EXHIBIT (10)-57
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PARTICIPATION AGREEMENT
Dated as of December 27, 2001
among
HEALTHSOUTH MEDICAL CENTER, INC.,
as the Construction Agent and as the Lessee,
HEALTHSOUTH CORPORATION,
as the Guarantor
State Street Bank and Trust Company
of connecticut, national association,
not individually, except as expressly stated herein,
but solely as Owner Trustee for Digital Hospital Trust 2001-1,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Holders,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Lenders,
and
FIRST UNION NATIONAL BANK,
as the Agent for the Lenders
and respecting the Security Documents,
as the Agent for the Secured Parties
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TABLE OF CONTENTS
Page
SECTION 1. THE LOANS.............................................................................................1
SECTION 2. HOLDER ADVANCES.......................................................................................2
SECTION 3. SUMMARY OF TRANSACTIONS...............................................................................2
3.1. Operative Agreements............................................................................2
3.2. Property Purchase...............................................................................2
3.3. Construction of Improvements; Commencement of Basic Rent........................................3
3.4. Ratable Interests of the Holders and the Lenders................................................3
SECTION 4. THE CLOSINGS..........................................................................................3
4.1. Initial Closing Date............................................................................3
4.2. Initial Closing Date; Property Closing Dates; Acquisition Advances; Construction Advances.......3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION DATE; THE LESSEE'S
DELIVERY OF NOTICES; RESTRICTIONS ON LIENS........................................................................4
5.1. General.........................................................................................4
5.2. Procedures for Funding..........................................................................4
5.3. Conditions Precedent for the Lessor, the Agent, the Lenders and the Holders Relating to the
Initial Closing Date and the Advance of Funds for the Acquisition of a Property.................6
5.4. Conditions Precedent for the Lessor, the Agent, the Lenders and the Holders Relating to the
Advance of Funds after the Acquisition Advance.................................................12
5.5. Additional Reporting and Delivery Requirements on Completion Date and on Construction Period
Termination Date...............................................................................13
5.6. The Construction Agent Delivery of Construction Budget Modifications...........................14
5.7. Restrictions on Liens..........................................................................14
5.8. [Intentionally Omitted]........................................................................14
5.9. Maintenance of the Lessee as a Wholly-Owned Entity.............................................14
5.10. Payments.......................................................................................15
5.11. Cash Collateral Account........................................................................15
5.12. [Intentionally Omitted]........................................................................16
5.13. Special Provision Regarding Renewal Term.......................................................16
5.14. Special Provision Regarding Mortgage Tax.......................................................16
5.15. Availability of Advances for Lessee and Construction Agent Obligations.........................16
5.16. Construction of Transaction....................................................................16
5.17. Payment of Ground Lease Rent...................................................................16
5.18. Force Majeure..................................................................................17
5.19. Accrual of Interest and Holder Yield Regarding Excluded Costs..................................18
SECTION 6. REPRESENTATIONS AND WARRANTIES.......................................................................18
6.1. Representations and Warranties of the Borrower.................................................18
6.2. Representations and Warranties of Each Credit Party............................................21
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SECTION 6B. GUARANTY............................................................................................27
6B.1. Guaranty of Payment and Performance............................................................27
6B.2. Obligations Unconditional......................................................................27
6B.3. Modifications..................................................................................28
6B.4. Waiver of Rights...............................................................................29
6B.5. Reinstatement..................................................................................29
6B.6. Remedies.......................................................................................29
6B.7. Limitation of Guaranty.........................................................................30
SECTION 7. PAYMENT OF CERTAIN EXPENSES...........................................................................30
7.1. Transaction Expenses...........................................................................30
7.2. Brokers' Fees..................................................................................31
7.3. Certain Fees and Expenses......................................................................31
7.4. Unused Fee.....................................................................................32
7.5. Administrative Fee.............................................................................32
7.6. Upfront Fee....................................................................................32
7.7. Structuring Fee................................................................................33
SECTION 8. OTHER COVENANTS AND AGREEMENTS.......................................................................33
8.1. Cooperation with the Construction Agent or the Lessee..........................................33
8.2. Covenants of the Owner Trustee and the Holders.................................................33
8.3. Credit Party Covenants, Consent and Acknowledgment.............................................35
8.4. Sharing of Certain Payments....................................................................39
8.5. Grant of Easements, etc........................................................................39
8.6. Appointment by the Agent, the Lenders, the Holders and the Owner Trustee.......................39
8.7. Collection and Allocation of Payments and Other Amounts........................................40
8.8. Release of Properties, etc.....................................................................43
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.................................................................44
9.1. The Construction Agent's and the Lessee's Credit Agreement Rights..............................44
9.2. The Construction Agent's and the Lessee's Trust Agreement Rights...............................44
SECTION 10. TRANSFER OF INTEREST................................................................................45
10.1. Restrictions on Transfer.......................................................................45
10.2. Effect of Transfer.............................................................................46
SECTION 11. INDEMNIFICATION.....................................................................................46
11.1. General Indemnity..............................................................................46
11.2. General Tax Indemnity..........................................................................49
11.3. Increased Costs, Illegality, etc...............................................................53
11.4. Funding/Contribution Indemnity.................................................................54
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.........................55
11.6. Additional Provisions Regarding Environmental Indemnification..................................56
11.7. Indemnity Prior to Completion Date.............................................................56
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SECTION 12. MISCELLANEOUS.......................................................................................56
12.1. Survival of Agreements.........................................................................56
12.2. Notices........................................................................................57
12.3. Counterparts...................................................................................59
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters................................59
12.5. Headings, etc..................................................................................61
12.6. Parties in Interest............................................................................61
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE.........................61
12.8. Severability...................................................................................62
12.9. Liability Limited..............................................................................62
12.10. Rights of the Credit Parties...................................................................63
12.11. Further Assurances.............................................................................64
12.12. Calculations under Operative Agreements........................................................64
12.13. Confidentiality................................................................................64
12.14. Financial Reporting/Tax Characterization.......................................................66
12.15. Set-off........................................................................................66
NATIONAL ASSOCIATION................................................................ERROR! BOOKMARK NOT DEFINED.
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EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Officer's Certificate - Section 5.3(z)
D- Form of Secretary's Certificate - Section 5.3(aa)
E - Form of Officer's Certificate - Section 5.3(cc)
F - Form of Secretary's Certificate - Section 5.3(dd)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(ee)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(ff)
I - Form of Officer's Certificate - Section 5.5
J - [Intentionally Omitted]
K -Description of Material Litigation - Section 6.2(d)
L - Form of Cash Collateral Agreement - Section 5.11
M - Form of Control Agreement - Section 5.11
Appendix A - Rules of Usage and Definitions
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of December 27, 2001 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Agreement") is by and among HEALTHSOUTH MEDICAL CENTER, INC., an Alabama
corporation (the "Lessee" or the "Construction Agent"); HEALTHSOUTH CORPORATION,
a Delaware corporation (the "Guarantor"); State Street Bank and Trust Company OF
CONNECTICUT, NATIONAL ASSOCIATION, a national banking association, not
individually (in its individual capacity, the "Trust Company"), except as
expressly stated herein, but solely as Owner Trustee for Digital Hospital Trust
2001-1 (the "Owner Trustee", the "Borrower" or the "Lessor"); the various banks
and other lending institutions which are parties hereto from time to time as
holders of certificates issued with respect to the Digital Hospital Trust 2001-1
(subject to the definition of Holders in Appendix A hereto, individually, a
"Holder" and collectively, the "Holders"); the various banks and other lending
institutions which are parties hereto from time to time as lenders (subject to
the definition of Lenders in Appendix A hereto, individually, a "Lender" and
collectively, the "Lenders"); and FIRST UNION NATIONAL BANK, a national banking
association, as the agent for the Lenders and respecting the Security Documents,
as the agent for the Secured Parties (in such capacity, the "Agent").
Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings set forth in Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, the Lenders
have agreed to make Loans to the Lessor from time to time in an aggregate
principal amount of up to the aggregate amount of the Commitments of the Lenders
in order for the Lessor to acquire the Properties and certain Improvements, to
develop and construct certain Improvements in accordance with the Agency
Agreement and the terms and provisions hereof and for the other purposes
described herein, and in consideration of the receipt of proceeds of the Loans,
the Lessor will issue the Notes. The Loans shall be made and the Notes shall be
issued pursuant to the Credit Agreement. Pursuant to Section 5 of this Agreement
and Section 2 of the Credit Agreement, the Loans will be made to the Lessor from
time to time at the request of the Construction Agent in consideration for the
Construction Agent agreeing for the benefit of the Lessor, pursuant to the
Agency Agreement, to acquire the Properties, to acquire the Equipment, to
construct certain Improvements and to cause the Lessee to lease the Properties,
each in accordance with the Agency Agreement and the other Operative Agreements.
The Loans and the obligations of the Lessor under the Credit Agreement shall be
secured by the Collateral.
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SECTION 2. HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, on each
date Advances are requested to be made in accordance with Section 5 hereof, each
Holder shall make a Holder Advance in proportion to each such Holder's share of
the aggregate Holder Commitments to the Lessor with respect to the Digital
Hospital Trust 2001-1 in immediately available funds in an amount equal to three
percent (3%) of the amount of the Requested Funds (less the Holder Fees);
provided, that no Holder shall be obligated for any Holder Advance in excess of
its pro rata share of the Available Holder Commitment; provided, further, with
respect to the Holder Fees, each Holder shall make a Holder Advance for Holder
Fees in proportion to each such Holder's share of the aggregate Holder
Commitments such that the aggregate of all Holder Advances shall be one hundred
percent (100%) of the Holder Fees payable on such date. The aggregate amount of
Holder Advances shall be up to the aggregate amount of the Holder Commitments.
No prepayment or any other payment with respect to any Advance shall be
permitted such that the Holder Advance with respect to such Advance is less than
three percent (3%) of the outstanding amount of such Advance plus the Holder
Fees, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default. The representations, warranties, covenants and agreements of
the Holders herein and in the other Operative Agreements are several, and not
joint or joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS.
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On the date hereof, each of the respective parties hereto and thereto
shall execute and deliver this Agreement, the Lease, each applicable Ground
Lease, the Agency Agreement, the Credit Agreement, the Notes, the Trust
Agreement, the Certificates, the Security Agreement, the Cash Collateral
Agreement, the Control Agreement, each applicable Mortgage Instrument and such
other documents, instruments, certificates and opinions of counsel as agreed to
by the parties hereto.
3.2. PROPERTY PURCHASE.
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On each Property Closing Date and subject to the terms and conditions
of this Agreement (a) the Holders will each make a Holder Advance in accordance
with Sections 2 and 5 of this Agreement and the terms and provisions of the
Trust Agreement, (b) the Lenders will each make Loans in accordance with
Sections 1 and 5 of this Agreement and the terms and provisions of the Credit
Agreement, (c) the Lessor will purchase and acquire good and marketable title to
or ground lease pursuant to a Ground Lease, the applicable Property, each to be
within an Approved State, identified by the Construction Agent, in each case
pursuant to a Deed, ▇▇▇▇ of Sale or Ground Lease, as the case may be, and grant
the Agent a lien on such Property by execution of the required Security
Documents, (d) the Agent, the Lessee and the Lessor shall execute and deliver a
Lease Supplement relating to such Property and (e) the Term shall commence with
respect to such Property.
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3.3. CONSTRUCTION OF IMPROVEMENTS; COMMENCEMENT OF BASIC RENT.
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Construction Advances will be made with respect to particular
Improvements to be constructed and with respect to ongoing Work regarding the
Equipment and construction of particular Improvements, in each case, pursuant to
the terms and conditions of this Agreement and the Agency Agreement. The
Construction Agent will act as a construction agent on behalf of the Lessor
respecting the Work regarding the Equipment, the construction of such
Improvements and the expenditures of the Construction Advances related to the
foregoing. The Construction Agent shall promptly notify the Lessor upon
Completion of the Improvements and the Lessee shall commence to pay Basic Rent
as of the Rent Commencement Date.
3.4. RATABLE INTERESTS OF THE HOLDERS AND THE LENDERS.
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Each Holder and Lender agrees at all times (a) to hold the same ratable
portion of the aggregate Lender Commitment for Tranche A Loans, the aggregate
Lender Commitment for Tranche B Loans and the aggregate Holder Commitment and
(b) to make advances consistent with such committed amounts referenced in
Section 3.4(a) in accordance with the requirements of the Operative Agreements.
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE.
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All documents and instruments required to be delivered on the Initial
Closing Date shall be delivered at the offices of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC,
Charlotte, North Carolina, or at such other location as may be determined by the
Lessor, the Agent and the Lessee.
4.2. INITIAL CLOSING DATE; PROPERTY CLOSING DATES; ACQUISITION
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ADVANCES; CONSTRUCTION ADVANCES.
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The Construction Agent shall deliver to the Agent a requisition (a
"Requisition"), in the form attached hereto as Exhibit A or in such other form
as is satisfactory to the Agent, in its reasonable discretion, in connection
with (a) the Transaction Expenses and other fees, expenses and disbursements
payable, pursuant to Section 7.1, by the Lessor and (b) each Acquisition Advance
pursuant to Section 5.3 and (c) each Construction Advance pursuant to Section
5.4.
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SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING
REQUIREMENTS ON COMPLETION DATE; THE LESSEE'S DELIVERY OF
NOTICES; RESTRICTIONS ON LIENS.
5.1. GENERAL.
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(a) To the extent funds have been advanced to the Lessor as
Loans by the Lenders and to the Lessor as Holder Advances by the
Holders, the Lessor will use such funds from time to time in accordance
with the terms and conditions of this Agreement and the other Operative
Agreements (i) at the direction of the Construction Agent to acquire
the Properties in accordance with the terms of this Agreement, the
Agency Agreement and the other Operative Agreements, (ii) to make
Advances to the Construction Agent to permit the acquisition, testing,
engineering, installation, development, construction, modification,
design, and renovation, as applicable, of the Properties (or components
thereof) in accordance with the terms of the Agency Agreement and the
other Operative Agreements, and (iii) to pay Transaction Expenses,
fees, expenses and other disbursements payable by the Lessor under
Sections 7.1(a) and 7.1(b).
(b) In lieu of the payment of interest on the Loans and Holder
Yield on the Holder Advances on any Scheduled Interest Payment Date
with respect to any Property during the period prior to the Rent
Commencement Date with respect to such Property, (i) each Lender's Loan
shall automatically be increased by the amount of interest accrued and
unpaid on such Loan for such period (except to the extent that at any
time such increase would cause such Lender's Loan to exceed such
Lender's Available Commitment, in which case the Lessee shall pay such
excess amount to such Lender in immediately available funds on the date
such Lender's Available Commitment was exceeded), and (ii) each
Holder's Holder Advance shall automatically be increased by the amount
of Holder Yield accrued and unpaid on such Holder Advance for such
period (except to the extent that at any time such increase would cause
the Holder Advance of such Holder to exceed such Holder's Available
Holder Commitment, in which case the Lessee shall pay such excess
amount to such Holder in immediately available funds on the date the
Available Holder Commitment of such Holder was exceeded). Such
increases in a Lender's Loan and a Holder's Holder Advance shall occur
without any disbursement of funds by any Person.
5.2. PROCEDURES FOR FUNDING.
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(a) The Construction Agent shall designate the date for
Advances hereunder in accordance with the terms and provisions hereof,
which in all cases shall be the first day of an Interest Period;
provided, however, it is understood and agreed that no more than two
(2) Advances (excluding any conversion and/or continuation of any Loans
or Holder Advances) may be requested during any calendar month. Except
as otherwise expressly agreed by the Agent, all Advances shall be made
to accounts located outside of the State of Alabama. Not less than (i)
three (3) Business Days prior to the Initial Closing Date and (ii)
three (3) Business Days prior to the date on which any Acquisition
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Advance or Construction Advance is to be made, the Construction Agent
shall deliver to the Agent, (A) with respect to the Initial Closing
Date and each Acquisition Advance, a Requisition as described in
Section 4.2 hereof (including without limitation a legal description of
the Land, if any, a schedule of the Improvements, if any, and a
schedule of the Equipment, if any, acquired or to be acquired on such
date, and a schedule of the Work, if any, to be performed, each of the
foregoing in a form reasonably acceptable to the Agent) and (B) with
respect to each Construction Advance, a Requisition identifying (among
other things) the Property to which such Construction Advance relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request
funds in an amount that is not in excess of the total aggregate of the
Available Commitments plus the Available Holder Commitments at such
time, and (iii) request that the Holders make Holder Advances and that
the Lenders make Loans to the Lessor for the payment of Transaction
Expenses, Property Acquisition Costs (in the case of an Acquisition
Advance) or other Property Costs (in the case of a Construction
Advance) that have previously been incurred or are to be incurred on
the date of such Advance to the extent such were not subject to a prior
Requisition, in each case as specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent
set forth in Sections 5.3 or 5.4, as applicable, on each Property
Closing Date or the date on which the Construction Advance is to be
made and with respect to the Requested Funds, including without
limitation Holder Fees specified in any Requisition, as applicable, (i)
each Lender shall make Loans to the Lessor in an amount equal to such
Lender's proportionate share of ninety-seven percent (97%) of the
Requested Funds (less Holder Fees) and (ii) each Holder shall make a
Holder Advance to the Lessor in an amount equal to such Holder's
proportionate share of the sum of three percent (3%) of the Requested
Funds plus such Holder's proportionate share of the Holder Fees set
forth in such Requisition. The Tranche A Lenders shall make Loans to
the Lessor in proportion to such Tranche A Lender's share of the
aggregate Tranche A Commitments of eighty-five percent (85%) of the
Requested Funds (less the Holder Fees); the Tranche B Lenders shall
make Loans to the Lessor in proportion to such Tranche B Lender's share
of the aggregate Tranche B Commitments of twelve percent (12%) of the
Requested Funds (less the Holder Fees), up to an aggregate principal
amount equal to the aggregate of the Available Commitments; and each
Holder shall make a Holder Advance in proportion to such Holder's share
of the aggregate Holder Commitments of three percent (3%) of the
Requested Funds (less the Holder Fees) plus such Holder's share of the
Holder Fees specified in such Requisition, up to the aggregate advanced
amount equal to the aggregate of the Available Holder Commitments. The
total amount of such Loans and Holder Advances made on such date shall
(x) be used by the Lessor to pay Property Costs including Transaction
Expenses within three (3) Business Days of the receipt by the Lessor of
such Advance or (y) be advanced by the Lessor on the date of such
Advance to the Construction Agent or the Lessee to pay Property Costs,
as applicable. Notwithstanding that the Operative Agreements state that
Advances shall be directed to the Lessor, each Advance shall in fact be
directed to the Construction Agent (for the benefit of the Lessor) and
applied by the Construction Agent (for the benefit of the Lessor)
pursuant to the requirements imposed on the Lessor under the Operative
Agreements.
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(d) With respect to an Advance obtained by the Lessor to pay
for Property Costs and/or Transaction Expenses or other costs payable
under Section 7.1 hereof and not expended by the Lessor for such
purpose on the date of such Advance, such amounts shall be held by the
Construction Agent until the applicable payment date or, if such
payment date does not occur within three (3) Business Days of the date
of the Construction Agent's receipt of such Advance, shall be paid to
the Agent to be applied regarding the applicable Advance to repay the
Lenders and the Holders and, subject to the terms hereof, and of the
Credit Agreement and the Trust Agreement, shall remain available for
future Advances. Any such amounts held by the Agent shall be subject to
the lien of the Security Agreement and shall accrue interest and Holder
Yield from the date any such amount is advanced to the Agent.
(e) All Operative Agreements which are to be delivered to the
Lessor, the Agent, the Lenders or the Holders shall be delivered to the
Agent, on behalf of the Lessor, the Agent, the Lenders or the Holders,
and such items (except for Notes, Certificates, Bills of Sale, the
Ground Leases and chattel paper originals, with respect to which in
each case there shall be only one original) shall be delivered with
originals sufficient for the Lessor, the Agent, each Lender and each
Holder. All other items which are to be delivered to the Lessor, the
Agent, the Lenders or the Holders shall be delivered to the Agent, on
behalf of the Lessor, the Agent, the Lenders or the Holders, and such
other items shall be held by the Agent. To the extent any such other
items are requested in writing from time to time by the Lessor, any
Lender or any Holder, the Agent shall provide a copy of such item to
the party requesting it.
(f) Notwithstanding funding of any Advance under this
Agreement pursuant to Sections 5.3 or 5.4, each condition precedent in
connection with any such Advance may be subsequently enforced by the
Agent as a covenant of the applicable party (unless such has been
expressly waived in writing by the Agent acting upon the direction of
the Majority Secured Parties).
5.3. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS
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AND THE HOLDERS RELATING TO THE INITIAL CLOSING DATE AND THE
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ADVANCE OF FUNDS FOR THE ACQUISITION OF A PROPERTY.
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The obligations (i) on the Initial Closing Date of the Lessor, the
Agent, the Lenders and the Holders to enter into the transactions contemplated
by this Agreement, including without limitation the obligation to execute and
deliver the applicable Operative Agreements to which each is a party on the
Initial Closing Date, (ii) on the Initial Closing Date of the Holders to make
Holder Advances, and of the Lenders to make Loans in order to pay Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1(a) of this Agreement and (iii) on a Property Closing Date for the
purpose of providing funds to the Lessor necessary to pay the Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1(b) of this Agreement and to acquire or ground lease a Property (an
"Acquisition Advance"), in each case (with regard to the foregoing Sections
5.3(i), (ii) and (iii)) are subject to the satisfaction or waiver of the
6
following conditions precedent on or prior to the Initial Closing Date or the
applicable Property Closing Date, as the case may be (to the extent such
conditions precedent require the delivery of any agreement, certificate,
instrument, memorandum, legal or other opinion, appraisal, commitment, title
insurance commitment, lien report or any other document of any kind or type,
such shall be in form and substance satisfactory to the Agent, in its reasonable
discretion; notwithstanding the foregoing, the obligations of each party shall
not be subject to any conditions contained in this Section 5.3 which are
required to be performed by such party):
(a) the correctness of the representations and warranties of
the parties to this Agreement contained herein, in each of the other
Operative Agreements and each certificate delivered pursuant to any
Operative Agreement (including without limitation the Incorporated
Representations and Warranties) on each such date;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart
copy of the Requisition, appropriately completed;
(d) title to each such Property shall conform to the
representations and warranties set forth in Section 6.2(l) hereof;
(e) the Construction Agent shall have delivered to the Agent a
good standing certificate for the Construction Agent in the state where
each such Property is located, the Deed with respect to the Land and
existing Improvements (if any), a copy of the Ground Lease (if any),
and a copy of the ▇▇▇▇ of Sale with respect to the Equipment (if any),
respecting such of the foregoing as are being acquired or ground leased
on each such date with the proceeds of the Loans and Holder Advances or
which have been previously acquired or ground leased with the proceeds
of the Loans and Holder Advances and such Land, existing Improvements
(if any) and Equipment (if any) shall be located in an Approved State;
(f) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Advance requested by each
such Requisition;
(g) the Construction Agent shall have delivered to the Agent
title insurance commitments to issue policies respecting each such
Property, with such endorsements as the Agent deems necessary, in favor
of the Lessor and the Agent from a title insurance company acceptable
to the Agent, but only with such title exceptions thereto as are
acceptable to the Agent;
(h) the Construction Agent shall have delivered to the Agent
an environmental site assessment respecting each such Property prepared
by an independent recognized professional acceptable to the Agent and
evidencing no pre-existing environmental condition with respect to
which there is more than a remote risk of loss;
(i) the Construction Agent shall have delivered to the Agent a
survey (with a flood hazard certification) respecting each such
Property prepared (i) by an independent recognized professional
acceptable to the Agent and (ii) in a manner and including such
information as is required by the Agent;
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(j) unless such an opinion has previously been delivered with
respect to a particular state, the Construction Agent shall have caused
to be delivered to the Agent a legal opinion in the form attached
hereto as EXHIBIT B or in such other form as is acceptable to the Agent
with respect to local law real property issues respecting the state in
which each such Property is located addressed to the Lessor, the Agent,
the Lenders and the Holders, from counsel located in the state where
each such Property is located, prepared by counsel acceptable to the
Agent;
(k) the Agent shall be satisfied that the acquisition, ground
leasing and/or holding of each such Property and the execution of the
Mortgage Instrument and the other Security Documents will not
materially and adversely affect the rights of the Lessor, the Agent,
the Holders or the Lenders under or with respect to the Operative
Agreements;
(l) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, the various
Transaction Expenses and other fees, expenses and disbursements
referenced in Sections 7.1(a) or 7.1(b) of this Agreement, as
appropriate;
(m) the Construction Agent shall have caused to be delivered
to the Agent a Mortgage Instrument (in such form as is acceptable to
the Agent, with revisions as necessary to conform to applicable state
law), Lessor Financing Statements and Lender Financing Statements
respecting each such Property, all fully executed and in recordable
form;
(n) the Lessee shall have delivered to the Agent with respect
to each such Property a Lease Supplement and a memorandum (or short
form lease) regarding the Lease and such Lease Supplement (such
memorandum or short form lease to be in the form attached to the Lease
as EXHIBIT B or in such other form as is acceptable to the Agent, with
modifications as necessary to conform to applicable state law, and in
form suitable for recording);
(o) with respect to each Acquisition Advance, the sum of the
Available Commitment plus the Available Holder Commitment (after
deducting the Unfunded Amount, if any, and after giving effect to the
Acquisition Advance) will be sufficient to pay all amounts payable
therefrom;
8
(p) if any such Property is subject to a Ground Lease, the
Construction Agent shall have caused a lease memorandum (or short form
lease) to be delivered to the Agent for such Ground Lease and, if
requested by the Agent, a landlord waiver and a mortgagee waiver (in
each case, in such form as is acceptable to the Agent);
(q) counsel (acceptable to the Agent) for the ground lessor of
each such Property subject to a Ground Lease shall have issued to the
Lessor, the Agent, the Lenders and the Holders, its opinion;
(r) the Construction Agent shall have delivered to the Agent a
preliminary Construction Budget for each such Property, if applicable;
(s) the Construction Agent shall have provided evidence to the
Agent of insurance that is required to be maintained with respect to
each such Property as provided in the Lease;
(t) the Construction Agent shall have caused an Appraisal
regarding each such Property to be provided to the Agent from an
appraiser satisfactory to the Agent, and no Lender nor any Holder shall
have provided the Agent written notice that such Appraisal is
unsatisfactory;
(u) the Construction Agent shall cause (i) Uniform Commercial
Code lien searches, tax lien searches and judgment lien searches
regarding the Lessee to be conducted (and copies thereof to be
delivered to the Agent) in such jurisdictions as determined by the
Agent by a nationally recognized search company acceptable to the Agent
and (ii) the liens referenced in such lien searches which are
objectionable to the Agent to be either removed or otherwise handled in
a manner satisfactory to the Agent;
(v) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements and/or documents related thereto shall have been
paid or provisions for such payment shall have been made to the
satisfaction of the Agent, including without limitation the provisions
of Section 5.14;
(w) in the opinion of the Agent and its respective counsel,
the transactions contemplated by the Operative Agreements do not and
will not subject the Lessor, the Lenders, the Agent or the Holders to
any adverse regulatory prohibitions, constraints, penalties or fines;
(x) each of the Operative Agreements to be entered into on
such date shall have been duly authorized, executed and delivered by
the parties thereto, and shall be in full force and effect, and the
Agent shall have received a fully executed copy of each of the
Operative Agreements;
(y) since the date of the most recent audited financial
statements (as delivered pursuant to the requirements of the Parent
Credit Agreement) of the Guarantor, there shall not have occurred any
event, condition or state of facts which shall have or could reasonably
be expected to have a Material Adverse Effect, other than as
specifically contemplated by the Operative Agreements;
9
(z) as of the Initial Closing Date only, the Agent shall have
received an Officer's Certificate, dated as of the Initial Closing
Date, of the Lessee and each other Credit Party in the form attached
hereto as EXHIBIT C or in such other form as is acceptable to the Agent
stating that (i) each and every representation and warranty of such
Credit Party contained in the Operative Agreements to which it is a
party is true and correct on and as of the Initial Closing Date; (ii)
no Default or Event of Default has occurred and is continuing under any
Operative Agreement; (iii) each Operative Agreement to which such
Credit Party is a party is in full force and effect with respect to it;
and (iv) such Credit Party has duly performed and complied with all
covenants, agreements and conditions contained herein or in any
Operative Agreement required to be performed or complied with by it on
or prior to the Initial Closing Date;
(aa) as of the Initial Closing Date only, the Agent shall have
received (i) a certificate of the Secretary or an Assistant Secretary
of each Credit Party, dated as of the Initial Closing Date, in the form
attached hereto as EXHIBIT D or in such other form as is acceptable to
the Agent attaching and certifying as to (1) the resolutions of the
Board of Directors of such Credit Party duly authorizing the execution,
delivery and performance by such Credit Party of each of the Operative
Agreements to which it is or will be a party, (2) the articles of
incorporation of such Credit Party certified as of a recent date by the
Secretary of State of its state of incorporation and its by-laws and
(3) the incumbency and signature of persons authorized to execute and
deliver on behalf of such Credit Party the Operative Agreements to
which it is or will be a party and (ii) a good standing certificate (or
local equivalent) from the respective states where such Credit Party is
incorporated and where the principal place of business of such Credit
Party is located as to its good standing in each such state. To the
extent any Credit Party is a partnership, a limited liability company
or is otherwise organized, such Person shall deliver to the Agent (in
form and substance satisfactory to the Agent) as of the Initial Closing
Date (A) a certificate regarding such Person and any corporate general
partners covering the matters described in EXHIBIT D and (B) a good
standing certificate, a certificate of limited partnership or a local
equivalent of either the foregoing as applicable;
(bb) as of the Initial Closing Date only, there shall not have
occurred any material adverse change in the consolidated assets,
liabilities, operations, business or condition (financial or otherwise)
of the Credit Parties (on a consolidated basis) from that set forth in
the most recent audited consolidated financial statements of the
Guarantor which have been provided to the Agent;
10
(cc) as of the Initial Closing Date only, the Agent shall have
received an Officer's Certificate of the Lessor dated as of the Initial
Closing Date in the form attached hereto as EXHIBIT E or in such other
form as is acceptable to the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Initial Closing Date, (ii) each Operative Agreement to which the Lessor
is a party is in full force and effect with respect to it and (iii) the
Lessor has duly performed and complied with all covenants, agreements
and conditions contained herein or in any Operative Agreement required
to be performed or complied with by it on or prior to the Initial
Closing Date;
(dd) as of the Initial Closing Date only, the Agent shall have
received (i) a certificate of the Secretary, an Assistant Secretary,
Trust Officer or Vice President of the Trust Company in the form
attached hereto as EXHIBIT F or in such other form as is acceptable to
the Agent, attaching and certifying as to (A) the signing resolutions
duly authorizing the execution, delivery and performance by the Lessor
of each of the Operative Agreements to which it is or will be a party,
(B) its articles of association or other equivalent charter documents
and its by-laws, as the case may be, certified as of a recent date by
an appropriate officer of the Trust Company and (C) the incumbency and
signature of persons authorized to execute and deliver, on the Lessor's
behalf, the Operative Agreements to which such entity is a party and
(ii) a good standing certificate from the Office of the Comptroller of
the Currency;
(ee) as of the Initial Closing Date only, counsel for the
Lessor acceptable to the Agent shall have issued to the Lessee, the
Holders, the Lenders and the Agent its opinion in the form attached
hereto as EXHIBIT G or in such other form as is reasonably acceptable
to the Agent;
(ff) as of the Initial Closing Date only, the Construction
Agent shall have caused to be delivered to the Agent a legal opinion in
the form attached hereto as EXHIBIT H or in such other form as is
acceptable to the Agent, addressed to the Lessor, the Agent, the
Lenders and the Holders, from counsel acceptable to the Agent;
(gg) as of the Initial Closing Date only, the Construction
Agent shall cause (i) tax lien searches and judgment lien searches
regarding each Credit Party to be conducted (and copies thereof to be
delivered to the Agent) in such jurisdictions as determined by the
Agent by a nationally recognized search company acceptable to the Agent
and (ii) the liens referenced in such lien searches which are
objectionable to the Agent to be either removed or otherwise handled in
a manner satisfactory to the Agent;
(hh) the Construction Agent shall have deposited good and
immediately available Dollars into the Cash Collateral Account in a
sufficient amount so that after giving effect to the requested Advance
the Construction Agent is in compliance with Section 5.11 hereof;
(ii) except with respect to the Property ground leased on the
Initial Closing Date, the Agent shall have received written approval
regarding each subsequent Property, prior to the acquisition or ground
leasing thereof by the Lessor, from each Lender and each Holder; and
11
(jj) the Lessee shall have complied with the provisions of
Section 5.11 and the terms and conditions of the Cash Collateral
Agreement and the Control Agreement.
5.4. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS
-----------------------------------------------------------
AND THE HOLDERS RELATING TO THE ADVANCE OF FUNDS AFTER THE
----------------------------------------------------------
ACQUISITION ADVANCE.
-------------------
The obligations of the Holders to make Holder Advances, and the Lenders
to make Loans in connection with all requests for Advances subsequent to the
acquisition of a Property (and to pay the Transaction Expenses, fees, expenses
and other disbursements payable by the Lessor under Section 7.1 of this
Agreement in connection therewith) are subject to the satisfaction or waiver of
the following conditions precedent (to the extent such conditions precedent
require the delivery of any agreement, certificate, instrument, memorandum,
legal or other opinion, appraisal, commitment, title insurance commitment, lien
report or any other document of any kind or type, such shall be in form and
substance satisfactory to the Agent, in its reasonable discretion;
notwithstanding the foregoing, the obligations of each party shall not be
subject to any conditions contained in this Section 5.4 which are required to be
performed by such party):
(a) the correctness on such date of the representations and
warranties of the parties to this Agreement contained herein, in each
of the other Operative Agreements and in each certificate delivered
pursuant to any Operative Agreement (including without limitation the
Incorporated Representations and Warranties);
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart
of the Requisition, appropriately completed;
(d) based upon the applicable Construction Budget which shall
satisfy the requirements of this Agreement, the Available Commitments
and the Available Holder Commitment (after deducting the Unfunded
Amount) will be sufficient to complete the Improvements;
(e) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Construction Advance
requested by the applicable Requisition;
(f) the title insurance policy delivered in connection with
the requirements of Section 5.3(g) shall provide for (or shall be
endorsed to provide for) insurance in an amount at least equal to the
maximum total Property Cost indicated by the Construction Budget
referred to in subparagraph (d) above and there shall be no title
change or exception objectionable to the Agent;
12
(g) the Construction Agent shall have delivered to the Agent
copies of the Plans and Specifications for the applicable Improvements;
(h) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, any
Transaction Expenses and other fees, expenses and disbursements
referenced in Section 7.1(b) that are to be paid with the Advance;
(i) the Construction Agent shall have delivered, or caused to
be delivered to the Agent, invoices, Bills of Sale or other documents
acceptable to the Agent, in each case with regard to any Equipment or
other components of such Property then being acquired with the proceeds
of the Loans and Holder Advances and naming the Lessor as purchaser and
transferee;
(j) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements shall have been paid or provisions for such
payment shall have been made to the satisfaction of the Agent;
(k) [Intentionally Omitted];
(l) the Lessee shall have complied with the provisions of
Section 5.11 and the term and conditions of the Cash Collateral
Agreement and the Control Agreement; and
(m) the Construction Agent shall have deposited good and
immediately available Dollars into the Cash Collateral Account in a
sufficient amount so that after giving effect to the requested Advance
the Construction Agent is in compliance with Section 5.11 hereof.
5.5. ADDITIONAL REPORTING AND DELIVERY REQUIREMENTS ON COMPLETION
------------------------------------------------------------
DATE AND ON CONSTRUCTION PERIOD TERMINATION DATE.
------------------------------------------------
On or prior to the Completion Date for each Property, the Construction
Agent shall deliver to the Agent an Officer's Certificate in the form attached
hereto as EXHIBIT I or in such other form as is acceptable to the Agent
specifying (a) the address for such Property, (b) the Completion Date for such
Property, (c) the aggregate Property Cost for such Property, (d) detailed,
itemized documentation supporting the asserted Property Cost figures and (e)
that all representations and warranties of the Construction Agent and Lessee in
each of the Operative Agreements and each certificate delivered pursuant thereto
(including without limitation the Incorporated Representations and Warranties)
are true and correct as of the Completion Date. The Agent shall have the right
to contest the information contained in such Officer's Certificate. Furthermore,
on or prior to the Completion Date for each Property, the Construction Agent
shall deliver or cause to be delivered to the Agent (unless previously delivered
to the Agent) originals of the following, each of which shall be in form and
substance acceptable to the Agent, in its reasonable discretion: (v) a title
insurance endorsement regarding the title insurance policy delivered in
connection with the requirements of Section 5.3(g), but only to the extent such
13
endorsement is necessary to provide for insurance in an amount at least equal to
the maximum total Property Cost and, if endorsed, the endorsement shall not
include a title change or exception objectionable to the Agent; (w) an as-built
survey for such Property, (x) insurance certificates respecting such Property as
required hereunder and under the Lease Agreement, (y) if requested by the Agent,
amendments to the Lessor Financing Statements executed by the appropriate
parties and (z) an Appraisal regarding such Property. In addition, on the
Completion Date for such Property the Construction Agent covenants and agrees
that the recording fees, documentary stamp taxes or similar amounts required to
be paid in connection with the related Mortgage Instrument shall have been paid
in an amount required by applicable law, subject, however, to the obligations of
the Lenders and the Holders to fund such costs to the extent required pursuant
to Section 7.1.
5.6. THE CONSTRUCTION AGENT DELIVERY OF CONSTRUCTION BUDGET
------------------------------------------------------
MODIFICATIONS.
-------------
The Construction Agent covenants and agrees to deliver to the Agent
each month notification of any modification to any Construction Budget regarding
any Property if such modification increases the cost to construct such Property
beyond the projected cost of the Construction Budget delivered to the Agent
regarding such Property; provided no Construction Budget may be increased unless
(a) the title insurance policies referenced in Section 5.3(g) are also modified
or endorsed, if necessary, to provide for insurance in an amount that satisfies
the requirements of Section 5.4(f) of this Agreement and (b) after giving effect
to any such amendment, the Construction Budget remains in compliance with the
requirements of Section 5.4(d) of this Agreement.
5.7. RESTRICTIONS ON LIENS.
---------------------
On each Property Closing Date, the Construction Agent shall cause each
Property acquired by the Lessor on such date to be free and clear of all Liens
except those referenced in Sections 6.2(r)(i) and 6.2(r)(ii). On each date a
Property is either sold to a third party in accordance with the terms of the
Operative Agreements or, pursuant to Section 22.1(a) of the Lease Agreement,
retained by the Lessor, the Lessee shall cause such Property to be free and
clear of all Liens (other than Lessor Liens and such other Liens that are
expressly set forth as title exceptions on the title commitment issued under
Section 5.3(g) with respect to such Property, to the extent such title
commitment has been approved by the Agent).
5.8. [INTENTIONALLY OMITTED].
-----------------------
5.9. MAINTENANCE OF THE LESSEE AS A WHOLLY-OWNED ENTITY.
--------------------------------------------------
From the Initial Closing Date and thereafter until such time as all
obligations of all Credit Parties under the Operative Agreements have been
satisfied and performed in full, the Parent shall retain the Lessee as a
Wholly-Owned Entity.
14
5.10. PAYMENTS.
--------
All payments of principal, interest, Holder Advances, Holder Yield and
other amounts to be made by the Construction Agent or the Lessee under this
Agreement or any other Operative Agreements (excluding Excepted Payments which
shall be paid directly to the party to whom such payments are owed) shall be
made to the Agent at the office designated by the Agent from time to time in
Dollars and in immediately available funds, without setoff, deduction, or
counterclaim. Subject to the definition of "Interest Period" in Appendix A
attached hereto, whenever any payment under this Agreement or any other
Operative Agreements shall be stated to be due on a day that is not a Business
Day, such payment may be made on the next succeeding Business Day, and such
extension of time in such case shall be included in the computation of interest,
Holder Yield and fees payable pursuant to the Operative Agreements, as
applicable and as the case may be.
5.11. CASH COLLATERAL ACCOUNT.
-----------------------
Prior to the funding of any Advances which in the aggregate, including
all prior Advances, exceed $60,000,000, (a) the Agent shall have received (i)
signature pages from each party to the Cash Collateral Agreement and the Control
Agreement which such agreements shall be in full force and effect and in form
and substance acceptable to the Agent, (b) counsel for the Cash Collateral
Possessor acceptable to the Agent shall have issued to the Lessee, the Holders,
the Lenders and the Agent its opinion in form and substance as is acceptable to
the Agent, (c) the Agent shall have received (i) a certificate of the Secretary,
an Assistant Secretary or Vice President of the Cash Collateral Possessor in
such form that is acceptable to the Agent, attaching and certifying as to (A)
the signing resolutions duly authorizing the execution, delivery and performance
by the Cash Collateral Possessor of each of the Operative Agreements to which it
is or will be a party, (B) its articles of association or other equivalent
charter documents and its by-laws certified as of a recent date by an
appropriate officer of the Cash Collateral Possessor and (C) the incumbency and
signature of persons authorized to execute and deliver, on the Cash Collateral
Possessor's behalf, the Operative Agreements to which such entity is a party and
(ii) a good standing certificate from the Office of the Comptroller of the
Currency or the jurisdiction of organization and (d) such other documentation
related to the Cash Collateral Account as required by the Operative Agreements
or otherwise requested by the Agent. The Construction Agent shall make cash
deposits in good and immediately available Dollars into the Cash Collateral
Account from time to time so that at all times during the Term, the amount on
deposit in the Cash Collateral Account equals or exceeds the sum of aggregate
Property Cost for all of the Properties, all Advances made but not yet expended
with respect to a Property and all amounts described in a Requisition not yet
funded, less sixty million dollars ($60,000,000). All amounts in the Cash
Collateral Account shall be held as cash or investments described in Exhibit A
to the Cash Collateral Agreement and otherwise in accordance with the terms and
conditions of the Cash Collateral Agreement.
15
5.12. [INTENTIONALLY OMITTED].
-----------------------
5.13. SPECIAL PROVISION REGARDING RENEWAL TERM.
----------------------------------------
No Renewal Term shall be effective unless agreed to by each Financing
Party, as applicable, in accordance with Section 2.2 of the Lease.
5.14. SPECIAL PROVISION REGARDING MORTGAGE TAX.
----------------------------------------
On or prior to the Initial Closing Date, (a) the Lessee shall cause the
mortgage recording tax to be paid pursuant to the requirements of the applicable
Laws and (b) the Lessee shall cause to be delivered to the Agent an amount equal
to the product of (i) the mortgage tax rate applicable to the Digital Hospital
Property and (ii) the difference between (A) the aggregate Commitments and
Holder Commitments less (B) the portion of the Commitments and Holder
Commitments upon which the recording mortgage tax was paid pursuant to
subsection (a) above. The Agent shall hold such amount delivered pursuant to
subsection (b) which may be applied to the mortgage recording tax as the Agent
determines, including without limitation payment of the mortgage recording tax
with respect to the Digital Hospital Property prior to such amount being due.
5.15. AVAILABILITY OF ADVANCES FOR LESSEE AND CONSTRUCTION AGENT
----------------------------------------------------------
OBLIGATIONS.
-----------
Solely with respect to each Construction Period Property, amounts to be
paid by the Lessee or the Construction Agent pursuant to the Operative
Agreements may be funded with Advances to the extent the terms and conditions of
the Operative Agreements applicable to Advances have been satisfied or waived
pursuant to the terms therein (including without limitation the conditions
precedent contained in Sections 5.3 and 5.4); provided, however, no Advances may
be applied to (a) amounts owed under any Operative Agreement or with respect to
any Property, including without limitation Construction Period Properties, which
relate to environmental matters, Environmental Claims or Environmental
Violations, including without limitation payments pursuant to Section 11.6,
fines and settlements regarding such environmental matters and any remediation
and cleanup cost required to be paid pursuant to Section 15.2 of the Lease or
(b) amounts owed to the Owner Trustee pursuant to Sections 11.1, 11.2, 11.3,
11.4, 11.5, 11.6 or 11.7 hereof.
5.16. CONSTRUCTION OF TRANSACTION.
Each of the Financing Parties and each of the Credit Parties
acknowledge and agree that each intends the transactions contemplated pursuant
to the Operative Agreements to be treated as interstate commerce under all Laws
applicable thereto.
5.17. PAYMENT OF GROUND LEASE RENT.
Solely with respect to each Construction Period Property which is
subject to a Ground Lease, amounts to be paid as scheduled rental payments
thereunder may be funded with Advances to the extent the terms and conditions of
the Operative Agreements applicable to Advances have been satisfied or waived
pursuant to the terms therein (including without limitation the conditions
precedent contained in Sections 5.3 and 5.4).
16
5.18. FORCE MAJEURE.
Upon the occurrence of a Force Majeure Event with respect to a
Construction Period Property and unless the Construction Agent shall have
previously purchased the Construction Period Property for the Termination Value,
the Lessor (at the direction of the Majority Secured Parties, regarding the
election of (a) or (c) below, and as a Unanimous Vote Matter, regarding the
election of (b) below), may elect any of the following:
(a) to direct the Construction Agent to restore such
Construction Period Property with insurance proceeds paid with respect
to such Force Majeure Event and in the event such proceeds are
insufficient to restore such Construction Period Property to the
condition of such Construction Period Property immediately prior to the
occurrence of such Force Majeure Event, then the remaining portion of
such restoration shall be funded with Advances to the extent the terms
and conditions of the Operative Agreements applicable to Advances have
been satisfied or waived pursuant to the terms in the Participation
Agreement (including without limitation the conditions precedent
contained in Sections 5.3 and 5.4), provided, for each month in which
such Force Majeure Event has occurred and is continuing and such Force
Majeure Event prevents the Construction Agent from continuing any work
on such Construction Period Property, the maximum length of the
Construction Period Termination Date with respect to such Construction
Period Property shall be extended one month, but in no event shall the
Construction Period Termination Date be extended beyond the third
anniversary of the Initial Closing Date;
(b) to terminate the Agency Agreement and the Lease Agreement
with respect to such Construction Period Property and thereafter the
Construction Agent shall have no further obligations under the Agency
Agreement or the Lease Agreement with respect to such Construction
Period Property, except with respect to (i) indemnity obligations
pursuant to Sections 11.1 through 11.7 of this Agreement and then only
with respect to matters which have occurred or commenced on or prior to
the date of such termination of the Agency Agreement and the Lease
Agreement and (ii) all Full Recourse Events of Default; or
(c) subject to the terms and conditions of the Operative
Agreements, to replace the Land and relocate the Improvements
comprising such Construction Period Property and/or modify the Plans
and Specifications and the Construction Budget for such Construction
Period Property and/or inform the Construction Agent that the
Construction Agent no longer has the right to modify the Plans and
Specifications or the Construction Budget for such Construction Period
Property, in each case in Lessor's sole discretion; provided, upon
Completion of any such replacement Property, such replacement Property
shall have a use, function and capacity substantially similar to the
use, function and capacity of such replaced Property.
17
Upon the termination of the Agency Agreement and the Lease
Agreement as referenced in Section 5.18(b), the Construction Agent
shall vacate such Construction Period Property, and neither the
Construction Agent nor the Lessee shall retain any right, title or
interest in such Construction Period Property. Thereafter, the
Financing Parties shall be permitted to retain any and all proceeds
related to or subsequently generated from their respective interests in
such Construction Period Property (including without limitation 100% of
all amounts owed to the Financing Parties in accordance with the
Operative Agreements).
5.19. ACCRUAL OF INTEREST AND HOLDER YIELD REGARDING EXCLUDED COSTS.
-------------------------------------------------------------
Notwithstanding any other provision of any Operative Agreement,
interest on the Loans and Holder Yield on the Holder Advances (in each case,
only to the extent such were used to fund Excluded Costs) shall, prior to the
Maturity Date, accrue (a) on each Scheduled Interest Payment Date and (b)
monthly after the Expiration Date; provided, all such accrued amounts shall be
capitalized and added to the Loans and Holder Advances and shall constitute a
component of Property Cost.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
Effective as of the Initial Closing Date and the date of each Advance,
the Trust Company in its individual capacity and as the Borrower, as indicated,
represents and warrants to each of the other parties hereto as follows,
provided, that the representations in the following paragraphs (c), (g), (h),
(j) and (k) are made solely in its capacity as the Borrower:
(a) It is a national banking association and is duly organized
and validly existing and in good standing under the laws of the United
States of America and has the power and authority to enter into and
perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the
Holders) has the corporate and trust power and authority to act as the
Owner Trustee and to enter into and perform the obligations under each
of the other Operative Agreements to which the Trust Company or the
Owner Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before such Closing Date in connection with or as contemplated by
each such Operative Agreement to which the Trust Company or the Owner
Trustee, as the case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) does or will require any approval or
consent of any trustee or holders of any of its indebtedness or
obligations, (ii) does or will contravene any federal or Connecticut
Legal Requirement relating to its banking or trust powers, (iii) does
or will contravene or result in any breach of or constitute any default
18
under, or result in the creation of any Lien upon any of its property
under, (A) its charter or by-laws, or (B) any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, bank loan
or credit agreement or other agreement or instrument to which it is a
party or by which it or its properties may be bound or affected, which
contravention, breach, default or Lien under clause (B) would
materially and adversely affect its ability, in its individual capacity
or as the Owner Trustee, to perform its obligations under the Operative
Agreements to which it is a party or (iv) does or will require any
Governmental Action by any federal or Connecticut Governmental
Authority regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as
the case may be, is or will be a party have been, or on or before such
Closing Date will be, duly executed and delivered by the Trust Company
or the Owner Trustee, as the case may be, and the Trust Agreement and
each such other Operative Agreement to which the Trust Company is a
party constitutes, or upon execution and delivery will constitute, a
legal, valid and binding obligation enforceable against the Trust
Company in accordance with the terms thereof. The Trust Agreement and
each other Operative Agreement to which the Owner Trustee is a party
constitutes, or upon execution and delivery will constitute, a legal,
valid and binding obligation enforceable against the Owner Trustee, in
accordance with the terms thereof;
(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability, in its individual capacity or as the Owner Trustee,
to perform its obligations under the Operative Agreements to which it
is a party or would question the validity or enforceability of any of
the Operative Agreements to which it is or will become a party;
(e) It, either in its individual capacity or as the Owner
Trustee, has not assigned or transferred any of its right, title or
interest in or under the Lease, the Agency Agreement or its interest in
any Property or any portion thereof, except in accordance with the
Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative
Agreements, the proceeds of the Loans and Holder Advances shall not be
applied by the Owner Trustee, either in its individual capacity or as
the Owner Trustee, for any purpose other than the purchase and/or lease
of the Properties, the acquisition, installation and testing of the
Equipment, the construction of Improvements and the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Sections 7.1(a) and 7.1(b) of this Agreement, in each
case which accrue prior to the Rent Commencement Date with respect to a
particular Property;
19
(h) Neither the Owner Trustee nor any Person authorized by the
Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to a
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Agent, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take
any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the
Notes to the provisions of Section 5 of the Securities Act or require
the qualification of any Operative Agreement under the Trust Indenture
Act of 1939, as amended;
(i) The Owner Trustee's principal place of business, chief
executive office, location for purposes of the UCC, and office where
the documents, accounts and records relating to the transactions
contemplated by this Agreement and each other Operative Agreement are
kept are located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department;
(j) The Owner Trustee is not engaged principally in, and does
not have as one (1) of its important activities, the business of
extending credit for the purpose of purchasing or carrying any margin
stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States), and no part of the
proceeds of the Loans or the Holder Advances will be used by it to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of
Regulations T, U, or X of the Board of Governors of the Federal Reserve
System of the United States;
(k) The Owner Trustee is not an "investment company" or a
company controlled by an "investment company" within the meaning of the
Investment Company Act;
(l) Each Property is free and clear of all Lessor Liens
attributable to the Owner Trustee, either in its individual capacity or
as the Owner Trustee;
(m) The Owner Trustee, in its trust capacity, is not a party
to any documents, instruments or agreements other than the Operative
Agreements executed by the Owner Trustee, in its trust capacity;
(n) The Owner Trustee is authorized to act in a fiduciary
capacity in the State of Connecticut and under the laws of the United
States;
20
(o) Any national association organized under the laws of the
United States having its principal place of business in the State of
Alabama which is authorized to act in a fiduciary capacity in the State
of Alabama is authorized to act in a like fiduciary capacity in the
State of Connecticut without the necessity of complying with any law of
the State of Connecticut relating to the qualification of a foreign
corporation in the State of Connecticut;
(p) The Owner Trustee (a) has not received written notice that
it is currently excluded, debarred or otherwise ineligible to
participate in the Federal healthcare programs or in the Federal
procurement or non-procurement programs; and (b) has not been convicted
of a criminal offense related to the provision of healthcare items or
services; and
(q) The Trust Company has filed with the appropriate Alabama
Govermental Authority the documents and other items required pursuant
to Alabama Code Sections 10-2B-15.41 and 10-2B-15.42.
6.2. REPRESENTATIONS AND WARRANTIES OF EACH CREDIT PARTY.
---------------------------------------------------
Effective as of the Initial Closing Date, the date of each Advance and
the Rent Commencement Date, each Credit Party represents and warrants to each of
the other parties hereto that:
(a) The Incorporated Representations and Warranties are true
and correct (unless such relate solely to an earlier point in time) and
the Lessee has delivered to the Agent the financial statements and
other reports referred to in Section 7.1 of the Parent Credit
Agreement;
(b) (i) Each of the Construction Agent and the Lessee is a
corporation duly organized and validly existing and in good standing
under the laws of the State of Alabama and the Guarantor is a
corporation duly organized and validly existing and in good standing
under the laws of the State of Delaware and each Credit Party has the
power and authority to enter into and perform its obligations under the
Operative Agreements to which it is a party and has the corporate power
and authority to act as the Construction Agent, the Lessee or the
Guarantor, as the case may be, and to enter into and perform the
obligations under each of the other Operative Agreements to which it is
a party or will be a party and each other agreement, instrument and
document to be executed and delivered by it on or before such date in
connection with or as contemplated by each such Operative Agreement to
which it is a party or will be a party;
(ii) The execution and delivery by each Credit Party
of this Agreement and the other applicable Operative
Agreements as of such date and the performance by each Credit
Party of its respective obligations under this Agreement and
the other applicable Operative Agreements are within the
corporate, partnership or limited liability company (as the
case may be) powers of each Credit Party, have been duly
authorized by all necessary corporate, partnership or limited
liability company (as the case may be) action on the part of
21
each Credit Party (including, without limitation, any
necessary shareholder action), have been duly executed and
delivered, have received all necessary governmental approval,
and do not and will not (A) violate any Legal Requirement
which is binding on any Credit Party or any of its
Subsidiaries, (B) contravene or conflict with, or result in a
breach of, any provision of the Articles of Incorporation,
By-Laws or other organizational documents of any Credit Party
or any of its Subsidiaries or of any agreement, indenture,
instrument or other document which is binding on any Credit
Party or any of its Subsidiaries or (C) result in, or require,
the creation or imposition of any Lien (other than pursuant to
the terms of the Operative Agreements) on any asset of any
Credit Party or any of its Subsidiaries;
(c) This Agreement and the other applicable Operative
Agreements, executed prior to and as of such date by any Credit Party,
constitute the legal, valid and binding obligation of such Credit
Party, as applicable, enforceable against such Credit Party, as
applicable, in accordance with their terms. Each Credit Party has
executed the various Operative Agreements required to be executed by
such Credit Party as of such date;
(d) Except as described on EXHIBIT K, there are no material
actions, suits or proceedings pending or, to our knowledge, threatened
against any Credit Party in any court or before any Governmental
Authority (nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority to set aside,
restrain, enjoin or prevent the full performance of any Operative
Agreement or any transaction contemplated thereby) that (i) concern any
Property or any Credit Party's interest therein, (ii) question the
validity or enforceability of any Operative Agreement to which any
Credit Party is a party or the overall transaction described in the
Operative Agreements to which any Credit Party is a party or (iii) have
or could reasonably be expected to have a Material Adverse Effect;
(e) No Governmental Action by any Governmental Authority or
other authorization, registration, consent, approval, waiver, notice or
other action by, to or of any other Person pursuant to any Legal
Requirement, contract, indenture, instrument or agreement or for any
other reason is required to authorize or is required in connection with
(i) the execution, delivery or performance of any Operative Agreement,
(ii) the legality, validity, binding effect or enforceability of any
Operative Agreement, (iii) the acquisition, ownership, construction,
completion, occupancy, operation, leasing or subleasing of any Property
or (iv) any Advance, in each case, except those which have been
obtained and are in full force and effect;
(f) Upon the execution and delivery of each Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in such Property, subject only to the
Permitted Liens, and (ii) no offset will exist with respect to any Rent
or other sums payable under the Lease;
22
(g) Except as otherwise contemplated by the Operative
Agreements, the Construction Agent shall not use the proceeds of any
Holder Advance or Loan for any purpose other than the purchase and/or
lease of the Properties, the acquisition, installation and testing of
the Equipment, the construction of Improvements and the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Sections 7.1(a) and 7.1(b) of this Agreement, in each
case which accrue prior to the Rent Commencement Date with respect to a
particular Property;
(h) All information heretofore or contemporaneously herewith
furnished by each Credit Party or its Subsidiaries to the Agent, the
Owner Trustee, any Lender or any Holder for purposes of or in
connection with this Agreement and the transactions contemplated hereby
is, and all information hereafter furnished by or on behalf of each
Credit Party or its Subsidiaries to the Agent, the Owner Trustee, any
Lender or any Holder pursuant hereto or in connection herewith will be,
true and accurate in every material respect on the date as of which
such information is dated or certified, and such information, taken as
a whole, does not and will not omit to state any material fact
necessary to make such information, taken as a whole, not misleading;
(i) The location of the Construction Agent and the Lessee for
purposes of the UCC is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇. The principal place of business, chief executive office and
office of the Construction Agent, the Lessee and the Guarantor where
the documents, accounts and records relating to the transactions
contemplated by this Agreement and each other Operative Agreement are
kept are located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
(j) The representations and warranties of each Credit Party
set forth in any of the Operative Agreements are true and correct in
all material respects on and as of each such date as if made on and as
of such date. Each Credit Party is in all material respects in
compliance with its obligations under the Operative Agreements and
there exists no Default or Event of Default under any of the Operative
Agreements which is continuing and which has not been cured within any
cure period expressly granted under the terms of the applicable
Operative Agreement or otherwise waived in accordance with the
applicable Operative Agreement. No Default or Event of Default will
occur under any of the Operative Agreements as a result of, or after
giving effect to, the Advance requested by the Requisition on the date
of each Advance;
(k) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
then being financed consists of (i) unimproved Land or (ii) Land and
existing Improvements thereon which Improvements are either suitable
for occupancy at the time of acquisition or ground leasing or will be
renovated and/or modified in accordance with the terms of this
Agreement. Each Property then being financed is located at the location
set forth on the applicable Requisition, each of which is in one (1) of
the Approved States;
23
(l) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, the Lessor has
good and marketable fee simple title to each Property, or, if any
Property is the subject of a Ground Lease, the Lessor will have a valid
ground leasehold interest enforceable against the ground lessor of such
Property in accordance with the terms of such Ground Lease, subject
only to (i) such Liens referenced in Sections 6.2(r)(i) and 6.2(r)(ii)
on the applicable Property Closing Date and (ii) subject to Section
5.7, Permitted Liens after the applicable Property Closing Date;
(m) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, no portion of
any Property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency, or if any such Property is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or
other applicable agency, then flood insurance has been obtained for
such Property in accordance with Section 14.2(b) of the Lease and in
accordance with the National Flood Insurance Act of 1968, as amended;
(n) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
complies with all Insurance Requirements and all standards of Lessee
with respect to similar properties owned by Lessee;
(o) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
complies with all Legal Requirements as of such date (including without
limitation all zoning and land use laws and Environmental Laws), except
to the extent that failure to comply therewith, individually or in the
aggregate, shall not have and could not reasonably be expected to have
a Material Adverse Effect;
(p) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, all utility
services and facilities necessary for the construction and operation of
the Improvements and the installation and operation of the Equipment
regarding each Property (including without limitation gas, electrical,
water and sewage services and facilities) are available at the
applicable Land and will be constructed prior to the Completion Date
for such Property;
(q) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, acquisition,
installation and testing of the Equipment (if any) and construction of
the Improvements (if any) to such date shall have been performed in a
good and workmanlike manner, substantially in accordance with the
applicable Plans and Specifications;
(r) (i) The Security Documents create, as security for the
Obligations (as such term is defined in the Security
Agreement), valid and enforceable security interests in, and
Liens on, all of the Collateral, in favor of the Agent, for
the ratable benefit of the Secured Parties, as their
respective interests appear in the Operative Agreements, and
such security interests and Liens are subject to no other
24
Liens other than Liens that are expressly set forth as title
exceptions on the title commitment issued under Section 5.3(g)
with respect to the applicable Property, to the extent such
title commitment has been approved by the Agent. Upon
recordation of the Mortgage Instrument in the real estate
recording office in the applicable Approved State identified
by the Construction Agent or the Lessee, the Lien created by
the Mortgage Instrument in the real property described therein
shall be a perfected first priority mortgage Lien on such real
property (or, in the case of a Ground Lease, the leasehold
estate under such Ground Lease) in favor of the Agent, for the
ratable benefit of the Secured Parties, as their respective
interests appear in the Operative Agreements. To the extent
that the security interests in the portion of the Collateral
comprised of personal property can be perfected by filing in
the filing offices of the Lessor's location for purposes of
the UCC (respecting the Lessor) and the filing offices of the
Construction Agent's and the Lessee's location for purposes of
the UCC (respecting the Construction Agent and the Lessee) or
location of the collateral or elsewhere identified by the
Construction Agent or the Lessee, upon filing of the Lender
Financing Statements in such filing offices, the security
interests created by the Security Agreement shall be perfected
first priority security interests in such personal property in
favor of the Agent, for the ratable benefit of the Secured
Parties, as their respective interests appear in the Operative
Agreements;
(ii) The Lease Agreement creates, as security for the
obligations of the Lessee under the Lease Agreement, valid and
enforceable security interests in, and Liens on, each Property
leased thereunder, in favor of the Lessor, and such security
interests and Liens are subject to no other Liens other than
Liens that are expressly set forth as title exceptions on the
title commitment issued under Section 5.3(g) with respect to
the applicable Property, to the extent such title commitment
has been approved by the Agent. Upon recordation of the
memorandum of the Lease Agreement and the memorandum of a
Ground Lease (or, in either case, a short form lease) in the
real estate recording office in the applicable Approved State
identified by the Construction Agent or the Lessee, the Lien
created by the Lease Agreement in the real property described
therein shall be a perfected first priority mortgage Lien on
such real property (or, in the case of a Ground Lease, on the
leasehold estate under such Ground Lease) in favor of the
Agent, for the ratable benefit of the Secured Parties, as
their respective interests appear in the Operative Agreements.
To the extent that the security interests in the portion of
any Property comprised of personal property can be perfected
by the filing in the filing offices of the Lessor's location
for purposes of the UCC (respecting the Lessor) and the filing
offices of the Construction Agent's and the Lessee's location
for purposes of the UCC (respecting the Construction Agent and
the Lessee) or location of the collateral or elsewhere
identified by the Construction Agent or the Lessee upon filing
of the Lessor Financing Statements in such filing offices, a
security interest created by the Lease Agreement shall be
perfected first priority security interests in such personal
property in favor of the Lessor, which rights pursuant to the
Lessor Financing Statements are assigned to the Agent, for the
ratable benefit of the Secured Parties, as their respective
interests appear in the Operative Agreements;
25
(s) The Plans and Specifications for each Property will be
prepared prior to the commencement of construction in accordance with
all applicable Legal Requirements (including without limitation all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith,
individually or in the aggregate, shall not have and could not
reasonably be expected to have a Material Adverse Effect. Upon
completion of the Improvements for each Property in accordance with the
applicable Plans and Specifications, such Improvements will be within
any building restriction lines and will not encroach in any manner onto
any adjoining land (except as permitted by express written easements,
which have been approved by the Agent). In addition, the Lessee has
caused to be delivered to the Agent for the applicable Property the
most current Plans and Specifications, the most current construction
schedule and the most current Construction Budget, all in accordance
with applicable provisions of the Operative Agreements;
(t) As of the Rent Commencement Date only, each Property shall
be improved in accordance with the applicable Plans and Specifications
in a good and workmanlike manner and shall be operational;
(u) [Intentionally Omitted];
(v) As of each Property Closing Date only, each Property has
been acquired or ground leased pursuant to a Ground Lease at a price
that is not in excess of fair market value or fair market rental value,
as the case may be; and
(w) The consolidated balance sheet and income statement of the
Guarantor and its Consolidated Subsidiaries as of September 30, 2001,
together with related consolidated statements of operations and
retained earnings and of cash flows as of September 30, 2001 and the
consolidated balance sheet and income statement of the Guarantor and
its Consolidated Subsidiaries as of December 31, 2000, together with
related consolidated statements of operations and retained earnings and
of cash flows as of December 31, 2000, fairly present in all material
respects the consolidated financial condition of the Guarantor and its
Consolidated Subsidiaries as at such dates and the consolidated results
of the operations of the Guarantor and its Consolidated Subsidiaries
for the periods ended on such dates, all in accordance with GAAP,
subject with respect to the September 30, 2001 financial statements, to
changes resulting from audit and normal year-end audit adjustments.
26
SECTION 6B. GUARANTY
6B.1. GUARANTY OF PAYMENT AND PERFORMANCE.
-----------------------------------
Subject to Section 6B.7, the Guarantor hereby, jointly and severally,
unconditionally guarantees (i) the prompt payment and performance of the Company
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) or when such is otherwise to be
performed; and (ii) on and after the earlier of the Construction Period
Termination Date and the occurrence of a Lease Event of Default, the prompt
payment and performance of the Lessor Obligations, including without limitation
payment of the Tranche A Notes, interest on the Tranche A Notes and other
amounts which are owed pursuant to any Operative Agreement to any Tranche A
Lender or the Agent, in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise) or when such is otherwise to
be performed. This Section 6B is a guaranty of payment and performance and not
of collection and is a continuing guaranty and shall apply to all Company
Obligations whenever arising and, to the extent set forth above, all Lessor
Obligations whenever arising. All rights granted under this Section 6B shall be
subject to the provisions of Section 8.2(h) and 8.6.
6B.2. OBLIGATIONS UNCONDITIONAL.
-------------------------
The Guarantor agrees that the obligations of the Guarantor hereunder
are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Operative Agreements, or
any other agreement or instrument referred to therein, or any substitution,
release or exchange of any other guarantee of or security for any of the Company
Obligations or Lessor Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety,
guarantor or co-obligor, it being the intent of this Section 6B.2 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances. The Guarantor agrees that this Section 6B may be
enforced without the necessity at any time of resorting to or exhausting any
other security or collateral and without the necessity at any time of having
recourse to the Notes, the Certificates or any other of the Operative Agreements
or any collateral, if any, hereafter securing the Company Obligations or
otherwise and the Guarantor hereby waives the right to require any benefitted
party to proceed against the Construction Agent, the Lessee or any other Person
(including without limitation a co-guarantor) or to require any benefitted party
to pursue any other remedy or enforce any other right. The Guarantor further
agrees that it hereby waives any and all right of subrogation, indemnity,
reimbursement or contribution against the Lessee and the Construction Agent, the
Lessor or the Guarantor of the Company Obligations or the Lessor Obligations for
amounts paid under this Section 6B until such time as the Loans, Holder
Advances, accrued but unpaid interest, accrued but unpaid Holder Yield and all
other amounts owing under the Operative Agreements have been paid in full.
Without limiting the generality of the waiver provisions of this Section 6B, the
Guarantor hereby waives any rights to require any benefitted party to proceed
against the Construction Agent, the Lessee or any co-guarantor or to require
Lessor to pursue any other remedy or enforce any other right, including without
limitation, any and all rights under N.C. Gen. Stat. ss. 26-7 through 26-9. The
Guarantor further agrees that nothing contained herein shall prevent any
benefitted party from suing on any Operative Agreement or foreclosing any
27
security interest in or Lien on any collateral, if any, securing the Company
Obligations or the Lessor Obligations or from exercising any other rights
available to it under any Operative Agreement, or any other instrument of
security, if any, and the exercise of any of the aforesaid rights and the
completion of any foreclosure proceedings shall not constitute a discharge of
the Guarantor's obligations hereunder; it being the purpose and intent of the
Guarantor that its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances; provided that any amounts due
under this Section 6B which are paid to or for the benefit of any benefitted
party shall reduce the Company Obligations and/or the Lessor Obligations, as
applicable, by a corresponding amount (unless required to be rescinded at a
later date). Neither the Guarantor's obligations under this Section 6B nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Construction Agent or the Lessee
or by reason of the bankruptcy or insolvency of the Construction Agent or the
Lessee. The Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Company Obligations or any of the Lessor
Obligations and notice of or proof of reliance by any benefitted party upon this
Section 6B or acceptance of this Section 6B. The Company Obligations and the
Lessor Obligations shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Section 6B. All dealings between the Construction Agent, the Lessee and the
Guarantor, on the one hand, and the benefitted parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Section 6B.
6B.3. MODIFICATIONS.
-------------
The Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Company Obligations or the Lessor Obligations, if any,
may be exchanged, compromised or surrendered from time to time; (b) no
benefitted party shall have any obligation to protect, perfect, secure or insure
any such security interests, liens or encumbrances now or hereafter held, if
any, for the Company Obligations or the Lessor Obligations or the properties
subject thereto; (c) the time or place of payment of the Company Obligations or
the Lessor Obligations may be changed or extended, in whole or in part, to a
time certain or otherwise, and may be renewed or accelerated, in whole or in
part; (d) the Construction Agent, the Lessee and any other party liable for
payment under the Operative Agreements may be granted indulgences generally; (e)
any of the provisions of the Notes, the Certificates or any of the other
Operative Agreements may be modified, amended or waived; (f) any party
(including any co-guarantor) liable for the payment thereof may be granted
indulgences or be released; and (g) any deposit balance for the credit of the
Construction Agent, the Lessee or any other party liable for the payment of the
Company Obligations or the Lessor Obligations or liable upon any security
therefor may be released, in whole or in part, at, before or after the stated,
extended or accelerated maturity of the Company Obligations or the Lessor
Obligations, all without notice to or further assent by the Guarantor, which
shall remain bound thereon, notwithstanding any such exchange, compromise,
surrender, extension, renewal, acceleration, modification, indulgence or
release.
28
6B.4. WAIVER OF RIGHTS.
----------------
The Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Section 6B by any benefitted
party and of all extensions of credit or other Advances to the Construction
Agent and the Lessee by the Lenders pursuant to the terms of the Operative
Agreements; (b) presentment and demand for payment or performance of any of the
Company Obligations or the Lessor Obligations; (c) protest and notice of
dishonor or of default with respect to the Company Obligations, the Lessor
Obligations or with respect to any security therefor; (d) notice of any
benefitted party obtaining, amending, substituting for, releasing, waiving or
modifying any security interest, lien or encumbrance, if any, hereafter securing
the Company Obligations or the Lessor Obligations, or any benefitted party's
subordinating, compromising, discharging or releasing such security interests,
liens or encumbrances, if any; and (e) all other notices to which the Guarantor
might otherwise be entitled. Notwithstanding anything to the contrary herein,
the Guarantor's payments hereunder shall be due five (5) Business Days after
written demand by the Agent for such payment (unless the Company Obligations or
the Lessor Obligations are automatically accelerated pursuant to the applicable
provisions of the Operative Agreements in which case the Guarantor's payments
shall be automatically due).
6B.5. REINSTATEMENT.
-------------
The obligations of the Guarantor under this Section 6B shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Company Obligations or the Lessor
Obligations is rescinded or must be otherwise restored by any holder of any of
the Company Obligations or the Lessor Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Guarantor
agrees that it will indemnify each benefitted party on demand for all reasonable
costs and expenses (including, without limitation, reasonable fees of counsel)
incurred by any benefitted party in connection with such rescission or
restoration, including without limitation any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
6B.6. REMEDIES.
--------
The Guarantor agrees that, as between the Guarantor, on the one hand,
and each benefitted party, on the other hand, the Company Obligations or the
Lessor Obligations may be declared to be forthwith due and payable as provided
in the applicable provisions of the Operative Agreements (and shall be deemed to
have become automatically due and payable in the circumstances provided therein)
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing such Company Obligations or such Lessor Obligations
from becoming automatically due and payable) as against any other Person and
that, in the event of such declaration (or such Company Obligations or such
Lessor Obligations being deemed to have become automatically due and payable),
such Company Obligations or such Lessor Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by the
Guarantor in accordance with the applicable provisions of the Operative
Agreements.
29
6B.7. LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in
any of the other Operative Agreements, to the extent the obligations of the
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including without limitation because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of the
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including without limitation
the Bankruptcy Code).
Subject to Section 6B.5, upon the satisfaction of the Company
Obligations and the Lessor Obligations in full, regardless of the source of
payment, the Guarantor's obligations hereunder shall be deemed satisfied,
discharged and terminated other than indemnifications set forth herein that
expressly survive.
6B.8. PAYMENT OF AMOUNTS TO THE AGENT.
Each benefitted party hereby instructs the Guarantor, and the Guarantor
hereby acknowledges and agrees, that until such time as the Loans and the Holder
Advances are paid in full and the Liens evidenced by the Security Agreement and
the Mortgage Instruments have been released any and all Rent (excluding Excepted
Payments which shall be payable to each Holder or other Person as appropriate)
and any and all other amounts of any kind or type under any of the Operative
Agreements due and owing or payable to any Person shall instead be paid directly
to the Agent (excluding Excepted Payments which shall be payable to each Holder
or other Person as appropriate) or as the Agent may direct from time to time for
allocation and distribution in accordance with the procedures set forth in
Section 8.7 hereof.
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. TRANSACTION EXPENSES.
(a) The Lessor agrees on the Initial Closing Date, to pay, or
cause to be paid, all Transaction Expenses arising from the Initial
Closing Date, including without limitation all reasonable fees,
expenses and disbursements of the various legal counsels for the Lessor
and the Agent in connection with the transactions contemplated by the
Operative Agreements and incurred in connection with such Initial
Closing Date, the initial fees and expenses of the Owner Trustee due
and payable on such Initial Closing Date, all fees, taxes and expenses
for the recording, registration and filing of documents and all other
reasonable fees, expenses and disbursements incurred in connection with
such Initial Closing Date; provided, however, the Lessor shall pay such
amounts described in this Section 7.1(a) only if (i) such amounts are
properly described in a Requisition delivered on or before the Initial
Closing Date, and (ii) funds are made available by the Lenders and the
Holders in connection with such Requisition in an amount sufficient to
allow such payment. On the Initial Closing Date after delivery and
receipt of the Requisition referenced in Section 4.2(a) hereof and
satisfaction of the other conditions precedent for such date, the
30
Holders shall make Holder Advances and the Lenders shall make Loans to
the Lessor to pay for the Transaction Expenses, fees, expenses and
other disbursements referenced in this Section 7.1(a). The Lessee
agrees to timely pay all amounts referred to in this Section 7.1(a) to
the extent not paid by the Lessor.
(b) Assuming no Default or Event of Default shall have
occurred and be continuing and only for the period prior to the Rent
Commencement Date, the Lessor agrees on each Property Closing Date, on
the date of any Construction Advance and on the Completion Date to pay,
or cause to be paid, all Transaction Expenses including without
limitation all reasonable fees, expenses and disbursements of the
various legal counsels for the Lessor and the Agent in connection with
the transactions contemplated by the Operative Agreements and billed in
connection with such Advance or such Completion Date, all amounts
described in Section 7.1(a) of this Agreement which have not been
previously paid, the annual fees and reasonable out-of-pocket expenses
of the Owner Trustee, all fees, expenses and disbursements incurred
with respect to the various items referenced in Sections 5.3, 5.4
and/or 5.5 (including without limitation any premiums for title
insurance policies and charges for any updates to such policies) and
all other reasonable fees, expenses and disbursements in connection
with such Advance or such Completion Date including without limitation
all expenses relating to and all fees, taxes and expenses for the
recording, registration and filing of documents and during the
Commitment Period, all fees, expenses and costs referenced in Sections
7.3(a), 7.3(b), 7.3(d) and 7.4; provided, however, the Lessor shall pay
such amounts described in this Section 7.1(b) only if (i) such amounts
are properly described in a Requisition delivered on the applicable
date and (ii) funds are made available by the Lenders and the Holders
in connection with such Requisition in an amount sufficient to allow
such payment. On each Property Closing Date, on the date of any
Construction Advance or any Completion Date, after delivery of the
applicable Requisition and satisfaction of the other conditions
precedent for such date, the Holders shall make a Holder Advance and
the Lenders shall make Loans to the Lessor to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in this
Section 7.1(b). The Lessee agrees to timely pay all amounts referred to
in this Section 7.1(b) to the extent not paid by the Lessor.
(c) All fees payable pursuant to the Operative Agreements
shall be calculated on the basis of a year of three hundred sixty (360)
days for the actual days elapsed.
7.2. BROKERS' FEES.
-------------
The Lessee agrees to pay or cause to be paid any and all brokers' fees,
if any, including without limitation any interest and penalties thereon, which
are payable in connection with the transactions contemplated by this Agreement
and the other Operative Agreements.
7.3. CERTAIN FEES AND EXPENSES.
-------------------------
The Lessee agrees to pay or cause to be paid (a) the initial and annual
Owner Trustee's fee and all reasonable expenses of the Owner Trustee and any
co-trustees (including without limitation reasonable counsel fees and expenses)
31
or any successor owner trustee and/or co-trustee, for acting as the owner
trustee under the Trust Agreement, (b) all reasonable costs and expenses
incurred by the Credit Parties, the Agent, the Lenders, the Holders or the
Lessor regarding filings of Security Documents, in entering into any Lease
Supplement and any future amendments, modifications, supplements, restatements
and/or replacements with respect to any of the Operative Agreements, whether or
not such Lease Supplement, amendments, modifications, supplements, restatements
and/or replacements are ultimately entered into, or giving or withholding of
waivers of consents hereto or thereto, which have been requested by any Credit
Party, the Agent, the Lenders, the Holders or the Lessor, (c) all reasonable
costs and expenses incurred by the Credit Parties, the Agent, the Lenders, the
Holders or the Lessor in connection with any exercise of remedies under any
Operative Agreement or any purchase of any Property by the Construction Agent,
the Lessee or any third party and (d) all reasonable costs and expenses incurred
by the Credit Parties, the Agent, the Lenders, the Holders or the Lessor in
connection with any transfer or conveyance of any Property, whether or not such
transfer or conveyance is ultimately accomplished.
7.4. UNUSED FEE.
----------
During the Commitment Period, the Lessee agrees to pay or to cause to
be paid to the Agent for the account of (a) the Lenders, respectively, an unused
fee (the "Lender Unused Fee") equal to the product of the average daily
Available Commitment of each Lender during the Commitment Period multiplied by
the applicable rate set forth for Unused Fee in the definition of Applicable
Percentage in accordance with the provisions set forth in such definition and
(b) the Holders, respectively, an unused fee (the "Holder Unused Fee") equal to
the product of the average daily Available Holder Commitment of each Holder
during the Commitment Period multiplied by the applicable rate set forth for
Unused Fee in the definition of Applicable Percentage in accordance with the
provisions set forth in such definition. Such Unused Fees shall be payable
quarterly in arrears on each Unused Fee Payment Date. If all or a portion of any
such Unused Fee shall not be paid when due, such overdue amount shall bear
interest, payable by the Lessee on demand, at a rate per annum equal to the ABR
plus the Applicable Percentage then applicable to Tranche B Loans which are ABR
Loans (or in the case of Holder Yield, the ABR plus the Applicable Percentage
then applicable to Holder Advances plus two percent (2%) from the date of such
non-payment until such amount is paid in full (as well as before judgment).
7.5. ADMINISTRATIVE FEE.
------------------
The Lessee shall pay or cause to paid an administrative fee to the
Agent (for its individual account) on the terms and conditions set forth in the
Engagement Letter.
7.6. UPFRONT FEE.
-----------
The Lessee, at its option, either (a) shall cause the Lessor to pay or
(b) to the extent such amounts are not otherwise paid by the Lessor, the Lessee
shall timely pay, in either case on the Initial Closing Date an upfront fee in
accordance with the terms and conditions set forth in the Upfront Fee Letter.
32
7.7. STRUCTURING FEE.
---------------
The Lessee shall pay or cause to be paid on or before the Initial
Closing Date to the Agent for its own account, a structuring fee on the terms
and conditions set forth in the Engagement Letter.
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. COOPERATION WITH THE CONSTRUCTION AGENT OR THE LESSEE.
-----------------------------------------------------
The Holders, the Lenders, the Lessor (at the direction of the Majority
Secured Parties) and the Agent shall, at the expense of and to the extent
reasonably requested by the Construction Agent or the Lessee (but without
assuming additional liabilities on account thereof and only to the extent such
is acceptable to the Holders, the Lenders, the Lessor (at the direction of the
Majority Secured Parties) and the Agent in their reasonable discretion),
cooperate with the Construction Agent or the Lessee in connection with the
Construction Agent or the Lessee satisfying certain of its covenant obligations
contained in the Operative Agreements (but only to the extent that the party
from whom such cooperation is requested deems, in its reasonable discretion,
such cooperation to be appropriate) including without limitation at any time and
from time to time, promptly and duly executing and delivering any and all such
further instruments, documents and financing statements (and continuation
statements related thereto).
8.2. COVENANTS OF THE OWNER TRUSTEE AND THE HOLDERS.
----------------------------------------------
Each of the Owner Trustee and the Holders hereby agrees that so long as
this Agreement is in effect:
(a) Neither the Owner Trustee (in its trust capacity or in its
individual capacity) nor any Holder will create or permit to exist at
any time, and each of them will, at its own cost and expense, promptly
take such action as may be necessary duly to discharge, or to cause to
be discharged, all Lessor Liens on the Properties attributable to it;
(b) Without prejudice to any right under the Trust Agreement
of the Owner Trustee to resign (subject to requirement set forth in the
Trust Agreement that such resignation shall not be effective until a
successor shall have agreed to accept such appointment), or the
Holders' rights under the Trust Agreement to remove the institution
acting as the Owner Trustee (after consent to such removal by the Agent
as provided in the Trust Agreement), each of the Owner Trustee and the
Holders hereby agrees with the Lessee and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of
the Trust Agreement in such a manner as to adversely affect the rights
of any such party without 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;
33
(c) The Owner Trustee or any successor may resign or be
removed by the Holders as the Owner Trustee, a successor Owner Trustee
may be appointed and a corporation may become the Owner Trustee under
the Trust Agreement, only in accordance with the provisions of Article
IX of the Trust Agreement and, with respect to such appointment, with
the consent of the Lessee (so long as there shall be no Lease Event of
Default that shall have occurred and be continuing), which consent
shall not be unreasonably withheld or delayed;
(d) The Owner Trustee, in its capacity as the Owner Trustee
under the Trust Agreement, and not in its individual capacity, shall
not contract for, create, incur or assume any Indebtedness, or enter
into any business or other activity or enter into any contracts or
agreements, other than pursuant to or under the Operative Agreements;
(e) The Holders will not instruct the Owner Trustee to take
any action in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i)
commence any case, proceeding or other action with respect to the Owner
Trustee under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official with respect to
the Owner Trustee or for all or any substantial benefit of the
creditors of the Owner Trustee; and neither any Holder nor the Owner
Trustee shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee,
the Holders and the Agent if the Owner Trustee's principal place of
business, chief executive office, location for purposes of UCC, or the
office where the records concerning the accounts or contract rights
relating to any Property are kept, shall cease to be located at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford, Connecticut 06103 or if it
shall change its name;
(h) The Owner Trustee shall take or refrain from taking such
actions and grant or refrain from granting such approvals with respect
to the Operative Agreements and/or relating to any Property in each
case as directed in writing by the Agent (until such time as the Loans
are paid in full, and then by the Majority Holders) or, in connection
with Sections 8.5 and 9.2 hereof, the Lessee; provided, however, that
notwithstanding the foregoing provisions of this subparagraph (h) the
Owner Trustee, the Agent, the Lenders and the Holders each acknowledge,
covenant and agree that neither the Owner Trustee nor the Agent shall
act or refrain from acting, regarding each Unanimous Vote Matter, until
such party has received the approval of each Lender and each Holder
affected by such matter; and
34
(i) The Owner Trustee authorizes the Agent to file fixture
filings and/or financing statements with respect to any collateral
under or pursuant to any Operative Agreement without the signature of
the Owner Trustee in such form and in such filing offices as the Agent
reasonably determines appropriate to perfect the security interests of
the Agent under the applicable Operative Agreement.
8.3. CREDIT PARTY COVENANTS, CONSENT AND ACKNOWLEDGMENT.
--------------------------------------------------
(a) Each Credit Party acknowledges and agrees that the Owner
Trustee, pursuant to the terms and conditions of the Security Agreement
and the Mortgage Instruments, shall create Liens respecting the various
personal property, fixtures and real property described therein in
favor of the Agent. Each Credit Party hereby irrevocably consents to
the creation, perfection and maintenance of such Liens. Each Credit
Party shall, to the extent reasonably requested by any of the other
parties hereto, cooperate with the other parties in connection with
their covenants herein or in the other Operative Agreements and shall
from time to time duly execute and deliver any and all such future
instruments, documents and financing statements (and continuation
statements related thereto) as any other party hereto may reasonably
request.
(b) The Lessor hereby instructs each Credit Party, and each
Credit Party hereby acknowledges and agrees, that until such time as
the Loans and the Holder Advances are paid in full and the Liens
evidenced by the Security Agreement and the Mortgage Instruments have
been released (i) any and all Rent 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 (except for Excepted Payments) shall instead be
paid directly to the Agent (on behalf of the Person entitled thereto)
or as the Agent may direct from time to time for allocation and
distribution in accordance with the procedures set forth in Section 8.7
hereof, (ii) all rights of the Lessor under the Lease shall be
exercised by the Agent and (iii) each Credit Party shall cause all
notices, certificates, financial statements, communications and other
information which are delivered, or are required to be delivered, to
the Lessor, to also be delivered at the same time to the Agent.
(c) No Credit Party shall consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement except in accordance with Section 12.4 of this
Agreement.
(d) Each Credit Party hereby covenants and agrees that, except
for amounts payable as Basic Rent, any and all payment obligations
owing from time to time under the Operative Agreements by any Person to
the Agent, any Lender, any Holder or any other Person shall (without
further action) be deemed to be Supplemental Rent obligations payable
by the Lessee and guaranteed by the other Credit Parties. Without
limitation, such obligations of the Credit Parties shall include
without limitation arrangement fees, administrative fees, participation
fees, commitment fees, unused fees, breakage costs, prepayment
penalties, indemnities, trustee fees and transaction expenses incurred
by the parties hereto in connection with the transactions contemplated
by the Operative Agreements.
35
(e) The Lessee hereby covenants and agrees to cause an
Appraisal or reappraisal (in form and substance satisfactory to the
Agent and from an appraiser selected by the Agent) to be issued
respecting any Property as requested by the Agent from time to time (i)
at each and every time as such shall be required to satisfy any
regulatory requirements imposed on the Agent, the Lessor, the Trust
Company, any Lender and/or any Holder and (ii) after the occurrence of
an Event of Default.
(f) [Intentionally Omitted].
(g) At any time the Lessor or the Agent is entitled under the
Operative Agreements to possession of a Property or any component
thereof, each of the Construction Agent and the Lessee hereby covenants
and agrees, at its own cost and expense, to assemble and make the same
available to the Agent (on behalf of the Lessor).
(h) [Intentionally Omitted].
(i) The Lessee hereby covenants and agrees that as of
Completion (i) the Property Cost for each individual parcel of the
Property shall be (A) no less than $5,000,000 and (B) no more than
$200,000,000 and (ii) each parcel of the Property shall be a Permitted
Facility.
(j) The Lessee hereby covenants and agrees that it shall give
prompt notice to the Agent if the Lessee's location for purposes of the
UCC shall cease to be ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and the Lessee shall specify its new location for purposes of
the UCC in such notice. The Lessee hereby covenants and agrees that it
shall give prompt notice to the Agent if the Lessee's principal place
of business or chief executive office, or the office where the records
concerning the accounts or contract rights relating to any Property are
kept, shall cease to be located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ or if it shall change its name, and the Lessee shall
specify its new principal place of business, chief executive office,
such other office where the records concerning the accounts or control
rights relating to any Property are kept and/or its new name in such
notice.
(k) If there is more than one Property, unless the Agent
otherwise agrees in writing, the Lessee hereby covenants and agrees
that the aggregate Property Cost of Properties purchased for any reason
by the Lessee prior to the Expiration Date shall not exceed ten percent
(10%) of the aggregate Property Cost for all Properties funded during
the Commitment Period.
(l) [Intentionally Omitted].
(m) The Lessee hereby covenants and agrees that the rights of
the Lessee under this Agreement and the Lease shall not impair or in
any way diminish the obligations of the Construction Agent and/or the
rights of the Lessor under the Agency Agreement.
36
(n) [Intentionally Omitted].
(o) Each Credit Party shall promptly notify the Agent, or
cause the Agent to be promptly notified, upon such Credit Party gaining
knowledge of the occurrence of any Default or Event of Default which is
continuing at such time. In any event, such notice shall be provided to
the Agent within ten (10) days of when such Credit Party gains such
knowledge.
(p) Until all of the obligations under the Operative
Agreements have been finally and indefeasibly paid and satisfied in
full and the Commitments and the Holder Commitments terminated unless
consent has been obtained from the Majority Secured Parties, each
Credit Party will:
(i) preserve and maintain its separate legal
existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and
remain qualified as a foreign corporation (or partnership,
limited liability company or other such similar entity, as the
case may be) and authorized to do business in each
jurisdiction in which the failure to so qualify would have a
Material Adverse Effect;
(ii) pay and perform all obligations of the Credit
Parties under the Operative Agreements and pay and perform (A)
all taxes, assessments and other governmental charges that may
be levied or assessed upon it or any of its property, and (B)
all other indebtedness, obligations and liabilities in
accordance with customary trade practices, which if not paid
would have a Material Adverse Effect; provided that any Credit
Party may contest any item described in this Section
8.3(p)(ii) in good faith so long as adequate reserves are
maintained with respect thereto in accordance with GAAP;
(iii) to the extent failure to do so would have a
Material Adverse Effect, observe and remain in compliance with
all applicable Laws and maintain in full force and effect all
Governmental Actions, in each case applicable to the conduct
of its business; keep in full force and effect all licenses,
certifications or accreditations necessary for any Property to
carry on its business; and not permit the termination of any
insurance reimbursement program available to any Property; and
(iv) provided that the Agent, the Lenders and the
Holders use reasonable efforts to minimize disruption to the
business of the Credit Parties and provide reasonable notice
thereof unless a Lease Default or Lease Event of Default has
occurred and is continuing, permit representatives of the
Agent or any Lender or Holder, from time to time, to visit and
inspect its properties; inspect, audit and make extracts from
its books, records and files, including without limitation
management letters prepared by independent accountants; and
discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects.
37
(q) [Intentionally Omitted].
(r) Lessee shall perform any and all obligations of Lessor
under, and cause Lessor to otherwise remain in full compliance with,
the terms and provisions of each Ground Lease, if any.
(s) Promptly after obtaining any required architectural
approvals by any business park or any other applicable entity with
oversight responsibility for the applicable Improvements, the
Construction Agent shall deliver to the Agent copies of the same.
(t) [Intentionally Omitted].
(u) The Lessee authorizes the Agent to file fixture filings
and/or financing statements with respect to any collateral under or
pursuant to any Operative Agreement without the signature of the Lessee
in such form and in such filing offices as the Agent reasonably
determines appropriate to perfect the security interests of the Agent
under the applicable Operative Agreements.
(v) As soon as available, and in any event within ten (10)
days of receipt of each statement or any correspondence regarding the
Cash Collateral Account or at any other time requested by the Agent,
Lessee shall deliver to the Agent a copy of such statement or
correspondence.
(w) On the third anniversary of the Initial Closing Date, the
Lessee shall purchase all of the Tranche A Notes from each of the
Tranche A Lenders as of such date for an amount equal to the sum of (i)
the then outstanding Tranche A Loans, (ii) all accrued but unpaid
interest on the Tranche A Loans and to the extent the same is not
duplicative of the amounts payable under (i) and (ii) above, all other
Rent and other amounts then due and payable or accrued in favor of the
Tranche A Lenders under the Agency Agreement, Lease and/or under any
other Operative Agreement (including without limitation amounts under
Sections 11.1 and 11.2 of the Participation Agreement and all costs and
expenses of Lessor regarding such transfer of the Tranche A Notes).
(x) In the event Lessee or Lessor would otherwise be required
to transfer or assign any license, certification or other similar
document, including without limitation pursuant to Article 22 of the
Lease, but is prohibited by any Legal Requirement, then Lessee shall,
at Lessee's expense, take all reasonable actions requested by the
Agent, Lessor or any third party transferee of the Property to assist
such Person in obtaining all such licenses, certifications and other
similar documents which are necessary or typical, for the operation of
a hospital facility similar to the Property or which were held
previously with respect to the Property.
(y) Lessee shall promptly, but in no event more than five (5)
Business Days after a change in Rating deliver to the Agent written
notice of such Rating change.
38
8.4. SHARING OF CERTAIN PAYMENTS.
---------------------------
Except for Excepted Payments, the parties hereto acknowledge and agree
that all payments due and owing by any Credit Party to the Lessor under the
Lease or any of the other Operative Agreements shall be made by such Credit
Party directly to the Agent as more particularly provided in Section 8.3 hereof.
The Lessor, the Holders, the Agent, the Lenders and the Credit Parties
acknowledge the terms of Section 8.7 of this Agreement regarding the allocation
of payments and other amounts made or received from time to time under the
Operative Agreements and agree, that all such payments and amounts are to be
allocated as provided in Section 8.7 of this Agreement.
8.5. GRANT OF EASEMENTS, ETC.
-----------------------
The Agent, the Lenders and the Holders hereby agree that, so long as no
Event of Default shall have occurred and be continuing, the Owner Trustee shall,
from time to time at the request of the Lessee (and with the prior consent of
the Agent), in connection with the transactions contemplated by the Agency
Agreement, the Lease or the other Operative Agreements, (i) grant easements and
other rights in the nature of easements with respect to any Property, (ii)
release existing easements or other rights in the nature of easements which are
for the benefit of any Property, (iii) execute and deliver to any Person any
instrument appropriate to confirm or effect such grants or releases, and (iv)
execute and deliver to any Person such other documents or materials in
connection with the acquisition, development, construction, testing or operation
of any Property, including without limitation reciprocal easement agreements,
construction contracts, operating agreements, development agreements, plats,
replats or subdivision documents; provided, that each of the agreements referred
to in this Section 8.5 shall be of the type normally executed by the Lessee in
the ordinary course of the Lessee's business and shall be on commercially
reasonable terms so as not to diminish the value of any Property in any material
respect.
8.6. APPOINTMENT BY THE AGENT, THE LENDERS, THE HOLDERS AND THE
----------------------------------------------------------
OWNER TRUSTEE.
-------------
The Holders hereby appoint the Agent to act as collateral agent for the
Holders in connection with the Lien granted by the Security Documents to secure
the Holder Amount. The Lenders and the Holders acknowledge and agree and direct
that the rights and remedies of the beneficiaries of the Lien of the Security
Documents shall be exercised by the Agent on behalf of the Lenders and the
Holders as directed from time to time by the Majority Secured Parties or,
pursuant to Sections 8.2(h) and 12.4, all of the Lenders and the Holders, as the
case may be; provided, in all cases, the Agent shall allocate payments and other
amounts received in accordance with Section 8.7. The Agent is further appointed
to provide notices under the Operative Agreements on behalf of the Owner Trustee
(as determined by the Agent, in its reasonable discretion), to receive notices
under the Operative Agreements on behalf of the Owner Trustee and (subject to
Sections 8.5 and 9.2) to take such other action under the Operative Agreements
on behalf of the Owner Trustee as the Agent shall determine in its reasonable
discretion from time to time. The Agent hereby accepts such appointments. For
purposes hereof, the provisions of Section 7 of the Credit Agreement, together
39
with such other terms and provisions of the Credit Agreement and the other
Operative Agreements as required for the full interpretation and operation of
Section 7 of the Credit Agreement are hereby incorporated by reference as if
restated herein for the mutual benefit of the Agent and each Holder as if each
Holder were a Lender thereunder. Outstanding Holder Advances and outstanding
Loans shall each be taken into account for purposes of determining Majority
Secured Parties. Further, the Agent shall be entitled to take such action on
behalf of the Owner Trustee as is delegated to the Agent under any Operative
Agreement (whether express or implied) as may be reasonably incidental thereto.
The parties hereto hereby agree to the provisions contained in this Section 8.6.
Any appointment of a successor agent under Section 7.9 of the Credit Agreement
shall also be effective as an appointment of a successor agent for purposes of
this Section 8.6.
8.7. COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
-------------------------------------------------------
(a) Each Credit Party has agreed pursuant to Section 5.10 and
otherwise in accordance with the terms of this Agreement to pay to (i)
the Agent any and all Rent and any and all other amounts of any kind or
type under any of the Operative Agreements due and owing or payable to
any Person and (ii) each Person as appropriate the Excepted Payments.
Promptly after receipt, the Agent shall apply and allocate, in
accordance with the terms of this Section 8.7, such amounts received
from any Credit Party and all other payments, receipts and other
consideration of any kind whatsoever received by the Agent pursuant to
the Security Agreement or otherwise received by the Agent, the Holders
or any of the Lenders in connection with the Collateral, the Security
Documents or any of the other Operative Agreements. Ratable
distributions among the Lenders and the Holders under this Section 8.7
shall be made based on (in the case of the Lenders) the ratio of the
outstanding Loans to the aggregate Property Cost and (in the case of
the Holders) the ratio of the outstanding Holder Advances to the
aggregate Property Cost. Ratable distributions among the Lenders (in
situations where the Tranche A Lenders are not differentiated from the
Tranche B Lenders) shall be made based on the ratio of the individual
Lender's Loans outstanding to the aggregate of all the Lenders' Loans
outstanding; provided, to the extent there are no Loans outstanding,
such distributions shall be made based on the ratio of the individual
Lender's Commitment to the aggregate of all the Lenders' Commitments.
Ratable distributions among the Holders under this Section 8.7 shall be
based on the ratio of the individual Holder's Holder Advances
outstanding to the aggregate of all the Holders' Holder Advances
outstanding; provided, to the extent there are not Holder Advances
outstanding, such distributions shall be made based on the ratio of the
individual Holder's Holder Commitment to the aggregate of all the
Holders' Holder Commitments.
(b) Payments and other amounts received by the Agent from time
to time in accordance with the terms of subparagraph (a) shall be
applied and allocated as follows (subject in all cases to Section
8.7(c)):
(i) Any such payment or amount identified as or
deemed to be Basic Rent shall be applied and allocated by the
Agent ratably to the Lenders and the Holders for application
and allocation to the payment of interest on the Loans and
thereafter the principal of the Loans which is due and payable
on such date and to the payment of accrued Holder Yield with
respect to the Holder Advances and thereafter the portion of
the Holder Advances which is due on such date.
40
(ii) If on any date the Agent or the Lessor shall
receive any amount in respect of (A) any Casualty or
Condemnation pursuant to Sections 15.1(a) or 15.1(g) of the
Lease (excluding any payments in respect thereof which are
payable to the Lessee in accordance with the Lease), or (B)
the Termination Value in connection with the delivery of a
Termination Notice pursuant to Article XVI of the Lease, or
(C) the Termination Value in connection with the exercise of
the Purchase Option under Section 20.1 of the Lease or the
exercise of the option of the Lessor to transfer the
Properties to the Lessee pursuant to Section 20.3 of the
Lease, or (D) any payment required to be made or elected to be
made by the Construction Agent to the Lessor pursuant to the
terms of the Agency Agreement, then in each case, the Lessor
shall be required to pay such amount received (1) if no
Acceleration has occurred, to prepay the principal balance of
the Loans and the Holder Advances, on a pro rata basis, a
portion of such amount to be distributed to the Lenders and
the Holders or (2) if an Acceleration has occurred, to apply
and allocate the proceeds respecting Sections 8.7(b)(ii)(A)
through 8.7(b)(ii)(D) in accordance with Section 8.7(b)(iii)
hereof.
(iii) An amount equal to any payment identified as
proceeds of the sale or other disposition (or lease upon the
exercise of remedies) of the Properties or any portion
thereof, whether pursuant to Article XXII of the Lease or the
exercise of remedies under the Security Documents or
otherwise, the execution of remedies set forth in the Lease
and any payment in respect of excess wear and tear pursuant to
Section 22.3 of the Lease (whether such payment relates to a
period before or after the Construction Period Termination
Date) shall be applied and allocated by the Agent first,
ratably to the payment of the principal and interest of the
Tranche B Loans then outstanding, second, ratably to the
payment of the principal and interest of the Tranche A Loans
then outstanding, third, ratably to the payment to the Holders
of the outstanding principal balance of all Holder Advances
plus all outstanding Holder Yield with respect to such
outstanding Holder Advances, fourth, to any and all other
amounts owing under the Operative Agreements to the Lenders
under the Tranche B Loans, fifth, to any and all other amounts
owing under the Operative Agreements to the Lenders under the
Tranche A Loans, sixth, to any and all other amounts owing
under the Operative Agreements to the Holders, and seventh, to
the extent moneys remain after application and allocation
pursuant to clauses first through sixth above, to the Owner
Trustee for application and allocation to any and all other
amounts owing to the Holders or the Owner Trustee and as the
Holders shall determine; provided, where no Event of Default
shall exist and be continuing and a prepayment is made for any
reason with respect to less than the full amount of the
outstanding principal amount of the Loans and the outstanding
Holder Advances, the proceeds shall be applied and allocated
ratably to the Lenders and to the Holders.
41
(iv) An amount equal to (A) any such payment pursuant
to Section 22.1(b) of the Lease (or otherwise) of the Maximum
Residual Guarantee Amount (and any such lesser amount as may
be required by Section 22.1(b) of the Lease) in respect of the
Properties and any such payment which derives from the Cash
Collateral Account and (B) any other amount payable upon any
exercise of remedies after the occurrence of an Event of
Default not covered by Sections 8.7(b)(i) or 8.7(b)(iii) above
(including without limitation any amount received in
connection with an Acceleration which does not represent
proceeds from the sale or liquidation of the Properties) shall
be applied and allocated by the Agent first, ratably, to the
payment of the principal and interest balance of Tranche A
Loans then outstanding, second, ratably to the payment of the
principal and interest balance of the Tranche B Loans then
outstanding, third, ratably to the payment of the principal
balance of all Holder Advances plus all outstanding Holder
Yield with respect to such outstanding Holder Advances,
fourth, to the payment of any other amounts owing to the
Lenders hereunder or under any of the other Operative
Agreement, and fifth, to the extent moneys remain after
application and allocation pursuant to clauses first through
fourth above, to the Owner Trustee for application and
allocation to Holder Advances and Holder Yield and any other
amounts owing to the Holders or the Owner Trustee as the
Holders shall determine.
(v) An amount equal to any such payment identified as
Supplemental Rent shall be applied and allocated by the Agent
to the payment of any amounts then owing to the Agent, the
Lenders, the Holders and the other parties to the Operative
Agreements (or any of them) (other than any such amounts
payable pursuant to the preceding provisions of this Section
8.7(b)) as shall be determined by the Agent in its reasonable
discretion; provided, however, that Supplemental Rent received
upon the exercise of remedies after the occurrence and
continuance of an Event of Default in lieu of or in
substitution of the Maximum Residual Guarantee Amount or as a
partial payment thereon shall be applied and allocated as set
forth in Section 8.7(b)(iv).
(vi) Amounts paid by the Guarantor pursuant to
Section 6B shall be applied and allocated by the Agent in the
same manner as the payment would have been applied and
allocated if paid by the Construction Agent or the Lessee.
(vii) The Agent in its reasonable judgment shall
identify the nature of each payment or amount received by the
Agent and apply and allocate each such amount in the manner
specified above.
(viii) Notwithstanding any other provision of any
Operative Agreement, if with respect to a Construction Period
Property any Advances were used to pay for Excluded Costs and
the Lessee has properly elected the Sale Option and paid the
Maximum Residual Guarantee Amount and all other amounts due,
then upon the sale of such Property an amount equal to the
proceeds from the sale of such Property plus the Maximum
Residual Guarantee Amount shall be applied in accordance with
42
Section 8.7 (b) (iii) up to the Adjusted Property Cost of such
Property. After distribution of an amount equal to the sales
proceeds pursuant to the preceding sentence with respect to
such Property plus the Maximum Residual Guarantee Amount, the
remaining sales proceeds, if any, shall be distributed first,
to the Lessee up to the Maximum Residual Guarantee Amount
previously paid by the Lessee (and not reclaimed) with respect
to such Property, second, ratably to the payment of the
principal and interest of the Tranche B Loans then
outstanding, third, ratably to the payment of the principal
and interest of the Tranche A Loans then outstanding, fourth,
ratably to the payment to the Holders of the outstanding
principal balance of and Holder Yield on all outstanding
Holder Advances, fifth, to any and all other amounts owing
under the Operative Agreements to the Lenders under the
Tranche B Loans, sixth, to any and all other amounts owing
under the Operative Agreements to the Lenders under the
Tranche A Loans, seventh, to any and all other amounts owing
under the Operative Agreements to the Holders, eighth, to any
and all other amounts owing under the Operative Agreements to
any Financing Party, and ninth, to the Lessee.
(c) Notwithstanding any other provision of any Operative
Agreement, payment of principal, interest or any other amounts payable
with respect to the Tranche A Loans held by any Credit Party or any of
such Credit Party's Affiliates or assignees shall be subordinated to
all other amounts owed to any other Financing Party whether by
acceleration or otherwise upon the occurrence and continuance of an
Event of Default. With respect to an election of Section 5.18(b) in
this Agreement, all proceeds resulting from the right, title and
interest of the Financing Parties in the applicable Construction Period
Property shall be for the sole benefit of the Financing Parties, and
the Lessee shall have no further right, title or interest therein.
Except as described in the prior sentence, upon the payment in full of
the Loans, the Holder Advances and all other amounts then due and owing
by the Owner Trustee hereunder or under any Credit Document and the
payment in full of all other amounts then due and owing to the Lenders,
the Holders, the Agent, the Owner Trustee and the other Financing
Parties pursuant to the Operative Agreements, any moneys remaining with
the Agent shall be returned to the Lessee. It is agreed that, prior to
the application and allocation of amounts received by the Agent in the
order described in Section 8.7(b) above or any distribution of money to
the Lessee, any such amounts shall first be applied and allocated to
the payment of (i) any and all sums advanced by the Agent in order to
preserve the Collateral or to preserve its Lien thereon, (ii) the
expenses of retaking, holding, preparing for sale or lease, selling or
otherwise disposing or realizing on the Collateral, or of any exercise
by the Agent of its rights under the Security Documents, together with
reasonable attorneys' fees and expenses and court costs and (iii) any
and all other amounts reasonably owed to the Agent under or in
connection with the transactions contemplated by the Operative
Agreements (including without limitation any accrued and unpaid
administration fees).
8.8. RELEASE OF PROPERTIES, ETC.
--------------------------
If the Lessee shall at any time purchase any Property pursuant to the
Lease, or the Construction Agent shall purchase any Property pursuant to the
43
Agency Agreement, or if any Property shall be sold in accordance with Article
XXII of the Lease, then, upon satisfaction by the Owner Trustee of its
obligation to prepay the Loans, Holder Advances and all other amounts owing to
the Lenders and the Holders under the Operative Agreements, the Agent is hereby
authorized and directed to release such Property from the liens created by the
Security Documents to the extent of its interest therein. In addition, upon the
termination of the Commitments and the Holder Commitments and the payment in
full of the Loans, the Holder Advances and all other amounts owing by the Owner
Trustee and the Lessee hereunder or under any other Operative Agreement the
Agent is hereby authorized and directed to release all of the Properties from
the Liens created by the Security Documents to the extent of its interest
therein. Upon request of the Owner Trustee following any such release, the Agent
shall, at the sole cost and expense of the Lessee, execute and deliver to the
Owner Trustee and the Lessee such documents as the Owner Trustee or the Lessee
shall reasonably request to evidence such release.
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
9.1. THE CONSTRUCTION AGENT'S AND THE LESSEE'S CREDIT AGREEMENT
----------------------------------------------------------
RIGHTS.
------
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Agent, the Lenders, the Holders, the Credit Parties and the Owner
Trustee hereby agree that, prior to the occurrence and continuation of any
Default or Event of Default, the Construction Agent or the Lessee, as the case
may be, shall have the following rights:
(a) the right to designate an account to which amounts funded
under the Operative Agreements shall be credited pursuant to Section
2.3(a) of the Credit Agreement;
(b) the right to terminate or reduce the Commitments pursuant
to Section 2.5(a) of the Credit Agreement;
(c) the right to exercise the conversion and continuation
options pursuant to Section 2.7 of the Credit Agreement;
(d) the right to receive any notice and any certificate, in
each case issued pursuant to Section 2.11(a) of the Credit Agreement;
(e) the right to replace any Lender pursuant to Section
2.11(b) of the Credit Agreement; and
(f) the right to approve any successor agent pursuant to
Section 7.9 of the Credit Agreement.
9.2. THE CONSTRUCTION AGENT'S AND THE LESSEE'S TRUST AGREEMENT
---------------------------------------------------------
RIGHTS.
------
Notwithstanding anything to the contrary contained in the Trust
Agreement, the Credit Parties, the Owner Trustee and the Holders hereby agree
44
that, prior to the occurrence and continuation of any Default or Event of
Default, the Construction Agent or the Lessee, as the case may be, shall have
the following rights:
(a) the right to exercise the conversion and continuation
options pursuant to Section 3.8 of the Trust Agreement;
(b) the right to receive any notice and any certificate, in
each case issued pursuant to Section 3.9(a) of the Trust Agreement;
(c) the right to replace any Holder pursuant to Section 3.9(b)
of the Trust Agreement;
(d) the right to exercise the removal options contained in
Section 9.1 of the Trust Agreement; provided, however, that no removal
of the Owner Trustee and appointment of a successor Owner Trustee by
the Holders pursuant to Section 9.1 of the Trust Agreement shall be
made without the prior written consent (not to be unreasonably withheld
or delayed) of the Lessee.
SECTION 10. TRANSFER OF INTEREST.
10.1. RESTRICTIONS ON TRANSFER.
------------------------
Each Lender may participate, assign or transfer all or a portion of its
interest hereunder and under the other Operative Agreements in accordance with
Sections 9.7 and 9.8 of the Credit Agreement; provided, each participant,
assignee or transferee must obtain the same ratable interest in Tranche A Loans,
Tranche A Commitments, Tranche B Loans and Tranche B Commitments (and to the
extent the selling Lender is also a Holder (or an Affiliate of a Holder), each
such participant, assignor or transferee must also obtain the same ratable
interest in and to the Holder Advances, Holder Commitments and the Trust
Estate); provided, further, that each Lender that participates, assigns or
transfers all or a portion of its interest hereunder and under the other
Operative Agreements shall deliver to the Agent a copy of each participation
agreement in form and substance reasonably satisfactory to the Agent (in the
case of a participation) and a copy of each Assignment and Acceptance (as
referenced in Section 9.8 of the Credit Agreement, in the case of an assignment
or other transfer) for purposes of maintaining the Register. The Holders may,
directly or indirectly, assign, convey or otherwise transfer any of their right,
title or interest in or to the Trust Estate or the Trust Agreement in accordance
with the terms of Section 11.8(b) of the Trust Agreement; provided, to the
extent the selling Holder is also a Lender (or an Affiliate of a Lender), each
such assignee, receiver of a conveyance or other transferee must also obtain the
same ratable interest in and to the Tranche A Loans, Tranche A Commitments,
Tranche B Loans and Tranche B Commitments. The Owner Trustee may, subject to the
rights of the Lessee under the Lease and the other Operative Agreements and to
the Lien of the applicable Security Documents but only with the prior written
consent of the Agent (which consent may be withheld by the Agent in its sole
discretion) and (provided, no Default or Event of Default has occurred and is
continuing) with the consent of the Lessee, directly or indirectly, assign,
convey, appoint an agent with respect to enforcement of, or otherwise transfer
45
any of its right, title or interest in or to any Property, the Lease, the Trust
Agreement and the other Operative Agreements (including without limitation any
right to indemnification thereunder), or any other document relating to a
Property or any interest in a Property as provided in the Trust Agreement and
the Lease. The provisions of the immediately preceding sentence shall not apply
to the obligations of the Owner Trustee to transfer Property to the Lessee or a
third party purchaser pursuant to Article XXII of the Lease upon payment for
such Property in accordance with the terms and conditions of the Lease. No
Credit Party may assign any of the Operative Agreements or any of their
respective rights or obligations thereunder or with respect to any Property in
whole or in part to any Person without the prior written consent of the Agent,
the Lenders, the Holders, the Lessor and the Lessee.
10.2. EFFECT OF TRANSFER.
------------------
From and after any transfer effected in accordance with this Section
10, the transferor shall be released, to the extent of such transfer, from its
liability hereunder and under the other documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer;
provided, however, that any transferor shall remain liable hereunder and under
such other documents to the extent that the transferee shall not have assumed
the obligations of the transferor thereunder. Upon any transfer by the Owner
Trustee, a Holder or a Lender as above provided, any such transferee shall
assume the obligations of the Owner Trustee, the Holder or the Lender, as the
case may be, and shall be deemed an "Owner Trustee", "Holder", or "Lender", as
the case may be, for all purposes of such documents and each reference herein to
the transferor shall thereafter be deemed a reference to such transferee for all
purposes, except as provided in the preceding sentence. Notwithstanding any
transfer of all or a portion of the transferor's interest as provided in this
Section 10, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer including without limitation rights to
indemnification under any such document.
SECTION 11. INDEMNIFICATION.
11.1. GENERAL INDEMNITY.
-----------------
Subject to the provisions of Section 11.7, whether or not any of the
transactions contemplated hereby shall be consummated, the Indemnity Provider
hereby assumes liability for and agrees to defend, indemnify and hold harmless
each Indemnified Person on an After Tax Basis from and against any Claims, which
may be imposed on, incurred by or asserted against an Indemnified Person by any
third party, including without limitation Claims arising from the negligence of
an Indemnified Person (but not to the extent such Claims arise from the gross
negligence or willful misconduct of such Indemnified Person itself, as
determined by a court of competent jurisdiction, as opposed to gross negligence
or willful misconduct imputed to such Indemnified Person) in any way relating to
or arising or alleged to arise out of the execution, delivery, performance or
enforcement of this Agreement, the Lease or any other Operative Agreement or on
or with respect to any Property or any component thereof, including without
limitation Claims in any way relating to or arising or alleged to arise out of
(a) the financing, refinancing, purchase, acceptance, rejection, ownership,
design, construction, refurbishment, development, delivery, acceptance,
46
nondelivery, leasing, subleasing, possession, use, occupancy, operation,
maintenance repair, modification, transportation, condition, sale, return,
repossession (whether by summary proceedings or otherwise), or any other
disposition of any Property or any part thereof, including without limitation
the acquisition, holding or disposition of any interest in the Property, lease
or agreement comprising a portion of any thereof; (b) any latent or other
defects in any Property or any portion thereof whether or not discoverable by an
Indemnified Person or the Indemnity Provider; (c) a violation of Environmental
Laws, Environmental Claims or other loss of or damage to any property or the
environment relating to the Property, the Lease, the Agency Agreement or the
Indemnity Provider; (d) the Operative Agreements, or any transaction
contemplated thereby; (e) any breach by the Indemnity Provider of any of its
representations or warranties under the Operative Agreements to which the
Indemnity Provider is a party or failure by the Indemnity Provider to perform or
observe any covenant or agreement to be performed by it under any of the
Operative Agreements; (f) the transactions contemplated hereby or by any other
Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle
B of Title I of ERISA; (g) personal injury, death or property damage, including
without limitation Claims based on strict or absolute liability in tort; and (h)
any fees, expenses and/or other assessments by any business park or any other
applicable entity with oversight responsibility for the applicable Property.
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including without
limitation a written notice of such proceeding), for any Claim, such Indemnified
Person shall promptly notify the Indemnity Provider in writing and shall not
take action with respect to such Claim without the consent of the Indemnity
Provider for thirty (30) days after the receipt of such notice by the Indemnity
Provider; provided, however, that in the case of any such Claim, if action shall
be required by law or regulation to be taken prior to the end of such period of
thirty (30) days, such Indemnified Person shall endeavor to, in such notice to
the Indemnity Provider, inform the Indemnity Provider of such shorter period,
and no action shall be taken with respect to such Claim without the consent of
the Indemnity Provider before seven (7) days before the end of such shorter
period; provided, further, that the failure of such Indemnified Person to give
the notices referred to in this sentence shall not diminish the Indemnity
Provider's obligation hereunder except to the extent such failure precludes in
all respects the Indemnity Provider from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim, in the Indemnity
Provider's reasonable discretion, can be pursued by the Indemnity Provider on
behalf of or in the name of such Indemnified Person, the Indemnified Person, at
the Indemnity Provider's request, shall allow the Indemnity Provider to conduct
and control the response to such Claim and (B) in the case of any Claim (and
notwithstanding the provisions of the foregoing subsection (A)), the Indemnified
Person may request the Indemnity Provider to conduct and control the response to
such Claim (with counsel to be selected by the Indemnity Provider and consented
to by such Indemnified Person, such consent not to be unreasonably withheld;
47
provided, however, that any Indemnified Person may retain separate counsel at
the expense of the Indemnity Provider in the event of a conflict of interest
between such Indemnified Person and the Indemnity Provider)) by, in the sole
discretion of the Person conducting and controlling the response to such Claim
(1) resisting payment thereof, (2) not paying the same except under protest, if
protest is necessary and proper, (3) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and judicial
proceedings, or (4) taking such other action as is reasonably requested by the
Indemnity Provider from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party. The parties agree that an Indemnified Person may at any time decline to
take further action with respect to the response to such Claim and may settle
such Claim if such Indemnified Person shall waive its rights to any indemnity
from the Indemnity Provider that otherwise would be payable in respect of such
Claim (and any future Claim, the pursuit of which is precluded by reason of such
resolution of such Claim) and shall pay to the Indemnity Provider any amount
previously paid or advanced by the Indemnity Provider pursuant to this Section
11.1 by way of indemnification or advance for the payment of an amount regarding
such Claim.
Notwithstanding the foregoing provisions of this Section 11.1, an
Indemnified Person shall not be required to take any action and the Indemnity
Provider shall not be permitted to respond to any Claim in its own name or that
of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including without limitation all
reasonable legal, accounting and investigatory fees and disbursements and the
Indemnity Provider shall have agreed that the Claim is an indemnifiable Claim
hereunder, (B) in the case of a Claim that must be pursued in the name of an
Indemnified Person (or an Affiliate thereof), the amount of the potential
indemnity (taking into account all similar or logically related Claims that have
been or could be raised for which the Indemnity Provider may be liable to pay an
indemnity under this Section 11.1) exceeds $25,000 (or such lesser amount as may
be subsequently agreed between the Indemnity Provider and the Indemnified
Person), (C) the Indemnified Person shall have reasonably determined that the
action to be taken will not result in any material danger of sale, forfeiture or
loss of the Property, or any part thereof or interest therein, will not
interfere with the payment of Rent, and will not result in risk of criminal
liability, (D) if such Claim shall involve the payment of any amount prior to
the resolution of such Claim, the Indemnity Provider shall provide to the
Indemnified Person an interest-free advance in an amount equal to the amount
that the Indemnified Person is required to pay (with no additional net after-tax
cost to such Indemnified Person) prior to the date such payment is due, (E) in
the case of a Claim that must be pursued in the name of an Indemnified Person
(or an Affiliate thereof), the Indemnity Provider shall have provided to such
Indemnified Person an opinion of independent counsel selected by the Indemnity
Provider and reasonably satisfactory to the Indemnified Person stating that a
reasonable basis exists to contest such Claim (or, in the case of an appeal of
an adverse determination, an opinion of such counsel to the effect that the
48
position asserted in such appeal will more likely than not prevail) and (F) no
Event of Default shall have occurred and be continuing. In no event shall an
Indemnified Person be required to appeal an adverse judicial determination to
the United States Supreme Court. In addition, an Indemnified Person shall not be
required to contest any Claim in its name (or that of an Affiliate) if the
subject matter thereof shall be of a continuing nature and shall have previously
been decided adversely by a court of competent jurisdiction pursuant to the
contest provisions of this Section 11.1, unless there shall have been a change
in law (or interpretation thereof) and the Indemnified Person shall have
received, at the Indemnity Provider's expense, an opinion of independent counsel
selected by the Indemnity Provider and reasonably acceptable to the Indemnified
Person stating that as a result of such change in law (or interpretation
thereof), it is more likely than not that the Indemnified Person will prevail in
such contest. In no event shall the Indemnity Provider be permitted to adjust or
settle any Claim without the consent of the Indemnified Person to the extent any
such adjustment or settlement involves, or is reasonably likely to involve, any
performance by or adverse admission by or with respect to the Indemnified
Person.
11.2. GENERAL TAX INDEMNITY.
---------------------
Subject to the provisions of Section 11.7:
(a) The Indemnity Provider shall pay and assume liability for,
and does hereby agree to indemnify, protect and defend each Property
and all Indemnified Persons, and hold them harmless against, all
Impositions on an After Tax Basis, and all payments pursuant to the
Operative Agreements shall be made free and clear of and without
deduction for any and all present and future Impositions.
(b) Notwithstanding anything to the contrary in Section
11.2(a) hereof, the following shall be excluded from the indemnity
required by Section 11.2(a):
(i) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on a Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
the United States federal government that are based on or
measured by the net income (including without limitation taxes
based on capital gains and minimum taxes) of such Person;
provided, that this clause (i) shall not be interpreted to
prevent a payment from being made on an After Tax Basis if
such payment is otherwise required to be so made;
(ii) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on any Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
any state or local jurisdiction or taxing authority within any
state or local jurisdiction and that are based upon or
measured by the net income (including without limitation taxes
based on capital gains and minimum taxes) of such Person;
provided that such Taxes shall not be excluded under this
subparagraph (ii) to the extent such Taxes would have been
imposed had the location, possession or use of any Property
in, the location or the operation of the Lessee in, or the
49
Lessee's making payments under the Operative Agreements from,
the jurisdiction imposing such Taxes been the sole connection
between such Indemnified Person and the jurisdiction imposing
such Taxes; provided, further, that this clause (ii) shall not
be interpreted to prevent a payment from being made on an
After Tax Basis if such payment is otherwise required to be so
made;
(iii) any Tax to the extent it relates to any act,
event or omission that occurs after the termination of the
Lease and redelivery or sale of the Property in accordance
with the terms of the Lease (but not any Tax that relates to
such termination, redelivery or sale and/or to any period
prior to such termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified
Person as a result of the gross negligence or willful
misconduct of such Indemnified Person itself, as determined by
a court of competent jurisdiction (as opposed to gross
negligence or willful misconduct imputed to such Indemnified
Person), but not Taxes imposed as a result of ordinary
negligence of such Indemnified Person;
(c) (i) Subject to the terms of Section 11.2(f), the Indemnity
Provider shall pay or cause to be paid all Impositions
directly to the taxing authorities where feasible and
otherwise to the Indemnified Person, as appropriate, and the
Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest
is conducted pursuant to Section 11.2(f) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including
without limitation the computation of the amount payable),
accompanied by receipts or other reasonable evidence of such
demand. In the case of Impositions for which a contest is
conducted pursuant to Section 11.2(f), the Indemnity Provider
shall pay such Impositions or reimburse such Indemnified
Person for such Impositions, to the extent not previously paid
or reimbursed pursuant to subsection (a), prior to the latest
time permitted by the relevant taxing authority for timely
payment after conclusion of all contests under Section
11.2(f).
(iii) At the Indemnity Provider's request, the amount
of any indemnification payment by the Indemnity Provider
pursuant to subsection (a) shall be verified and certified by
an independent public accounting firm mutually acceptable to
the Indemnity Provider and the Indemnified Person. The fees
50
and expenses of such independent public accounting firm shall
be paid by the Indemnity Provider unless such verification
shall result in an adjustment in the Indemnity Provider's
favor of fifteen percent (15%) or more of the payment as
computed by the Indemnified Person, in which case such fee
shall be paid by the Indemnified Person.
(d) The Indemnity Provider shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns in
respect of each Property and any other tax returns required for the
Owner Trustee respecting the transactions described in the Operative
Agreements. In case any other report or tax return shall be required to
be made with respect to any obligations of the Indemnity Provider under
or arising out of subsection (a) and of which the Indemnity Provider
has knowledge or should have knowledge, the Indemnity Provider, at its
sole cost and expense, shall notify the relevant Indemnified Person of
such requirement and (except if such Indemnified Person notifies the
Indemnity Provider that such Indemnified Person intends to prepare and
file such report or return) (A) to the extent required or permitted by
and consistent with Legal Requirements, make and file in the Indemnity
Provider's name such return, statement or report; and (B) in the case
of any other such return, statement or report required to be made in
the name of such Indemnified Person, advise such Indemnified Person of
such fact and prepare such return, statement or report for filing by
such Indemnified Person or, where such return, statement or report
shall be required to reflect items in addition to any obligations of
the Indemnity Provider under or arising out of subsection (a), provide
such Indemnified Person at the Indemnity Provider's expense with
information sufficient to permit such return, statement or report to be
properly made with respect to any obligations of the Indemnity Provider
under or arising out of subsection (a). Such Indemnified Person shall,
upon the Indemnity Provider's request and at the Indemnity Provider's
expense, provide any data maintained by such Indemnified Person (and
not otherwise available to or within the control of the Indemnity
Provider) with respect to each Property which the Indemnity Provider
may reasonably require to prepare any required tax returns or reports.
(e) As between the Indemnity Provider on one hand, and each
Financing Party on the other hand, the Indemnity Provider shall be
responsible for, and the Indemnity Provider shall indemnify and hold
harmless each Financing Party (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis
against, any obligation for United States or foreign withholding taxes
or similar levies, imposts, charges, fees, deductions or withholdings
(collectively, "Withholdings") imposed in respect of the interest
payable on the Notes, Holder Yield payable on the Certificates or with
respect to any other payments under the Operative Agreement (all such
payments being referred to herein as "Exempt Payments" to be made
without deduction, withholding or set off) (and, if any Financing Party
receives a demand for such payment from any taxing authority or a
Withholding is otherwise required with respect to any Exempt Payment,
the Indemnity Provider shall discharge such demand on behalf of such
Financing Party); provided, however, that the obligation of the
Indemnity Provider under this Section 11.2(e) shall not apply to:
51
(i) Withholdings on any Exempt Payment to any
Financing Party which is a non-U.S. Person unless such
Financing Party is, on the date hereof (or on the date it
becomes a Financing Party hereunder) and on the date of any
change in the principal place of business or the lending
office of such Financing Party, entitled to submit a W-8BEN or
W-8ECI (relating to such Financing Party and entitling it to a
complete exemption from Withholding on such Exempt Payment) or
is otherwise subject to exemption from Withholding with
respect to such Exempt Payment (except where the failure of
the exemption results from a change in the principal place of
business of the Lessee; provided if a failure of exemption for
any Financing Party results from a change in the principal
place of business or lending office of any other Financing
Party, then such other Financing Party shall be liable for any
Withholding or indemnity with respect thereto), or
(ii) Any U.S. Taxes imposed solely by reason of the
failure by a non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Taxes.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean
a citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or
under any laws of the United States of America or any State thereof, or
any estate or trust that is subject to Federal income taxation
regardless of the source of its income, (B) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or
on behalf of the United States of America or any taxing authority
thereof or therein, (C) "Form W-8BEN" shall mean Form W-8BEN
(Certificate of Foreign Status of Beneficial Owner for United States
Tax Withholdings) of the Department of the Treasury of the United
States of America and (D) "Form W-8ECI" shall mean Form W-8ECI
(Certificate of Foreign Person's Claim for Exemption from Withholding
of Tax on Income Effectively Connected with the Conduct of a Trade or
Business in the United States) of the Department of Treasury of the
United States of America (or in relation to either such Form such
successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document
a claim to which such Form relates). Each of the Forms referred to in
the foregoing clauses (C) and (D) shall include such successor and
related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a claim
to which such Form relates.
If a Financing Party or an Affiliate with whom such Financing
Party files a consolidated tax return (or equivalent) subsequently
receives the benefit in any country of a tax credit or an allowance
resulting from U.S. Taxes with respect to which it has received a
payment of an additional amount under this Section 11.2(e), such
Financing Party will pay to the Indemnity Provider such part of that
benefit as in the opinion of such Financing Party will leave it (after
such payment) in a position no more and no less favorable than it would
have been in if no additional payment had been required to be paid,
52
provided always that (i) such Financing Party will be the sole judge of
the amount of any such benefit and of the date on which it is received,
(ii) such Financing Party will have the absolute discretion as to the
order and manner in which it employs or claims tax credits and
allowances available to it and (iii) such Financing Party will not be
obliged to disclose to the Borrower any information regarding its tax
affairs or tax computations.
Each non-U.S. Person that shall become a Financing Party after
the date hereof shall, upon the effectiveness of the related transfer
or otherwise upon becoming a Financing Party hereunder, be required to
provide all of the forms and statements referenced above or other
evidences of exemption from Withholdings.
(f) If a written Claim is made against any Indemnified Person
or if any proceeding shall be commenced against such Indemnified Person
(including without limitation a written notice of such proceeding), for
any Impositions, the provisions in Section 11.1 relating to
notification and rights to contest shall apply; provided, however, that
the Indemnity Provider shall have the right to conduct and control such
contest only if such contest involves a Tax other than a Tax on net
income of the Indemnified Person and can be pursued independently from
any other proceeding involving a Tax liability of such Indemnified
Person.
11.3. INCREASED COSTS, ILLEGALITY, ETC.
--------------------------------
Subject to the provisions of Section 11.7:
(a) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request hereafter adopted, promulgated
or made by any central bank or other governmental authority (whether or
not having the force of law), there shall be any increase in the cost
to any Financing Party of agreeing to make or making, funding or
maintaining Advances, then the Lessee shall from time to time, upon
demand by such Financing Party (with a copy of such demand to the Agent
but subject to the terms of Section 2.11 of the Credit Agreement and
3.9 of the Trust Agreement, as the case may be), pay to the Agent for
the account of such Financing Party additional amounts sufficient to
compensate such Financing Party for such increased cost. A certificate
as to the amount of such increased cost, submitted to the Lessee and
the Agent by such Financing Party, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any Financing Party determines that compliance with any
law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law,
but in each case promulgated or made after the date hereof) affects or
would affect the amount of capital required or expected to be
maintained by such Financing Party or any corporation controlling such
Financing Party and that the amount of such capital is increased by or
based upon the existence of such Financing Party's commitment to make
Advances and other commitments of this type or upon the Advances, then,
upon demand by such Financing Party (with a copy of such demand to the
Agent but subject to the terms of Section 2.11 of the Credit Agreement
53
and 3.9 of the Trust Agreement), the Lessee shall pay to the Agent for
the account of such Financing Party, from time to time as specified by
such Financing Party, additional amounts sufficient to compensate such
Financing Party or such corporation in the light of such circumstances,
to the extent that such Financing Party reasonably determines such
increase in capital to be allocable to the existence of such Financing
Party's commitment to make such Advances. A certificate as to such
amounts submitted to the Lessee and the Agent by such Financing Party
shall be conclusive and binding for all purposes, absent manifest
error.
(c) Without affecting its rights under Sections 11.3(a),
11.3(b) or any other provision of any Operative Agreement, each
Financing Party agrees that if there is any increase in any cost to or
reduction in any amount receivable by such Financing Party with respect
to which the Lessee would be obligated to compensate such Financing
Party pursuant to Sections 11.3(a) or 11.3(b), such Financing Party
shall use reasonable efforts to select an alternative office for
Advances which would not result in any such increase in any cost to or
reduction in any amount receivable by such Financing Party; provided,
however, that no Financing Party shall be obligated to select an
alternative office for Advances if such Financing Party determines that
(i) as a result of such selection such Financing Party would be in
violation of any applicable law, regulation, treaty, or guideline, or
would incur additional costs or expenses or (ii) such selection would
be inadvisable for regulatory reasons or materially inconsistent with
the interests of such Financing Party.
(d) With reference to the obligations of the Lessee set forth
in Sections 11.3(a) through 11.3(c), the Lessee shall not have any
obligation to pay to any Financing Party amounts owing under such
Sections for any period which is more than one (1) year prior to the
date upon which the request for payment therefor is delivered to the
Lessee.
(e) Notwithstanding any other provision of this Agreement, if
any Financing Party shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes
it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for any Financing Party to perform its
obligations hereunder to make or maintain Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, then (i) each
Eurodollar Loan or Eurodollar Holder Advance, as the case may be, will
automatically, at the earlier of the end of the Interest Period for
such Eurodollar Loan or Eurodollar Holder Advance, as the case may be,
or the date required by law, convert into an ABR Loan or an ABR Holder
Advance, as the case may be, and (iii) the obligation of the Financing
Parties to make, convert or continue Eurodollar Loans or Eurodollar
Holder Advances, as the case may be, shall be suspended until the Agent
shall notify the Lessee that such Financing Party has determined that
the circumstances causing such suspension no longer exist.
11.4. FUNDING/CONTRIBUTION INDEMNITY.
------------------------------
Subject to the provisions of Section 11.7 hereof, Section 2.11(a) of
the Credit Agreement and 3.9(a) of the Trust Agreement, as the case may be, the
Lessee agrees to indemnify each Financing Party and to hold each Financing Party
54
harmless from any loss or reasonable expense which such Financing Party may
sustain or incur as a consequence of (a) any default in connection with the
drawing of funds for any Advance, (b) any default in making any prepayment after
a notice thereof has been given in accordance with the provisions of the
Operative Agreements or (c) the making of a voluntary or involuntary payment of
Eurodollar Loans or Eurodollar Holder Advances, as the case may be, on a day
which is not the last day of an Interest Period with respect thereto. Such
indemnification shall be in an amount equal to the excess, if any, of (x) the
amount of interest or Holder Yield, as the case may be, which would have accrued
on the amount so paid, or not so borrowed, accepted, converted or continued for
the period from the date of such payment or of such failure to borrow, accept,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, accept, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable
Eurodollar Rate plus the Applicable Percentage for such Loan or Holder Advance,
as the case may be, for such Interest Period over (y) the amount of interest (as
determined by such Financing Party in its reasonable discretion) which would
have accrued to such Financing Party on such amount by (i) (in the case of the
Lenders) reemploying such funds in loans of the same type and amount during the
period from the date of payment or failure to borrow to the last day of the then
applicable Interest Period (or, in the case of a failure to borrow, the Interest
Period that would have commenced on the date of such failure) and (ii) (in the
case of the Holders) placing such amount on deposit for a comparable period with
leading banks in the relevant interest rate market. This covenant shall survive
the termination of the Operative Agreements and the payment of all other amounts
payable hereunder.
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT
-------------------------------------------------------
LIABILITY, ETC.
--------------
SUBJECT TO THE PROVISIONS OF SECTION 11.7, WITHOUT LIMITING THE
GENERALITY OF THE INDEMNIFICATION PROVISIONS OF ANY AND ALL OF THE OPERATIVE
AGREEMENTS, EACH PERSON PROVIDING INDEMNIFICATION OF ANOTHER PERSON UNDER ANY
OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY RELEASES EACH BENEFICIARY OF ANY
SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE, DESCRIBED IN ANY
OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON THE PART OF ANY SUCH
BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES,
EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, LOSSES, COSTS,
LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION ATTORNEY'S FEES
AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH BENEFICIARY (IRRESPECTIVE
OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH
INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT)
ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT
LIABILITY OF ANY SUCH BENEFICIARY.
55
11.6. ADDITIONAL PROVISIONS REGARDING ENVIRONMENTAL INDEMNIFICATION.
-------------------------------------------------------------
Each and every Indemnified Person shall at all times have the rights
and benefits, and the Indemnity Provider shall have the obligations, in each
case provided pursuant to the Operative Agreements with respect to environmental
matters, violations of any Environmental Law, any Environmental Claim or other
loss of or damage to any property or the environment relating to any Property,
the Lease, the Agency Agreement or the Indemnity Provider (including without
limitation the rights and benefits provided pursuant to Section 11.1(c)).
11.7. INDEMNITY PRIOR TO COMPLETION DATE.
----------------------------------
The Owner Trustee shall be the only beneficiary of the provisions set
forth in Sections 11.1, 11.2, 11.3, 11.4 and 11.5 with respect to any Claim
arising thereunder for the period prior to the Completion Date related to the
applicable Property. Notwithstanding the foregoing, to the extent that the Owner
Trustee becomes obligated to any Indemnified Person pursuant to the next
succeeding paragraph of Section 11.7, the Owner Trustee shall only be obligated
to make such payments to the extent the Lenders and Holders make Advances for
such payments, provided, no Requisition shall be required for the Lenders and
Holders to make such payments. To the extent any such Claim arising pursuant to
Section 11.1 does not arise in connection with any Construction Agency Person's
acts or a failure to act while any Construction Agency Person is in possession
or control of the applicable Construction Period Property, then amounts paid by
Advances prior to the Completion Date for such Claim shall be an Excluded Cost
(such amounts paid shall be referred to as the "Excluded Indemnity Amount").
To the extent the Indemnity Provider is not obligated to indemnify any
Indemnified Person with respect to Claims arising under Sections 11.1, 11.2,
11.3, 11.4 or 11.5, prior to the Completion Date related to the applicable
Property, the Owner Trustee shall provide such indemnities in favor of such
Indemnified Person in accordance with the relevant provisions of Sections 11.1,
11.2, 11.3, 11.4 or 11.5 as the case may be, but the Owner Trustee shall only be
obligated to make such payments to the extent the Lenders and Holders make
Advances for such payments, provided, no Requisition shall be required for the
Lenders and Holders to make such payments.
THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE OWNER TRUSTEE PURSUANT TO
THIS SECTION 11.7 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY
REFERENCED IN SECTION 12.9.
SECTION 12. MISCELLANEOUS.
12.1. SURVIVAL OF AGREEMENTS.
----------------------
The representations, warranties, covenants, indemnities and agreements
of the parties provided for in the Operative Agreements, and the parties'
obligations under any and all thereof, shall survive the execution and delivery
of this Agreement, the transfer of any Property to the Owner Trustee, the
56
acquisition of any Property (or any of its components), the construction of any
Improvements, the Completion of any Property, any disposition of any interest of
the Owner Trustee in any Property or any interest of the Holders in the Trust
Estate, the payment of the Notes and any disposition thereof and shall be and
continue in effect notwithstanding any investigation made by any party and the
fact that any party may waive compliance with any of the other terms, provisions
or conditions of any of the Operative Agreements. Except as otherwise expressly
set forth herein or in other Operative Agreements, the indemnities of the
parties provided for in the Operative Agreements shall survive the expiration or
termination of one or more Operative Agreements.
12.2. NOTICES.
-------
All notices required or permitted to be given under any Operative
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage paid with return receipt requested; by private courier, prepaid;
by telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or acknowledged by the
addressee or its office. Personal delivery shall be effective when accomplished.
Unless a party changes its address by giving notice to the other party as
provided herein, notices shall be delivered to the parties at the following
addresses:
If to the Construction Agent or the Lessee, to such entity at
the following address:
HEALTHSOUTH Medical Center, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
HEALTHSOUTH Medical Center, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
57
If to the Guarantor, to such entity at the following address:
HEALTHSOUTH Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
HEALTHSOUTH Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Owner Trustee, to it at the following address:
State Street Bank and Trust Company of Connecticut,
National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attention: Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
State Street Bank and Trust Company
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Reference: HealthSouth
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to the Holders, to each such Holder at the address set
forth for such Holder on Schedule I of the Trust Agreement.
58
If to the Agent, to it at the following address:
First Union National Bank
c/o Wachovia Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
If to any Lender, to it at the address set forth for such
Lender in Schedule 2.1 of the Credit Agreement.
From time to time any party may designate additional parties
and/or another address for notice purposes by notice to each of the
other parties hereto. Each notice hereunder shall be effective upon
receipt or refusal thereof.
12.3. COUNTERPARTS.
------------
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one (1) and the same
instrument.
12.4. TERMINATIONS, AMENDMENTS, WAIVERS, ETC.; UNANIMOUS VOTE
-------------------------------------------------------
MATTERS.
-------
Each Basic Document may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by, subject to Article VIII of
the Trust Agreement regarding termination of the Trust Agreement, the Majority
Secured Parties and each Credit Party (to the extent such Credit Party is a
party to such Basic Document); provided, to the extent no Default or Event of
Default shall have occurred and be continuing, the Majority Secured Parties
shall not amend, supplement, waive or modify any provision of any Basic Document
in such a manner as to adversely affect the rights of any Credit Party without
the prior written consent (not to be unreasonably withheld or delayed) of such
Credit Party. Each Operative Agreement which is not a Basic Document may be
terminated, amended, supplemented, waived or modified only by an instrument in
writing signed by the parties thereto and (without the consent of any other
Financing Party) the Agent. In addition, the Unanimous Vote Matters shall
require the consent of each Lender and each Holder affected by such matter. At
no time shall any Credit Party (acting as a Financing Party) have any right to
consent or to withhold consent with regard to any matter concerning any
Operative Agreement.
Notwithstanding the foregoing, no such termination, amendment,
supplement, waiver or modification shall, without the consent of the Agent and,
to the extent affected thereby, each Lender, except each Credit Party or any of
such Credit Party's Affiliates or assignees who may be a Lender from time to
time, and each Holder (collectively, the "Unanimous Vote Matters") (i) reduce
the Lender Commitments and/or the Holder Commitments (except for a pro-rata
59
reduction in each such commitment of the Lenders and the Holders or as otherwise
provided in Section 2.5 of the Credit Agreement and Section 3.1(e) of the Trust
Agreement), extend the scheduled date of maturity of any Note, extend the
scheduled Expiration Date, extend the Construction Period Termination Date,
extend any payment date of any Note or Certificate, reduce the stated rate of
interest payable on any Note, reduce the stated Holder Yield payable on any
Certificate (other than as a result of waiving the applicability of any
post-default increase in interest rates or Holder Yields), modify the priority
of any Lien in favor of the Agent under any Security Document, subordinate any
obligation owed to such Lender or Holder, reduce any Lender Unused Fees or any
Holder Unused Fees payable to such Lender or Holder (as the case may be) under
the Participation Agreement, extend the scheduled date of payment of any Lender
Unused Fees or any Holder Unused Fees payable to such Lender or Holder (as the
case may be) or extend the expiration date of such Lender's Commitment or the
Holder Commitment of such Holder, or (ii) terminate, amend, supplement, waive or
modify any provision of this Section 12.4 or reduce the percentages specified in
the definitions of Majority Lenders, Majority Holders or Majority Secured
Parties, or consent to the assignment or transfer by the Owner Trustee of any of
its rights and obligations under any Credit Document or release a material
portion of the Collateral (except in accordance with Section 8.8) or release any
Credit Party from its obligations under any Operative Agreement or otherwise
alter any payment obligations of any Credit Party to the Lessor or any Financing
Party under the Operative Agreements, or (iii) terminate, amend, supplement,
waive or modify any provision of Section 7 of the Credit Agreement, or (iv)
permit Advances for Work in excess of the Construction Budget, or (v) eliminate
the automatic option under Section 5.3(b) of the Agency Agreement requiring that
the Construction Agent pay certain liquidated damages in exchange for the
conveyance of a Property to the Construction Agent. Any such termination,
amendment, supplement, waiver or modification shall apply equally to each of the
Lenders and the Holders and shall be binding upon all the parties to this
Agreement. In the case of any waiver, each party to this Agreement shall be
restored to its former position and rights under the Operative Agreements, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. The parties to this
Agreement agree that any increase in the Lender Commitments and/or any increase
in the Holder Commitments shall be a matter decided by the Majority Secured
Parties and not as a Unanimous Vote Matter; provided, however, no individual
Lender's Commitment nor any Holder's Holder Commitment shall be increased
without such party's express consent, in each such party's sole discretion.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Loan are, in the opinion of the Majority Lenders, satisfied,
any Lender shall fail to fulfill its obligations to make such Loan (any such
Lender, a "Defaulting Lender") then, for so long as such failure shall continue,
the Defaulting Lender shall (unless the Lessee and the Majority Lenders,
determined as if the Defaulting Lender were not a "Lender", shall otherwise
consent in writing) be deemed for all purposes relating to terminations,
amendments, supplements, waivers or modifications under the Operative Agreements
to have no Loans, shall not be treated as a "Lender" when performing the
computation of Majority Lenders or Majority Secured Parties, and shall have no
rights under this Section 12.4; provided that any action taken pursuant to the
second paragraph of this Section 12.4 shall not be effective as against the
Defaulting Lender.
60
If at a time when the conditions precedent set forth in the Operative
Agreements to any Holder Advance are, in the opinion of the Majority Holders,
satisfied, any Holder shall fail to fulfill its obligations to make such Holder
Advance (any such Holder, a "Defaulting Holder") then, for so long as such
failure shall continue, the Defaulting Holder shall (unless the Lessee and the
Majority Holders, determined as if the Defaulting Holder were not a "Holder",
shall otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Holder Advances, shall not be treated as a
"Holder" when performing the computation of Majority Holders or Majority Secured
Parties, and shall have no rights under this Section 12.4; provided that any
action taken pursuant to the second paragraph of this Section 12.4 shall not be
effective as against the Defaulting Holder.
12.5. HEADINGS, ETC.
-------------
The Table of Contents and headings of the various Articles and Sections
of this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof.
12.6. PARTIES IN INTEREST.
-------------------
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
---------------------------------------------------------
TRIAL; VENUE.
------------
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW). Any legal action or proceeding with respect to this
Agreement or any other Operative Agreement may be brought in the courts
of the State of North Carolina in Mecklenburg County or of the United
States for the Western District of North Carolina and, by execution and
delivery of this Agreement, each of the parties to this Agreement
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the parties to this Agreement further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the
address set out for notices pursuant to Section 12.2, such service to
become effective three (3) days after such mailing. Nothing herein
shall affect the right of any party to serve process in any other
manner permitted by Law or to commence legal proceedings or to
otherwise proceed against any party in any other jurisdiction.
61
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY
DISPUTE OR THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement or any other Operative Agreement
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(d) Each party to this Agreement agrees that it shall not have
a remedy of punitive or exemplary damages against any other party in any legal
action or proceeding and hereby waives any right or claim to punitive or
exemplary damages it has now or which may arise in the future in connection with
any legal action or proceeding.
12.8. SEVERABILITY.
------------
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12.9. LIABILITY LIMITED.
-----------------
(a) The Lenders, the Agent, the Credit Parties, the Owner
Trustee and the Holders each acknowledge and agree that the Owner
Trustee is (except as otherwise expressly provided herein or therein)
entering into this Agreement and the other Operative Agreements to
which it is a party (other than the Trust Agreement and to the extent
otherwise provided in Section 6.1 of this Agreement), solely in its
capacity as trustee under the Trust Agreement and not in its individual
capacity and that the Trust Company shall not be liable or accountable
under any circumstances whatsoever in its individual capacity for or on
account of any statements, representations, warranties, covenants or
obligations stated to be those of the Owner Trustee, except for its own
gross negligence or willful misconduct and as otherwise expressly
provided herein or in the other Operative Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, no Exculpated Person shall be personally liable in any
respect for any liability or obligation arising hereunder or in any
other Operative Agreement including without limitation the payment of
the principal of, or interest on, the Notes, or for monetary damages
62
for the breach of performance of any of the covenants contained in the
Credit Agreement, the Notes, this Agreement, the Security Agreement or
any of the other Operative Agreements. The Lenders, the Holders and the
Agent agree that, in the event any remedies under any Operative
Agreement are pursued, neither the Lenders, the Holders nor the Agent
shall have any recourse against any Exculpated Person, for any
deficiency, loss or Claim for monetary damages or otherwise resulting
therefrom and recourse shall be had solely and exclusively against the
Trust Estate (excluding Excepted Payments) and the Credit Parties (with
respect to the Credit Parties' obligations under the Operative
Agreements); but nothing contained herein shall be taken to prevent
recourse against or the enforcement of remedies against the Trust
Estate (excluding Excepted Payments) in respect of any and all
liabilities, obligations and undertakings contained herein and/or in
any other Operative Agreement. Notwithstanding the provisions of this
Section, nothing in any Operative Agreement shall: (i) constitute a
waiver, release or discharge of any indebtedness or obligation
evidenced by the Notes and/or the Certificates arising under any
Operative Agreement or secured by any Operative Agreement, but the same
shall continue until paid or discharged; (ii) relieve any Exculpated
Person from liability and responsibility for (but only to the extent of
the damages arising by reason of): active waste knowingly committed by
any Exculpated Person with respect to any Property, any fraud, gross
negligence or willful misconduct on the part of any Exculpated Person;
(iii) relieve any Exculpated Person from liability and responsibility
for (but only to the extent of the moneys misappropriated, misapplied
or not turned over) (A) except for Excepted Payments, misappropriation
or misapplication by the Lessor (i.e., application in a manner contrary
to any of the Operative Agreements) of any insurance proceeds or
condemnation award paid or delivered to the Lessor by any Person other
than the Agent, (B) except for Excepted Payments, any deposits or any
escrows or amounts owed by the Construction Agent under the Agency
Agreement held by the Lessor or (C) except for Excepted Payments, any
rent or other income received by the Lessor from any Credit Party that
is not turned over to the Agent; or (iv) affect or in any way limit the
Agent's rights and remedies under any Operative Agreement with respect
to the Rents and rights and powers of the Agent under the Operative
Agreements or to obtain a judgment against the Lessee's interest in the
Properties or the Agent's rights and powers to obtain a judgment
against the Lessor or any Credit Party (provided, that no deficiency
judgment or other money judgment shall be enforced against any
Exculpated Person except to the extent of the Lessor's interest in the
Trust Estate (excluding Excepted Payments) or to the extent the Lessor
may be liable as otherwise contemplated in clauses (ii) and (iii) of
this Section 12.9(b)).
12.10. RIGHTS OF THE CREDIT PARTIES.
----------------------------
If at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents and the other Operative Agreements and
(ii) of the Credit Parties under the Operative Agreements have in each case been
satisfied or discharged in full, then the Credit Parties shall be entitled to
(a) terminate the Lease and guaranty obligations under Section 6B and (b)
receive all amounts then held under the Operative Agreements and all proceeds
with respect to any of the Properties. Upon the termination of the Lease and
Section 6B pursuant to the foregoing clause (a), the Lessor shall transfer to
the Lessee all of its right, title and interest free and clear of the Lien of
63
the Lease, the Lien of the Security Documents and all Lessor Liens in and to any
Properties then subject to the Lease and any amounts or proceeds referred to in
the foregoing clause (b) shall be paid over to the Lessee.
12.11. FURTHER ASSURANCES.
------------------
The parties hereto shall promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of the Lessee, all such further
acts, conveyances, documents and assurances as the other parties may from time
to time reasonably request in order to carry out and effectuate the intent and
purposes of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including without limitation the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of Mortgage Instruments and other filings or
registrations which the parties hereto may from time to time request to be filed
or effected). The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or (if the Owner Trustee shall so request) as so requested, in order to maintain
and protect all security interests provided for hereunder or under any other
Operative Agreement. In addition, in connection with the sale or other
disposition of any Property or any portion thereof, the Lessee agrees to execute
such instruments of conveyance as reasonably required in connection therewith.
12.12. CALCULATIONS UNDER OPERATIVE AGREEMENTS.
---------------------------------------
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Owner Trustee
shall be made by the Agent and that such calculations and determinations shall
be conclusive and binding on the parties hereto in the absence of manifest
error.
12.13. CONFIDENTIALITY.
---------------
Each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to any Credit Party or any of
its Subsidiaries which is provided to it by any Credit Party or any of its
Subsidiaries, and shall not intentionally disclose such information to any
Person except:
(a) to the extent such information is public when received by
such Person or becomes public thereafter due to the act or omission of
any party other than such Person;
(b) to the extent such information is independently obtained
from a source other than any Credit Party or any of its Subsidiaries
and such information from such source is not, to such Person's
knowledge, subject to an obligation of confidentiality or, if such
information is subject to an obligation of confidentiality, that
disclosure of such information is permitted;
64
(c) to counsel, auditors or accountants retained by any such
Person or any Affiliates of any such Person (if such Affiliates are
permitted to receive such information pursuant to clause (f) or (g)
below), provided they agree to keep such information confidential as if
such Person or Affiliate were party to this Agreement and to financial
institution regulators, including examiners of any Financing Party or
any Affiliate thereof in the course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of any Financing Party under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person; provided, however,
that such Person shall endeavor (if not otherwise prohibited by Law) to
notify the Lessee prior to any disclosure made pursuant to this clause
(e), except that no such Person shall be subject to any liability
whatsoever for any failure to so notify the Lessee;
(f) any Financing Party may disclose such information to
another Financing Party or to any Affiliate of a Financing Party that
is a direct or indirect owner of any Financing Party;
(g) any Financing Party may disclose such information to an
Affiliate of any Financing Party to the extent required in connection
with the transactions contemplated hereby or to the extent such
Affiliate is involved in, or provides advice or assistance to such
Person with respect to, such transactions (provided, in each case that
such Affiliate has agreed in writing to maintain confidentiality as if
it were such Financing Party (as the case may be)); or
(h) to the extent disclosure to any other financial
institution or other Person is appropriate in connection with any
proposed or actual (i) assignment or grant of a participation by any of
the Lenders of interests in the Credit Agreement or any Note to such
other financial institution (who will in turn be required by the Agent
to agree in writing to maintain confidentiality as if it were a Lender
originally party to this Agreement) or (ii) assignment by any Holder of
interests in the Trust Agreement to another Person (who will in turn be
required by the transferring Holder to agree in writing to maintain
confidentiality as if it were a Holder originally party to this
Agreement).
Subject to the terms of Sections 12.13(a)-12.13(h), under the terms of
any one or more of which circumstances disclosure shall be permitted, each
Financing Party severally agrees to use reasonable efforts to keep confidential
all non-public information pertaining to the financing structure described in
the unrecorded Operative Agreements.
65
12.14. FINANCIAL REPORTING/TAX CHARACTERIZATION.
----------------------------------------
Lessee agrees to obtain advice from its own accountants and tax counsel
regarding the financial reporting treatment and the tax characterization of the
transactions described in the Operative Agreements. Lessee further agrees that
Lessee shall not rely upon any statement of any Financing Party or any of their
respective Affiliates and/or Subsidiaries regarding any such financial reporting
treatment and/or tax characterization.
12.15. SET-OFF.
-------
In addition to any rights now or hereafter granted under applicable Law
and not by way of limitation of any such rights, upon and after the occurrence
of any Event of Default and during the continuance thereof, the Lenders, the
Holders, their respective Affiliates and any assignee or participant of a Lender
or a Holder in accordance with the applicable provisions of the Operative
Agreements are hereby authorized by the Credit Parties at any time or from time
to time, without notice to the Credit Parties or to any other Person, any such
notice being hereby expressly waived, to set-off and to appropriate and to apply
any and all deposits (general or special, time or demand, including without
limitation indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
the Holders, their respective Affiliates or any assignee or participant of a
Lender or a Holder in accordance with the applicable provisions of the Operative
Agreements to or for the credit or the account of any Credit Party against and
on account of the obligations of any Credit Party under the Operative Agreements
irrespective of whether or not (a) the Lenders or the Holders shall have made
any demand under any Operative Agreement or (b) the Agent shall have declared
any or all of the obligations of any Credit Party under the Operative Agreements
to be due and payable and although such obligations shall be contingent or
unmatured. Notwithstanding the foregoing, neither the Agent nor any other
Financing Party shall exercise, or attempt to exercise, any right of setoff,
banker's lien, or the like, against any deposit account or property of any
Credit Party held by the Agent or any other Financing Party, without the prior
written consent of the Majority Secured Parties, and any Financing Party
violating this provision shall indemnify the Agent and the other Financing
Parties from any and all costs, expenses, liabilities and damages resulting
therefrom. The contractual restriction on the exercise of setoff rights provided
in the foregoing sentence is solely for the benefit of the Agent and the
Financing Parties and may not be enforced by any Credit Party.
[signature pages follow]
66
Participation Agreement
Digital Hospital Trust 2001-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CONSTRUCTION AGENT
------------------
AND LESSEE:
-----------
HEALTHSOUTH MEDICAL CENTER, INC.,
an Alabama corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Vice President and Treasurer
----------------------------
[signature pages continued]
GUARANTOR:
----------
HEALTHSOUTH CORPORATION, a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Executive Vice President and Treasurer
--------------------------------------
[signature pages continued]
OWNER TRUSTEE AND
-----------------
LESSOR: STATE STREET BANK AND TRUST
------ COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not individually,
except as expressly stated herein,
but solely as Owner Trustee for
Digital Hospital Trust 2001-1
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: Assistant Secretary
----------------------------
[signature pages continued]
THE AGENT AND
-------------
LENDERS: FIRST UNION NATIONAL BANK, as a
------- Lender and as the Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------
Title: Vice President
----------------------------
[signature pages continued]
DBAH CAPITAL, LLC, as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Title: Director
----------------------------
[signature pages continued]
JPMORGAN CHASE BANK, as a Lender
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇
-----------------------------
Title: Vice President
----------------------------
[signature pages continued]
HOLDERS: FIRST UNION NATIONAL BANK, as a Holder
-------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------
Title: Vice President
----------------------------
[signature pages continued]
DBAH CAPITAL, LLC, as a Holder
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Title: Director
----------------------------
[signature pages continued]
CSL LEASING, INC., as a Holder
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: Vice President
----------------------------
[signature pages end]
--------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
--------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any document
to articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits are references to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any
document are solely for convenience of reference and shall not constitute a part
of any such document nor shall they affect the meaning, construction or effect
of any provision thereof.
(d) References to any Person shall include such Person, its successors,
permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented, restated
and/or replaced from time to time in accordance with the applicable provisions
thereof.
(f) Except as otherwise expressly provided, references to any law
includes any amendment or modification to such law and any rules or regulations
issued thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable document
and not to any particular article, section, subsection, paragraph or clause
thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
Appendix A-1
(i) References herein to "attorney's fees", "legal fees", "costs of
counsel" or other such references shall be deemed to include the allocated cost
of in-house counsel.
(j) Each of the parties to the Operative Agreements and their counsel
have reviewed and revised, or requested revisions to, the Operative Agreements,
and the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction and
interpretation of the Operative Agreements and any amendments or exhibits
thereto.
(k) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
have the meaning so ascribed to such term in the applicable Operative Agreement.
II. Definitions
"ABR" shall mean, for any day, a rate per annum equal to the greater of
(a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.5%). For
purposes hereof: "Prime Lending Rate" shall mean the rate announced by the Agent
from time to time as its prime lending rate as in effect from time to time. The
Prime Lending Rate is a reference rate and is one of several interest rate bases
used by the Agent and does not necessarily represent the lowest or most
favorable rate offered by the Agent actually charged to any customer. Any Lender
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate. The Prime Lending Rate shall change automatically and
without notice from time to time as and when the prime lending rate of the Agent
changes. "Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members or the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
(3) Federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Lending Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Lending Rate or the Federal Funds Effective Rate,
respectively.
"ABR Holder Advance" shall mean a Holder Advance bearing a Holder Yield
based on the ABR.
"ABR Loans" shall mean Loans the rate of interest applicable to which
is based upon the ABR.
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
Appendix A-2
"Accounts" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Acquisition Advance" shall have the meaning given to such term in
Section 5.3 of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with an
Acquisition Advance.
"Additional Incorporated Terms" shall have the meaning given to such
term in Section 28.1 of the Lease.
"Adjusted Property Cost" shall mean, for each Property, the Property
Cost for such Property minus the Excluded Costs for such Property.
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the then
maximum marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated on or about
the Initial Closing Date between the Construction Agent and the Lessor.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in Section 5.1 of the Agency Agreement.
"Agent" shall mean First Union National Bank, as agent for the Lenders
pursuant to the Credit Agreement, or any successor agent appointed in accordance
with the terms of the Credit Agreement and respecting the Security Documents, as
agent for the Secured Parties.
"Applicable Percentage" shall mean for [ABR Loans, ABR Holder Advances,
Eurodollar Loans, Eurodollar Holder Advances and Unused Fees] the margin,
expressed as a percentage per annum, set forth below determined (except with
respect to Cash Secured Loans) according to the highest Rating of outstanding
senior unsecured indebtedness of the Parent from time to time as specified in
the table below (provided that in the event of a Rating split between Tiers,
then the Tier next above the Tier corresponding to the lower Rating shall apply)
or such margin as may otherwise be applicable for Cash Secured Loans:
Appendix A-3
---------------------------------------------------------------------------------------------------------------------
Senior Unsecured Debt Rating ABR Eurodollar
---------------------------- ABR Holder Eurodollar Holder Unused Fee
Tier S&P ▇▇▇▇▇'▇ Loans Advances Loans Advances
---------------------------------------------------------------------------------------------------------------------
I Cash Secured Loans Cash Secured Loans 0.0 n/a 40.0 n/a 15.0
---------------------------------------------------------------------------------------------------------------------
II BBB or greater Baa2 or greater 12.5 112.5 112.5 212.5 25.0
---------------------------------------------------------------------------------------------------------------------
III BB+ Ba1 37.5 137.5 137.5 237.5 37.5
---------------------------------------------------------------------------------------------------------------------
IV less than BB+ less than Ba1 87.5 187.5 187.5 287.5 50.0
---------------------------------------------------------------------------------------------------------------------
Additionally, the following provisions shall apply to the Tranche A Loans and
the Tranche A Unused Fee:
Tranche A Loans: The portion of Tranche A Loans in an amount equal to the
aggregate of all Advances in excess of $60,000,000 (Cash Secured Loans) shall
bear interest calculated at the rate applicable to such Advances set forth in
Tier I. The remaining portion of the total Tranche A Loans shall bear interest
at the rate applicable to the type of Tranche A Loan set forth in Tier II-IV
according to the Rating.
Tranche A Unused Fee: Commitments in an amount equal to the unused Tranche A
Commitments which if funded would be required to be Cash Secured Loans shall
receive an Unused Fee calculated at the rate applicable to such Commitments set
forth in Tier I. The difference between the aggregate unused Tranche A
Commitments and the unused Tranche A Commitments which if funded would be
required to be Cash Secured Loans shall receive an unused fee calculated at the
rate applicable to such Commitments set forth in Tier II-IV according to the
Rating.
The "Applicable Percentage" shall be determined by the Agent and for purposes of
such determination: (i) no change in Rating shall be effective until the Agent
receives notice or otherwise has notice knowledge thereof; and (ii) each change
in the Applicable Percentage shall, subject to the terms of the immediately
preceding subsection (i), be effective on and as of the date of each such
change. Initially, the Applicable Percentage shall be at Tier III. If at any
time either the Parent's senior unsecured debt is not rated by S&P or ▇▇▇▇▇'▇,
then Tier IV shall apply.
"Appraisal" shall mean, with respect to any Property, an appraisal to
be delivered in connection with the Participation Agreement or in accordance
with the terms of the Lease, in each case prepared by a reputable appraiser
reasonably acceptable to the Agent, which in the judgment of counsel to the
Agent, complies with all of the provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, the rules and regulations
adopted pursuant thereto, and all other applicable Legal Requirements.
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
Appendix A-4
"Approved Bank" shall have the meaning given to such term in the
definition of "Cash Equivalents" in this Appendix A.
"Approved State" shall mean each of the following: Alabama and any
other state within the continental United States proposed by the Lessee and
consented to in writing by the Agent.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying the Improvements or the Improvements,
including without limitation the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (b)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land or the Improvements.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached to the Credit Agreement as EXHIBIT B.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by such
Lender as of such date after giving effect to Section 5.2(d) of the
Participation Agreement (but without giving effect to any other repayments or
prepayments of any Loans hereunder).
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (a) the aggregate amount of the Holder Commitments over (b)
the aggregate amount of the Holder Advances made since the Initial Closing Date
after giving effect to Section 5.2(d) of the Participation Agreement (but
without giving effect to any other repayments or prepayments of any Holder
Advances).
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Basic Documents" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease and the Security Agreement.
"Basic Rent" shall mean, the sum of (a) the Loan Basic Rent and (b) the
Lessor Basic Rent, calculated as of the applicable date on which Basic Rent is
due.
"Benefitted Lender" shall have the meaning specified in Section 9.10(a)
of the Credit Agreement.
"▇▇▇▇ of Sale" shall mean a ▇▇▇▇ of Sale regarding Equipment in form
and substance satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
Appendix A-5
"Borrower" shall mean the Owner Trustee, not in its individual capacity
but as Borrower under the Credit Agreement.
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Credit Agreement as a date on which the
Lessor requests the Lenders to make Loans thereunder.
"Budgeted Total Property Cost" shall mean, at any date of determination
with respect to any Construction Period Property, an amount equal to the
aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or any other states
from which the Agent, any Lender or any Holder funds or engages in
administrative activities with respect to the transactions under the Operative
Agreements are authorized or required by law to close; provided, however, that
when used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Capital Stock" shall mean any nonredeemable capital stock of any
Credit Party or any of its Subsidiaries or of any other applicable Person,
whether common or preferred.
"Cash Collateral" shall mean such cash and Cash Equivalents
constituting the Cash Collateral Account pledged by the Lessee and maintained in
a trust account with State Street Bank and Trust Company of Connecticut,
National Association in accordance with the Cash Collateral Agreement.
"Cash Collateral Account" shall mean the cash collateral account
(including without limitation the deposits and certificates of deposit in such
account) which is the subject of the Cash Collateral Agreement and held at the
Cash Collateral Possessor.
"Cash Collateral Agreement" shall mean that certain Cash Collateral
Agreement by the Lessee and agreed and accepted by the Agent and the Cash
Collateral Possessor, in substantially the form of Exhibit L attached to the
Participation Agreement, with any modifications thereto being approved by the
Majority Secured Parties.
"Cash Collateral Agreement Event of Default" shall have the meaning
specified in Section 3.1 of the Cash Collateral Agreement.
Appendix A-6
"Cash Collateral Possessor" shall mean an institution selected by the
Lessee and approved by the Agent that is not an affiliate of any Credit Party or
Financing Party.
"Cash Equivalents" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof).
"Cash Secured Loan" shall mean those certain Tranche A Loans which the
Lessee has secured dollar for dollar by making deposits in the Cash Collateral
Account in accordance with Section 5.11 of the Participation Agreement and the
Cash Collateral Agreement.
"Casualty" shall mean any damage or destruction of all or any portion
of the Property as a result of a fire or other casualty.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C.ss.9601 et seq., as amended by
the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of each Holder
regarding the Holder Commitment of such Holder issued pursuant to the terms and
conditions of the Trust Agreement in favor of each Holder.
"Chattel Paper" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986 together with rules
and regulations promulgated thereunder, as amended from time to time, or any
successor statute thereto.
"Collateral" shall mean all assets of the Lessor, the Construction
Agent and the Lessee, now owned or hereafter acquired, upon which a Lien is
purported to be created by one or more of the Security Documents.
"Commencement Date" shall have the meaning specified in Section 2.2 of
the Lease.
"Commitment" shall mean, as to any Lender, the Lender Commitment of
such Lender.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Loans then outstanding constitutes of the aggregate principal amount of all of
Appendix A-7
the Loans then outstanding), and such Commitment Percentage shall take into
account both the Lender's Tranche A Commitment and the Lender's Tranche B
Commitment.
"Commitment Period" shall mean the period from and including the
Initial Closing Date to and including the Construction Period Termination Date,
or such earlier date as the Commitments shall terminate as provided in the
Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
"Company Obligations" shall mean the obligations of HEALTHSOUTH Medical
Center, Inc. in any and all capacities under and with respect to the Operative
Agreements and each Property.
"Completion" shall mean, with respect to a Property, such time as the
acquisition, installation, testing and final completion of the Improvements on
such Property has been achieved in accordance with the Plans and Specifications,
the Agency Agreement and/or the Lease, and in compliance with all Legal
Requirements and Insurance Requirements and a certificate of occupancy has been
issued with respect to such Property by the appropriate governmental entity
(except if non-compliance, individually or in the aggregate, shall not have and
could not reasonably be expected to have a Material Adverse Effect or if
compliance with any of the foregoing is otherwise waived by the Agent upon
instruction from the Majority Secured Parties). If the Lessor purchases a
Property that includes existing Improvements that are to be immediately occupied
by the Lessee without any improvements financed pursuant to the Operative
Agreements, the date of Completion for such Property shall be the Property
Closing Date.
"Completion Date" shall mean, with respect to a Property, the date on
which Completion for such Property has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent to,
any Property or alter the pedestrian or vehicular traffic flow to any Property
so as to result in a change in access to such Property, or by or on account of
an eviction by paramount title or any transfer made in lieu of any such
proceeding or action.
"Consolidated Subsidiary" shall mean, as to any Person, any Subsidiary
of such Person which under the rules of GAAP consistently applied should have
its financial results consolidated with those of such Person for purposes of
financial accounting statements.
"Construction Advance" shall mean an advance of funds to pay Property
Costs pursuant to Section 5.4 of the Participation Agreement.
Appendix A-8
"Construction Agency Person" shall mean the Construction Agent and any
Person that the Construction Agent directly or indirectly supervises, and any
Affiliate of any of the foregoing.
"Construction Agent" shall mean HEALTHSOUTH Medical Center, Inc., an
Alabama corporation, as the construction agent under the Operative Agreements.
"Construction Budget" shall mean the cost of acquisition, installation,
testing, constructing and developing any Property as determined by the
Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Contract" shall mean any contract entered into between
the Construction Agent or the Lessee with a Contractor for the construction of
Improvements or any portion thereof on the Property.
"Construction Loan" shall mean any Loan made in connection with a
Construction Advance.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement Date for such Property and
ending on the Completion Date for such Property.
"Construction Period Property" means, at any date of determination, any
Property as to which the Rent Commencement Date has not occurred on or prior to
such date.
"Construction Period Termination Date" shall mean (a) the earlier of
(i) the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5 of the Credit Agreement, (ii) the date
that is thirty months after the Initial Closing Date, or (iii) with respect to
any Property, the Completion Date for such Property or (b) such later date as
shall be agreed in accordance with Section 12.4 of the Participation Agreement
or as provided pursuant to Section 5.18(a) of the Participation Agreement.
"Contract Provider" shall mean any Person who provides professional
health care services under or pursuant to any contract with the Parent or any
Subsidiary.
"Contractor" shall mean each entity with whom the Construction Agent or
the Lessee contracts to construct any Improvements or any portion thereof on the
Property.
"Control Agreement" shall mean that certain control agreement by and
among the Lessee, the Agent and the Cash Collateral Possessor, in substantially
the form of Exhibit M attached to the Participation Agreement, with any
modifications thereto being approved by the Majority Secured Parties.
Appendix A-9
"Control Investment Affiliate" shall mean as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Credit Party, are treated as a single
employer under Section 414 of the Code.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated on or about
the Initial Closing Date, among the Lessor, the Agent and the Lenders, as
specified therein.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Participation Agreement, the Credit
Agreement, the Notes and the Security Documents.
"Credit Parties" shall mean the Construction Agent, the Lessee and the
Guarantor.
"Deed" shall mean a warranty deed regarding the Land and/or
Improvements in form and substance satisfactory to the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Holder" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Defaulting Lender" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Deficiency Balance" shall have the meaning given in Section 22.1(b) of
the Lease Agreement.
"Digital Hospital Property" shall mean that certain Property located in
Birmingham, Alabama which was ground leased to the Lessor on or about the
Initial Closing Date and which is described more particularly in Lease
Supplement No. 1.
Appendix A-10
"Digital Hospital Trust 2001-1" shall mean the grantor trust created
pursuant to the terms and conditions of the Trust Agreement.
"Documents" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Election Date" shall have the meaning given to such term in Section
20.1 of the Lease.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan
(within the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue Service and the Department of Labor
in rules, regulations, releases or bulletins in effect on any Closing Date.
"Engagement Letter" shall mean the engagement letter dated October 25,
2001 addressed to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, EVP & Treasurer of HEALTHSOUTH Corporation
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President of First Union Securities, Inc.
"Environmental Claims" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or
other response action in connection with a Hazardous Substance, Environmental
Law, or other order of a Tribunal or (d) from any actual or alleged damage,
injury, threat, or harm to health, safety, natural resources, or the
environment.
"Environmental Laws" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Tribunal relating
to emissions, discharges, releases, threatened releases of any Hazardous
Substance into ambient air, surface water, ground water, publicly owned
treatment works, septic system, or land, or otherwise relating to the handling,
storage, treatment, generation, use, or disposal of Hazardous Substances,
pollution or to the protection of health or the environment, including without
limitation CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., and state statutes analogous thereto.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens (if the threat requires remediation under
any Environmental Law and is not remediated during any grace period allowed
under such Environmental Law) to violate or results in or threatens (if the
threat requires remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
Appendix A-11
"Equipment" shall mean only the equipment, apparatus, furnishings,
fixtures, fittings and personal property of every kind and nature necessary or
typical for the operation of any Improvements, whenever purchased using the
proceeds of the Loans or the Holder Advances and all improvements and
modifications thereto and replacements thereof, whether or not now owned or
hereafter acquired or now or subsequently attached to any Improvements,
necessary or typical for the operation of any Improvements.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean each entity required to be aggregated with
any Credit Party pursuant to the requirements of Section 414(b) or (c) of the
Code.
"Eurodollar Holder Advance" shall mean a Holder Advance bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Percentage" shall mean for the Interest Period for each
Eurodollar Loan or Eurodollar Holder Advance comprising part of the same
borrowing or advance (including without limitation conversions, extensions and
renewals), the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate page 3750 (or any successor thereto) at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period. If for any reason such rate is not available, the
term "Eurodollar Percentage" shall mean for the Interest Period for each
Eurodollar Loan or Eurodollar Holder Advance comprising part of the same
borrowing or advance (including without limitation conversions, extensions and
renewals), the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%), appearing on the Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. ( London time)
two (2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%). As used herein, "Reuters Screen LIBO Page" means the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such
other page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks) ("RMMRS"). If, for any
reason, neither of such rates is available, then "Eurodollar Percentage" shall
mean for the Interest Period for each Eurodollar Loan or Eurodollar Holder
Advance comprising part of the same borrowing or advance (including without
limitation conversions, extensions and renewals), the rate per annum at which,
as determined by the Agent, Dollars in an amount comparable to the Eurodollar
Appendix A-12
Loans and Eurodollar Holder Advances then requested, converted, extended, or
renewed, as the case may be, are being offered to leading banks at approximately
11:00 A.M. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds by
leading banks in the London interbank market for a period equal to the Interest
Period selected.
"Eurodollar Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Agent pursuant to
the following formula:
Eurodollar Rate = Eurodollar Percentage
------------------------------------
1.00 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean for any day as applied to a
Eurodollar Loan or a Eurodollar Holder Advance, the aggregate (without
duplication) of the maximum rates (expressed as a decimal) of reserve
requirements in effect on such day (including without limitation basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed on eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D) maintained by a
member bank of the Federal Reserve System.
"Event of Default" shall mean a Lease Event of Default, an Agency
Agreement Event of Default, a Cash Collateral Agreement Event of Default or a
Credit Agreement Event of Default.
"Excepted Payments" shall mean:
(a) all indemnity payments (including without limitation
indemnity payments made pursuant to Section 11 of the Participation
Agreement), whether made by adjustment to Basic Rent or otherwise, to
which the Owner Trustee, any Holder or any of their respective
Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value)
payable under any Operative Agreement to reimburse the Owner Trustee,
any Holder or any of their respective Affiliates (including without
limitation the reasonable expenses of the Owner Trustee, the Trust
Company and the Holders incurred in connection with any such payment)
for performing or complying with any of the obligations of any Credit
Party under and as permitted by any Operative Agreement;
(c) any amount payable to a Holder by any transferee of such
interest of a Holder as the purchase price of such Holder's interest in
the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable to the Agent or any Lender;
Appendix A-13
(e) any insurance proceeds under policies maintained by the
Owner Trustee or any Holder;
(f) Transaction Expenses or other amounts, fees, disbursements
or expenses paid or payable to or for the benefit of the Owner Trustee;
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above;
and
(h) any rights of either the Owner Trustee or the Trust
Company to demand, collect, ▇▇▇ for or otherwise receive and enforce
payment of any of the foregoing amounts, provided that such rights
shall not include the right to terminate the Lease.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Excluded Cost" shall mean the sum of (a) the actual construction costs
(net of insurance proceeds, but including the applicable deductible) necessary
to repair and restore damage caused by a Force Majeure Event with respect to the
Improvements to a Construction Period Property to the condition of such
Improvements immediately prior to such Force Majeure Event plus (b) the Excluded
Indemnity Amount.
"Excluded Indemnity Amount" shall have the meaning given to such term
in Section 11.7 of the Participation Agreement.
"Exculpated Persons" shall mean the Trust Company (except with respect
to the representations and warranties and the other obligations of the Trust
Company pursuant to the Operative Agreements expressly undertaken in its
individual capacity, including without limitation the representations and
warranties of the Trust Company pursuant to Section 6.1 of the Participation
Agreement, the obligations of the Trust Company pursuant to Section 8.2 of the
Participation Agreement and the obligations of the Trust Company pursuant to the
Trust Agreement), the Holders (except with respect to the obligations of the
Holders pursuant to the Participation Agreement and the Trust Agreement
expressly undertaken in their respective individual capacities), their officers,
directors, shareholders and partners.
"Exempt Payments" shall have the meaning specified in Section 11.2(e)
of the Participation Agreement.
"Expiration Date" shall mean the last day of the Term; provided, in no
event shall the Expiration Date be later than the date that is seven (7) years
and six (6) months after the Initial Closing Date, unless such later date has
been expressly agreed to in writing by each of the Lessor, the Lessee, the
Agent, the Lenders and the Holders.
Appendix A-14
"Extended Remarketing Period" shall have the meaning given to such term
in Section 22.6 of the Lease.
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero (0), that would be paid
in cash in an arms-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, such Property is in the condition and state of
repair required under Section 10.1 of the Lease and each Credit Party is in
compliance with the other requirements of the Operative Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such
term in the definition of ABR.
"Financing Parties" shall mean the Lessor, the Owner Trustee, in its
trust capacity, the Agent, the Holders and the Lenders.
"Fixtures" shall mean all fixtures relating to the Improvements,
including without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto.
"Force Majeure Event" shall mean with respect to a Construction Period
Property, any event beyond the control of the Lessee, Guarantor or any
Construction Agency Person (the existence of which was not known on the Property
Closing Date with respect to such Property, or would not reasonably have been
expected to be discovered through the exercise of commercially reasonable due
diligence, by the Lessee, Guarantor, or Construction Agency Person, taking into
account the anticipated construction of Improvements and the contemplated use of
such Property) including, but not limited to, general strikes (but not any
strike or other job action involving employees of the Lessee, Guarantor or any
Construction Agency Person), acts of God, government activities or inactivities
directly interfering with the construction of the Improvements, inability to
obtain labor or materials, civil commotion and enemy action; but excluding in
all cases (a) any event, cause or condition that results from (i) an act or
omission of Lessee, Guarantor or any Construction Agency Person, (ii) a breach
by Lessee, Guarantor or any Construction Agency Person of its obligations or
representations or warranties under the Operative Agreements or any other
agreements to which it is a party, or (iii) from either the Lessee's, the
Guarantor's or any Construction Agency Person's financial condition or failure
to pay, (b) any event, cause or condition which could have been avoided or which
could be remedied or mitigated through the exercise of commercially reasonable
efforts or the expenditure of funds, (c) any event, cause or condition which
Lessee certifies does not constitute a Force Majeure Event, or (d) any Full
Recourse Event of Default.
"Form W-8BEN" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
Appendix A-15
"Form W-8ECI" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Full Recourse Event of Default" shall mean any of the following:
(i) an Agency Agreement Event of Default arising in whole or
in part as a consequence of any fraudulent act or omission of any
Construction Agency Person in connection with the negotiation,
execution, delivery, consummation and/or performance of any Operative
Agreement or any other contractual agreement relating to the Property
or the construction or work thereon;
(ii) an Agency Agreement Event of Default arising in whole or
in part as a consequence of the misapplication of any Advance or any
portion thereof or any other funds made available to, or on behalf of,
Construction Agent or any other Construction Agency Person under any
Operative Agreement;
(iii) an Agency Agreement Event of Default arising as a
consequence of an Insolvency Event with respect to Construction Agent;
(iv) any Construction Agency Person shall willfully breach any
of its respective obligations, covenants, representations or warranties
under any Operative Agreement or any other contractual agreement or law
relating to the Property or the construction or work thereon; or
(v) any Construction Agency Person shall commit any illegal
act regarding any Property or otherwise causing any loss, cost or
damage to any Financing Party.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the accounting principles board of the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operating of the Property.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Appendix A-16
"Ground Lease" shall mean a ground lease (in form and substance
satisfactory to the Agent) respecting any Property (a) owned by any Credit Party
(or a parent corporation or any Subsidiary of any Credit Party) and leased to
the Lessor where such lease has at least a ninety-nine (99) year term and
payments set at no more than $562,000.00 per year during the Term and no more
than the fair market rental value thereafter, or (b) where such lease is subject
to such other terms and conditions as are satisfactory to the Agent.
"Guarantor" shall mean HEALTHSOUTH Corporation, a Delaware corporation.
"Hard Costs" shall mean all costs and expenses payable for supplies,
materials, labor and profit with respect to the Improvements under any
Construction Contract.
"Hazardous Substance" shall mean any of the following: (a) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (b) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety as determined in accordance with
any Environmental Law; or (c) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
"HEALTHSOUTH" shall mean HEALTHSOUTH Medical Center, Inc., an Alabama
corporation, and its successors and permitted assigns.
"Holder Advance" shall mean any advance made by any Holder to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Advances made by each Holder to the Trust Estate pursuant to Section 2 of
the Participation Agreement and Section 3.1 of the Trust Agreement less any
payments of any Holder Advances received by the Holders pursuant to Section 3.4
of the Trust Agreement.
"Holder Commitments" shall mean the Holder Commitment of each Holder as
set forth in Schedule I to the Trust Agreement as such Schedule I may be amended
and replaced from time to time.
"Holder Fees" shall mean all fees paid in connection with Sections 7.6
and 7.7 of the Participation Agreement.
"Holder Overdue Rate" shall mean the lesser of (a) the then current
rate of Holder Yield respecting the particular amount in question plus two
percent (2%) and (b) the highest rate permitted by applicable law.
Appendix A-17
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Advances with respect thereto.
"Holder Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Holder Yield" shall mean with respect to Holder Advances from time to
time either the Eurodollar Rate plus the Applicable Percentage or the ABR plus
the Applicable Percentage as elected by the Owner Trustee from time to time with
respect to such Holder Advances in accordance with the terms of the Trust
Agreement; provided, however, (a) upon delivery of the notice described in
Section 3.7(c) of the Trust Agreement, the outstanding Holder Advances of each
Holder shall bear a yield at the ABR plus the Applicable Percentage applicable
from time to time from and after the dates and during the periods specified in
Section 3.7(c) of the Trust Agreement, and (b) upon the delivery by a Holder of
the notice described in Section 11.3(e) of the Participation Agreement, the
Holder Advances of such Holder shall bear a yield at the ABR plus the Applicable
Percentage applicable from time to time after the dates and during the periods
specified in Section 11.3(e) of the Participation Agreement.
"Holders" shall mean First Union National Bank and shall include the
other banks and financial institutions which may be from time to time holders of
Certificates in connection with the Digital Hospital Trust 2001-1.
"Impositions" shall mean any and all liabilities, losses, expenses,
costs, charges and Liens of any kind whatsoever for fees, taxes, levies,
imposts, duties, charges, assessments or withholdings ("Taxes") including but
not limited to (i) real and personal property taxes, including without
limitation personal property taxes on any property covered by the Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes
and other similar taxes (including rent taxes and intangibles taxes); (iii)
excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes and
documentary recording taxes and fees; (v) taxes that are or are in the nature of
franchise, income, value added, privilege and doing business taxes, license and
registration fees; (vi) assessments on any Property, including without
limitation all assessments for public Improvements or benefits, whether or not
such improvements are commenced or completed within the Term; and (vii) taxes,
Liens, assessments or charges asserted, imposed or assessed by the PBGC or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and in each case all interest, additions to tax and penalties thereon,
which at any time prior to, during or with respect to the Term or in respect of
any period for which the Lessee shall be obligated to pay Supplemental Rent, may
be levied, assessed or imposed by any Governmental Authority upon or with
respect to (a) any Property or any part thereof or interest therein; (b) the
leasing, financing, refinancing, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, sale, transfer of title, return or other disposition of
such Property or any part thereof or interest therein; (c) the Notes, other
indebtedness with respect to any Property, or the Certificates, or any part
thereof or interest therein; (d) the rentals, receipts or earnings arising from
any Property or any part thereof or interest therein; (e) the Operative
Agreements, the performance thereof, or any payment made or accrued pursuant
Appendix A-18
thereto; (f) the income or other proceeds received with respect to any Property
or any part thereof or interest therein upon the sale or disposition thereof;
(g) any contract (including the Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Notes or the Certificates; (i) the Owner
Trustee, the Trust or the Trust Estate; or (j) otherwise in connection with the
transactions contemplated by the Operative Agreements.
"Improvements" shall mean, with respect to the construction,
renovations and/or Modifications on any Land, all buildings, structures,
Fixtures, and other improvements of every kind existing at any time and from
time to time on or under the Land purchased or otherwise acquired using the
proceeds of the Loans or the Holder Advances or which is subject to a Ground
Lease, together with any and all appurtenances to such buildings, structures or
improvements, including without limitation sidewalks, utility pipes, conduits
and lines, parking areas and roadways, and including without limitation all
Modifications and other additions to or changes in the Improvements at any time,
including without limitation (a) any Improvements existing as of the Property
Closing Date as such Improvements may be referenced on the applicable
Requisition and (b) any Improvements made subsequent to such Property Closing
Date.
"Incorporated Covenants" shall have the meaning given to such term in
Section 28.1 of the Lease.
"Incorporated Representations and Warranties" shall have the meaning
given to such term in Section 28.1 of the Lease.
"Indebtedness" of a Person shall mean, without duplication, such
Person's:
(a) obligations for borrowed money;
(b) obligations representing the deferred purchase price of
Property (whether real, personal, tangible, intangible or mixed) or
services (other than accounts payable arising in the ordinary course of
such Person's business payable on terms customary in the trade);
(c) obligations, whether or not assumed, secured by liens or
payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person;
(d) obligations which are evidenced by notes, acceptances or
other instruments;
(e) Capitalized Lease obligations and the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP;
Appendix A-19
(f) net liabilities under interest rate swap, exchange or cap
agreements; and
(g) contingent obligations.
"Indemnified Person" shall mean the Lessor, the Owner Trustee, in its
individual and its trust capacity, the Trust, the Trust Company, the Agent,
First Union Securities, Inc., the Holders, the Lenders and their respective
successors, assigns, directors, shareholders, partners, officers, employees,
agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the Lessee
and during the Construction Period, the Construction Agent.
"Ineligible Person" shall have the meaning given to such term in
Section 30.15 of the Lease.
"Initial Closing Date" shall mean December 28, 2001.
"Insolvency Event" shall mean each event described in Sections 17.1(g),
(h), (i), and/or (j) of the Lease Agreement.
"Instruments" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
all requirements of the issuer of any such policy and, regarding self insurance,
any other requirements of the Lessee.
"Interest Period" shall mean during the Commitment Period as to any
Eurodollar Loan or Eurodollar Holder Advance (i) with respect to the initial
Interest Period, the period beginning on the date of the first Eurodollar Loan
and Eurodollar Holder Advance and ending one (1) month thereafter, and (ii)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan or Eurodollar Holder Advance
and ending one (1) month thereafter and for Interest Periods commencing after
the Commitment Period, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan or Eurodollar
Holder Advance and ending one (1) month, two (2) months, three (3) months or (to
the extent available to all Lenders and all Holders) six (6) months thereafter,
as selected by the Lessor by irrevocable notice to the Agent (in the case of a
Eurodollar Loan) or by the Owner Trustee (in the case of a Eurodollar Holder
Advance) in each case not less than three (3) Business Days prior to the last
day of the then current Interest Period with respect thereto; provided, however,
that all of the foregoing provisions relating to Interest Periods are subject to
the following: (A) if any Interest Period would end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day (except that where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Maturity Date or the Expiration Date, as
the case may be and (C) where an Interest Period begins on a day for which there
Appendix A-20
is no numerically corresponding day in the calendar month in which the Interest
Period is to end, such Interest Period shall end on the last Business Day of
such calendar month, (D) there shall not be more than two (2) Interest Periods
outstanding during the Commitment Period and more than four (4) Interest Periods
outstanding at any one (1) time after the Commitment Period.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, together with the rules and regulations promulgated thereunder.
"Land" shall mean a parcel of real property described on (a) the
Requisition issued by the Construction Agent on the Property Closing Date
relating to such parcel and (b) the schedules to each applicable Lease
Supplement executed and delivered in accordance with the requirements of Section
2.4 of the Lease.
"Land Cost" shall have the meaning specified in Section 5.4 of the
Agency Agreement.
"Law" shall mean any statute, law, ordinance, regulation, rule,
directive, order, writ, injunction or decree of any Tribunal.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated on or
about the Initial Closing Date, between the Lessor and the Lessee, together with
any Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all foreign, federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, any
Holder, the Lessor, any Credit Party, the Agent, any Lender or any Property,
Land, Improvement, Equipment or the taxation, demolition, construction, use or
alteration of such Improvements, whether now or hereafter enacted and in force,
including without limitation any that require repairs, modifications or
alterations in or to any Property or in any way limit the use and enjoyment
thereof (including without limitation all building, zoning and fire codes and
the Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101 et. seq., and
any other similar federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including without limitation all Environmental Laws), and all permits,
certificates of occupancy, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments which are either of record or known to any Credit Party
affecting any Property or the Appurtenant Rights.
Appendix A-21
"Lender Commitments" shall mean the Lender Commitment of each Lender as
set forth in Schedule 2.1 to the Credit Agreement as such Schedule 2.1 may be
amended and replaced from time to time.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to procure a security interest in favor of the
Agent in the Collateral subject to the Security Documents.
"Lender Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Lenders" shall mean First Union National Bank and shall include the
other banks and financial institutions which may be from time to time party to
the Participation Agreement and the Credit Agreement.
"Lessee" shall mean HEALTHSOUTH Medical Center, Inc., an Alabama
corporation, as the lessee under the Operative Agreements.
"Lessor" shall mean the Owner Trustee, as the lessor under the
Operative Agreements.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (a) any such scheduled Holder Yield due
on the Holder Advances prior to the Rent Commencement Date with respect to the
Property to which such Holder Advances relate or (b) overdue amounts under the
Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien arising as a result of (a) any claim
against the Lessor or the Trust Company, in its individual capacity, not
resulting from the transactions contemplated by the Operative Agreements, (b)
any act or omission of the Lessor or the Trust Company, in its individual
capacity, which is not required by the Operative Agreements or is in violation
of any of the terms of the Operative Agreements, (c) any claim against the
Lessor or the Trust Company, in its individual capacity, with respect to Taxes
or Transaction Expenses against which the Lessee is not required to indemnify
the Lessor or the Trust Company, in its individual capacity, pursuant to Section
11 of the Participation Agreement or (d) any claim against the Lessor arising
out of any transfer by the Lessor of all or any portion of the interest of the
Lessor in the Properties, the Trust Estate or the Operative Agreements other
than the transfer of title to or possession of any Properties by the Lessor
pursuant to and in accordance with the Lease, the Credit Agreement, the Security
Agreement or the Participation Agreement or pursuant to the exercise of the
remedies set forth in Article XVII of the Lease.
Appendix A-22
"Lessor Obligations" shall mean the obligations of State Street Bank
and Trust Company of Connecticut, National Association, as Owner Trustee in any
and all capacities under and with respect to the Operative Agreements and each
Property.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Loan Basic Rent" shall mean the scheduled interest due on the Loans on
any Scheduled Interest Payment Date pursuant to the Credit Agreement (but not
including interest on (a) any such Loan due prior to the Rent Commencement Date
with respect to the Property to which such Loan relates or (b) any overdue
amounts under Section 2.8(b) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) the aggregate principal amount all
Loans (including without limitation all Acquisition Loans and Construction
Loans) made on or prior to such date with respect to such Property minus (b) the
aggregate amount of prepayments or repayments as the case may be of the Loans
allocated to reduce the Loan Property Cost of such Property pursuant to Section
2.6(c) of the Credit Agreement.
"Loans" shall mean the loans extended pursuant to the Credit Agreement
and shall include both the Tranche A Loans and the Tranche B Loans.
"Majority Holders" shall mean at any time, Holders whose Holder
Advances outstanding represent at least fifty-one percent (51%) of (a) the
aggregate Holder Advances outstanding or (b) to the extent there are no Holder
Advances outstanding, the aggregate Holder Commitments.
"Majority Lenders" shall mean (a) prior to the Note Acquisition Date,
Lenders whose Loans outstanding represent at least fifty-one percent (51%) of
(i) the aggregate Loans outstanding or (ii) to the extent there are no Loans
outstanding, the aggregate of the Lender Commitments and (b) on or after the
Note Acquisition Date, Tranche B Lenders and Tranche A Lenders other than any
Credit Party or any of their Affiliates or any assignee thereof, if any, whose
Loans outstanding represent at least fifty-one percent (51%)of the aggregate
Loans outstanding, except Loans held by any Credit Party or any of their
Affiliates or any assignee thereof.
"Majority Secured Parties" shall mean (a) prior to the Note Acquisition
Date, Lenders and Holders whose Loans and Holder Advances outstanding represent
at least fifty-one percent (51%) of (i) the aggregate Advances outstanding or
(ii) to the extent there are no Advances outstanding, the sum of the aggregate
Holder Commitments plus the aggregate Lender Commitments and (b) on or after the
Note Acquisition Date, Holders, Tranche B Lenders and Tranche A Lenders other
than any Credit Party or any of their Affiliates or any assignee thereof, if
any, whose Holder Advances and Loans represent at least fifty-one percent
(51%)of the aggregate Advances outstanding, except Loans held by any Credit
Party; or any of their Affiliates or any assignee thereof.
Appendix A-23
"Marketing Period" shall mean, if the Lessee has given a Sale Notice in
accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the Expiration Date.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise), assets, liabilities or
operations of the Credit Parties (on a consolidated basis), (b) the ability of
any Credit Party to perform its respective obligations under any Operative
Agreement to which it is a party, (c) the validity or enforceability of any
Operative Agreement or the rights and remedies of the Agent, the Lenders, the
Holders, or the Lessor thereunder, (d) the validity, priority or enforceability
of any Lien on any Property created by any of the Operative Agreements, or (e)
the value, utility or useful life of any Property or the use, or ability of the
Lessee to use, any Property for the purpose for which it was intended.
"Maturity Date" shall mean the Expiration Date or to the extent there
is an Extended Remarketing Period, the date upon which a sale of the Properties
occurs or if there is no such sale during the Extended Remarketing Period, the
last day of such period.
"Maximum Residual Guarantee Amount" shall mean an amount equal to the
product of the aggregate Adjusted Property Cost for all Properties times
eighty-five percent (85%) less the sum of accreted value of prepaid rent
payments made by Lessee regarding a Construction Period Property in accordance
with Section 3.3 of the Agency Agreement and Section 3.6 of the Lease.
"Medicaid Certification" means certification by the Healthcare
Financing Administration (HCFA) or a state agency or entity under contract with
the Healthcare Financing Administration (HCFA) that a health care operation is
in compliance with all the conditions of participation set forth in the Medicaid
Regulations.
"Medicaid Provider Agreement" means an agreement entered into between a
state agency or other entity administering the Medicaid program and a health
care operation under which the health care operation agrees to provide services
for Medicaid patients in accordance with the terms of the agreement and Medicaid
Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (ii) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (i) above;
(iii) all state statutes and plans for medical assistance enacted in connection
with the statutes and provisions described in clauses (i) and (ii) above; and
(iv) all applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (iii) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
Appendix A-24
described in clause (ii) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"Medicare Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that a health care operation is in compliance
with all the conditions of participation set forth in the Medicare Regulations.
"Medicare Provider Agreement" means an agreement entered into between a
state agency or other entity administering the Medicare program and a health
care operation under which the health care operation agrees to provide services
for Medicare patients in accordance with the terms of the agreement and Medicare
Regulations.
"Medicare Regulations" means, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto;
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including without limitation, Health and
Human Services ("HHS"), HCFA, the Office of the Inspector General for HHS, or
any Person succeeding to the functions of any of the foregoing) promulgated
pursuant to or in connection with any of the foregoing having the force of law,
as each may be amended, supplemented or otherwise modified from time to time.
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Moody's" shall mean ▇▇▇▇▇'▇ Investor Service, Inc.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee and the Lessee (or regarding any
Property subject to a Ground Lease, the applicable Affiliate of the Lessee) in
favor of the Agent (for the benefit of the Lenders and the Holders) and
evidencing a Lien on the Property, in form and substance reasonably acceptable
to the Agent.
"Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or required by
any Credit Party or any of its Subsidiaries or ERISA Affiliates.
"Multiple Employer Plan" shall mean a plan to which any Credit Party or
any ERISA Affiliate and at least one (1) other employer other than an ERISA
Affiliate is making or accruing an obligation to make, or has made or accrued an
obligation to make, contributions.
"New Facility" shall have the meaning given to such term in Section
28.1 of the Lease.
"Note Acquisition Date" shall mean the date upon which the Lessee
acquires the Tranche A Note pursuant to Section 8.3(w) of the Participation
Agreement.
Appendix A-25
"Notes" shall mean those notes issued to the Lenders pursuant to the
Credit Agreement and shall include both the Tranche A Notes and the Tranche B
Notes.
"Obligations" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Officer's Certificate" with respect to any person shall mean a
certificate executed on behalf of such person by a Responsible Officer who has
made or caused to be made such examination or investigation as is necessary to
enable such Responsible Officer to express an informed opinion with respect to
the subject matter of such Officer's Certificate.
"Operative Agreements" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease, the Lease Supplements (and memoranda of
the Lease and each Lease Supplement in a form reasonably acceptable to the
Agent), the Security Agreement, the Mortgage Instruments, the Cash Collateral
Agreement, the Control Agreement, the other Security Documents, the Ground
Leases, the Deeds and the Bills of Sale and any and all other agreements,
documents and instruments executed in connection with any of the foregoing.
"Original Executed Counterpart" shall have the meaning given to such
term in Section 5 of Exhibit A to the Lease.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Credit Agreement.
"Overdue Rate" shall mean (a) with respect to the Loan Basic Rent, and
any other amount owed under or with respect to the Credit Agreement or the
Security Documents, the rate specified in Section 2.8(b) of the Credit
Agreement, (b) with respect to the Lessor Basic Rent, the Holder Yield and any
other amount owed under or with respect to the Trust Agreement, the Holder
Overdue Rate, and (c) with respect to any other amount, the amount referred to
in clause (y) of Section 2.8(b) of the Credit Agreement.
"Owner Trustee," "Borrower" or "Lessor" shall mean State Street Bank
and Trust Company of Connecticut, National Association, not individually, except
as expressly stated in the various Operative Agreements, but solely as Owner
Trustee for Digital Hospital Trust 2001-1, and any successor, replacement and/or
additional Owner Trustee expressly permitted under the Operative Agreements.
"Parent" shall mean HEALTHSOUTH Corporation, a Delaware corporation.
"Parent Credit Agreement" shall mean that certain credit agreement
dated as of June 23, 1998 between the Parent, Bank of America, National
Association (formerly NationsBank, National Association), as the administrative
agent and the lenders party thereto from time to time, as such may hereafter be
amended, modified, supplemented, restated and/or replaced from time to time.
Appendix A-26
"Parent Credit Agreement Event of Default" shall mean an Event of
Default as defined in Article IX of the Parent Credit Agreement.
"Participant" shall have the meaning given to such term in Section 9.7
of the Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated
on or about the Initial Closing Date, among the Lessee, the Guarantor, the Owner
Trustee, not in its individual capacity except as expressly stated therein, the
Holders, the Lenders and the Agent.
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Advances is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Pension Plan" shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
Multiemployer Plan), and to which any Credit Party or any ERISA Affiliate may
have any liability, including without limitation any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five (5) years, or by reason of being deemed to
be a contributing sponsor under section 4069 of ERISA.
"Permitted Facility" shall mean a digital hospital and medical office
building fit for commercial operation.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
(b) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease for no
longer than the duration of the Lease;
(c) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 13.1 of the
Lease;
(d) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
thirty (30) days past due or are being diligently contested in good
faith by appropriate proceedings, so long as such proceedings satisfy
the conditions for the continuation of proceedings to contest Taxes set
forth in Section 13.1 of the Lease;
Appendix A-27
(e) Liens of any of the types referred to in clause (d) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor and
the Agent have been made), which bonding (or arrangements) shall comply
with applicable Legal Requirements, and shall have effectively stayed
any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
13.1 of the Lease;
(g) Liens described in the title policy delivered pursuant to
Section 5.3(g) of the Participation Agreement and Liens granted
pursuant to Section 8.5 of the Participation Agreement; and
(h) Lessor Liens.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Operative
Agreements.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Property" shall mean, with respect to each Permitted Facility that is
(or is to be) acquired, constructed and/or renovated pursuant to the terms of
the Operative Agreements, the Land and each item of Equipment and the various
Improvements, in each case located on such Land, including without limitation
each Construction Period Property, each Property subject to a Ground Lease and
each Property for which the Term has commenced.
"Property Acquisition Cost" shall mean the cost to the Lessor to
purchase a Property on a Property Closing Date.
"Property Closing Date" shall mean the date on which the Lessor
purchases or ground leases a Property or, with respect to the first Advance, the
date on which the Lessor seeks reimbursement for Property previously purchased
by the Lessor.
Appendix A-28
"Property Cost" shall mean with respect to a Property the aggregate
amount (and/or the various items and occurrences giving rise to such amounts) of
the Loan Property Cost plus the Holder Property Cost for such Property (as such
amounts shall be increased equally among all Properties, including, without
limitation, all Construction Period Properties and all Properties subject to a
Lease Supplement, respecting the Holder Advances and the Loans extended from
time to time to pay for the Transaction Expenses, fees, expenses, disbursements,
indemnity payments and other amounts pursuant to the Operative Agreements).
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"Rating" means the rating of senior unsecured debt of the Parent in
effect at any time which rating is made by either of Moody's or S&P.
"Register" shall have the meaning given to such term in Section 9.9(a)
of the Credit Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Renewal Term" shall have the meaning given to such term in Section 2.2
of the Lease.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Rent Commencement Date" shall mean, regarding each Property, the
Completion Date.
Appendix A-29
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Responsible Officer" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chairman or Vice Chairman of the Executive Committee of
the Board of Directors, the President, any Senior Vice President or Executive
Vice President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer, except that when used with respect to the
Trust Company or the Owner Trustee, "Responsible Officer" shall also include the
Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer,
the Controller and any Assistant Controller or any other officer of the Trust
Company or the Owner Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"S&P" shall mean Standard & Poor's Rating Group, a division of The
McGraw Hill Companies.
"Sale Date" shall mean the Expiration Date.
"Sale Notice" shall mean a notice given to the Lessor in connection
with the election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1
of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan or Eurodollar Holder Advance, the last day of the Interest Period
applicable to such Eurodollar Loan or Eurodollar Holder Advance (or respecting
any Eurodollar Loan or Eurodollar Holder Advance having an Interest Period of
six (6) months, the three (3) month anniversary of such Interest Period), (b) as
to any ABR Loan or any ABR Holder Advance, the fifteenth day of each month,
unless such day is not a Business Day and in such case on the next occurring
Business Day and (c) as to all Loans and Holder Advances, the date of any
voluntary or involuntary payment, prepayment, return or redemption, and the
Maturity Date or the Expiration Date, as the case may be.
"Secured Parties" shall have the meaning given to such term in the
Security Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
Appendix A-30
"Security Agreement" shall mean the Security Agreement dated on or
about the Initial Closing Date between the Lessor and the Agent, for the benefit
of the Secured Parties, and accepted and agreed to by the Lessee.
"Security Documents" shall mean the collective reference to the
Security Agreement the Cash Collateral Agreement, the Control Agreement, the
Mortgage Instruments, (to the extent the Lease is construed as a security
instrument) the Lease, the UCC Financing Statements and all other security
documents hereafter delivered to the Agent granting a lien on any asset or
assets of any Person to secure the obligations and liabilities of the Lessor
under the Operative Agreements or to secure any guarantee of any such
obligations and liabilities or to secure the obligations and liabilities of the
Construction Agent and/or the Lessee- under the Operative Agreements or to
secure any guarantee of any such obligations and liabilities.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition, development, installation,
construction, improvement and testing of the Properties other than Hard Costs,
including without limitation structuring fees, administrative fees, legal fees,
upfront fees, fees and expenses related to appraisals, title examinations, title
insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, the Lender Unused Fee, the
Holder Unused Fee, fees and expenses of the Owner Trustee payable or
reimbursable under the Operative Agreements and costs and expenses incurred
pursuant to Sections 7.3(a) and 7.3(b) of the Participation Agreement.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person, or by one (1)
or more Subsidiaries, or by such Person and one (1) or more Subsidiaries.
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Credit Agreement.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor,
the Trust Company, the Holders, the Agent, the Lenders or any other Person under
the Lease or under any of the other Operative Agreements including without
limitation payments of the Termination Value and the Maximum Residual Guarantee
Amount and all indemnification amounts, liabilities and obligations.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Term" shall have the meaning specified in Section 2.2 of the Lease.
"Termination Date" shall have the meaning specified in Section 16.2(a)
of the Lease.
Appendix A-31
"Termination Event" shall mean (a) with respect to any Pension Plan,
the occurrence of a Reportable Event or an event described in Section 4062(e) of
ERISA, (b) the withdrawal of any Credit Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan, (c) the distribution of a notice of intent to
terminate a Plan or Multiemployer Plan pursuant to Section 4041(a)(2) or 4041A
of ERISA, (d) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC under Section 4042 of ERISA, (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (f) the complete or partial withdrawal of any Credit
Party or any ERISA Affiliate from a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
"Termination Value" shall mean the sum of (a) either (i) with respect
to all Properties, an amount equal to the aggregate outstanding Property Cost
for all the Properties, or (ii) with respect to a particular Property, an amount
equal to the Property Cost allocable to such Property, plus (b) respecting the
amounts described in each of the foregoing subclause (i) or (ii), as applicable,
any and all accrued but unpaid interest on the Loans and any and all accrued and
unpaid Holder Yield on the Holder Advances related to the applicable Property
Cost, plus (c) to the extent the same is not duplicative of the amounts payable
under clause (b) above, all other Rent and other amounts then due and payable or
accrued under the Agency Agreement, Lease and/or under any other Operative
Agreement (including without limitation amounts under Sections 11.1 and 11.2 of
the Participation Agreement and all costs and expenses referred to in clause
FIRST of Section 22.2 of the Lease).
"Tranche A Commitments" shall mean the obligation of the Tranche A
Lenders to make the Tranche A Loans to the Lessor in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche A Lender's name on Schedule 2.1 to the
Credit Agreement, as such amount may be increased or reduced from time to time
in accordance with the provisions of the Operative Agreements; provided, no
Tranche A Lender shall be obligated to make Tranche A Loans in excess of such
Tranche A Lender's share of the Tranche A Commitments as set forth adjacent to
such Tranche A Lender's name on Schedule 2.1 to Credit Agreement.
"Tranche A Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Credit Agreement that commit to make the Tranche A Loans.
"Tranche A Loans" shall mean the Loans made pursuant to the Tranche A
Commitment.
"Tranche A Note" shall have the meaning given to it in Section 2.2 of
the Credit Agreement.
"Tranche B Commitments" shall mean the obligation of the Tranche B
Lenders to make the Tranche B Loans to the Lessor in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
Appendix A-32
amounts set forth opposite each Tranche B Lender's name on Schedule 2.1 to the
Credit Agreement, as such amount may be increased or reduced from time to time
in accordance with the provisions of the Operative Agreements; provided, no
Tranche B Lender shall be obligated to make Tranche B Loans in excess of such
Tranche B Lender's share of the Tranche B Commitments as set forth adjacent to
such Tranche B Lender's name on Schedule 2.1 to Credit Agreement.
"Tranche B Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Credit Agreement that commit to make the Tranche B Loans.
"Tranche B Loan" shall mean the Loans made pursuant to the Tranche B
Commitment.
"Tranche B Note" shall have the meaning given to it in Section 2.2 of
the Credit Agreement.
"Transaction Expenses" shall mean all Soft Costs and all other costs
and expenses incurred in connection with the preparation, execution and delivery
of the Operative Agreements and the transactions contemplated by the Operative
Agreements including without limitation all costs and expenses described in
Section 7.1 of the Participation Agreement and the following:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of accountants for any Credit Party in connection with
the transaction contemplated by the Operative Agreements;
(c) any and all other reasonable fees, charges or other
amounts payable to the Lenders, the Agent, the Holders, the Owner
Trustee or any broker which arises under any of the Operative
Agreements;
(d) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of
the other transaction documents; and
(e) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreements.
Appendix A-33
"Tribunal" shall mean any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision agency, department,
commission, board, bureau or instrumentality of a governmental body.
"Trust" shall mean the Digital Hospital Trust 2001-1.
"Trust Agreement" shall mean the Trust Agreement dated on or about the
Initial Closing Date between the Holders and the Owner Trustee.
"Trust Company" shall mean State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity, and any successor
owner trustee under the Trust Agreement in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the
Trust Agreement.
"Type" shall mean, as to any Loan, whether it is an ABR Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender Financing
Statements and the Lessor Financing Statements.
"Unanimous Vote Matters" shall have the meaning given it in Section
12.4 of the Participation Agreement.
"Unfunded Amount" shall have the meaning specified in Section 3.2 of
the Agency Agreement.
"Unfunded Liability" shall mean, with respect to any Plan, at any time,
the amount (if any) by which (a) the present value of all benefits under such
Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of the Company or any member of the Controlled Group to the PBGC or such Plan
under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"Uninsurable Force Majeure Events" shall mean, subject to the next
sentence, such events that are outside of the control of the Lessee, Guarantor
or any Construction Agency Person for which no insurance was available on the
Initial Closing Date. Uninsurable Force Majeure Events shall be permitted
exclusions in the Lessee's builders all risk insurance policy and shall be
limited to (a) governmental action including seizure or destruction of property
by order of governmental authority (for reasons other than to prevent the spread
of fire), (b) nuclear hazard, including nuclear reaction, radiation or
radioactive contamination (provided, damage from loss by fire shall be insured),
and (c) war and military action, including (i) war, including undeclared civil
war, (ii) warlike action by a military force and (iii) insurrection, rebellion,
Appendix A-34
revolution, usurped power, or action taken by governmental authority in
hindering or defending against any of these.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, collectively, the Holder Unused Fee and the
Lender Unused Fee.
"Unused Fee Payment Date" shall mean the last Business Day of each
December, March, June and September and the last Business Day of the Commitment
Period, or such earlier date as the Commitments shall terminate as provided in
the Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
"Upfront Fee Letter" shall mean that certain upfront fee letter dated
as of _________ addressed to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, EVP & Treasurer of HEALTHSOUTH
Corporation from [__________________, _________] of First Union Securities, Inc.
"U.S. Person" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Withholdings" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Wholly-Owned Entity" shall mean a Person all of the shares of capital
stock or other ownership interest of which are owned by the Parent and/or one of
its wholly-owned Subsidiaries or other wholly-owned entities.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods and/or services with respect to
any Property.
Appendix A-35