EX-10.94 3 f72851ex10-94.txt EXHIBIT 10.94 1 EXHIBIT 10.94 EXECUTION COPY -------------------------------------------------------------------------------- PARTICIPATION AGREEMENT Dated as of March 30, 2001 among SYMANTEC CORPORATION, as the Lessee, THE SYMANTEC 2001 TRUST, as the Lessor, WILMINGTON TRUST COMPANY, THE VARIOUS BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS, OR THEIR INVESTMENT AFFILIATES WHICH ARE PARTIES HERETO FROM TIME TO TIME, as the Holders, THE VARIOUS BANKS, FINANCIAL INSTITUTIONS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES HERETO FROM TIME TO TIME, as the Lenders, FUJI BANK, LIMITED, as the Documentation Agent, KEYBANK NATIONAL ASSOCIATION, as the Syndication Agent, and THE BANK OF NOVA SCOTIA, as the Administrative Agent for the Lenders and the Holders and as the Sole Lead Arranger -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS

PAGE SECTION 1. LOANS AND HOLDER ADVANCES.....................................................1 1.1 Loans.........................................................................1 1.2 Holder Advances...............................................................2 1.3 Restrictions on Lease Balance.................................................2 1.4 Interest on Loans.............................................................3 1.5 Yield on Holder Certificates..................................................3 1.6 Construction Period Holder Yield and Lessor Commitment Fees...................4 1.7 Interest Period Selection Elections...........................................4 1.8 Prepayments...................................................................4 1.9 Payments......................................................................5 1.10 Commitment Fee................................................................5 SECTION 2. SUMMARY OF TRANSACTIONS.......................................................5 2.1 Operative Agreements..........................................................5 2.2 Property Purchase.............................................................5 2.3 Construction of Improvements; Lease of Property...............................6 SECTION 3. THE CLOSING...................................................................6 3.1 Closing Date..................................................................6 SECTION 4. FUNDING OF ADVANCES; PLEDGED COLLATERAL.......................................6 4.1 General.......................................................................6 4.2 Procedures for Funding........................................................6 4.3 Allocation of Advances Between Land and Improvements..........................7 4.4 Pledged Collateral............................................................8 SECTION 5. CONDITIONS OF THE CLOSING AND ADVANCES........................................8 5.1 Conditions to the Holders' and Lenders' Obligations to Make Loans and Holder Advances on the Initial Funding Date...................................8 5.2 Conditions to the Holders' and Lenders' Obligations to Make Loans and Holder Advances on each Property Closing Date................................10 5.3 Conditions to the Holders' and the Lenders' Obligations to Make Advances to Pay Project Costs for Construction on the Property or Properties...................................................................13

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PAGE 5.4 Completion Date Conditions...................................................15 5.5 Restrictions on Liens........................................................15 SECTION 6. REPRESENTATIONS AND WARRANTIES...............................................15 6.1 Representations and Warranties of the Trust Companies........................15 6.2 Representations and Warranties of the Borrower...............................17 6.3 Representations and Warranties of the Lessee.................................19 6.4 Representations and Warranties of the Lessee Upon each Funding Date..........24 6.5 Representations and Warranties of the Lessor Upon each Funding Date..........26 SECTION 7. PAYMENT OF CERTAIN EXPENSES..................................................27 7.1 Payment of Costs and Expenses................................................27 7.2 Brokers' Fees and Stamp Taxes................................................27 SECTION 8. OTHER COVENANTS AND AGREEMENTS...............................................28 8.1 Cooperation with the Lessee..................................................28 8.2 Covenants of the Trust Companies, the Trust, and the Holders.................28 8.3 Proceeds of Casualty.........................................................29 8.4 Lessee Covenants, Consent and Acknowledgment.................................30 8.5 Appointment of the Agent by the Lenders, the Holders and the Trust...........33 8.6 Release of Properties, etc...................................................34 SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.........................................34 9.1 Lessee's Credit Agreement Rights.............................................34 9.2 Lessee's Trust Agreement Rights..............................................35 SECTION 10. TRANSFER OF INTEREST.........................................................35 10.1 Restrictions on Transfer.....................................................35 10.2 Effect of Transfer...........................................................35 10.3 Disclosure of Information; Pledge Under Regulation A.........................36 SECTION 11. INDEMNIFICATION..............................................................37 11.1 General Indemnity............................................................37 11.2 Environmental Indemnity......................................................38 11.3 General Impositions Indemnity................................................39 11.4 LIBOR Lending Unlawful.......................................................44

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PAGE 11.5 Deposits Unavailable.........................................................44 11.6 Increased Costs, etc.........................................................44 11.7 Funding Losses...............................................................46 11.8 Capital Adequacy.............................................................46 11.9 Special Tax Indemnity........................................................47 11.10 Indemnity Payments in Addition to Lease Obligations..........................48 11.11 Lessor Indemnification.......................................................48 11.12 Indemnifications Provided by the Lessor in Favor of the Other Indemnified Persons..........................................................50 SECTION 12. DISTRIBUTION.................................................................50 12.1 Basic Rent...................................................................50 12.2 Purchase Payments by the Lessee..............................................51 12.3 Payment of Participant Balances..............................................51 12.4 Sales Proceeds of Remarketing of Properties..................................51 12.5 Supplemental Rent............................................................52 12.6 Distribution of Payments after Event of Default..............................52 12.7 Other Payments...............................................................53 12.8 Casualty and Condemnation Amounts............................................54 12.9 Order of Application.........................................................54 SECTION 13. MISCELLANEOUS................................................................54 13.1 Survival of Agreements.......................................................54 13.2 Notices......................................................................54 13.3 Counterparts.................................................................56 13.4 Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters..............56 13.5 Headings, etc................................................................58 13.6 Parties in Interest..........................................................58 13.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE.......58 13.8 Severability.................................................................59 13.9 Liability Limited............................................................59 13.10 Rights of the Lessee.........................................................60

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PAGE 13.11 Further Assurances...........................................................60 13.12 Financial Reporting/Tax Characterization.....................................60 13.13 Successors and Assigns.......................................................61 SECTION 14. RENEWALS.....................................................................61 14.1 Extensions of Maturity Date and Expiration Date..............................61

iv. 6 SCHEDULES 1.2 - Holder Commitments and Addresses 1.9 - Agent's Payment Address EXHIBITS A - Form of Requisition - Section 4.2 B - Form of Lessee's Secretary's Certificate - Sections 5.1(e), (f) and (i) C - Form of Lessee's Officer's Certificate - Section 5.1(g) D - Form of Trust's Officer's Certificate - Section 5.1(p) E - Form of Lessee Completion Certificate - Section 5.4(b) F - Form of Lessee's Officer's Compliance Certificate - Section 8.4(a)(i) ANNEX A - Rules of Usage and Definitions v. 7 EXECUTION COPY PARTICIPATION AGREEMENT THIS PARTICIPATION AGREEMENT, dated as of March 30, 2001 (as amended, extended, supplemented, modified or restated from time to time, this "Agreement"), is entered into by and among SYMANTEC CORPORATION, a Delaware corporation (the "Lessee" or "Construction Agent"), THE SYMANTEC 2001 TRUST, a Delaware business trust (the "Trust," "Borrower" or "Lessor"), the entity serving as trustee of the Trust (together with any institutional co-trustee and any successor trustee, the "Trust Companies"), the various banks, financial institutions and institutional lenders, or their investment affiliates, which are party hereto from time to time as holders of Certificates (individually, a "Holder" and collectively, the "Holders"), the various banks, financial institutions and institutional lenders which are party hereto from time to time as lenders (individually, a "Lender" and collectively, the "Lenders"), FUJI BANK, LIMITED, as the documentation agent, KEYBANK NATIONAL ASSOCIATION as the syndication agent and THE BANK OF NOVA SCOTIA, as the administrative agent for the benefit and on behalf of the Lenders and with respect to the Security Documents, as agent for the benefit and on behalf of the Lenders and the Holders, to the extent of their respective interests, and as the Sole Lead Arranger (in such capacity, the "Agent"). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in ANNEX A. In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. LOANS AND HOLDER ADVANCES. 1.1 LOANS. (a) 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 Trust from time to time in an aggregate principal amount of up to $62,400,000 in order for the Trust to acquire each Property to develop the Land related thereto, and to construct the Improvements thereon in accordance with the Construction Agency Agreement, and for other purposes described herein, and in consideration of the receipt of proceeds of the Loans, the Trust will issue the Notes. The Loans shall be made and the Notes shall be issued pursuant to the Credit Agreement. Pursuant to SECTION 4 and Section 2 of the Credit Agreement, the Loans will be made to the Trust at the request of the Construction Agent, in consideration for the Construction Agent's agreement, for the benefit of the Holders, pursuant to the Construction Agency Agreement, to purchase each Property and to develop the Land related thereto and to construct the Improvements thereon in accordance with the applicable Plans and Specifications. (b) The Loans and the obligations of the Trust under the Credit Agreement shall be secured by, inter alia, (i) a first priority assignment of the Lease, granted pursuant to the Assignment of Lease and consented to by the Lessee pursuant to the Consent to Lease Assignment, (ii) a first priority assignment of the Construction Agency Agreement and all Construction Agency Agreement Supplements thereto granted pursuant to the Contract 1 8 Assignment and consented to by the Construction Agent pursuant to the Consent to Contract Assignment; and (iii) a first priority mortgage lien (subject to the Permitted Exceptions) on each Property and the Lease thereof pursuant to a Deed of Trust joined by the Lessee. 1.2 HOLDER ADVANCES. (a) Subject to the terms and conditions of this Agreement and the other Operative Agreements, including the satisfaction of all applicable conditions precedent set forth in SECTION 5, and in reliance on the representations and warranties of each of the parties hereto contained herein or made pursuant hereto, on each Funding Date, each Holder shall make an advance of immediately available funds (each, a "Holder Advance"), on a pro rata basis, to the Trust, based on such Holder's Holder Commitment as set forth on SCHEDULE 1.2; provided, that the Agent shall have received a Requisition from the Construction Agent in accordance with SECTION 4. The aggregate amount of all Holder Advances shall be not less than four percent (4.0%) of the amount of all Advances requested; provided, that no Holder shall be obligated to make any Holder Advance if, after giving effect to the proposed Holder Advance, the outstanding aggregate amount of the Holder Advances of such Holder would exceed such Holder's Holder Commitment; and provided, further, that the aggregate amount of Holder Advances shall not, at any time, exceed the aggregate amount of all Holder Commitments. (b) No prepayment or any other payment with respect to any Advance shall be permitted if such prepayment or payment would cause the outstanding Holder Advances to equal less than four percent (4.0%) of the outstanding amount of all Advances, except in connection with the termination or expiration of the Term, or in connection with the exercise of remedies relating to the occurrence of an Event of Default. To the extent the Trust, in its capacity as Borrower under the Credit Agreement, shall have elected to terminate or reduce the amount of the aggregate Lender Commitments pursuant to Section 2.4(b) of the Credit Agreement, a pro rata election shall be deemed to have been made with respect to the Holder Commitment. On any date on which the aggregate Lender Commitments shall be reduced to zero ($0) as a result of a Credit Agreement Event of Default, the aggregate Holder Commitments shall also automatically be reduced to zero ($0) and the Trust shall prepay the Holder Advances in full, together with accrued but unpaid Holder Yield thereon and all other amounts owing under the Certificates. (c) 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. 1.3 RESTRICTIONS ON LEASE BALANCE. The Lease Balance shall not exceed the lesser of (x) the Estimated Project Costs and (y) 110 percent (110.0%) of the Fair Market Sales Value of any Property, as set forth in the Appraisal of such Property delivered pursuant to SECTION 5.2. The Trust shall use the Holder Advances to pay a portion of the Project Costs simultaneously and pro rata with the fundings by the Lenders. 2 9 1.4 INTEREST ON LOANS. (a) Each Loan shall accrue interest computed and payable in accordance with the terms of the Credit Agreement. Each Loan shall become due and payable at the dates and times provided under the Credit Agreement. (b) The Lessor shall, in accordance with SECTION 12, distribute the Debt Basic Rent and all other amounts due with respect to the Loans paid to the Lessor by the Lessee under the Lease from time to time. (c) Interest accruing at the Overdue Rate shall be payable on demand. 1.5 YIELD ON HOLDER CERTIFICATES. (a) The amount of the Holder Advances outstanding from time to time shall accrue yield ("Holder Yield") at the Yield Rate, calculated using the actual number of days elapsed and, when the Yield Rate is based on the Adjusted LIBOR, a 360-day year basis and, if calculated at the ABR, a 360-day year basis if the ABR is calculated at the Federal Funds Effective Rate, and a 365-, or, if applicable, 366-, day year basis if the ABR is calculated at the Base Rate. (b) Each Holder shall receive its pro rata portion of the Holder Yield on Holder Advances from the Trust Estate. Payment of Holder Yield to each Holder shall be made on each Scheduled Interest Payment Date, or as otherwise provided herein, in the Trust Agreement or in the Credit Agreement. If not repaid sooner, the outstanding aggregate amount of Holder Advances shall be due in full on the Maturity Date. On the Maturity Date, the Trust shall pay to each Holder its portion of the Holder Advances then due, together with all accrued but unpaid Holder Yield and all other amounts due to such Holder from the Trust. (c) Holder Yield on outstanding Holder Advances shall be due and payable by the Holders during the Construction Period as provided in SECTION 1.6 and thereafter the Trust shall distribute to the Holders the Holder Yield and all other amounts due with respect to the Holder Advances paid to the Trust by the Lessee under the Lease, provided, that Holder Yield accruing at the Overdue Rate shall be payable on demand and (ii) each prepayment of Holder Advances shall be accompanied by accrued Holder Yield to the date of such prepayment on the amount prepaid and breakage costs, if any. (c) The calculation of Holder Yield shall be made by the Agent, such calculation being conclusive and binding on the Trust and the Holders in the absence of manifest error. The Agent shall distribute, in accordance with SECTION 12, the Lessor Basic Rent and all other amounts due with respect to the Holder Advances paid to the Lessor by the Lessee under the Lease or the other Operative Agreements from time to time. (e) If all or any portion of the Holder Advances, any Holder Yield payable thereon, or any other amount payable hereunder shall not be paid within three (3) days after the same is due (whether at stated maturity, acceleration thereof or otherwise), such overdue amount shall, without limiting the rights of the Holders under any Operative Agreement, bear interest at a rate per annum equal to the Overdue Rate, in each case from the date of nonpayment until paid 3 10 (whether before or after judgment). Upon the occurrence, and during the continuance of an Event of Default, the amount of, and, to the extent permitted by law, interest on the Loans and Holder Yield on the Holder Advances and any other amounts owing hereunder or under the other Operative Agreements shall bear interest, payable on demand, at a per annum rate equal to the Overdue Rate. 1.6 CONSTRUCTION PERIOD HOLDER YIELD AND LESSOR COMMITMENT FEES. During the Construction Period, on each date which is one (1) Business Day prior to any date on which the Holders are entitled to a payment on account of Holder Yield or their pro rata share of the Commitment Fee, the Construction Agent shall be deemed to have requested that the Holders make Holder Advances, with an Interest Period of one month, in an amount equal to their respective Holder Yield or Commitment Fee due and payable on such date solely for the purpose of paying such Holder Yield or Commitment Fee which are then due and payable, which Holder Advances shall not be paid to the Construction Agent or any third party under the Operative Agreements but shall be capitalized as part of Project Costs. 1.7 INTEREST PERIOD SELECTION ELECTIONS. By delivering an Interest Period Selection Notice to the Trust and the Agent with respect to Holder Advances and Loans, respectively, the Lessee may from time to time during the Term irrevocably select, on not less than three (3) nor more than five (5) Business Days' notice (other than the initial Interest Period with respect to the Advance to be made on the Closing Date, which such Advance is to bear interest at a rate equal to the ABR and notice may be given on the Closing Date), the duration for the next succeeding Interest Period; provided, however, that (a) in the absence of a delivery of an Interest Period Selection Notice with respect to any Loan or Holder Advance at least three (3) Business Days before the last day of the then current Interest Period with respect thereto, the Lessee shall be deemed to have selected that such Loan or Holder Advance have an Interest Period of one (1) month, (b) each such selection shall be prorated among the applicable outstanding Loans and Holder Advances of all Financing Parties, (c) the outstanding Loans and Holder Advances may not be apportioned into more than three (3) separate Interest Periods at any one time, and (d) only Interest Periods of one month shall be permitted during the Construction Period. Each Interest Period Selection Notice so delivered or deemed delivered by the Lessee shall be deemed an effective election by the Borrower of the method for computing interest on the Loans under the Credit Agreement. 1.8 PREPAYMENTS. (a) VOLUNTARY PREPAYMENTS. The Lessee shall have the right to prepay an amount equal to the aggregate outstanding Lease Balance in whole, but not in part, pursuant to the exercise of the purchase options permitted under the Lease or the Construction Agency Agreement. (b) MANDATORY PREPAYMENTS. (i) If at any time the sum of the aggregate amount of outstanding Loans and Holder Advances shall exceed the Aggregate Commitment Amount, the Lessee shall immediately make payment on the Loans or Holder Advances in an amount sufficient to eliminate such excess. Payments required to be made hereunder shall be applied first to ABR 4 11 Loans or ABR Holder Advances and second to LIBOR Loans or LIBOR Holder Advances in direct order of their Interest Period maturities. (ii) The Borrower shall prepay or repay the Loans and the Holder Advances with the proceeds of all amounts payable by the Lessee pursuant to Article XV, XVI, XVII, XX or XXI of the Lease or Articles IV or V of the Construction Agency Agreement, and such prepayments or repayments shall be applied to the Loans and the Holder Advances in the manner set forth in SECTION 12. (c) NOTICE. The Lessee will provide irrevocable notice to the Agent of any prepayment of Loans or Holder Advances at least three (3) Business Days prior to the date of prepayment. 1.9 PAYMENTS. All payments (including prepayments) to be made by the Lessee hereunder and under any other Operative Agreement, whether on account of Holder Advances, Holder Yield, Loans or interest thereon or otherwise, shall be made without setoff, deduction or counterclaim and shall be made prior to 1:00 p.m., New York City time, on the due date thereof to the Agent for the account of the Lenders and the Holders, at the Agent's office specified in SCHEDULE 1.9, in Dollars and in immediately available funds. Subject to the definition of "Interest Period" in ANNEX A, whenever any payment under this Agreement or any other Operative Agreement 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. 1.10 COMMITMENT FEE. Each Holder and each Lender shall be entitled to receive its pro rata share of the Commitment Fee. Such fees shall be payable monthly in arrears based on the daily utilization for that month as calculated by the Agent and (a) in the case of that portion of the Commitment Fee payable to the Holder, pursuant to SECTION 1.6, and (b) in the case of that portion of the Commitment Fee payable to the Lender, pursuant to Section 2.3(b) of the Credit Agreement. SECTION 2. SUMMARY OF TRANSACTIONS. 2.1 OPERATIVE AGREEMENTS. On the Closing Date, each of the parties hereto shall execute and deliver, as applicable, this Agreement, the Construction Agency Agreement, the Lease, the Credit Agreement, the Notes, the Trust Agreement, the Certificates, the Pledge Agreement, the Deed of Trust and such other Operative Agreements and documents, instruments, certificates and opinions of counsel as agreed to by the parties hereto. 2.2 PROPERTY PURCHASE. On each Property Closing Date and subject to the terms and conditions of this Agreement, (a) the Holders will each make Holder Advances in accordance with SECTIONS 1 and 4 and the terms and provisions of the Trust Agreement; (b) the Lenders will each make Loans in accordance with SECTIONS 1 and 4 and the terms and provisions of the Credit Agreement; (c) the Trust will purchase and acquire good and marketable title by Deed or Deeds the Property or Properties identified by the Construction Agent in any Construction Agency 5 12 Agreement Supplement, and grant the Lessor and/or the Agent a lien on such Property by execution of the required Security Documents. 2.3 CONSTRUCTION OF IMPROVEMENTS; LEASE OF PROPERTY. On each Property Closing Date, the Lessor and the Construction Agent will execute and deliver (i) a Construction Agency Agreement Supplement, pursuant to which the Lessee will agree to act as the Construction Agent and to perform the Lessor's obligations under the applicable Construction Contracts, (ii) a Lease Supplement, pursuant to which the Lessor will lease, for the Term, all of its right, title and interest in the applicable Property to the Lessee, and (iii) a Memorandum of Lease. SECTION 3. THE CLOSING. 3.1 CLOSING DATE. All documents and instruments required to be delivered on the Closing Date and any subsequent Property Closing Date shall be delivered at the offices of Cooley Godward LLP, San Francisco, California or at such other location as may be determined by the Trust, the Agent and the Lessee. SECTION 4. FUNDING OF ADVANCES; PLEDGED COLLATERAL. 4.1 GENERAL. To the extent funds have been made available to or advanced to the Trust as Loans by the Lenders and as Holder Advances by the Holders, the Trust will make advances of such funds to the Construction Agent from time to time in accordance with the terms and conditions of this Agreement and the other Operative Agreements in order to provide sufficient funds to: (i) allow the Trust, at the direction of the Lessee, to acquire the Property in accordance with the terms of this Agreement and the other Operative Agreements; (ii) allow the Trust, on behalf of the Lessee, to pay Transaction Expenses; (iii) permit the Construction Agent to construct the Improvements in accordance with the applicable Plans and Specifications and the terms of the Construction Agency Agreement and any Construction Agency Agreement Supplement thereto, the Lease, the applicable Construction Contracts and the other Operative Agreements; and (iv) pay all other Project Costs. The Participants shall have no obligation to fund Loans or Holder Advances, and the Trust shall have no obligation to fund any Advance to pay for Property Acquisition Costs, the construction of any Improvements or other Project Costs until the applicable conditions precedent set forth in SECTION 5 have been satisfied. 4.2 PROCEDURES FOR FUNDING. (a) Not less than three (3) Business Days prior to each proposed Funding Date other than the initial Advance to be made on the initial Funding Date, where such Advance is to bear interest and Holder Yield at a rate equal to the ABR, the Construction Agent shall deliver to the Trust and the Agent a requisition, appropriately completed, in the form of EXHIBIT A (a "Requisition"). (b) Each Requisition shall: (i) be irrevocable, (ii) request funds in an amount that is not in excess of the total aggregate amount of the Available Commitments at such time, and (iii) request that the Holders make Holder Advances and that the Lenders make Loans to the Trust for the payment of Property Acquisition Costs or other Project Costs which were not the subject of, and funded pursuant to, a prior Requisition, in each case as specified in such 6 13 Requisition. The Lessee shall not request more than one (1) Funding Date with respect to any single Property during any calendar month. (c) Subject to the satisfaction of the applicable conditions precedent set forth in SECTION 5, (i) the Lenders shall make Loans based on their respective Lender Commitments to the Borrower in an aggregate amount equal to ninety-six percent (96%) of the amount specified in any Requisition plus any additional amount of Transaction Expenses as referenced in SECTION 7 and any additional amount respecting any indemnity payment as referenced in SECTION 11.12, unless any such funding of Transaction Expenses or any indemnity payment is declined in writing by each Lender and each Holder (such decision to be in the sole discretion of each Lender and each Holder) up to an aggregate principal amount equal to the aggregate of the Available Lender Commitments; (ii) the Holders shall make Holder Advances based on their respective Holder Commitments in an aggregate amount equal to four percent (4%) of the amount specified in such Requisition plus any additional amount of Transaction Expenses as referenced in SECTION 7 and any additional amount respecting any indemnity payment as referenced in SECTION 11.12, unless any such funding of Transaction Expenses or any indemnity payment is declined in writing by each Lender and each Holder (such decision to be in the sole discretion of each Lender and each Holder), up to an amount equal to the Available Commitments; and (iii) the total amount of such Loans and Holder Advances made on such date shall (x) be used by the Trust to pay Project Costs or (y) be advanced by the Trust on the date of such Advance to the Lessee to pay Project Costs, as applicable. The Construction Agent agrees that it cannot incur Project Costs (i) unless the Lessee, as Construction Agent, has complied with the applicable provisions of SECTION 5 or (ii) which would result in the Lease Balance exceeding the Aggregate Commitment Amount. Notwithstanding that the Operative Agreements state that Advances shall be directed to the Trust, each Advance shall in fact be directed to the Lessee (for the benefit of the Trust) and applied by the Lessee (for the benefit of the Trust) pursuant to the requirements imposed on the Trust under the Operative Agreements. (d) All Operative Agreements which are to be delivered to the Trust, the Agent, the Lenders or the Holders shall be delivered to the Agent, on behalf of the Trust, the Agent, the Lenders or the Holders, and such items shall be delivered with originals sufficient for the Trust, the Agent, each Lender and each Holder (except for Notes, certificates, bills of sale, and chattel paper originals, with respect to which in each case there shall be only one original). All other items which are to be delivered to the Trust, the Agent, the Lenders or the Holders shall be delivered to the Agent, on behalf of the Trust, 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 Trust, any Lender or any Holder, the Agent shall provide a copy of such item to the party requesting it. (e) Notwithstanding the completion of a Property Closing Date, each condition precedent set forth in SECTION 5.2 may be subsequently enforced by the Agent (unless such has been expressly waived in writing by the Agent). 4.3 ALLOCATION OF ADVANCES BETWEEN LAND AND IMPROVEMENTS. In the event the Fair Market Sales Value of any Land purchased and leased pursuant to the Operative Agreements, as set forth in the Appraisal, is greater than twenty-five percent (25.0%) of the aggregate Fair Market Sales Value of such Property as set forth in the Appraisal, Lessor shall 7 14 determine a separate Land Investment Balance and Improvement Investment Balance for such Property, and Lessee shall execute and deliver a separate Lease Supplement for each of the Land and Improvements. 4.4 PLEDGED COLLATERAL. Lessee shall deliver Pledged Collateral to and maintain such Pledged Collateral with the Collateral Agent or the Depositary Bank, as applicable, in the amount set forth in and pursuant to the terms and conditions of the Pledge Agreement. No Advances shall be made unless the Agent shall have received on the Funding Date for such Advance confirmation from the Depositary Bank that the Value of the Pledge Collateral equals or exceeds that amount which is required by Section 3.1(a) of the Pledge Agreement. The Pledged Collateral shall be held and administered in accordance with the Pledge Agreement. SECTION 5. CONDITIONS OF THE CLOSING AND ADVANCES. 5.1 CONDITIONS TO THE HOLDERS' AND LENDERS' OBLIGATIONS TO MAKE LOANS AND HOLDER ADVANCES ON THE INITIAL FUNDING DATE. The agreement of each Lender to make Loans, and of each Holder to make Holder Advances on the initial Funding Date, and the agreement of the Trust to acquire the Property or Properties, as applicable, on the initial Funding Date, is subject to the satisfaction, immediately prior to or concurrently therewith, of the following conditions precedent: (a) OPERATIVE AGREEMENTS. Each of the Operative Agreements entered into on the Closing Date or subsequently shall have been duly authorized, executed, acknowledged (if required) and delivered by the parties thereto and shall be in full force and effect, and no Default shall exist thereunder (both before and after giving effect to the transactions contemplated by the Operative Agreements), and the Agent, the Lenders, the Holders and the Lessor shall have received a fully executed copy of each of the Operative Agreements (other than the Notes of which the Agent shall have received the originals). (b) TAXES. All taxes, fees and other charges in connection with the execution, delivery, and, where applicable, recording, filing and registration of the Operative Agreements shall have been paid or provisions for such payment shall have been made to the reasonable satisfaction of the Agent and the Lessor. (c) LITIGATION. No action or proceeding shall have been instituted before any Governmental Authority, nor shall any order, judgment or decree have been issued or proposed to be issued by any Governmental Authority (i) to set aside, restrain, enjoin or prevent the full performance of this Agreement, any other Operative Agreement or any of the transactions contemplated hereby or thereby or (ii) which is reasonably likely to have a Material Adverse Effect. (d) LEGAL REQUIREMENTS. In the opinion of the Agent, the Lessor and their respective counsel, the transactions contemplated by the Operative Agreements do not and will not violate in any material respect any Legal Requirements and do not and will not subject the Lenders, the Holders or the Lessor to any adverse regulatory prohibitions or constraints. (e) CORPORATE PROCEEDINGS OF THE LESSEE. The Agent and the Lessor shall have received a copy of the resolutions or minutes of the Board of Directors of the Lessee, in 8 15 form and substance reasonably satisfactory to the Agent and the Lessor, authorizing the execution, delivery and performance of this Agreement and the other Operative Agreements to which it is a party, certified by the Secretary or an Assistant Secretary of the Lessee as of the Closing Date, which certification shall be in the form attached as EXHIBIT B. (f) LESSEE INCUMBENCY CERTIFICATE. The Agent and the Lessor shall have received a certificate of the Lessee, dated as of the Closing Date, as to the incumbency and signature of the officers of the Lessee executing any Operative Agreement, executed by the Secretary or any Assistant Secretary of the Lessee, which certificate shall be in the form attached as EXHIBIT B. (g) LESSEE'S OFFICER'S CERTIFICATE. The Agent and the Lessor shall each have received a certificate of the president or any vice president of the Lessee and Construction Agent, dated as of the Closing Date, in the form attached as EXHIBIT C, stating that (i) each and every representation and warranty of the Lessee and the Construction Agent contained in the Operative Agreements to which it is a party is true and correct in all material respects on and as of the Closing Date; (ii) no Default or Event of Default has occurred and is continuing under any Operative Agreement; (iii) each Operative Agreement to which the Lessee and the Construction Agent are a party is in full force and effect with respect to it; and (iv) the Lessee and the Construction Agent have duly performed and complied in all material respects with all covenants, agreements and conditions contained herein or in any Operative Agreement required to be performed or complied with by each on or prior to the Closing Date. (h) GOOD STANDING. The Agent and the Lessor shall have received (i) Certificates of the Secretaries of the States of Delaware, Oregon and California, each dated as of a recent date stating that the Lessee is a corporation in good legal standing under the laws of such states, and (ii) a Certificate of the Franchise Tax Board of the State of California dated as of a recent date stating that the Lessee is in good standing with such agency. (i) LESSEE'S CORPORATE DOCUMENTS. The Agent and the Lessor shall have received true and complete copies of the certificate of incorporation and bylaws of the Lessee, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Lessee, which certification shall be in the form attached as EXHIBIT B. (j) LEGAL OPINIONS. (i) The Agent and the Lessor shall have received executed and customary legal opinions of Pillsbury Winthrop LLP, general counsel to the Lessee and Hershner, Hunter, Andrews, Neill & Smith, LLP, Oregon counsel to the Lessee, each in form and substance acceptable to the Agent. (ii) The Lessee, the Agent, the Holders and the Lenders shall have received the executed legal opinion of Richards, Layton & Finger, counsel to the Lessor, in form and substance acceptable to the Agent. (k) LIEN SEARCHES. The Lessor and the Agent shall have received the results of a recent search by a Person reasonably satisfactory to the Agent, of the Uniform Commercial Code, judgement and tax lien filings which may have been filed in States of Oregon, Delaware, 9 16 California and the Commonwealth of Virginia with respect to personal property of the Lessee, and the results of such search shall be satisfactory to the Lessor and the Agent. (l) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Lessee and the Lessor contained herein and in each of the other Operative Agreements shall be true and correct in all material respects. (m) PERFORMANCE OF AGREEMENTS. The parties hereto and thereto shall have performed in all material respects their respective agreements to be performed on or prior to the initial Funding Date contained herein and in the other Operative Agreements on or prior to the initial Funding Date. (n) REQUISITION. The Agent and the Lessor shall have received a fully-executed counterpart of a Requisition, appropriately completed. (o) FEES. The Agent, the Lessor, the Holders and the Lenders shall have received the fees pursuant to the Fee Letter. (p) LESSOR CERTIFICATE. The Agent shall have received a certificate, duly executed on behalf of the Lessor, dated as of the Closing Date, in the form attached as EXHIBIT D, stating that (i) each and every representation and warranty of the Lessor contained in the Operative Agreements to which it is a party is true and correct on and as of the Closing Date, (ii) each Operative Agreement to which it is a party is in full force and effect with respect to it, and (iii) Lessor has duly performed and complied with all covenants, agreements and conditions contained herein and in any other Operative Agreement required to be performed or complied with by it on or prior to the Closing Date. (q) TRUST COMPANY CERTIFICATES. The Agent shall have received from each Trust Company (i) a certificate of the Secretary, an Assistant Secretary, Trust Officer or Vice President of the Trust Company in such form as is acceptable to the Agent, attaching and certifying (A) the resolutions duly authorizing the execution, delivery and performance by such Trust Company of each of the Operative Agreements to which it is or will be a party, (B) such Trust Company's articles of association or other equivalent charter documents, and its bylaws, as the case may be, certified as of a recent date by an appropriate officer of such Trust Company, and (C) the incumbency and signature of persons authorized to execute and deliver on such Trust Company's behalf the Operative Agreements to which it is a party and (ii) a certificate from the applicable governmental authority indicating that the Trust Company is in good standing. 5.2 CONDITIONS TO THE HOLDERS' AND LENDERS' OBLIGATIONS TO MAKE LOANS AND HOLDER ADVANCES ON EACH PROPERTY CLOSING DATE. The agreement of each Lender to make Loans, and of each Holder to make Holder Advances on each Property Closing Date, including the initial Property Closing Date, and the agreement of the Trust to acquire the Property or Properties, as applicable, on such Property Closing Date, is subject to the satisfaction, immediately prior to or concurrently therewith, of the following additional conditions precedent: (a) GOVERNMENTAL APPROVALS. All necessary (or, in the reasonable opinion of the Agent, the Lessor and their respective counsel, advisable) Governmental Actions shall have been obtained or made and be in full force and effect with respect to each Property. 10 17 (b) CONSENTS, LICENSES AND APPROVALS. The Agent and the Lessor shall have received a certificate of the President or a Vice President of the Lessee stating that any consents, authorizations, licenses and filings required in connection with this Agreement and the acquisition of the Property or Properties, as applicable, are in full force and effect, except such as are not required for Completion of any Improvements in accordance with the terms of the Operative Agreements. Each such consent, authorization, license and filing shall be in form and substance reasonably satisfactory to the Agent and the Lessor. (c) ENVIRONMENTAL AUDIT. (i) The Lessor and the Agent shall have received not less than ten (10) days prior to such Property Closing Date an Environmental Audit with respect to the Property or Properties, as applicable, being acquired on such Property Closing Date, prepared by the Environmental Engineer, and the results of such Environmental Audit shall be in form and substance satisfactory to the Lessor and the Agent, it being understood and agreed that the Lessee agrees to remedy any environmental conditions requiring further action to comply with Environmental Law indicated in such Environmental Audit within ninety (90) days following such Property Closing Date, and to deliver to the Agent and the Lessor, upon completion of such remedial action, a written statement by the Environmental Engineer indicating that all such environmental conditions have been remedied in compliance with Environmental Laws; and (ii) the Lessor and the Agent shall have received letters from the Environmental Engineer stating, among other things, that the Agent, the Lenders, the Holders and the Lessor may rely in all respects on such Environmental Audit and other environmental reports with respect to the Property or Properties, as applicable, which have been prepared by such firm as if they were addressed to them in all respects. (d) SURVEY. The Lessor and the Agent shall have received, and the Title Company shall have received, a survey of the Property or Properties, as applicable, certified to the Lessor and the Title Company in a manner satisfactory to them, dated as of a date within three (3) months of such Property Closing Date, by an independent professionally licensed land surveyor satisfactory to the Agent, which survey shall be made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 1999, and, without limiting the generality of the foregoing, there shall be surveyed and shown on such survey the following: (i) the locations on such Property of all the buildings, structures and other improvements, if any, and the established building setback lines; (ii) the lines of streets abutting such Property; (iii) all access and other easements appurtenant to such Property; (iv) all roadways, paths, driveways, easements, encroachments and overhanging projections and similar encumbrances affecting such Property, whether recorded, apparent from a physical inspection of the Property or otherwise known to the surveyor; (v) any encroachments on any adjoining property by the building, structures and improvements on such Property; and (vi) if such Property is described as being on a filed map, a legend relating the survey to said map. (e) APPRAISAL. The Lessor and the Agent shall have received an Appraisal covering the Property or Properties, as applicable, which Appraisal shall show, as of the projected Completion Date for such Property or Properties, the Fair Market Sales Value of such 11 18 Property or Properties, and such Appraisal shall meet the other applicable requirements set forth in the definition of the term "Appraisal" contained in ANNEX A. (f) TITLE. Title to the Property or Properties, as applicable, being acquired on such Property Closing Date shall conform to the representations and warranties set forth in SECTION 6.3. (g) TITLE INSURANCE. (i) The Agent and Lessor shall have received an owner's title policy, or an unconditional written undertaking of the Title Company to issue such insurance, dated as of such Property Closing Date, for the Property or Properties being acquired on such Property Closing Date, insuring the Lessor that the Lien of the Lease is a first and primary Lien in the Lessee's interest in such Property or Properties; and the Lessor shall have received evidence reasonably satisfactory to it that all premiums in respect of such policy have been paid or provision made therefor. (ii) The Agent shall have received with respect to the applicable Deed of Trust a mortgage title policy or an unconditional written undertaking of the Title Company to issue such insurance dated as of such Property Closing Date; such policy shall (i) be in an amount equal to the amount attributable to such Property (with a pending disbursements clause); (ii) be issued at ordinary rates; (iii) insure that such Deed of Trust insured thereby creates a valid first Lien on the Lessor's interest in the Lease and in the fee title to such Property or Properties, free and clear of all defects and encumbrances, except Permitted Exceptions; (iv) name the Agent for the benefit of the Lenders as the insured thereunder; (v) be in the form of ALTA Loan Policy - 1992; (vi) contain such endorsements and affirmative coverage as the Agent may reasonably request, including mechanics' lien coverage, to the extent such endorsements and coverage are available; and (vii) be issued by the Title Company; and the Agent shall have received evidence reasonably satisfactory to it that all premiums in respect of such policy, and all charges for mortgage recording tax with respect to such Deed of Trust have been paid or provision made therefor. (h) TITLE DOCUMENTS. The Lessor and the Agent shall have received evidence in form and substance satisfactory to them that all of the requirements of Article 14 of the Lease shall have been satisfied. (i) ACTIONS TO TRANSFER OWNERSHIP AND PERFECT LIENS. Each applicable Deed, Memorandum of Lease, Assignment of Lease, Consent to Assignment of Leases and Rents and Deed of Trust shall have been delivered to the Title Company which shall have undertaken an obligation to promptly record the same with the appropriate Governmental Authorities in the order set forth in this paragraph, and the UCC Financing Statements with respect to the Property or Properties shall have been delivered to the Title Company which shall have undertaken an obligation to promptly file the same with the appropriate Governmental Authorities. The Agent shall have received evidence in form and substance satisfactory to it that arrangements have been made for the completion of all filings, recordings, registrations and other actions, including the filing of duly executed financing statements on form UCC-1, and each Deed of Trust necessary, 12 19 or in the opinion of the Agent, desirable to perfect the Liens created by the Security Documents shall have been completed. (j) SUFFICIENT FUNDS. Based on the Budget, the Available Commitments will be sufficient to finance the purchase of the Property or Properties, as applicable, and the construction of the Improvements and to pay the other Project Costs. (k) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Lessee, the Lessor and the Trust Company contained herein and in each of the other Operative Agreements shall be true and correct in all material respects. (l) REQUISITION. To the extent not already provided on such Property Closing Date, the Agent and the Lessor shall have received a fully-executed counterpart of a Requisition, appropriately completed. (m) LESSOR CERTIFICATE. To the extent not already provided on the applicable Property Closing Date, the Agent shall have received a certificate, duly executed on behalf of the Lessor, dated as such Property Closing Date, in such form as is acceptable to the Agent, stating that (i) each and every representation and warranty of the Lessor contained in the Operative Agreements to which it is a party is true and correct on and as of the Closing Date, (ii) each Operative Agreement to which it 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 and in any other Operative Agreement required to be performed or complied with by it on or prior to the Closing Date. (n) NO DEFAULT. There shall not have occurred and be continuing any Default or Event of Default under any of the Operative Agreements attributable to the Lessee or the Construction Agent and no such Default or Event of Default under any of the Operative Agreements will occur after giving effect to such Property Closing Date. (o) LEGAL OPINIONS. The Agent and the Lessor shall have received executed and customary legal opinions from Lessee's counsel qualified to give an opinion on the law of the jurisdiction in which the applicable Property is located, each in form and substance acceptable to the Agent. 5.3 CONDITIONS TO THE HOLDERS' AND THE LENDERS' OBLIGATIONS TO MAKE ADVANCES TO PAY PROJECT COSTS FOR CONSTRUCTION ON THE PROPERTY OR PROPERTIES. (a) LESSOR'S CONDITIONS. The obligations of the Holders to make Holder Advances to the Lessor and of the Lessor to advance the proceeds of Loans from the Lenders and Holder Advances from the Holders on each Funding Date for the purpose of providing funds to or at the direction of the Construction Agent necessary to pay for the construction of the Improvements or Transaction Expenses, or other Project Costs (other than Property Acquisition Costs and Transaction Expenses payable on the initial Funding Date or any Property Closing Date) are subject to the satisfaction or waiver of the following additional conditions precedent: (i) REPRESENTATION AND WARRANTIES. On such date, the representations and warranties of the Lessee and the Construction Agent contained herein and in 13 20 each of the other Operative Agreements shall be true and correct, in all material respects, unless such representations or warranties speak as of a particular date, in which case they shall be true and correct as of such date. (ii) PERFORMANCE OF AGREEMENTS. The Lessee and the Construction Agent shall have performed their respective agreements contained herein and in the other Operative Agreements on or prior to such Funding Date. (iii) REQUISITION. The Agent and Lessor shall have received a fully-executed counterpart of a Requisition, appropriately completed. (iv) SUFFICIENT FUNDS; PROGRESS OF CONSTRUCTION. Based upon the Budget, (a) the Available Commitments will be sufficient to complete the Improvement or Improvements for which the Requisition relates and (b) the Budget is In Balance. Based on the construction schedule (x) no delays in construction attributable to Force Majeure Events have occurred such that Completion will not be achieved on or prior to the Commitment Termination Date and (y) Completion will be achieved on or prior to the Commitment Termination Date. (v) NO DEFAULT. There shall not have occurred and be continuing any Default or Event of Default under any of the Operative Agreements attributable to the Lessee or the Construction Agent and no such Default or Event of Default under any of the Operative Agreements will occur after giving effect to the Advance requested by such Requisition. (vi) LIEN WAIVERS OR TITLE ENDORSEMENT. The Agent shall have received (A) copies of lien waivers, in form and substance reasonably satisfactory to the Agent, from each contractor, subcontractor, supplier and materialman which the Lessee reasonably believes will receive total compensation for services rendered or materials supplied in connection with the construction of the related Improvements of $250,000 or more; each such lien waiver shall evidence that such contractor, subcontractor, supplier or materialmen has been paid in full for all work performed or materials supplied to the date of the request for such Advance, other than work which is the subject of such request or (B) an updated title search from the Title Company with an endorsement to the Lender's title insurance policy insuring the continuing validity and priority of the Agent's Liens subsequent to such Advance. (vii) PERMITS. The Lessee shall have received all required building and other permits and authorizations permitting construction of the Improvements on the Land in accordance with the applicable Plans and Specifications. (viii) INSURANCE. The Lessee, as Construction Agent, shall have obtained the hazard and builder's risk insurance policies insuring the construction of the Property or Properties, as applicable, required by Article VI of the Construction Agency Agreement. (ix) CONSTRUCTION SCHEDULE. The Agent shall have received a copy of the schedule prepared by or at the direction of the Construction Agent showing the estimated timetable (a) for construction of the initial Improvements to be constructed on the Land, including construction milestones in critical path form; and (b) for the making of Loans and Holder Advances. 14 21 (x) BUDGET. The Agent and the Lessor shall have received a copy of the Budget with respect to the construction of the initial Improvements to be constructed on the Land, and such Budget shall be in form and substance reasonably satisfactory to the Agent. (xi) PLANS. The Agent and the Lessor shall have received a copy of the applicable Plans and Specifications with respect to the Improvements to be constructed on the Land. (xii) LEGAL OPINIONS. The Agent and the Lessor shall have received executed and customary legal opinions of Pillsbury Winthrop LLP, general counsel to the Lessee, and of separate local counsel as may be required, each in form and substance acceptable to the Agent. (xiii) CORPORATE PROCEEDINGS OF THE LESSEE. The Agent and the Lessor shall have received a copy of the resolutions or minutes of the Board of Directors of the Lessee, in form and substance reasonably satisfactory to the Agent and the Lessor, authorizing the execution, delivery and performance of the Operative Agreements to be delivered on such Property Closing Date, certified by the Secretary or an Assistant Secretary of the Lessee as of such Property Closing Date, which certification shall be in the form of paragraph 1 of EXHIBIT B. (b) LENDERS' CONDITIONS. The obligations of the Lenders to make Loans to the Lessor on each Funding Date for the purpose of providing funds to the Lessor necessary to pay for the construction of Improvements or the payment of Transaction Expenses or other Project Costs (other than Property Acquisition Costs) are subject to the satisfaction or waiver by the Lenders of each of the applicable conditions precedent set forth in this SECTION 5 and Section 4.2 of the Credit Agreement. (c) RETURN OF FUNDS IF NO FUNDING. If the applicable conditions set forth in this SECTION 5 are not satisfied or waived with respect to each Funding Date and the Lenders have funded their respective Loans to the Lessor, the Lessor shall return such funds to the Lenders funding the same, together with interest at the Federal Funds Effective Rate from the day such funds were advanced until the date such funds are returned. 5.4 COMPLETION DATE CONDITIONS. The occurrence of Completion shall be subject to the fulfillment to the satisfaction of, or waiver by, the Majority Secured Parties and the Required Holders of the following conditions precedent, at which time "Completion" shall be deemed to have occurred: (a) CONSTRUCTION COMPLETION. The construction of the Improvements shall have been completed substantially in accordance with the applicable Plans and Specifications and in compliance with all material Legal Requirements and Insurance Requirements, and the Property or Properties, as applicable, shall be ready for occupancy and use. This shall require, without limiting the generality of the preceding sentence, that (i) all utilities to adequately service the Improvements for their intended use are available and "tapped on" and hooked up pursuant to adequate permits (including any that may be required under applicable Environmental Laws) and (ii) access to the Improvements for pedestrians and motor vehicles from publicly dedicated streets and public highways is available. 15 22 (b) LESSEE CERTIFICATION. The Lessee shall have furnished the Lessor and the Agent with a completion certificate substantially in the form attached as EXHIBIT E. 5.5 RESTRICTIONS ON LIENS. On the date the Property or Properties, as applicable, are 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 with respect to such Property, to the extent such title commitment has been approved by the Agent). SECTION 6. REPRESENTATIONS AND WARRANTIES. 6.1 REPRESENTATIONS AND WARRANTIES OF THE TRUST COMPANY. The Trust Company represents and warrants to each of the other parties hereto as of the Closing Date and each Funding Date as follows: (a) Wilmington Trust Company is a banking corporation organized under the laws of the State of Delaware, duly organized and validly existing and in good standing under the laws of the State of Delaware and the United States of America, as applicable, 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) the corporate and trust power and authority to act as a trustee and to enter into and perform the obligations under each of the other Operative Agreements to which it is or will be a party and each other agreement, instrument and document to be executed and delivered by it on or before the Closing Date in connection with or as contemplated by each such Operative Agreement to which such Trust Company 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 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, (A) its charter or bylaws 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, which contravention, breach or default under clause (B) would materially and adversely affect its ability 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) This Agreement and each other Operative Agreement to which it is or will be a party, if any, have been, or on or before such Closing Date will be, duly executed and delivered by it, and the Trust Agreement constitutes, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against it in accordance with the terms thereof, subject, in each case as to enforceability, to bankruptcy, insolvency, reorganization and other similar laws affecting enforcement of creditor rights generally (insofar 16 23 as any such law relates to the bankruptcy, insolvency, reorganization or similar event of the Trust Company) and, as to the availability of specific performance or other injunctive relief, subject to the discretionary power of a court to deny such relief and to general equitable principles; (d) There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party before any Governmental Authority that, if adversely determined, would materially and adversely affect its ability 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) Wilmington Trust Company's principal place of business and chief executive office are located at: Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 (f) All documents, accounts and records relating to the transactions contemplated by this Agreement and the other Operative Agreements shall be located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware, 19890-0001. 6.2 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower represents and warrants to each of the other parties hereto as of the Closing Date and each Funding Date as follows: (a) It is a business trust and is duly formed and validly existing and in good standing under the laws of the State of Delaware and has the power and authority to enter into and perform its obligations under the Operative Agreements to which it is a party and (assuming due authorization, execution and delivery of the Trust Agreement by the parties thereto) the trust power and authority to enter into and perform the obligations under each of the other Operative Agreements to which it is or will be a party and each other agreement, instrument and document to be executed and delivered by it on or before the Closing Date in connection with or as contemplated by each such Operative Agreement to which it 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 (assuming due authorization, execution and delivery of the Trust Agreement by the parties thereto) 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 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) the Trust Agreement or Certificate of Trust, 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 to perform its obligations under the 17 24 Operative Agreements to which it is a party or (iv) does or will require any Governmental Action by any Governmental Authority regulating its trust powers; (c) The Trust Agreement and, assuming the Trust Agreement is the legal, valid and binding obligation of the parties hereto, each other Operative Agreement to which the Borrower is or will be a party have been, or on or before such Closing Date will be, duly executed and delivered by it, and each Operative Agreement to which it is a party constitutes, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against it in accordance with the terms thereof subject, in each case as to enforceability, to bankruptcy, insolvency, reorganization and other similar laws affecting enforcement of creditor rights generally (insofar as any such law relates to the bankruptcy, insolvency, reorganization or similar event of the Borrower) and, as to the availability of specific performance or other injunctive relief, subject to the discretionary power of a court to deny such relief and to general equitable principles; (d) There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party before any Governmental Authority that, if adversely determined, would materially and adversely affect its ability 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 has not assigned or transferred any of its right, title or interest in or under the Lease or its interest in any of the Properties, 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 it for any purpose other than the purchase or lease of the Property or Properties, as applicable, and the payment of Transaction Expenses and the fees, expenses and other disbursements referenced in SECTION 7; (h) Neither it nor any Person authorized by it 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 any 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 it nor any Person authorized by it 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 principal place of business, chief executive office and office where the documents, accounts and records relating to the transactions contemplated by this Agreement 18 25 and the other Operative Agreements are located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware, 19890-0001; (j) It is not engaged principally in, and does not have as one of its important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U of the 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) Each Property is free and clear of all Lessor Liens attributable to it; (l) It is not (i) an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act, or (ii) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935; and (m) It is not a party to any documents, instruments or agreements other than the Operative Agreements executed by it. 6.3 REPRESENTATIONS AND WARRANTIES OF THE LESSEE. Subject to SCHEDULE 6.3, the Lessee represents and warrants to each of the other parties hereto as of the Closing Date and each Funding Date as follows: (a) ORGANIZATION; POWERS. Each of the Lessee and its Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (iii) is qualified to do business in every jurisdiction where such qualification is required, except where the failure so to qualify would not result in a Material Adverse Effect, and (iv) has the power and authority to execute, deliver and perform its obligations under each of the Operative Agreements and each other agreement or instrument contemplated thereby to which it is or will be a party. (b) AUTHORIZATION. The execution, delivery and performance by the Lessee and the Construction Agent of each of the Operative Agreements to which either is a party (i) have been duly authorized by all requisite action on the part of the Lessee and the Construction Agent, including, if required, stockholder action and (ii) will not (A) violate (1) any provision of law, statute, rule or regulation, or of the certificate of incorporation or other constitutive documents or bylaws of the Lessee or any Material Subsidiary, (2) any order of any Governmental Authority, or (3) any provision of any indenture, agreement or other instrument to which the Construction Agent, the Lessee or any Material Subsidiary is a party or by which any of them or any of their property is or may be bound, (B) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or (C) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by the Construction 19 26 Agent, the Lessee or any Material Subsidiary except in accordance with the Operative Agreements. (c) ENFORCEABILITY. This Agreement and each of the other Operative Agreements to which the Construction Agent or Lessee is a party have been duly executed and delivered and constitute a legal, valid and binding obligation of the Construction Agent and the Lessee enforceable against either in accordance with its terms, subject, in each case as to enforceability, to bankruptcy, insolvency, reorganization and other similar laws affecting enforcement of creditor rights generally (insofar as any such law relates to the bankruptcy, insolvency, reorganization or similar event of the Lessee) and, as to the availability of specific performance or other injunctive relief, subject to the discretionary power of a court to deny such relief and to general equitable principles. (d) GOVERNMENTAL APPROVALS. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority (the "Required Action") is or will be required by the Lessee in connection with the purchase, leasing or financing of any Property (the "Transactions"), except such as (i) have been made, taken or obtained and are in full force and effect, or (ii) are not yet required to be made, taken or obtained in order for construction to proceed in accordance with the construction schedule, provided, that such Required Action shall be made, taken or obtained on or prior to the time so required. (e) FINANCIAL STATEMENTS. The consolidated balance sheet of the Lessee and its Subsidiaries as at March 31, 2000, and the related consolidated statements of income and cash flows of the Lessee and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of Ernst & Young LLP, independent auditors, and the consolidated balance sheet of the Lessee and its Subsidiaries as at December 31, 2000, and the related consolidated statements of income and cash flows of the Lessee and its Subsidiaries for the nine (9) months then ended, copies of which have been furnished to the Agent, fairly present, subject in the case of said balance sheet as at December 31, 2000, and said statements of income and cash flows for the nine (9) months then ended, to year-end audit adjustments, the consolidated financial condition of the Lessee and its Subsidiaries as at such dates and the consolidated results of the Lessee and its Subsidiaries for the periods ended on such dates, all in accordance with GAAP consistently applied. Since March 31, 2000, no event has occurred which could have a Material Adverse Effect. (f) NO MATERIAL ADVERSE CHANGE. There has been no material adverse change in the business, assets, operations, prospects, property or condition, financial or otherwise, of the Lessee and its Subsidiaries since March 31, 2000. (g) LITIGATION, COMPLIANCE WITH LAWS. (i) There is no action, suit or proceeding at law or in equity or by or before any Governmental Authority now pending or threatened against the Lessee or any Subsidiary or any business, property or rights of any such person (A) which involves any Operative Agreements or the Transactions or (B) which is reasonably likely to have a Material Adverse Effect. 20 27 (ii) Neither the Lessee nor any of its Subsidiaries is in violation of any law, rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any Governmental Authority, where such violation or default could reasonably be anticipated to result in a Material Adverse Effect. (h) FEDERAL RESERVE REGULATIONS. Neither the Lessee nor any of its Subsidiaries is engaged principally in, or has as one of its most important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U of the Board), and no part of the proceeds of the 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. (i) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Lessee nor any of its Subsidiaries is (i) an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act, or (ii) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. (j) AGREEMENTS. (i) Neither the Lessee nor any of its Subsidiaries is a party to any agreement or instrument or subject to any corporate or other restriction that has resulted or could reasonably be anticipated to result in a Material Adverse Effect. (ii) Neither the Lessee nor any of its Subsidiaries is in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, where such default could reasonably be anticipated to result in a Material Adverse Effect. (k) TAX RETURNS. Each of the Lessee and its Subsidiaries has filed or caused to be filed all Federal, state, local and foreign tax returns required to have been filed by it and has paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessments received by it, except taxes that are being contested in good faith by appropriate proceedings and for which the Lessee or such Subsidiary shall have set aside on its books adequate reserves, or taxes the nonpayment of which would not result in fines, penalties or other charges in excess of $500,000 in the aggregate. (l) NO MATERIAL MISSTATEMENTS. No information, report, financial statement, exhibit or schedule furnished by or on behalf of the Lessee to the Lessor, the Holders, the Agent or any Lender in connection with the negotiation of any Operative Agreement or included therein or delivered pursuant thereto contained, contains or will contain any misstatement of a material fact or omitted, omits or will omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were, are or will be made. (m) EMPLOYEE BENEFIT PLANS. Each of the Lessee and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the 21 28 regulations and published interpretations thereunder. No Reportable Event has occurred as to which the Lessee or any ERISA Affiliate was required to file a report with the PBGC, and the present value of all benefit liabilities under each Plan (based on those assumptions used to fund such Plan) did not, as of the last annual valuation date applicable thereto, exceed by more than $1,000,000 the value of the assets of such Plan. Neither the Lessee nor any ERISA Affiliate has incurred any Withdrawal Liability which remains unpaid and that could result in a Material Adverse Effect. Neither the Lessee nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and to the best knowledge of the Lessee no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, where such reorganization or termination has resulted or could reasonably be expected to result, through increases in the contributions required to be made to such Plan or otherwise, in a Material Adverse Effect. (n) ENVIRONMENTAL MATTERS. Except as set forth in the Environmental Audit, each Property is free of contamination from any Release of Hazardous Substances. Neither the Lessee nor any of its Subsidiaries has any material contingent liability related to noncompliance with any Environmental Laws, or related to any Release or threatened Release of a Hazardous Substance or the generation, use, storage or disposal of Hazardous Substances associated with any Property. The Lessee and each Subsidiary is conducting its respective business in compliance with all applicable Environmental Laws except such as would not result in a fine, penalty or cost to remediate in excess of $500,000. Neither the Lessee nor any of its Subsidiaries has received notice of any failure to so comply. The Lessee and its Subsidiaries, at the Lessee's and its Subsidiaries' facilities, do not manage any hazardous wastes, hazardous substances, hazardous materials, toxic substances, toxic pollutants or substances similarly denominated, as those terms or similar terms are used in the Environmental Laws, in violation of any such law or any regulations promulgated pursuant thereto. Neither the Lessee nor any of its Subsidiaries has caused or suffered to occur any Release with respect to any Hazardous Substance at, under, above or upon any real property which it owns or leases or to which it transported, disposed or arranged for disposal of Hazardous Substances that would result in a Material Adverse Effect. Neither the Lessee nor any of its Subsidiaries is involved in operations which are reasonably likely to result in the imposition of any material liability on the Lessee or any of its Subsidiaries under any Environmental Law, and neither the Lessee nor any of its Subsidiaries has permitted any tenant or occupant of such premises to engage in any such activities. (o) INSURANCE. The Lessee has obtained insurance coverage covering each Property which meets the requirements of Section 14.1 of the Lease and Section 6.1 of the Construction Agency Agreement before commencing construction, repairs or modifications, as the case may be, and such coverage is in full force and effect. (p) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and warranties of the Construction Agent and the Lessee set forth in the Operative Agreements are true and correct. The Construction Agent and the Lessee are in compliance with their respective obligations under the Operative Agreements and there exists no Default or Event of Default. (q) NATURE OF EACH PROPERTY. The Lessee, as Construction Agent on behalf of the Lessor, shall construct office buildings on the Land substantially in accordance with the applicable Plans and Specifications. The Lessee has performed all actions necessary to ensure 22 29 that it and all other Lessee Persons will be able to obtain, and the Lessee and all other Lessee Persons will obtain, all subdivision, platting, zoning, construction, environmental and other permits, licenses, consents, approvals and authorizations from all Governmental Authorities in connection with the acquisition of the Land and the development and construction of the Improvements in accordance with the applicable Plans and Specifications when required to be obtained. The Lessee, as Construction Agent, has performed, or will perform, all examinations and has made, or will make, all inquiries reasonably necessary to ensure that each of the other Lessee Persons, and each of the other contractors, subcontractors and suppliers that are currently or will be involved in the development and construction of the Property or Properties, as applicable, is capable of, and each of them will, obtain all necessary materials, supplies and labor at the points in time required by the construction schedule for the Property or Properties, as applicable, in order to enable them to complete construction of such Property or Properties in accordance with the applicable Plans and Specifications and the requirements of such construction schedule. There is no local opposition known to Lessee to any of the proposed or approved development plans for any Property that could reasonably be expected to have any effect on the ability of the Construction Agent to construct the Improvements or obtain the permits and other authorizations from Governmental Authorities for the Improvements. (r) PRIORITY OF LIENS. As to each Property, (i) upon proper recordation in the applicable governmental recording office in the country in which such Property is located, the Deed of Trust, the Assignment of Lease and the Memorandum of Lease with respect to such Property will constitute a valid and perfected first lien on the Lessor's interest and the Lessee's interest in such Property, and the Improvements thereon, subject only to the Permitted Exceptions including the Lien of the Lease and the Lessor's Liens, and (ii) upon proper filing in the applicable governmental filing office, the Lessor Financing Statements will perfect the Lessor's interest under the Lease to the extent the Lease is a security agreement governed by Article 9 of the Uniform Commercial Code, and to the extent the security interest can be perfected by filing a financing statement under Article 9 of the Uniform Commercial Code. (s) FLOOD ZONE. No portion of any Property is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, or if any 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. (t) LEGAL REQUIREMENTS. The Property or Properties, as applicable, being acquired by the Trust comply with all Legal Requirements (including all zoning and land use laws and Environmental Laws). (u) CONSENTS, ETC. All consents, licenses and building permits required by all Legal Requirements for construction, completion, occupancy and operation of each Property have been or will be obtained and are or will be in full force and effect by the time required to satisfy such Legal Requirements. (v) SOLVENCY. The fair salable value of the Lessee's assets exceeds the fair value of its liabilities; the Lessee is not left with unreasonably small capital after consummation 23 30 of the transactions contemplated by the Operative Agreements; and the Lessee is able to pay its debts (including trade debts) as they mature. (w) TITLE TO PROPERTY. Upon the acquisition of each Property on the applicable Property Closing Date, the Lessor will have good and marketable title to such Property, subject only to the Permitted Exceptions, including the Lien of the Lease and Lessor Liens. Upon the acquisition of title to such Property on such Property Closing Date, the Lessor will have the right to grant the Deed of Trust on such Property. The Lessor will at all times have good and marketable title to the Land and the Improvements, subject only to Permitted Exceptions, including the Lien of the Lease and Lessor Liens. (x) CONDITIONS PRECEDENT IN OPERATIVE AGREEMENTS. All conditions precedent contained in this Agreement and in the other Operative Agreements to be satisfied by the Lessee or the Lessor, as applicable, relating to the acquisition of each Property, will be satisfied in full on or prior to the date on which an Advance is requested to be made in respect of Property Acquisition Costs for such Property. (y) OFFERING. Neither Lessee nor anyone acting on behalf of the Lessee has directly or indirectly offered any interest in any Property or the Notes for sale to, or solicited any offer to acquire any of the same from, anyone other than the Lessor, the Holders, the Lenders, and other institutions, each of which is believed capable of evaluating and bearing the risks of investment in the transactions contemplated hereby. (z) TAX REGISTRATION. The transactions contemplated hereby are either (i) not required to be registered pursuant to Code Section 6111 and any regulations promulgated thereunder or (ii) required to be registered pursuant to Code Section 6111, and, if so required, the Lessee will properly and timely register such transaction in accordance with Code Section 6111 and any regulations promulgated thereunder and will provide the correct registration number to the Lessor. No inference is to be drawn from this SECTION 6.3(dd) or SECTION 11.9 that (i) the transactions contemplated by the Operative Agreements (or any provision thereof) are a confidential corporate tax shelter subject to registration within the meaning of Code Section 6111 (and the regulations thereunder), a "potentially abusive tax shelter" within the meaning of Code Section 6112 (and the regulations thereunder) or a transaction requiring a disclosure statement under Temporary Regulation ss. 1.6011-4T or (ii) the Lessee or any other signatory to this Agreement or any other Operative Agreement is a promoter, organizer, manager, seller or investor in a corporate tax shelter, as any of those terms are defined under Code Section 6111 or 6112 (and any other regulations thereunder). It is understood and agreed that the representations, warranties and covenants contained in this SECTION 6.3(dd) are for the purpose of SECTION 11.9. (aa) NO CONFIDENTIAL OFFERS. Each Participant or other offeree (and each employee, representative, or other agent of such Participant or offeree) shall be permitted to disclose the structure as it relates to the tax aspects of the transaction contemplated by the Operative Agreements to any and all Persons, without limitation of any kind on such disclosure. 24 31 6.4 REPRESENTATIONS AND WARRANTIES OF THE LESSEE UPON EACH FUNDING DATE. The Lessee and the Construction Agent hereby represent and warrant as of each Funding Date as follows: (a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Construction Agent and the Lessee set forth in the Operative Agreements are true and correct (with respect to Funding Dates following the initial Funding Date) on and as of such Funding Date. The Construction Agent and the Lessee are in compliance with their respective obligations under the Operative Agreements and there exists no Default or Event of Default attributable to the Lessee or the Construction Agent under any of the Operative Agreements. No Default or Event of Default attributable to the Lessee or the Construction Agent will occur under any of the Operative Agreements as a result of, or after giving effect to, the Advance requested by the related Requisition on such date. (b) TITLE TO LAND AND PROPERTY. The Lessor has good and marketable title to the Land, subject only to the Permitted Exceptions, including the Lien of the Lease and Lessor Liens. The Lessor has good and marketable title to any Improvements theretofore financed under the Operative Agreements, subject only to Permitted Exceptions including the Lien of the Lease and Lessor Liens. (c) PRIORITY OF LIENS. As to each Property, assuming proper recordation in the applicable governmental recording office in the county where such Property is located, the Deed of Trust and the Assignment of Lease and the Lease Supplement with respect to such Property constitute a valid and perfected first lien on the Property or Properties, as applicable, subject only to Permitted Exceptions, including the Lien of the Lease and Lessor's Liens. (d) EXECUTION AND DELIVERY BY THE CONSTRUCTION AGENT. The execution and delivery of each Operative Agreement delivered by the Construction Agent on such date and the performance of the Construction Agent's obligations under such Operative Agreements have been duly authorized by all requisite corporate action of the Construction Agent. (e) VALID AND BINDING OBLIGATIONS OF THE CONSTRUCTION AGENT. Each Operative Agreement delivered by the Construction Agent on such date is a legal, valid and binding obligation of the Construction Agent, enforceable against the Construction Agent in accordance with its terms, subject, in each case, as to enforceability, bankruptcy, insolvency, reorganization and other similar laws affecting enforcement of creditor rights generally and, as to the availability of specific performance or other injunctive relief, subject to the discretionary power of a court to deny such relief and to general equitable principles. (f) INSURANCE. The Construction Agent has obtained insurance coverage covering the Property or Properties, as applicable, which meets the requirements of the Construction Agency Agreement and the other Operative Agreements before commencing construction, repairs or Modifications, as the case may be, and such coverage is in full force and effect. (g) PROPERTY-RELATED MATTERS. Each Property, as improved in accordance with the applicable Plans and Specifications, will comply with all Legal Requirements (including 25 32 all applicable zoning and land use laws and Environmental Laws) in all material respects and all Insurance Requirements. All Plans and Specifications have been or will be prepared in accordance with all applicable Legal Requirements (including all applicable Environmental Laws and building, planning, zoning and fire codes) and upon completion of the applicable Improvements in accordance with the applicable Plans and Specifications, such Improvements on any Property will not encroach in any manner onto any adjoining land (except as permitted by express written easements or variance) and such Improvements and the use thereof by the Lessee and its agents, assignees, employees, invitees, lessees, licensees and tenants will comply in all material respects with all applicable Legal Requirements (including all applicable Environmental Laws and building, planning, zoning and fire codes) in all material respects. Upon completion of such Improvements in accordance with the applicable Plans and Specifications, (i) there will be no defects to such Improvements, including the plumbing, heating, air conditioning and electrical systems thereof, that will adversely effect the Fair Market Sales Value of the Property, and (ii) all water, sewer, electric, gas, telephone and drainage facilities and all other utilities required to adequately service such Improvements for their intended use will be available pursuant to adequate permits (including any that may be required under applicable Environmental Laws). There is no action, suit or proceeding (including any proceeding in condemnation or eminent domain or under any Environmental Law) pending or threatened which adversely affects the title to, or the use, operation or value of, any Property. No fire or other casualty with respect to the Property has occurred, which fire or other casualty has had a Material Adverse Effect on the Lessee's ability to perform its obligations under the Construction Agency Agreement and the other Operative Agreements. All utilities serving each Property, or proposed to serve each Property in accordance with the applicable Plans and Specifications, are located in, and in the future will be located in, and vehicular access to the Improvements on each Property is provided by, either public rights-of-way abutting each Property or Appurtenant Rights. All applicable licenses, approvals, authorizations, consents, permits (including building, demolition and environmental permits, licenses, approvals, authorizations and consents), easements and rights-of-way, including proof of dedication, required for (i) the use, treatment, storage, transport, disposal or disposition of any Hazardous Substance on, at, under or from any Property during the construction of the Improvements thereon and the use and operation of the Improvements following such construction, (ii) the construction of the Improvements in accordance with the applicable Plans and Specifications and the Construction Agency Agreement and (iii) the use and operation of the Improvements following such construction as permitted pursuant to the Lease have been obtained from the appropriate Governmental Authorities having jurisdiction or from private parties, except those which are not yet required to be obtained in order for construction to proceed in accordance with the construction schedule, so long as they shall be obtained on or prior to the time so required. (h) LEASE REQUIREMENTS. The Improvements, when completed, will comply with all requirements and conditions set forth in the Lease and all other conditions and requirements of the Operative Agreements. (i) CONDITIONS PRECEDENT CONTAINED IN THE OPERATIVE AGREEMENTS. All conditions precedent contained in this Agreement and in the other Operative Agreements to be satisfied by the Construction Agent relating to the relevant Advance have been satisfied in full. 26 33 6.5 REPRESENTATIONS AND WARRANTIES OF THE LESSOR UPON EACH FUNDING DATE. The Lessor hereby represents and warrants as of each Funding Date as follows: (a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Lessor set forth in the Operative Agreements are true and correct in all material respects (with respect to Fundings following the initial Funding Date). The Lessor is in compliance with its respective obligations under the Operative Agreements. (b) AUTHORITY OF THE LESSOR. The execution and delivery of each Operative Agreement delivered by the Lessor on such date and the performance of the obligations of the Lessor under each such Operative Agreement has been duly authorized by all requisite action of the Lessor. (c) EXECUTION AND DELIVERY BY THE LESSOR. Each Operative Agreement delivered by the Lessor on such date has been duly executed and delivered by the Lessor. (d) VALID AND BINDING OBLIGATIONS OF THE LESSOR. Each Operative Agreement delivered by the Lessor on such date is a legal, valid and binding obligation of the Lessor, enforceable against the Lessor in accordance with its terms, subject, in each case, as to enforceability, bankruptcy, insolvency, reorganization and other similar laws affecting enforcement of creditor rights generally and, as to the availability of specific performance or other injunctive relief, subject to the discretionary power of a court to deny such relief and to general equitable principles. SECTION 7. PAYMENT OF CERTAIN EXPENSES. The Lessee agrees, for the benefit of the Lessor, the Holders, the Lenders and the Agent, that: 7.1 PAYMENT OF COSTS AND EXPENSES. The Construction Agent or the Lessee shall pay (on behalf of the Lessor in the case of amounts incurred by the Lessor) all amounts described in this SECTION 7.1 as set forth herein; provided, however, that the amounts set forth in clauses (a) through (d) below will, so long as the conditions set forth herein for an Advance are satisfied, be paid with the proceeds of Advances and capitalized as part of Project Costs: (a) Transaction Expenses not otherwise referenced in this SECTION 7.1 which shall be payable from time to time. (b) All reasonable expenses of the Lessor, the Trust Companies, the Holders, the Lenders and the Agent, including the following (which expenses shall include the reasonable fees, charges and disbursements of legal counsel and of local counsel, if any, who may be retained by such legal counsel in connection with any of the following): (1) the initial and annual fee of the Trust Companies and all reasonable expenses of the Trust Companies and any co-trustees (including reasonable counsel fees and expenses) or any successor trustee or co-trustee, for acting as a trustee under the Trust Agreement; (2) the reasonable fees, charges and expenses incurred in connection with the negotiation, preparation, execution and delivery of any amendment, supplement or other modification to this Agreement or any other Operative Agreement, whether or not such amendment, supplement or modification is ultimately entered 27 34 into, or giving or withholding of waivers or consents hereto or thereto requested by the Lessee or (3) all reasonable costs and expenses incurred by 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 Lessee or any third party, including in connection with any workout, restructuring or negotiations in respect thereof; (4) all reasonable costs and expenses incurred by the Deposit Taker or Depositary Bank in connection with the Pledged Collateral; (5) reasonable syndication expenses and all reasonable expenses relating to the Appraisals; and (6) all reasonable costs and expenses incurred by 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, each of which shall be payable within ten (10) Business Days of demand. (c) THE COMMITMENT FEES. From the Closing Date until the Commitment Termination Date, the Lessee agrees to pay, or cause to be paid, the Commitment Fee to the Agent for the account of the Lenders and the Holders. (d) OTHER FEES. Lessee agrees to pay or cause to be paid to the Agent, Lenders and Holders the fees set forth in the Fee Letter. 7.2 BROKERS' FEES AND STAMP TAXES. Lessee agrees to pay or cause to be paid brokers' fees relating to any Property and any and all stamp, transfer and other similar taxes, fees and excises, if any, including any interest and penalties, which are payable in connection with the transactions contemplated by this Agreement and the other Operative Agreements; provided, however, that in connection with the acquisition of any Property by the Lessor, each party shall bear its own costs relating to brokers retained by such party in connection with such acquisition. SECTION 8. OTHER COVENANTS AND AGREEMENTS. 8.1 COOPERATION WITH THE LESSEE. The Holders, the Lenders, the Lessor (at the direction of the Majority Secured Parties) and the Agent shall, at the expense of and to the extent reasonably requested by the Lessee (but without assuming additional liabilities on account thereof and only to the extent such is acceptable to the Holders, the Lenders, the Lessor (at the direction of the Majority Secured Parties) and the Agent in their reasonable discretion), cooperate with the Lessee in connection with the Lessee satisfying its covenant obligations contained in the Operative Agreements and its other obligations respecting any Property including, 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) as the Lessee may reasonably request in order to perform such covenants. The Lessor agrees that, to the extent it shall obtain actual knowledge of the occurrence of a Default or Event of Default caused by the Lessor or any of its Affiliates, it shall promptly notify the Lessee describing the same in reasonable detail. 8.2 COVENANTS OF THE TRUST COMPANIES, THE TRUST, AND THE HOLDERS. Each of the Trust Companies, the Trust, and the Holders hereby agrees that so long as this Agreement is in effect: 28 35 (a) Neither the Trust Companies, the Trust 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 any Property attributable to it; provided, however, that the Trust Companies, the Trust 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 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 Trust Companies to resign (subject to the requirement set forth in the Trust Agreement that such resignation shall not be effective until a successor shall have agreed to accept such appointment), or the Holders' rights under the Trust Agreement to remove the institution acting as the trustee (after consent to such removal by the Agent as provided in the Trust Agreement), each of the Trust Companies 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 X of the Trust Agreement, (ii) not to amend, supplement, terminate or revoke or otherwise modify any provision of the Trust Agreement in such a manner as to adversely affect the rights of any such party without the prior written consent of such party and (iii) to comply with all of the terms of the Trust Agreement, the nonperformance of which would adversely affect such party; (c) The Trust Companies or any successor may resign or be removed by the Holders as the trustee, a successor trustee may be appointed and a corporation may become the trustee under the Trust Agreement, only in accordance with the provisions of Article X of the Trust Agreement and, with respect to such appointment, with the consent of the Lessee (so long as there shall be no Event of Default that shall have occurred and be continuing), which consent shall not be unreasonably withheld or delayed; (d) The Trust 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 Trust Companies or the Trust to take any action in violation of the terms of any Operative Agreement; (f) Neither any Holder, the Trust Companies nor the Trust shall (i) commence any case, proceeding or other action with respect to the Trust 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 Trust or for all or any substantial benefit of the creditors of the Trust; and neither any Holder, the Trust Companies nor the Trust 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; 29 36 (g) Each Trust Company and the Trust shall give prompt notice to the Lessee, the Holders and the Agent if such party'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 the addresses set forth in SECTION 6.1, or if any such party shall change its name; and (h) The Trust shall take or refrain from taking such actions and grant or refrain from granting such approvals with respect to the Operative Agreements 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 Required Holders); provided, however, that notwithstanding the foregoing provisions of this subparagraph (h), the Trust Companies, the Trust, the Agent, the Lenders and the Holders each acknowledge, covenant and agree that neither the Trust nor the Agent shall act or refrain from acting, regarding each Unanimous Vote Matter, until such party has received the approval of each Lender and each Holder affected by such matter. 8.3 PROCEEDS OF CASUALTY. The Lessor agrees, for the benefit of the Agent, the Holders, and the Lenders, that if at any time the Lessor receives any proceeds as a result, directly or indirectly, of any Casualty with respect to any Property which the Lessor is entitled to retain and hold in accordance with the terms of the Lease, the Lessor agrees that it will promptly deposit such amounts in an account with the Agent. The Lessor also agrees that it will execute and deliver such documents and instruments as the Agent may request in order to grant the Agent, for the benefit of the Holders and the Lenders, a valid and perfected, first priority security interest in such proceeds. 8.4 LESSEE COVENANTS, CONSENT AND ACKNOWLEDGMENT. (a) INFORMATION. The Lessee will deliver to the Lessor and the Agent: (i) as soon as available and in any event within one hundred (100) days after the end of each fiscal year of the Lessee a statement of financial position of the Lessee and its consolidated subsidiaries as of the end of such fiscal year and the related consolidated statements of income, shareholder's equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young LLP or other independent accountants of nationally recognized standing, together with a Compliance Certificate, in the form attached as EXHIBIT F (the "Compliance Certificate"), from the chief financial officer of the Lessee substantially containing a computation of, and showing compliance with, each of the financial covenants, ratios and restrictions contained in this SECTION 8.4 and stating that no Default or Event of Default has occurred or is continuing or, if any Default or Event of Default has occurred and is continuing, describing it and the steps, if any, being taken to cure it; (ii) as soon as available and in any event within sixty (60) days after the end of each of the first three (3) quarters of each fiscal year of the Lessee, an unaudited consolidated statement of financial position of the Lessee as of the end of such period and the related consolidated statements of income, shareholders' equity and cash flows for such period and for the portion of the Lessee's fiscal year ended at the end of such period, setting forth in each case in comparative form the figures for the same period in the previous fiscal year, 30 37 together with a Compliance Certificate of the chief financial officer of the Lessee or other officer responsible for the financial affairs of the Lessee containing a computation of, and showing compliance with, each of the financial covenants, ratios and restrictions contained in this SECTION 8.4 and stating that no Default or Event of Default has occurred or is continuing or, if any Default or Event of Default has occurred and is continuing, describing it and the steps, if any, being taken to cure it; (iii) promptly after the filing thereof, if applicable, copies of all reports on Forms 10-K, 10-Q and 8-K (or their equivalents), prospectuses and registration statements which the Lessee shall have filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended; (iv) if and when any member of the ERISA Group (1) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV or ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (2) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (3) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (4) applies for a waiver of the minimum funding standard under Section 412 of the Code, a copy of such application; (5) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (6) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (7) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of the Lessee setting forth details as to such occurrence and action, if any, which the Lessee or applicable member of the ERISA Group is required or proposes to take; (v) promptly after the occurrence of any Default or Event of Default attributable to Lessee, notice thereof in writing by an authorized officer of the Lessee, together with information regarding the steps, if any, being taken or proposed to be taken to cure it; (vi) at least ten (10) Business Days prior to the expiration of any policy of insurance required by Section 14 of the Lease, confirmation of renewal; and (vii) from time to time such additional information regarding the Lessee or any Property as the Lessor or the Agent, at the request of the Lessor, any Lender or any Holder, may reasonably request. (b) COMPLIANCE WITH LAWS. The Lessee will, and will cause its Subsidiaries to, comply with all Requirements of Law (including Environmental Laws and ERISA and the rules and regulations thereunder), except where the necessity of compliance therewith is 31 38 contested in good faith by appropriate proceedings and such contest is not reasonably likely to result in a Material Adverse Effect. (c) FURTHER ASSURANCES. The Lessee shall take or cause to be taken from time to time all action necessary to assure during the Construction Period and the Term that title to each Property remains in the Lessor as contemplated by Section 12.1 of the Lease, that the Lessor holds a perfected Lien on each Property securing the Lease Balance as contemplated by Section 7.1 of the Lease, and that the Lessor and the Agent, for the benefit of the Holders and the Lenders, hold a perfected Lien on the Pledged Collateral securing the Obligations. (d) EXISTENCE; FRANCHISES; BUSINESSES. Except as otherwise expressly permitted in this Agreement, the Lessee shall, and shall cause each Material Subsidiary to (i) maintain in full force and effect its separate existence and all rights, licenses, leases and franchises reasonably necessary to the conduct of its business, and (ii) continue doing business as a whole in the lines of business in which they were engaged on the Closing Date or those related thereto. (e) BOOKS AND RECORDS. The Lessee shall, and shall cause each Subsidiary to, maintain its books and records in accordance with GAAP, and permit the Lessor and the Agent to make or cause to be made inspections and audits of any books, records and papers of the Lessee and its Subsidiaries and to make extracts therefrom at all such reasonable times and as often as any such Person may reasonably require. (f) FUNDAMENTAL CHANGES. The Lessee shall not, nor shall it permit any Subsidiary via any merger, consolidation, amalgamation, liquidation, wind-up or dissolution, to convey, sell, assign, transfer or otherwise dispose of all or substantially all of the property, business or assets of the Lessee and its Subsidiaries on a consolidated basis, nor shall the Lessee or any Subsidiary approve of any such action if, in either case, a Default attributable to the Lessee or a Lease Event of Default shall have occurred before or after giving effect thereto. (g) NO IMPAIRMENT OF DEPOSITS. The Lessee shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, enter into or become bound by any agreement, instrument, indenture or other obligation which could directly or indirectly restrict, prohibit or require the consent of any Person to the making by the Lessee of any deposit constituting part of the Pledged Collateral or the realization thereon or utilization thereof (or of any earnings thereon or of any other Collateral) by the Agent, the Lessor, the Holders or the Lenders. (h) CHANGE IN NAME OR LOCATION. 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 each Property are kept, shall cease to be located at 20330 Stevens Creek Blvd., Cupertino, California 95014, or if it shall change its name. (i) FINANCIAL COVENANTS OF LESSEE. The Lessee and its Subsidiaries shall maintain, on a consolidated basis, all of the following financial covenants. (i) MINIMUM CASH. Maintain an unrestricted Cash Balance of at least $150,000,000 in the aggregate. 32 39 (ii) MINIMUM TANGIBLE NET WORTH. Maintain Tangible Net Worth of no less than the sum of: (A) 85% of the greater of (1) $421,899,000 or (2) Lessee's Tangible Net Worth as of March 31, 2001; (B) 75% of its net income after income taxes (without subtracting losses) earned in each quarterly accounting period commencing after March 31, 2001; and (C) 100% of Equity Proceeds less any amount up to $75,000,000 annually reflecting costs related to Acquisitions. (iii) TOTAL DEBT TO ADJUSTED EBITDA RATIO. Maintain a ratio of (A) total debt (which shall include letter of credit reimbursement obligations) to (B) Adjusted EBITDA (as measured for the immediately preceding four (4) Fiscal Quarters ending on the date of such measurement if such date is the last day of a Fiscal Quarter, or ending on the last day of the immediately preceding Fiscal Quarter if such measurement is made on a day that is not the last day of a Fiscal Quarter) not to exceed 1.00 to 1.00. (j) AGENT TO ACT FOR LESSOR. The Lessor hereby instructs Lessee and 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 Pledge Agreement, Security Agreement and the Deed of Trust 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 12, (ii) all rights of the Lessor under the Lease shall be exercised by the Agent and (iii) 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 to be delivered at the same time to the Agent. (k) APPRAISALS. 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 each 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 or any Holder and (ii) after the occurrence of an Event of Default. (l) SUPPLEMENTAL RENT. 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 Lessee or Lessor 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. Such obligations of the Lessee shall include the Supplement Rent obligations pursuant to Section 3.3 of the Lease, arrangement fees, administrative fees, participation fees, commitment fees, unused fees, prepayment penalties, breakage costs, indemnities, trustee fees and transaction expenses incurred by the parties hereto in connection. 8.5 APPOINTMENT OF THE AGENT BY THE LENDERS, THE HOLDERS AND THE TRUST. 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 and all other amounts due 33 40 and owing to the Holders. 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 SECTION 13.4, 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 12. The Agent is further appointed to provide notices under the Operative Agreements on behalf of the Trust (as determined by the Agent, in its reasonable discretion), to receive notices under the Operative Agreements on behalf of the Trust and to take such other action under the Operative Agreements on behalf of the Trust 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