Term with respect to each
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 Properties as contemplated by this Lease. Lessee shall not
commit or permit any waste of the Properties 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 a particular Property,
each 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 or a copy of
the Ground Lease (if any). The Equipment and Improvements
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respecting each particular 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) On the Commencement Date for each Property, Lessor and
Lessee shall execute a Lease Supplement in regard to such Property
which shall contain an Equipment Schedule that has a general
description of the Equipment which shall comprise the Property, an
Improvement Schedule that has a general description of the Improvements
which shall comprise the Property and a legal description of the Land
to be leased hereunder (or in the case of any Property subject to a
Ground Lease to be subleased hereunder) as of such date. Each Property
subject to a Ground Lease shall be deemed to be ground subleased from
Lessor to Lessee as of the Commencement Date, and such ground sublease
shall be in effect until this Lease is terminated or expires, in each
case in accordance with the terms and provisions hereof. Lessee shall
satisfy and perform all obligations imposed on Lessor under each Ground
Lease. Simultaneously with the execution and delivery of each Lease
Supplement, such Equipment, Improvements, Land, ground subleasehold
interest, all additional Equipment and all additional Improvements
which are financed under the Operative Agreements after the
Commencement Date and the remainder of such Property shall be deemed to
have been accepted by Lessee for all purposes of this Lease and to be
subject to this Lease (but subject to all rights Lessee, Construction
Agent or Lessor may have against vendors, manufacturers, contractors
and other third parties with respect to any such Equipment or
Improvements).
(e) At all times during the Term with respect to each
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, 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 PROPERTIES.
On the Rent Commencement Date for each Property, Lessee shall, at its
sole cost and expense, cause such Property and the applicable property subject
to a Ground Lease to constitute (and for the duration of the Term shall continue
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.
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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 Properties, (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 Properties, 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 Properties, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property unless the
failure to procure, maintain and comply with Legal Requirements relating to the
Properties other than Environmental Laws or such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not 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 each
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 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 use or locate any component of any
Property outside of the Approved State therefor. Lessee shall not move
or relocate any component of any 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.
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(c) If any component of any 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 any 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 each 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) If, at any time, the aggregate appraised value of
Properties then subject to this Lease for which the Agent has received
an Appraisal pursuant to the terms of Section 5.3 of the Participation
Agreement is less than twenty-five percent (25%) of the aggregate
Property Cost at such time (the "Base Amount"), then Lessee will cause
an additional. Appraisal or Appraisals to be immediately delivered to
Lessor in an amount sufficient to cause such aggregate appraised value
to equal or exceed the Base Amount. In addition, Lessee shall cause to
be delivered to Lessor (at Lessee's sole expense) one (1) or more
Appraisals (or reappraisals of Property) as Lessor may request if any
one (1) 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 any Property, make any
repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in
connection with this Lease or maintain any Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part of
any Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of any 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 a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) to Lessor pursuant
to the exercise of the applicable remedies upon the occurrence of a
Lease Event of Default 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
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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 a 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 at its expense 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.
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 any 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 any 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 any
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
or could reasonably be expected to have a Material Adverse Effect. All
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 shall not remove or attempt to remove any Modification
from any Property. Each Ground Lease for a Property shall expressly
provide for the provisions of the foregoing sentence. Lessee, at its
own cost and expense, will pay for the repairs of any damage to any
Property caused by the removal or attempted removal of any
Modification.
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(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements,
all replacement components to each 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
(provided, respecting each Property subject to a Ground Lease, Lessor's
interest therein is acknowledged to be a leasehold interest pursuant to
such Ground Lease) from and after the date hereof or such date of
incorporation into any 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 any 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 a 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
subsequent to the Commencement Date respecting a Property, Lessee shall
(i) cause a valid, perfected, first priority Lien on each applicable
Property to be in place in favor of the Agent (for the benefit of the
Lenders and the 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 any 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
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SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE
INTEREST OF LESSOR IN AND TO ANY 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 Properties, Lessor, each Holder, the Agent and each Lender; (b)
there shall not be imposed a Lien (other than Permitted Liens and Lessor Liens)
on any Property and no part of any 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.
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 each Property and (b) each Property to comply with
all applicable Legal Requirements.
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ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
During the Term for each 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 no event shall 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
$30,000,000. 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 Properties, 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 each Property, Lessee shall keep such
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 Property Cost of such Property from time to
time 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 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 $2,000,000 will be paid to
Lessee.
(b) If, during the Term with respect to a Property the area in
which such 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
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such Property. During the Term, Lessee shall, in the operation and use
of each 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 each 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 or any Contractor, as the case
may be, 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, 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.
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(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.
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of the Agency Agreement and 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 a 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 $2,000,000, 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 paragraph (a). All
amounts held by Lessor hereunder on account of any award, 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 (i)
to the extent no Default or Event of Default shall have occurred and be
continuing at such time, Lessor shall pay such amounts so held by
Lessor (A) from time to time as Lessee either restores and repairs such
Property pursuant to Section 15.1(e) and gives Lessor reasonable
evidence of such restoration and repair work or (b) promptly to Lessee
upon Lessee's payment in full of the Termination Value for such
Property pursuant to Article XVI or (ii) to the extent a Default or
Event of Default shall have occurred and be continuing at such time,
all amounts so held by Lessor shall be paid over to Lessee 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 and no
Default or Event of Default is then continuing.
(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
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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 a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed fifty percent (50%)
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 unless the
Lease is terminated and Lessee has paid all amounts then due and owing.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term with respect to
a Property 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
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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 any 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.
Within five (5) Business Days of the date any Responsible Officer of
Lessee initially had actual knowledge or should have known of the presence of
Hazardous Substances in any portion of any Property or Properties 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 $25,000, 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
or Properties 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 applicable 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 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 any Property or to remarket any
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
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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 or any
Affiliate of Lessee.
15.3 NOTICE OF ENVIRONMENTAL MATTERS.
Promptly, but in any event within five (5) Business Days from the date
a Responsible Officer of the Lessee has actual knowledge or should have known
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 any Property or Properties. 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 any Property. Lessee shall also provide,
within a reasonable amount of time after Lessor's request, 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 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 each 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.
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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) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) Business Days
after 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 any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) which
has become due and payable within three (3) 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, obligation or condition of Lessee under this Lease 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, and such failure
shall continue for fifteen (15) days after notice thereof to the
Lessee, provided if any such failure other than those set forth in
Sections 17.1(a), (b) or (c) hereof is not capable of remedy within
such fifteen (15) day period but can be remedied with further diligence
and if the Lessee has and continues to pursue diligently such remedy,
then the Lessee shall be granted additional time to pursue such remedy
but in no event more than an additional fifteen (15) days or (ii) any
representation or warranty made by Lessee set forth in this Lease 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 statement delivered in connection herewith or
therewith shall be false or inaccurate in any material way when made;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) Lessee or any of its Subsidiaries 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;
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(g) The liquidation or dissolution of Lessee, or the
suspension of the business of Lessee, or the filing by Lessee 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 Lessee indicating its consent to, approval of or acquiescence
in, any such petition or proceeding; the application by Lessee for, or
the appointment by consent or acquiescence of Lessee of a receiver, a
trustee or a custodian of Lessee for all or a substantial part of its
property; the making by Lessee of any assignment for the benefit of
creditors; the admission by Lessee in writing of its inability to pay
its debts as they mature or Lessee is generally not paying its debts
and other financial obligations as they become due and payable; or
Lessee taking any corporate action to authorize any of the foregoing;
(h) The filing of an involuntary petition against Lessee 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 Lessee 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 Lessee, and the continuance of any of such events for
ninety (90) days undismissed or undischarged;
(i) The adjudication of Lessee as bankrupt or insolvent;
(j) The entering of any order in any proceedings against
Lessee or any Subsidiary decreeing the dissolution, divestiture or
split-up of Lessee or any Subsidiary, 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 Lessee pursuant to
the terms of this Lease or any other Operative Agreement is false or
misleading in any material respect when made or delivered;
(l) [INTENTIONALLY RESERVED];
(m) A final judgment or judgments for the payment of money
shall be rendered by a court or courts against Lessee or any of its
Subsidiaries or any of their assets 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 thirty (30) days from the date of entry
thereof, or (ii) Lessee or such Subsidiary shall not, within said
period of thirty (30) 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 thirty
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(30) days after a decision has been reached with respect to such appeal
and the related stay has been lifted;
(n) Lessee 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 Lessee
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 Lessee 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 TRW,
Inc., 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%) (forty-one percent (41%) regarding TRW, Inc.) or more of the
outstanding common stock of Lessee (excluding any such instances of
beneficial ownership arising as a direct result of the solicitation of
revocable proxies by or on behalf of the board of directors 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 to
constitute a majority of the board of directors of Lessee, provided,
that the relationships among the respective shareholders of Lessee on
the Initial Closing Date shall not be deemed to constitute all or any
combination of them as a "group" for purposes of clause (o)(i); or
(p) Any Operative Agreement shall cease to be in full force
and effect;
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.
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A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LEA STROMIRE JOHNSON OR HER SUCCESSORS OR ASSIGNEE, AS TRUSTEE FOR THE
BENEFIT OF LESSOR, TO TAKE THE PROPERTIES AND SELL THE PROPERTIES 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 Properties. Lessor may enter upon and repossess the Properties
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 Properties. 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 Properties 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 under no obligation to, relet any or all of the
Properties, 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 any 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 all or any of the
Properties pursuant to Section 17.1; (b) the repossession of all or any of the
Properties; nor (c) the failure of Lessor to relet all or any of the Properties,
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
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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 any 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 each
Lease Supplement, a Lien against the Properties WITH POWER OF SALE, and that,
upon the occurrence and during the continuance of any Lease Event of Default,
Lea Stromire Johnson, or her successors or assignee, as trustee for the benefit
of 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 Properties.
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 Properties, 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
Properties shall be conveyed to Lessee "AS-IS, WHERE-IS" and in their then
present physical condition. If any
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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
Properties, 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 a reputable environmental consultant selected by
the Agent and reasonably acceptable to the Lessee, such acceptance by Lessee
shall not be unreasonably withheld, for the cost of any environmental testing
and/or remediation work undertaken respecting any Property, as such testing or
work is deemed appropriate in the reasonable judgment of Lessor in consultation
with an environmental consultant, and shall indemnify and hold harmless Lessor
and each other Indemnified Person therefrom for the costs of the testing or
remediation work (the foregoing shall not limit Lessee's obligations pursuant to
Section 11 of the Participation Agreement). Lessee shall pay all amounts
referenced in the immediately preceding sentence within fifteen (15) days of any
written 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.
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 Properties (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
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relate to the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties 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 any
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.
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 any 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 any 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 A
PROPERTY.
Lessee shall not be entitled to exercise its Purchase Option or the
Sale Option separately with respect to a portion of any Property consisting of
Land, Equipment, Improvements and/or
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any interest pursuant to a Ground Lease but shall be required to exercise its
Purchase Option or the Sale Option with respect to an entire Property.
ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
Not less than one hundred twenty (120) days and no more than one
hundred eighty (180) days prior to either the third or fourth annual anniversary
of the date of this Lease, the Expiration Date or, respecting the Purchase
Option only, any Payment Date after the second annual anniversary of the date of
this Lease (such third or fourth annual anniversary date, such Expiration Date
or, respecting the Purchase Option only, any such Payment Date being hereinafter
referred to as the "Election Date"), Lessee may give Lessor irrevocable written
notice (the "Election Notice") that Lessee is electing to exercise either (a)
the option to purchase all, but not less than all, the Properties on the
applicable Election Date (the "Purchase Option") or (b) with respect to an
Election Notice given in connection with the third or fourth annual anniversary
of the date of this Lease or the Expiration Date only, the option to remarket
all, but not less than all, the Properties to a Person other than Lessee or any
Affiliate of Lessee and cause a sale of such Properties to occur on the
applicable Election 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 one hundred twenty (120) days and not more
than one hundred eighty (180) days prior to the Expiration Date, then Lessee
shall be deemed to have elected for the Purchase Option to apply on the
Expiration Date. 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 Properties to be sold in accordance with the
terms of Section 22.1 on the applicable Election 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 Properties (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 all of Lessor's right, title and
interest in and to all, but not less than all, the Properties 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 Properties) and provided, that the Election Notice
has been appropriately given specifying the Purchase Option, Lessee shall
purchase all the Properties on the applicable Election Date at a price equal to
the Termination Value for such Properties (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 any 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 a Property or
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all of the Properties, and upon tender by Lessee 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, at Lessee's cost and
expense, each of the following: (a) a termination or assignment (as requested by
the Lessee) of each applicable Ground Lease and special or limited warranty
Deeds conveying each Property (to the extent it is real property not subject to
a Ground Lease) to Lessee 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 each
Property (to the extent it is personal property) to Lessee 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/or the applicable Ground
Lease termination; 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 "AS-IS, WHERE-IS" and in then present
physical condition.
If any Property is the subject of remediation efforts respecting
Hazardous Substances at the applicable Election 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
each such Property pursuant to Section 20.2.
On the applicable Election 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 Sale Option, Lessee shall undertake
to cause a sale of the Properties on the applicable Election 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 and
not more than ninety (90) days prior to the Sale Date, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental
site assessment for each of the Properties recently prepared (no more
than thirty (30) days old prior to the delivery 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 Sale 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
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reasonable discretion), then Lessee on the Sale Date shall pay to
Lessor an amount equal to the Termination Value for all the Properties
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 all the Properties 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 all the Properties 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, the
sum of all costs and expenses incurred by Lessor and/or the Agent (as
the case may be) in connection with such sale of one or more
Properties, 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 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 Properties,
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 Properties
on the Sale Date is less than the sum of the Limited Recourse Amount
for all the Properties 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 one or more of the Properties 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, each of the Properties 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
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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 one or more of the
Properties pursuant to the provisions of the preceding paragraph,
Lessee shall arrange for Lessor to sell all the Properties 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 each such Property (to the extent it is real
property titled to Lessor) and an assignment of the Ground Lease
conveying the leasehold interest of Lessor in each such Property (to
the extent it is real property and subject to a Ground Lease) 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 each such 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 each Deed and/or each
Ground Lease assignment; 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 Properties 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 any Property. If each of
the Properties 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 all the Properties less
any sales proceeds received, and (y) Lessor shall transfer each
applicable Property to Lessee in accordance with Section 20.2.
(b) If the Properties are 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 all the Properties is
less than the sum of the aggregate Property Cost for all the Properties
(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
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Amount for all the Properties. On a Sale Date if (x) Lessor receives
the aggregate Termination Value for all the Properties 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 Properties on such date exceeds the sum of the aggregate Property
Cost for all the Properties, then Lessee may retain such excess. If one
or more of the Properties 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 Properties 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) (without
duplication).
(c) In the event that all the Properties are 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) to the extent permitted by applicable Legal Requirements, all
permits, certificates of occupancy, governmental licenses and
authorizations necessary to use, operate, repair, access and maintain
each such 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 each such
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. Lessee
shall also execute any documentation requested by Lessor or such third
party purchaser(s), as applicable, evidencing the continuation or
assignment of each Ground Lease.
22.2 APPLICATION OF PROCEEDS OF SALE.
Lessor shall apply the proceeds of sale of any 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);
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(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 Properties shall be less than the Limited Recourse Amount with respect to
the Properties, 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 Properties 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 Properties 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 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.
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22.5 CERTAIN OBLIGATIONS CONTINUE.
During the Marketing Period, the obligation of Lessee to pay Rent with
respect to the Properties (including without limitation the installment of Basic
Rent due on the Sale 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 Properties 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 a 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 all Properties. 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 any 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.
ARTICLE XXIV
24.1 RISK OF LOSS.
During the Term, unless Lessee shall not be in actual possession of any
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
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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 any Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1
or otherwise) or other relinquishment of possession to any 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 any Property in which rights or
obligations have been assigned or otherwise transferred.
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 date of each Lease Supplement, 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.
(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 any Property or portion thereof to
any wholly-owned Subsidiary of Lessee. Except as referenced in the
immediately preceding sentence, no other subleases shall be permitted
unless consented to in writing by Lessor. 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.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to any 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. The term of any
such sublease shall not extend beyond the Term. Each sublease shall be
expressly subject and subordinate to this Lease.
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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 any
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.
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 any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 [INTENTIONALLY RESERVED]
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.
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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.
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.
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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
each Property promptly after the acquisition thereof in the local filing office
with respect thereto, in all cases at Lessee's cost and expense, and as required
under applicable law to sufficiently evidence this Lease and any such Lease
Supplement in the applicable real estate filing records.
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 Properties 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 Properties
(and in no circumstance to the Agent, the Lenders, the Holders 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
Properties 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
38
<PAGE> 43
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; ARBITRATION.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO
JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY REFERENCE HEREIN,
MUTATIS MUTANDIS.
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
39
<PAGE> 44
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 OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.
[signature pages follow]
40
<PAGE> 45
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 RFMD Real Estate Trust
1999-1, as Lessor
By: /s/ Val T. Orton
-----------------------------------
Name: Val T. Orton
Title: Vice President
[signature pages continue]
<PAGE> 46
RF MICRO DEVICES, INC., as Lessee
By: /s/ William Priddy
-----------------------------------
Name: William Priddy
Title: Chief Financial Officer
[signature pages continue]
<PAGE> 47
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By: /s/ Jim Redman
----------------------------
Name: Jim Redman
Title: Senior Vice President
[signature pages end]
<PAGE> 48
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
August __, 1999 between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
RFMD Real Estate Trust 1999-1, as lessor (the "Lessor"), and RF MICRO DEVICES,
INC., a [____________] 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 August __, 1999, among Lessee, Lessor, not individually, except as
expressly stated therein, but solely as the Owner Trustee under the RFMD Real
Estate 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 PROPERTIES. 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 / A COPY OF THE GROUND LEASE] 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 [___________] unless extended to not later than [___________].
<PAGE> 49
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 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 each 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 TO AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE
STATE OF [__________], 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.
A-2
<PAGE> 50
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.
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> 51
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 RFMD Real Estate Trust
1999-1, as Lessor
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
RF MICRO DEVICES, INC., as Lessee
By: ________________________________
Name: ________________________________
Title: ________________________________
[LESSEE ADDRESS]
___________________________________________
___________________________________________
Attn: _____________________________________
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
A-4
<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 RFMD Real Estate 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 [_______________,
a ________________] 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-5
<PAGE> 53
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
A-6
<PAGE> 54
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
A-7
<PAGE> 55
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
A-8
<PAGE> 56
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
[(LAND)/
(GROUND LEASE)]
A-9
<PAGE> 57
EXHIBIT B TO THE LEASE
[MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
NECESSARY FOR LOCAL LAW REQUIREMENTS]
Recordation requested by:
Moore & Van Allen, PLLC
After recordation return to:
Moore & Van Allen, PLLC (WMA)
100 North Tryon Street, Floor 47
Charlotte, NC 28202-4003
Space above this line for Recorder's use
________________________________________________________________________________
MEMORANDUM OF LEASE AGREEMENT,
LEASE SUPPLEMENT NO. ____ AND DEED OF TRUST
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO. ____
("Memorandum"), dated as of [_____________, 199___], is by and between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the RFMD Real Estate Trust
1999-1, with an office at 79 South Main Street, Salt Lake City, Utah 84111
(hereinafter referred to as "Lessor") and [_______________, a __________]
corporation, with an office at [___________________] (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 [________________], 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 [__________, 199__] (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").
<PAGE> 58
The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated. The maturity date of the obligations secured
thereby shall be ___________, unless extended to not later than ___________.
For purposes of provisions of the Lease and the Lease Supplement
related to the creation and enforcement of the Lease and the Lease Supplement as
a security agreement and a fixture 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 as set forth on the signature pages
hereof. A carbon, photographic or other reproduction of this Memorandum or of
any financing statement related to the Lease and the Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.
2. TERM, RENEWAL, EXTENSION 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 Lease contains provisions for renewal and
extension. The tenant has a purchase option under the Lease.
3. TAX PAYER NUMBERS.
Lessor's tax payer number: __________________.
Lessee's tax payer number: __________________.
4. 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 has
granted, pursuant to the terms of the Lease 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 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.
5. 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 to the same extent as if the Lease and the Lease
Supplement were fully set forth herein. 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.
B-2
<PAGE> 59
[The remainder of this page has been intentionally left blank.]
B-3
<PAGE> 60
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 RFMD Real Estate 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:
RF MICRO DEVICES, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
[LESSEE ADDRESS]
________________________________
________________________________
Attn: _________________________
B-4
<PAGE> 61
SCHEDULE 1
(Description of Property)
B-5
<PAGE> 62
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ 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
[_____ Real Estate Trust _____], on behalf of the Owner Trustee.
[Notarial Seal]
_________________________________
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of [_______________, a __________] corporation, on behalf of
the corporation.
[Notarial Seal]
_________________________________
Notary Public
My commission expires: ____________
B-6
<PAGE> 1
Exhibit 10.3
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of August 13, 1999
among
First Security Bank, National Association,
not individually, except as
expressly stated herein,
but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1,
as the Borrower,
The Several Lenders
from Time to Time Parties Hereto,
and
FIRST UNION NATIONAL BANK,
as the Agent
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS.......................................................1
1.1 Definitions......................................................1
1.2 Interpretation...................................................1
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS...................................1
2.1 Commitments......................................................1
2.2 Notes............................................................2
2.3 Procedure for Borrowing..........................................2
2.4 Lender Unused Fees...............................................3
2.5 Termination or Reduction of Commitments..........................3
2.6 Prepayments and Payments.........................................4
2.7 Conversion and Continuation Options..............................5
2.8 Interest Rates and Payment Dates.................................5
2.9 Computation of Interest..........................................6
2.10 Pro Rata Treatment and Payments.................................7
2.11 Notice of Amounts Payable; Mandatory Assignment.................8
SECTION 3. REPRESENTATIONS AND WARRANTIES....................................8
SECTION 4. CONDITIONS PRECEDENT..............................................9
4.1 Conditions to Effectiveness......................................9
4.2 Conditions to Each Loan..........................................9
SECTION 5. COVENANTS.........................................................9
5.1 Other Activities.................................................9
5.2 Ownership of Properties, Indebtedness............................9
5.3 Disposition of Assets...........................................10
5.4 Compliance with Operative Agreements............................10
5.5 Further Assurances..............................................10
5.6 Notices.........................................................10
5.7 Discharge of Liens..............................................10
5.8 Trust Agreement.................................................11
SECTION 6. EVENTS OF DEFAULT................................................11
SECTION 7. THE AGENT........................................................14
7.1 Appointment.....................................................14
7.2 Delegation of Duties............................................14
7.3 Exculpatory Provisions..........................................14
7.4 Reliance by the Agent...........................................15
7.5 Notice of Default...............................................15
7.6 Non-Reliance on the Agent and Other Lenders.....................15
7.7 Indemnification.................................................16
7.8 The Agent in Its Individual Capacity............................16
7.9 Successor Agent.................................................17
7.10 Actions of the Agent on Behalf of Holders......................17
7.11 The Agent's Duty of Care.......................................17
i
<PAGE> 3
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL.......................18
8.1 Collection and Allocation of Payments and Other Amounts.........18
8.2 Certain Remedial Matters........................................18
8.3 Excepted Payments...............................................18
SECTION 9. MISCELLANEOUS....................................................18
9.1 Amendments and Waivers..........................................18
9.2 Notices.........................................................19
9.3 No Waiver; Cumulative Remedies..................................19
9.4 Survival of Representations and Warranties......................19
9.5 Payment of Expenses and Taxes...................................19
9.6 Successors and Assigns; Participations and Assignments..........19
9.7 Participations..................................................20
9.8 Assignments.....................................................20
9.9 The Register; Disclosure; Pledges to Federal Reserve Banks......23
9.10 Adjustments; Set-off...........................................23
9.11 Counterparts...................................................24
9.12 Severability...................................................24
9.13 Integration....................................................24
9.14 GOVERNING LAW..................................................24
9.15 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.................25
9.16 Acknowledgments................................................25
9.17 WAIVERS OF JURY TRIAL..........................................25
9.18 Nonrecourse....................................................25
9.19 USURY SAVINGS PROVISION........................................26
SCHEDULES
Schedule 2.1 Commitments and Addresses of Lenders
EXHIBITS
Exhibit A-1 Form of Tranche A Note
Exhibit A-2 Form of Tranche B Note
Exhibit B Form of Assignment and Acceptance
ii
<PAGE> 4
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 13, 1999 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
the "Agreement") is among FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, except as expressly stated herein, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1 (the "Owner Trustee" or the "Borrower"),
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders") and FIRST UNION NATIONAL BANK, a national banking
association, as a Lender and as the agent for the Lenders (the "Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINITIONS.
For purposes of this Agreement, capitalized terms used in this
Agreement and not otherwise defined herein shall have the meanings assigned to
them in Appendix A to that certain Participation Agreement dated as of August
13, 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 RF Micro Devices, Inc., the Borrower, 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 Agreement to articles, sections,
paragraphs, clauses, appendices, schedules and exhibits are to the same
contained in this Agreement.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Agreement.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 COMMITMENTS.
(a) Subject to the terms and conditions hereof, each of the
Lenders severally agrees to make the portion of the Tranche A Loans and
the Tranche B Loans to the Borrower from time to time during the
Commitment Period in an amount up to such Lender's Commitment as is set
forth adjacent to such Lender's name in Schedule 2.1 hereto for the
purpose of enabling the Borrower to purchase the Properties and to pay
Property Acquisition Costs, Property Costs and Transaction Expenses,
provided, that the
<PAGE> 5
aggregate principal amount at any one (1) time outstanding with respect
to each of the Tranche A Loans and the Tranche B Loans shall not exceed
the amount of the Tranche A Commitments and the Tranche B Commitments
respectively. Any prepayments of the Loans, whether mandatory or at the
Borrower's election, shall not be subject to reborrowing except as set
forth in Section 5.2(d) of the Participation Agreement.
(b) The Loans may from time to time be (i) Eurodollar Loans,
(ii) ABR Loans, or (iii) a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with Sections 2.3 and
2.7. In the event the Borrower fails to provide notice pursuant to
Section 2.3, the Loan shall be an ABR Loan. Further, any Loans by the
Lenders on a given date in an aggregate amount less than $100,000 shall
be ABR Loans, unless the remaining Available Commitment for the Lenders
in the aggregate is less than $100,000, in which case, the Borrower may
elect a Eurodollar Loan for such remaining amount.
(c) The Commitment of each Lender to make Tranche A Loans and
Tranche B Loans shall be pro rata.
2.2 NOTES.
The Loans made by each Lender shall be evidenced by promissory notes of
the Borrower, substantially in the form of Exhibit A-1 in the case of the
Tranche A Loans (each, a "Tranche A Note") or Exhibit A-2 in the case of the
Tranche B Loans (each, a "Tranche B Note," and with the Tranche A Notes, the
"Notes"), with appropriate insertions as to payee and date, payable to the order
of such Lender and in a principal amount up to the Tranche A Commitment or
Tranche B Commitment, as the case may be, of such Lender. Each Lender is hereby
authorized to record the date, Type and amount of each Loan made by such Lender,
each continuation thereof, each conversion of all or a portion thereof to
another Type, and the date and amount of each payment or prepayment of principal
thereof on the schedule annexed to and constituting a part of its Note, and any
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided, that the failure to make any such recordation
or any error in such recordation shall not affect the Borrower's obligations
hereunder or under such Note. Each Note shall (i) be dated the Initial Closing
Date, (ii) be stated to mature on the Maturity Date and (iii) provide for the
payment of principal in accordance with Section 2.6(d) and the payment of
interest in accordance with Section 2.8.
2.3 PROCEDURE FOR BORROWING.
(a) The Borrower may borrow under the Commitments during the
Commitment Period on any Business Day that an Advance may be requested
pursuant to the terms of Section 5.2 of the Participation Agreement,
provided, that the Borrower shall give the Agent irrevocable notice
(which must be received by the Agent prior to 12:00 Noon, New York
time, at least three (3) Business Days prior to the requested Borrowing
Date specifying (i) the amount to be borrowed (which on any date shall
not be in excess of the then Available Commitments), (ii) the requested
Borrowing Date, (iii) whether the
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borrowing is to be of Eurodollar Loans, ABR Loans or a combination
thereof, (iv) if the borrowing is to be a combination of Eurodollar
Loans and ABR Loans, the respective amounts of each Type of Loan and
(v) the Interest Period applicable to each Eurodollar Loan. Pursuant to
the terms of the Participation Agreement, the Borrower shall be deemed
to have delivered such notice upon the delivery of a notice by the
Construction Agent or the Lessee containing such required information.
Upon receipt of any such notice from the Borrower, the Agent shall
promptly notify each Lender thereof. Each Lender will make the amount
of its pro rata share of each borrowing available to the Agent for the
account of the Borrower at the office of the Agent specified in Section
9.2 prior to 12:00 Noon, New York time, on the Borrowing Date requested
by the Borrower in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the Agent
crediting an account designated, subject to Section 9.1 of the
Participation Agreement, by the Borrower on the books of such office
with the aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent. No amount of any
Loan which is repaid or prepaid by the Borrower may be reborrowed
hereunder, except as set forth in Section 5.2(d) of the Participation
Agreement.
(b) Interest accruing on each Loan during the Construction
Period with respect to any Property shall, subject to the limitations
set forth in Section 5.1(b) of the Participation Agreement be added to
the principal amount of such Loan on the relevant Scheduled Interest
Payment Date. On each such Scheduled Interest Payment Date, the Loan
Property Cost and Construction Loan Property Cost shall be increased by
the amount of interest added to the Loans.
2.4 LENDER UNUSED FEES.
Promptly after receipt from the Lessee of the payment of the Lender
Unused Fee payable pursuant to Section 7.4 of the Participation Agreement, the
Agent shall distribute such payments to the Lenders pro rata in accordance with
their respective Commitments.
2.5 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) The Borrower shall have the right, upon not less than
three (3) Business Days' written notice to the Agent, to terminate the
Commitments or, from time to time, to reduce the amount of the
Commitments, provided, that (i) after giving effect to such reduction,
the aggregate outstanding principal amount of the Loans shall not
exceed the aggregate Commitments and (ii) such notice shall be
accompanied by a certificate of the Construction Agent stating that the
amount equal to ninety-seven percent (97%) of aggregate Budgeted Total
Property Costs as of the date of such reduction does not exceed the
aggregate amount of Available Commitments as of such date after giving
effect to such reduction. Any such reduction (A) shall be in an amount
equal to the lesser of (1) $1,000,000 (or an even multiple thereof) or
(2) the remaining Available Commitments, (B) shall reduce permanently
the Commitments then in effect and (C) shall be pro rata for
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the Commitments of all Lenders and pro rata between the Tranche A Loans
and the Tranche B Loans.
(b) The Commitments respecting any particular Property shall
automatically be reduced to zero (0) upon the occurrence of the Rent
Commencement Date respecting such Property. On any date on which the
Commitments shall automatically be reduced to zero (0) pursuant to
Section 6, the Borrower shall prepay all outstanding Loans, together
with accrued unpaid interest thereon and all other amounts owing
thereunder.
2.6 PREPAYMENTS AND PAYMENTS.
(a) Subject to Sections 11.2(e), 11.3 and 11.4 of the
Participation Agreement, the Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty,
upon at least three (3) Business Days' irrevocable notice to the Agent,
specifying the date and amount of prepayment and whether the prepayment
is of Eurodollar Loans, ABR Loans or a combination thereof, and, if a
combination thereof, the amount allocable to each. Upon receipt of any
such notice the Agent shall promptly notify each Lender thereof. If any
such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein. Amounts prepaid may not be
reborrowed, and shall reduce the Commitments and the Available
Commitments, except in each case as set forth in Section 5.2(d) of the
Participation Agreement.
(b) If on any date the Agent or the Lessor shall receive any
payment in respect of (i) any Casualty, Condemnation or Environmental
Violation pursuant to Sections 15.1(a) or 15.1(g) or Article XVI of the
Lease (excluding any payments in respect thereof which are payable to
the Lessee in accordance with the Lease), or (ii) the Termination Value
of any Property in connection with the delivery of a Termination Notice
pursuant to Article XVI of the Lease, or (iii) the Termination Value of
any Property in connection with the exercise of the Purchase Option
under Article XX of the Lease or the exercise of the option of the
Lessor to transfer the Properties to the Lessee pursuant to Section
20.3 of the Lease, or (iv) any payment required to be made or elected
to be made by the Construction Agent to the Lessor pursuant to the
terms of the Agency Agreement, then in each case, the Borrower shall
pay such amounts to the Agent and the Agent shall be required to apply
and pay such amounts in accordance with the provisions of Section
8.7(b)(ii) of the Participation Agreement.
(c) Each prepayment of the Loans pursuant to Section 2.6(a)
shall be allocated to reduce the respective Loan Property Costs of all
Properties pro rata according to the Loan Property Costs of such
Properties immediately before giving effect to such prepayment. Each
prepayment of the Loans pursuant to Section 2.6(b) shall be allocated
to reduce the Loan Property Cost of the Property or Properties subject
to the respective Casualty, Condemnation, Environmental Violation,
termination, purchase, transfer or other circumstance giving rise to
such prepayment. Any amounts applied to reduce the Loan Property Cost
of any Construction Period Property pursuant to this paragraph (c)
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shall also be applied to reduce the Construction Loan Property Cost of
such Property until such Construction Loan Property Cost has been
reduced to zero (0).
(d) The outstanding principal balance of the Loans and all
other amounts then due and owing under this Agreement or otherwise with
respect to the Loans shall be due and payable in full on the Maturity
Date.
2.7 CONVERSION AND CONTINUATION OPTIONS.
(a) The Borrower may elect from time to time to convert
Eurodollar Loans to ABR Loans by giving the Agent at least three (3)
Business Days' prior irrevocable notice of such election, provided,
that any such conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto, and provided,
further, to the extent an Event of Default has occurred and is
continuing on the last day of any such Interest Period, the applicable
Eurodollar Loan shall automatically be converted to an ABR Loan. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar
Loans by giving the Agent at least three (3) Business Days' prior
irrevocable notice of such election. Upon receipt of any such notice,
the Agent shall promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans or ABR Loans may be converted as provided
herein, provided, that (i) no ABR Loan may be converted into a
Eurodollar Loan after the date that is one (1) month prior to the
Maturity Date and (ii) such notice of conversion regarding any
Eurodollar Loan shall contain an election by the Borrower of an
Interest Period for such Eurodollar Loan to be created by such
conversion and such Interest Period shall be in accordance with the
terms of the definition of the term "Interest Period" including without
limitation subparagraphs (A) through (D) thereof.
(b) Subject to the restrictions set forth in Section 2.3
hereof, any Eurodollar Loan may be continued as such upon the
expiration of the current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Agent, in accordance with the
applicable notice provision for the conversion of ABR Loans to
Eurodollar Loans set forth herein, of the length of the next Interest
Period to be applicable to such Loans, provided, that no Eurodollar
Loan may be continued as such after the date that is one (1) month
prior to the Maturity Date, provided, further, no Eurodollar Loans may
be continued as such if an Event of Default has occurred and is
continuing as of the last day of the Interest Period for such
Eurodollar Loan, and provided, further, that if the Borrower shall fail
to give any required notice as described above or otherwise herein, or
if such continuation is not permitted pursuant to the proceeding
proviso, such Loan shall automatically be converted to an ABR Loan on
the last day of such then expiring Interest Period.
2.8 INTEREST RATES AND PAYMENT DATES.
(a) The Loans outstanding hereunder from time to time shall
bear interest at a rate per annum equal to either (i) with respect to a
Eurodollar Loan, the Eurodollar Rate determined for the applicable
Interest Period plus the Applicable Percentage or (ii) with
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respect to an ABR Loan, the ABR plus the Applicable Percentage, as
selected by the Borrower in accordance with the provisions hereof;
provided, however, (A) upon delivery by the Agent of the notice
described in Section 2.9(c), the Loans of each of the Lenders shall
bear interest at the ABR plus the Applicable Percentage applicable from
time to time from and after the dates and during the periods specified
in Section 2.9(c), (B) upon the delivery by a Lender of the notice
described in Section 11.3(f) of the Participation Agreement, the Loans
of such Lender shall bear interest at the ABR plus the Applicable
Percentage applicable from time to time from and after the dates and
during the periods specified in Section 11.3(f) of the Participation
Agreement and (C) in such other circumstances as expressly provided
herein, the Loans shall bear interest at the ABR plus the Applicable
Percentage.
(b) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any other amount
payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is the lesser of (x) the then
current rate of interest respecting such payment plus two percent (2%)
and (y) the highest interest rate permitted by applicable law, in each
case from the date of such non-payment until such amount is paid in
full (whether after or before judgment).
(c) Interest shall be payable in arrears on the applicable
Scheduled Interest Payment Date, provided, that (i) interest accruing
pursuant to paragraph (b) of this Section 2.8 shall be payable from
time to time on demand and (ii) each prepayment of the Loans shall be
accompanied by accrued interest to the date of such prepayment on the
amount prepaid.
2.9 COMPUTATION OF INTEREST.
(a) Whenever it is calculated on the basis of the Prime
Lending Rate, interest shall be calculated on the basis of a year of
three hundred sixty-five (365) days (or three hundred sixty-six (366)
days, as the case may be) for the actual days elapsed; and, otherwise,
interest shall be calculated on the basis of a year of three hundred
sixty (360) days for the actual days elapsed. The Agent shall as soon
as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on
a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the day on which such change
becomes effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest
error.
(c) If the Eurodollar Rate cannot be determined by the Agent
in the manner specified in the definition of the term "Eurodollar
Rate", the Agent shall give telecopy or
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telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. Until such time as the Eurodollar Rate can be
determined by the Agent in the manner specified in the definition of
such term, no further Eurodollar Loans shall be made or shall be
continued as such at the end of the then current Interest Period nor
shall the Borrower have the right to convert ABR Loans to Eurodollar
Loans.
2.10 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing by the Borrower from the Lenders hereunder
and any reduction of the Commitments of the Lenders shall be made pro
rata according to their respective Commitments. Subject to the
provisions of Section 8.7 of the Participation Agreement and Section
2.11(b) hereof, each payment (including without limitation each
prepayment) by the Borrower on account of principal of and interest on
the Loans shall be made pro rata according to the respective
outstanding principal amounts on the Loans then held by the Lenders.
All payments (including without limitation prepayments) to be made by
the Borrower hereunder and under the Notes, whether on account of
principal, interest or otherwise, shall be made without setoff or
counterclaim and shall be made prior to 12:00 Noon, New York time, on
the due date thereof to the Agent, for the account of the Lenders, at
the Agent's office specified in Section 9.2, in Dollars and in
immediately available funds. The Agent shall distribute such payments
to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day; provided, however, if such payment includes an amount of
interest calculated with reference to the Eurodollar Rate and the
result of such extension would be to extend such payment into another
calendar month, then such payment shall be made on the immediately
preceding Business Day. In the case of any extension of any payment of
principal pursuant to the preceding two (2) sentences, interest thereon
shall be payable at the then applicable rate during such extension.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make its
share of such borrowing available to the Agent, the Agent may assume
that such Lender is making such amount available to the Agent, and the
Agent may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such amount is not made available
to the Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Agent, on demand, such amount with interest
thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately
available to the Agent. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this Section 2.10(b)
shall be conclusive in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Agent by such
Lender within three (3) Business Days of such Borrowing Date, the Agent
shall also be entitled to recover such amount with interest thereon at
the rate as set forth above on demand from the Borrower.
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2.11 NOTICE OF AMOUNTS PAYABLE; MANDATORY ASSIGNMENT.
(a) In the event that any Lender becomes aware that any
amounts are or will be owed to it pursuant to Sections 11.2(e) or 11.3
of the Participation Agreement or that it is unable to make Eurodollar
Loans, then it shall promptly notify the Borrower, the Lessee and the
Agent thereof and, as soon as possible thereafter, such Lender shall
submit to the Borrower (with a copy to the Agent) a certificate
indicating the amount owing to it and the calculation thereof. The
amounts set forth in such certificate shall be prima facie evidence of
the obligations of the Borrower hereunder.
(b) In the event that any Lender delivers to the Borrower a
certificate in accordance with Section 2.11(a) in connection with
amounts payable pursuant to Sections 11.2(e) or 11.3 of the
Participation Agreement or such Lender is required to make Loans as ABR
Loans in accordance with Section 11.3(d) of the Participation Agreement
then, subject to Section 9.1 of the Participation Agreement, the
Borrower may, at its own expense (provided, such amounts shall be
reimbursed or paid entirely (as elected by the Borrower) by the Lessee,
as Supplemental Rent) and in the discretion of the Borrower, (i)
require such Lender to transfer or assign, in whole or (with such
Lender's consent) in part, without recourse (in accordance with Section
9.8), all or (with such Lender's consent) part of its interests, rights
(except for rights to be indemnified for actions taken while a party
hereunder) and obligations under this Agreement to a replacement bank
or institution if the Borrower (subject to Section 9.1 of the
Participation Agreement), with the full cooperation of such Lender, can
identify a Person who is ready, willing and able to be such replacement
bank or institution with respect thereto and such replacement bank or
institution (which may be another Lender) shall assume such assigned
obligations, or (ii) during such time as no Default or Event of Default
has occurred and is continuing, terminate the Commitment of such Lender
and prepay all outstanding Loans of such Lender; provided, however,
that (x) subject to Section 9.1 of the Participation Agreement, the
Borrower or such replacement bank or institution, as the case may be,
shall have paid to such Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the
Loans made by it hereunder and all other amounts owed to it hereunder
(and, if such Lender is also a Holder, all Holder Advances and Holder
Yield accrued and unpaid thereon), (y) any termination of Commitments
shall be subject to the terms of Section 2.5(a) and (z) such assignment
or termination of the Commitment of such Lender and prepayment of Loans
does not conflict with any law, rule or regulation or order of any
court or Governmental Authority.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
make the Loans, each of the Trust Company and the Owner Trustee hereby makes and
affirms the representations and warranties set forth in Section 6.1 of the
Participation Agreement to the same extent as if such representations and
warranties were set forth in this Agreement in their entirety.
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SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO EFFECTIVENESS.
The effectiveness of this Agreement is subject to the satisfaction of
all conditions precedent set forth in Section 5.3 of the Participation Agreement
required by said Section to be satisfied on or prior to the Initial Closing
Date.
4.2 CONDITIONS TO EACH LOAN.
The agreement of each Lender to make any Loan requested to be made by
it on any date is subject to the satisfaction of all conditions precedent set
forth in Section 5.3 and 5.4 of the Participation Agreement required by said
Sections to be satisfied on or prior to the date of the applicable Loan.
Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such Loan that the
conditions contained in this Section 4.2 have been satisfied.
SECTION 5. COVENANTS
Unless the Agent and each Lender has otherwise given its express
written consent during such period that any Loan or Note remains outstanding and
unpaid or any other amount is owing to any Lender or the Agent hereunder:
5.1 OTHER ACTIVITIES.
The Borrower shall not conduct, transact or otherwise engage in, or
commit to transact, conduct or otherwise engage in, any business or operations
other than the entry into, and exercise of rights and performance of obligations
in respect of, the Operative Agreements and other activities incidental or
related to the foregoing.
5.2 OWNERSHIP OF PROPERTIES, INDEBTEDNESS.
The Borrower shall not own, lease, manage or otherwise operate any
properties or assets other than in connection with the activities described in
Section 5.1, or incur, create, assume or suffer to exist any Indebtedness or
other consensual liabilities or financial obligations other than as may be
incurred, created or assumed or as may exist in connection with the activities
described in Section 5.1 (including without limitation the Loans and other
obligations incurred by the Borrower hereunder).
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5.3 DISPOSITION OF ASSETS.
The Borrower shall not convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether now owned
or hereafter acquired, except to the extent expressly contemplated by the
Operative Agreements.
5.4 COMPLIANCE WITH OPERATIVE AGREEMENTS.
The Borrower shall at all times (a) observe and perform all of the
covenants, conditions and obligations required to be performed by it (whether in
its capacity as the Lessor, the Owner Trustee or otherwise) under each Operative
Agreement to which it is a party and (b) observe and perform, or cause to be
observed and performed, all of the covenants, conditions and obligations of the
Lessor under the Lease, even in the event that the Lease is terminated at stated
expiration following a Lease Event of Default or otherwise.
5.5 FURTHER ASSURANCES.
At any time and from time to time, upon the written request of the
Agent, and at the expense of the Borrower (provided, such amounts shall be
reimbursed or paid entirely (as elected by the Borrower) by the Lessee, as
Supplemental Rent), the Borrower will promptly and duly execute and deliver such
further instruments and documents and take such further action as the Agent or
the Majority Lenders may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and the other Operative
Agreements and of the rights and powers herein or therein granted.
5.6 NOTICES.
If on any date, a Responsible Officer of the Borrower shall obtain
actual knowledge of the occurrence of a Default or Event of Default, the
Borrower will give written notice thereof to the Agent within five (5) Business
Days after such date.
5.7 DISCHARGE OF LIENS.
Neither the Borrower nor the Trust Company will create or permit to
exist at any time, and will, at its own expense, promptly take such action as
may be necessary duly to discharge, or cause to be discharged, all Lessor Liens
attributable to it, provided, that the Borrower and the Trust Company shall not
be required to discharge any Lessor Lien while the same is being contested in
good faith by appropriate proceedings diligently prosecuted so long as such
proceedings shall not involve any material danger of impairment of any of the
Liens contemplated by the Security Documents or of the sale, forfeiture or loss
of, and shall not materially interfere with the disposition of, any Property or
title thereto or any interest therein or the payment of Rent.
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5.8 TRUST AGREEMENT.
Without prejudice to any right under the Trust Agreement of the Owner
Trustee to resign, the Owner Trustee (a) agrees not to terminate or revoke the
trust created by the Trust Agreement except as permitted by Article VIII of the
Trust Agreement, (b) agrees not to amend, supplement, terminate, revoke or
otherwise modify any provision of the Trust Agreement in any manner which could
reasonably be expected to have an adverse effect on the rights or interests of
the Agent or the Lenders hereunder or under the other Operative Agreements and
(c) agrees to comply with all of the terms of the Trust Agreement.
SECTION 6. EVENTS OF DEFAULT
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
(a) Except as provided in Sections 6(c), the Borrower shall
default in the payment when due of any principal on the Loans or
default in the payment when due of any interest on the Loans, and in
either such case, such default shall continue for three (3) or more
days; or
(b) Except as provided in Sections 6(a) and 6(c), the Borrower
shall default, and such default shall continue for three (3) or more
days, in the payment of any amount owing under any Credit Document; or
(c) (i) The Borrower shall default in the payment of any
amount due on the Maturity Date owing under any Credit Document or (ii)
the Borrower shall default in the payment when due of any principal or
interest on the Loans payable with regard to any obligation of Lessee
to pay Termination Value when due or to pay Basic Rent or Supplemental
Rent at such time as any Termination Value is due; or
(d) The Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in any
Credit Document to which it is a party (other than those referred to in
paragraphs (a), (b) and (c) above), provided, that in the case of any
such default under Sections 5.4, 5.5 or 5.8(c), such default shall have
continued unremedied for a period of at least fifteen (15) days after
notice to the Borrower by the Agent or the Majority Lenders, provided,
further, if any such default under Sections 5.4, 5.5 or 5.8(c) is not
capable of remedy within such fifteen (15) day period but may be
remedied with further diligence and if the Borrower has and continues
to pursue diligently such remedy, then the Borrower shall be granted
additional time to pursue such remedy but in no event more than an
additional thirty (30) days.
(e) Any representation, warranty or statement made or deemed
made by the Borrower herein or in any other Credit Document or by the
Borrower or the Lessee in the Participation Agreement, or in any
statement or certificate delivered or required to be
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delivered pursuant hereto or thereto, shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
(f) (i) Any Lease Event of Default shall have occurred and be
continuing, or (ii) the Owner Trustee shall default in the due
performance or observance by it of any term, covenant or agreement
contained in the Participation Agreement or in the Trust Agreement to
or for the benefit of the Agent or a Lender, provided, that in the case
of this clause (ii) such default shall have continued unremedied for a
period of at least fifteen (15) days after notice to the Owner Trustee
and Lessee by the Agent or the Majority Lenders, provided, further,
that in the case of this clause (ii), such default is not capable of
remedy within such fifteen (15) day period but may be remedied with
further diligence and if the Borrower has and continues to pursue
diligently such remedy, then the Borrower shall be granted additional
time to pursue such remedy but in no event more than an additional
thirty (30) days; or
(g) The Borrower shall commence a voluntary case concerning
itself under the Bankruptcy Code or an involuntary case is commenced
against the Borrower and the petition is not contravened within ten
(10) days after commencement of the case or an involuntary case is
commenced against the Borrower and the petition is not dismissed within
sixty (60) days after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of,
all or substantially all of the property of the Borrower; or the
Borrower commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether
now or hereafter in effect relating to the Borrower, or there is
commenced against the Borrower any such proceeding which remains
undismissed for a period of sixty (60) days; or the Borrower is
adjudicated insolvent or bankrupt, or any order of relief or other
order approving any such case or proceeding is entered; or the Borrower
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of sixty (60) days; or the Borrower makes a general
assignment for the benefit of creditors; or any corporate or
partnership action is taken by the Borrower for the purpose of
effecting any of the foregoing; or
(h) Any Security Document shall cease to be in full force and
effect, or shall cease to give the Agent the Liens, rights, powers and
privileges purported to be created thereby (including without
limitation a first priority perfected security interest in, and Lien
on, all of the Properties), in favor of the Agent on behalf of the
Lenders and the Holders, superior to and prior to the rights of all
third Persons and subject to no other Liens (except in each case to the
extent expressly permitted herein or in any Operative Agreement) other
than any Ground Lease; or
(i) The Lease shall cease to be enforceable against the
Lessee; or
(j) One (1) or more judgments or decrees shall be entered
against the Borrower involving a liability of $100,000 or more in the
aggregate for all such
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judgments and decrees for the Borrower and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within sixty (60) days from the entry thereof,
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Majority Lenders, the Agent may, or upon the request of the
Majority Lenders, the Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Majority Lenders, the
Agent may, or upon the request of the Majority Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith, whereupon the same shall immediately become due and
payable (any of the foregoing occurrences or actions referred to in clause (A)
or (B) above, an "Acceleration"). Except as expressly provided above in this
Section 6, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Agent shall, upon the
written instructions of the Majority Secured Parties, exercise any or all of the
rights and powers and pursue any and all of the remedies available to it
hereunder and (subject to the terms thereof) under the other Credit Documents,
the Lease and the other Operative Agreements and shall have any and all rights
and remedies available under the Uniform Commercial Code or any provision of
law.
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Agent may, and upon
request of the Majority Secured Parties shall, proceed to protect and enforce
this Agreement, the Notes, the other Credit Documents and the Lease by suit or
suits or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement herein contained or in
execution or aid of any power herein granted, or for foreclosure hereunder, or
for the appointment of a receiver or receivers for the Property or for the
recovery of judgment for the indebtedness secured thereby or for the enforcement
of any other proper, legal or equitable remedy available under applicable laws.
The Borrower shall be liable for any and all accrued and unpaid amounts
due hereunder before, after or during the exercise of any of the foregoing
remedies, including without limitation all reasonable legal fees and other
reasonable costs and expenses incurred by the Agent or any Lender by reason of
the occurrence of any Event of Default or the exercise of remedies with respect
thereto.
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SECTION 7. THE AGENT
7.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints the Agent as the
agent of such Lender under this Agreement and the other Operative Agreements,
and each such Lender irrevocably authorizes the Agent, in such capacity, to
execute the Operative Agreements as agent for and on behalf of such Lender, to
take such action on behalf of such Lender under the provisions of this Agreement
and the other Operative Agreements and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of this Agreement
and other Operative Agreements, together with such other powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
each of the Lenders hereby specifically acknowledges the terms and provisions of
the Participation Agreement and directs the Agent to exercise such powers, make
such decisions and otherwise perform such duties as are delegated to the Agent
thereunder without being required to obtain any specific consent with respect
thereto from any Lender, unless the matter under consideration is a Unanimous
Vote Matter or otherwise requires the consent of the Majority Lenders and/or the
Majority Secured Parties. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Operative Agreement or otherwise exist against the Agent.
7.2 DELEGATION OF DUTIES.
The Agent may execute any of its duties under this Agreement and the
other Operative Agreements by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
7.3 EXCULPATORY PROVISIONS.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Operative Agreement (except for its
or such Person's own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or the Lessee or any officer
thereof contained in this Agreement or any other Operative Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Operative Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Operative Agreement or for any failure of the Borrower or the Lessee to perform
its obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other
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Operative Agreement, or to inspect the properties, books or records of the
Borrower or the Lessee.
7.4 RELIANCE BY THE AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including without limitation counsel to the
Borrower or the Lessee), independent accountants and other experts selected by
the Agent. The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Operative Agreement unless it shall first receive such advice or
concurrence of the Majority Lenders, the Majority Secured Parties or all Secured
Parties, as the case may be, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Operative
Agreements in accordance with a request of the Majority Lenders, the Majority
Secured Parties or all Secured Parties, as the case may be, and such and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes (or all Secured Parties, as the case
may be).
7.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Secured Parties; provided, that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Secured Parties; provided, further, the foregoing shall
not limit (a) the rights of the Majority Secured Parties to elect remedies as
set forth in Section 6 and/or (b) the rights of the Majority Secured Parties or
all Secured Parties, as the case may be, as described in the Participation
Agreement (including without limitation Sections 8.2(h) and 8.6 of the
Participation Agreement).
7.6 NON-RELIANCE ON THE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including without limitation any
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review of the affairs of the Borrower or the Lessee, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and the Lessee and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Operative Agreements, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the Lessee. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or the Lessee which
may come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
7.7 INDEMNIFICATION.
The Lenders agree to indemnify the Agent, in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought under this
Section 7.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against any of them in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Operative Agreements or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any of them
under or in connection with any of the foregoing; provided, that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of the Agent.
The agreements in this Section 7.7 shall survive the payment of the Notes and
all other amounts payable hereunder.
7.8 THE AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or the Lessee as
though the Agent were not the Agent hereunder and under the other Operative
Agreements. With respect to its Loans made or renewed by it and any Note issued
to it, the Agent shall have the same rights and powers under
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this Agreement and the other Operative Agreements as any Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
7.9 SUCCESSOR AGENT.
The Agent may resign at any time as the Agent upon thirty (30) days'
notice to the Lenders, the Borrower and, so long as no Lease Event of Default
shall have occurred and be continuing, the Lessee. If the Agent shall resign as
the Agent under this Agreement, the Majority Lenders shall appoint from among
the Lenders a successor Agent which successor Agent shall be subject to the
approval of the Borrower and, so long as no Lease Event of Default shall have
occurred and be continuing, the Lessee, such approval not to be unreasonably
withheld or delayed. If no successor Agent is appointed prior to the effective
date of the resignation of the resigning Agent, the Agent may appoint, after
consulting with the Lenders and subject to the approval of the Borrower and, so
long as no Lease Event of Default shall have occurred and be continuing, the
Lessee, such approval not to be unreasonably withheld or delayed, a successor
Agent from among the Lenders. If no successor Agent has accepted appointment as
the Agent by the date which is thirty (30) days following a retiring Agent's
notice of resignation, the retiring Agent's notice of resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent until such time, if any, as the Majority Lenders appoint a
successor Agent, as provided for above. Upon the effective date of such
resignation, only such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's rights, powers and duties in such capacity shall
be terminated. After any retiring Agent resigns hereunder as the Agent, the
provisions of this Article VII and Section 9.5 shall inure to their respective
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
7.10 ACTIONS OF THE AGENT ON BEHALF OF HOLDERS.
The parties hereto specifically acknowledge and consent to the Agent's
acting on behalf of the Holders as provided in the Participation Agreement, and,
in any such case, the Lenders acknowledge that the Holders shall be entitled to
vote as "Secured Parties" hereunder to the extent required or permitted by the
Operative Agreements (including without limitation Sections 8.2(h) and 8.6 of
the Participation Agreement).
7.11 THE AGENT'S DUTY OF CARE.
Other than the exercise of reasonable care to assure the safe custody
of the Collateral while being held by the Agent hereunder or under any other
Operative Agreement, the Agent shall have no duty or liability to preserve
rights pertaining thereto, it being understood and agreed that the Lessee shall
be responsible for preservation of all rights in the Collateral, and the Agent
shall be relieved of all responsibility for the Collateral upon surrendering it
or tendering the surrender of it to the Lessee. The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Agent accords its own property, which shall be no
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less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Agent shall not have responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any of the Collateral.
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL
8.1 COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
The Lessee, the Construction Agent, the Agent, the Lenders, the Holders
and the Borrower have agreed pursuant to the terms of Section 8.7 of the
Participation Agreement to a procedure for the allocation and distribution of
certain payments and distributions, including without limitation the proceeds of
Collateral.
8.2 CERTAIN REMEDIAL MATTERS.
Notwithstanding any other provision of this Agreement or any other
Credit Document:
(a) the Borrower shall at all times retain to the exclusion of
all other parties, all rights to Excepted Payments payable to it and to
demand, collect or commence an action at law to obtain such payments
and to enforce any judgment with respect thereto; and
(b) the Borrower and each Holder shall at all times retain the
right, but not to the exclusion of the Agent, (i) to retain all rights
with respect to insurance that Article XIV of the Lease specifically
confers upon the "Lessor", (ii) to provide such insurance as the Lessee
shall have failed to maintain or as the Borrower or any Holder may
desire, and (iii) to enforce compliance by the Lessee with the
provisions of Articles VIII, IX, X, XI, XIV and XVII of the Lease.
8.3 EXCEPTED PAYMENTS.
Notwithstanding any other provision of this Agreement or the Security
Documents, any Excepted Payment received at any time by the Agent shall be
distributed promptly to the Person entitled to receive such Excepted Payment.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS.
None of the terms or provisions of this Agreement may be terminated,
amended, supplemented, waived or modified except in accordance with the terms of
Section 12.4 of the Participation Agreement.
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9.2 NOTICES.
All notices required or permitted to be given under this Agreement
shall be given in accordance with Section 12.2 of the Participation Agreement.
9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Agent or any Lender, any right, remedy, power or privilege hereunder or under
the other Credit Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by the Borrower under the
Operative Agreements shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans hereunder.
9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees to (with funds provided by the Lessee as
Supplemental Rent): (a) pay all reasonable out-of-pocket costs and expenses of
(i) the Agent whether or not the transactions herein contemplated are
consummated, in connection with the negotiation, preparation, execution and
delivery of the Operative Agreements and the documents and instruments referred
to therein (including without limitation the reasonable fees and disbursements
of Moore & Van Allen, PLLC) and any amendment, waiver or consent relating
thereto (including without limitation the reasonable fees and disbursements of
counsel to the Agent) and (ii) the Agent and each of the Lenders in connection
with the enforcement of the Operative Agreements and the documents and
instruments referred to therein (including without limitation the reasonable
fees and disbursements of counsel for the Agent and for each of the Lenders) and
(b) pay and hold each of the Lenders harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
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9.7 PARTICIPATIONS.
Subject to and in accordance with Section 10.1 of the Participation
Agreement, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one (1) or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Operative Agreements; provided, that any such sale of a
participating interest shall be in a principal amount of at least $2,000,000 or
such lesser amount constituting such Lender's entire interest in this Agreement
and the Notes. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement and the Notes, and
the Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the Notes. In no event shall any Participant have any right to
approve any amendment or waiver of any provision of this Agreement or any other
Operative Agreement, or any consent to any departure by the Borrower or any
other Person therefrom, except to the extent that such amendment, waiver or
consent would (a) reduce the principal of, or interest on, any Loan or Note, or
postpone the date of the final maturity of any Loan or Note, or reduce the
amount of any Lender Unused Fee, in each case to the extent subject to such
participation or (b) release all or substantially all of the Collateral. The
Borrower agrees that, while an Event of Default shall have occurred and be
continuing, if amounts outstanding under this Agreement and the Notes are due or
unpaid, or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interests in amounts owing directly to it as a Lender under this Agreement or
any Note, provided, that in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.10(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 11.2(e), 11.3 and 11.4 of the Participation Agreement
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided, that such Participant shall
have complied with the requirements of said Sections and provided, further, that
no Participant shall be entitled to receive any greater amount pursuant to any
such Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
9.8 ASSIGNMENTS.
(a) Subject to and in accordance with Section 10.1 of the
Participation Agreement, any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate of any Lender or,
with the consent, subject to Section 9.1 of the Participation
Agreement, of the Borrower and the Agent (which in each case shall not
be unreasonably
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withheld or delayed and which consent of the Borrower shall not be
required during the continuation of any Event of Default), to an
additional bank, financial institution or other entity that is either
organized under the laws of the United States or any state thereof or
is a foreign bank that operates a branch office in the United States,
(each, a "Purchasing Lender") all or any part of its rights and
obligations under this Agreement and the other Operative Agreements
pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit B, executed by such Purchasing Lender, such assigning Lender
(and, in the case of a Purchasing Lender that is not a Lender or an
affiliate thereof, subject to Section 9.1 of the Participation
Agreement, by the Borrower and the Agent) and delivered to the Agent
for its acceptance and recording in the Register; provided, that no
such assignment to a Purchasing Lender (other than any Lender or any
affiliate thereof) shall be in an aggregate principal amount less than
$5,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement and the Notes). Upon such
execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance,
(x) the Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding anything to
the contrary in this Agreement, the consent of the Borrower shall not
be required, and, unless requested by the relevant Purchasing Lender
and/or assigning Lender, new Notes shall not be required to be executed
and delivered by the Borrower, for any assignment which occurs at any
time when any of the events described in Section 6(g) shall have
occurred and be continuing.
(b) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not a Lender or an affiliate thereof, by the
Borrower and the Agent) together with payment to the Agent of a
registration and processing fee of $2,500 (which shall not be payable
by the Borrower or the Lessee, except as otherwise provided in
connection with an assignment requested in accordance with Section
2.11(b)), the Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) promptly after the effective date determined
pursuant thereto, record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Lenders and the Borrower. On or prior to such effective date, the
Borrower, at its own expense, shall execute and deliver to the Agent
new Notes (in exchange for the Notes of the assigning Lender), each in
an amount equal to the Commitment assumed or Loans purchased by the
relevant Purchasing Lender pursuant to such Assignment and Acceptance,
and, if the assigning Lender has retained a Commitment or any Loan
hereunder, new Notes to the order of the assigning Lender, each in an
amount equal to the Commitment or Loans retained by it hereunder. Such
new Notes shall be dated the effective date of the applicable
Assignment and Acceptance and shall otherwise be in the form of the
Notes replaced thereby.
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(c) Each Purchasing Lender (other than any Lender organized
and existing under the laws of the U.S. or any political subdivision in
or of the U.S.), by executing and delivering an Assignment and
Acceptance,
(i) agrees to execute and deliver to the Agent, as
promptly as practicable, four (4) signed copies (two (2) for
the Agent and two (2) for delivery by the Agent to the
Borrower) of Form 1001 or Form 4224 (or any successor form or
comparable form) (it being understood that if the applicable
form is not so delivered, payments under or in respect of this
Agreement may be subject to withholding and deduction);
(ii) represents and warrants to the Borrower and the
Agent that the form so delivered is true and accurate and
that, as of the effective date of the applicable Assignment
and Acceptance, each of such Purchasing Lender's lending
offices is entitled to receive payments of principal and
interest under or in respect of this Agreement without
withholding or deduction for or on account of any taxes
imposed by the U.S. Federal government;
(iii) agrees to annually hereafter deliver to each of
the Borrower and the Agent not later than December 31 of the
year preceding the year to which it will apply, two (2)
further properly completed signed copies of Form 1001 or Form
4224 (or any successor form or comparable form), as
appropriate, unless an event has occurred which renders the
relevant form inapplicable (it being understood that if the
applicable form is not so delivered, payments under or in
respect of this Agreement may be subject to withholding and
deduction);
(iv) agrees to promptly notify the Borrower and the
Agent in writing if it ceases to be entitled to receive
payments of principal and interest under or in respect of this
Agreement without withholding or deduction for or on account
of any taxes imposed by the U.S. or any political subdivision
in or of the U.S. (it being understood that payments under or
in respect of this Agreement may be subject to withholding and
deduction in such event);
(v) acknowledges that in the event it ceases to be
exempt from withholding and/or deduction of such taxes, the
Agent may withhold and/or deduct the applicable amount from
any payments to which such assignee Lender would otherwise be
entitled, without any liability to such assignee Lender
therefor; and
(vi) agrees to indemnify the Borrower and the Agent
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs or
expenses that result from such assignee Lender's breach of any
such representation, warranty or agreement.
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(d) Any Lender party to this Agreement may, from time to time
and without the consent of the Borrower or any other Person, pledge or
assign for security purposes any portion of its Loans or any other
interests in this Agreement and the other Credit Documents to any
Federal Reserve Bank.
9.9 THE REGISTER; DISCLOSURE; PLEDGES TO FEDERAL RESERVE BANKS.
(a) The Agent shall maintain for the benefit of the Lenders at
its address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders, the Commitments
of the Lenders, and the principal amount of the Loans owing to each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of clearly demonstrable error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable notice.
(b) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with
applicable law.
9.10 ADJUSTMENTS; SET-OFF.
(a) Except as otherwise expressly provided in Section 8.1
hereof and Section 8.7 of the Participation Agreement where, and to the
extent, one (1) Lender is entitled to payments prior to other Lenders,
if any Lender (a "Benefitted Lender") shall at any time receive any
payment of all or part of its Loans, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in Section 6(g), or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to
cause such Benefitted Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to
the event of such recovery, but without interest.
(b) In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, the Agent and each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly
waived, to set
23
<PAGE> 27
off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by the
Agent or such Lender (including without limitation by branches and
agencies of the Agent or such Lender wherever located) to or for the
credit or the account of the Borrower against and on account of the
obligations and liabilities of the Borrower to the Agent or such Lender
under this Agreement or under any of the other Operative Agreements,
including without limitation all interests in obligations of the
Borrower purchased by any such Lender pursuant to Section 9.10(a), and
all other claims of any nature or description arising out of or
connected with this Agreement or any other Operative Agreement,
irrespective or whether or not the Agent or such Lender shall have made
any demand and although said obligations, liabilities or claims, or any
of them, shall be contingent or unmatured.
9.11 COUNTERPARTS.
This Agreement may be executed by one (1) or more of the parties to
this Agreement on any number of separate counterparts (including without
limitation by telecopy), and all of said counterparts taken together shall be
deemed to constitute one (1) and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Agent.
9.12 SEVERABILITY.
Any provision of this Agreement which 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.
9.13 INTEGRATION.
This Agreement and the other Credit Documents represent the agreement
of the Borrower, the Agent, and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.
9.14 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH
CAROLINA.
24
<PAGE> 28
9.15 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO
JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY REFERENCE HEREIN,
MUTATIS MUTANDIS.
9.16 ACKNOWLEDGMENTS.
The Borrower hereby acknowledges that:
(a) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Credit Documents,
and the relationship between the Agent and the Lenders, on one (1)
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(b) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
9.17 WAIVERS OF JURY TRIAL.
THE BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.18 NONRECOURSE.
In addition to and not in limitation of Section 12.9 of the
Participation Agreement, anything to the contrary contained in this Agreement or
in any other Operative Agreement notwithstanding, no Exculpated Person shall be
personally liable in any respect for any liability or obligation hereunder or
under 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 this Agreement, the
Notes or any of the other Operative Agreements. The Agent and the Lenders agree
that, in the event any of them pursues any remedies available to them under this
Agreement, the Notes or any other Operative Agreement, neither the Agent nor the
Lenders shall have any recourse against the Borrower, nor any other 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 and the Lessee; but nothing contained herein shall be taken to
prevent recourse against or the enforcement of remedies against the Trust Estate
in respect of any and all liabilities, obligations and undertakings contained in
this Agreement, the Notes or any other Operative Agreement. The Agent and the
Lenders further agree that the Borrower shall not be responsible
25
<PAGE> 29
for the payment of any amounts owing hereunder (excluding principal and interest
(other than Overdue Interest) in respect of the Loans) (such non-excluded
amounts, "Supplemental Amounts") except to the extent that payments of
Supplemental Rent designated by the Lessee for application to such Supplemental
Amounts shall have been paid by the Lessee pursuant to the Lease (it being
understood that the failure by the Lessee for any reason to pay any Supplemental
Rent in respect of such Supplemental Amounts shall nevertheless be deemed to
constitute a default by the Borrower for the purposes of Section 6).
Notwithstanding the foregoing provisions of this Section 9.18, nothing in this
Agreement or any other Operative Agreement shall (a) constitute a waiver,
release or discharge of any obligation evidenced or secured by this Agreement or
any other Credit Document, (b) limit the right of the Agent or any Lender to
name the Borrower as a party defendant in any action or suit for judicial
foreclosure and sale under any Security Document, or (c) affect in any way the
validity or enforceability of any guaranty (whether of payment and/or
performance) given to the Lessor, the Agent or the Lenders, or of any indemnity
agreement given by the Borrower, in connection with the Loans made hereunder.
9.19 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 AND THAT
N.C. GEN. STAT. ss. 24-9 SHALL APPLY WITH RESPECT TO THIS AGREEMENT. TO THE
EXTENT N.C. GEN. STAT. ss. 24-9 IS HEREAFTER DEEMED NOT TO APPLY BY A COURT OF
COMPETENT JURISDICTION AND ANY PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED
BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND
INTEREST THEREON, THE FOLLOWING PROVISIONS OF THIS SECTION 9.19 SHALL APPLY. ANY
SUCH 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
AGREEMENT 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 THE AGENT OR ANY
LENDER SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST
WITH RESPECT TO THE OBLIGATIONS OWED
26
<PAGE> 30
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 THE BORROWER 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 NEITHER THE AGENT NOR ANY LENDER INTENDS TO CHARGE OR RECEIVE ANY
UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE
PAID TO THE AGENT OR ANY LENDER 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 AGREEMENT
SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED THE
MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
[signature pages follow]
27
<PAGE> 31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner
Trustee under the RFMD Real Estate Trust
1999-1
By: /s/ Val T. Orton
-----------------------------------
Name: Val T. Orton
Title: Vice President
[signature pages continue]
<PAGE> 32
FIRST UNION NATIONAL BANK, as the Agent
and a Lender
By: /s/ Jim Redman
-----------------------------------
Name: Jim Redman
Title: Senior Vice President
[signature pages end]
<PAGE> 33
Schedule 2.1
<TABLE>
<CAPTION>
Tranche A Tranche B
Commitment Commitment
---------- ----------
Name and Address of Lenders Amount Percentage Amount Percentage
- --------------------------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C>
First Union National Bank $38,250,000.00 100% $5,400,000.00 100%
First Union Capital Markets
301 South College Street, DC6
Charlotte, NC 28288-0166
Attn: Christy Lee Foster
Phone: 704-383-5398
Fax: 704-383-7989
TOTAL $38,250,000.00 100% $5,400,000.00 100%
</TABLE>
<PAGE> 34
Exhibit A-1
TRANCHE A NOTE
(RFMD Real Estate Trust 1999-1)
August ___, 1999
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1 (the "Borrower"), hereby unconditionally
promises to pay to the order of [LENDER] (the "Lender"), at the office of First
Union National Bank, located at c/o First Union Capital Markets Group, DC-6, 301
South College Street, Charlotte, North Carolina 28288-0166 or at such other
address as may be specified by First Union National Bank, in lawful money of the
United States of America and in immediately available funds, on the Maturity
Date, the aggregate unpaid principal amount of all Tranche A Loans made by the
Lender to the Borrower pursuant to Section 2.1 of the Credit Agreement (as
defined below). The Borrower agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in Section 2.8 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Tranche A Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof and
each conversion of all or a portion thereof to another Type. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Note (a) is one (1) of the Notes referred to in the Credit
Agreement dated as of August 13, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and First Union National Bank, as the Agent, (b) is subject to the
provisions of the Credit Agreement (including without limitation Section 9.18
thereof) and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. Reference is hereby made to the Credit
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one (1) or more of the Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
A1-1
<PAGE> 35
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, THE UNDERSIGNED AUTHORIZED OFFICER OF THE BORROWER
HAS EXECUTED THIS NOTE AS OF THE DATE FIRST SET FORTH ABOVE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner
Trustee under the RFMD Real Estate Trust
1999-1
By: ________________________________
Name: ________________________________
Title: ________________________________
A1-2
<PAGE> 36
Exhibit A-2
TRANCHE B NOTE
(RFMD Real Estate Trust 1999-1)
August ___, 1999
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1 (the "Borrower"), hereby unconditionally
promises to pay to the order of [LENDER] (the "Lender") at the office of First
Union National Bank located at c/o First Union Capital Markets Group, DC-6, 301
South College Street, Charlotte, North Carolina 28288-0166 or at such other
address as may be specified by First Union National Bank, in lawful money of the
United States of America and in immediately available funds, on the Maturity
Date, the aggregate unpaid principal amount of all Tranche B Loans made by the
Lender to the Borrower pursuant to Section 2.1 of the Credit Agreement (as
defined below). The Borrower agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in Section 2.8 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Tranche B Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof and
each conversion of all or a portion thereof to another Type. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Note (a) is one (1) of the Notes referred to in the Credit
Agreement dated as of August __, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and First Union National Bank, as the Agent, (b) is subject to the
provisions of the Credit Agreement (including without limitation Section 9.18
thereof) and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. Reference is hereby made to the Credit
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one (1) or more of the Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
A2-1
<PAGE> 37
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, THE UNDERSIGNED AUTHORIZED OFFICER OF THE BORROWER
HAS EXECUTED THIS NOTE AS OF THE DATE FIRST SET FORTH ABOVE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner
Trustee under the RFMD Real Estate Trust
1999-1
By: ________________________________
Name: ________________________________
Title: ________________________________
A2-2
<PAGE> 38
Exhibit B
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of ____________, 1999 (as
amended, modified, supplemented, restated and/or replaced from time to time, the
"Assignment and Acceptance") is between [____________________] (the "Assignor")
and [_______________] (the "Assignee").
Reference is made to the Credit Agreement, dated as of August ____,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as the Owner Trustee under the RFMD Real Estate
Trust 1999-1 (the "Owner Trustee" or the "Borrower"), the Lenders named therein
and FIRST UNION NATIONAL BANK, as the Agent. Unless otherwise defined herein,
terms defined in the Credit Agreement (or pursuant to Section 1 of the Credit
Agreement, defined in other agreements) and used herein shall have the meanings
given to them in or pursuant to the Credit Agreement.
The Assignor and the Assignee agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), a [___%] interest (the "Assigned Interest")
in and to the Assignor's rights and obligations under the Credit Agreement with
respect to the credit facility contained in the Credit Agreement as are set
forth on Schedule 1 hereto (the "Assigned Facility"), in a principal amount for
the Assigned Facility as set forth on Schedule 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Operative
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Operative Agreement or
any other instrument or document furnished pursuant thereto, other than that it
has not created any adverse claim upon the interest being assigned by it
hereunder and that such interest is free and clear of any such adverse claim;
(b) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower, or any other obligor or the
performance or observance by the Borrower, or any other obligor of any of their
respective obligations under the Credit Agreement or any other Operative
Agreement or any other instrument or document furnished pursuant hereto or
thereto; and (c) attaches the Note held by it evidencing the Assigned Facility
and requests that the Agent exchange such Note for a new Note payable to the
Assignee and (if the Assignor has retained any interest in the Assigned
Facility) a new Note payable to the Assignor in the respective amounts
B-1
<PAGE> 39
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received copies of the Operative Agreements, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, the other Operative Agreements or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Operative
Agreements or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and the other Operative Agreements to which
Assignee is a party and will perform in accordance herewith all the obligations
which by the terms of the Credit Agreement and the other Operative Agreements to
which Assignee is a party are required to be performed by it as a Lender
including without limitation, if it is organized under the laws of a
jurisdiction outside the U.S., its obligation pursuant to Section 11.2(e) of the
Participation Agreement.
4. The effective date of this Assignment and Acceptance shall be
[________, 19__] (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to Section 9.9 of the Credit Agreement,
effective as of the Effective Date (which shall not, unless otherwise agreed to
by the Agent, be earlier than five (5) Business Days after the date of such
acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including without limitation payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Agent for
periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Operative Agreements and shall be bound by the provisions thereof and (b)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Operative Agreements.
B-2
<PAGE> 40
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
B-3
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
[Name of Assignor]
By: ________________________________
Name: ________________________________
Title: ________________________________
[Name of Assignee]
By: ________________________________
Name: ________________________________
Title: ________________________________
Consented To:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner
Trustee under the RFMD Real Estate Trust
1999-1
By: ________________________________
Name: ________________________________
Title: ________________________________
FIRST UNION NATIONAL BANK, as the Agent
By: ________________________________
Name: ________________________________
Title: ________________________________
[consents required only to the extent expressly provided in Section 9.8 of the
Credit Agreement]
B-4
<PAGE> 42
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT,
DATED AS OF AUGUST __, 1999,
AMONG
FIRST SECURITY BANK, NATIONAL ASSOCIATION
NOT INDIVIDUALLY,
BUT SOLELY AS THE OWNER TRUSTEE,
THE LENDERS NAMED THEREIN
AND
FIRST UNION NATIONAL BANK, AS THE AGENT
FOR THE LENDERS (IN SUCH CAPACITY, THE "AGENT")
Name of Assignor: ________________________________
Name of Assignee: ________________________________
Effective Date of Assignment: ____________________
Credit Principal Commitment
Facility Assigned Amount Assigned Percentage Assigned
----------------- --------------- -------------------
_________________ $____________ _______________%
[Name of Assignor]
By: ________________________________
Name: ________________________________
Title: ________________________________
[Name of Assignee]
By: ________________________________
Name: ________________________________
Title: ________________________________
B-5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1999 AND THE CONDENSED STATEMENT OF
OPERATIONS OF RF MICRO DEVICES, INC. FOR THE SIX MONTHS ENDED SEPTEMBER 30,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-25-2000
<PERIOD-START> MAR-28-1999
<PERIOD-END> SEP-25-1999
<CASH> 43,116
<SECURITIES> 0
<RECEIVABLES> 38,310
<ALLOWANCES> 0
<INVENTORY> 31,532
<CURRENT-ASSETS> 159,538
<PP&E> 127,439
<DEPRECIATION> (12,421)
<TOTAL-ASSETS> 290,795
<CURRENT-LIABILITIES> 25,336
<BONDS> 0
0
0
<COMMON> 225,282
<OTHER-SE> 29,213
<TOTAL-LIABILITY-AND-EQUITY> 290,795
<SALES> 130,969
<TOTAL-REVENUES> 130,969
<CGS> 72,472
<TOTAL-COSTS> 98,069
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (729)
<INCOME-PRETAX> 35,212
<INCOME-TAX> 12,324
<INCOME-CONTINUING> 22,888
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,888
<EPS-BASIC> 0.29
<EPS-DILUTED> 0.27
</TABLE>
