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EXHIBIT 10.1
LEASE AGREEMENT
Dated as of March 30, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the PHC Real Estate Trust 1998,
as Lessor
and
PROVINCE HEALTHCARE COMPANY,
as Lessee
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This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent") under a Security Agreement dated as of March 30, 1998,
between First Security Bank, National Association, not individually, but solely
as the Owner Trustee under the PHC Real Estate Trust 1998-1 and the Agent, as
amended, modified, extended, supplemented, restated and/or replaced from time to
time in accordance with the applicable provisions thereof. This Lease Agreement
has been executed in several counterparts. To the extent, if any, that this
Lease Agreement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no
security interest in this Lease Agreement may be created through the transfer or
possession of any counterpart other than the original counterpart containing the
receipt therefor executed by the Agent on the signature page hereof.
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TABLE OF CONTENTS
ARTICLE I........................................................................................................ 1
1.1 Definitions......................................................................................... 1
1.2 Interpretation...................................................................................... 2
ARTICLE II....................................................................................................... 2
2.1 Property............................................................................................ 2
2.2 Lease Term.......................................................................................... 2
2.3 Title............................................................................................... 2
2.4 Lease Supplements................................................................................... 2
ARTICLE III...................................................................................................... 3
3.1 Rent................................................................................................ 3
3.2 Payment of Basic Rent............................................................................... 3
3.3 Supplemental Rent................................................................................... 3
3.4 Performance on a Non-Business Day................................................................... 4
3.5 Rent Payment Provisions............................................................................. 4
ARTICLE IV....................................................................................................... 4
4.1 Taxes; Utility Charges.............................................................................. 4
ARTICLE V........................................................................................................ 5
5.1 Quiet Enjoyment..................................................................................... 5
ARTICLE VI....................................................................................................... 5
6.1 Net Lease........................................................................................... 5
6.2 No Termination or Abatement......................................................................... 6
ARTICLE VII...................................................................................................... 6
7.1 Ownership of the Properties......................................................................... 6
ARTICLE VIII..................................................................................................... 7
8.1 Condition of the Properties......................................................................... 7
8.2 Possession and Use of the Properties................................................................ 8
8.3 Integrated Properties............................................................................... 9
8.4 Lessee's Equipment..................................................................................10
ARTICLE IX.......................................................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards.......................................................10
ARTICLE X........................................................................................................10
10.1 Maintenance and Repair; Return.....................................................................10
10.2 Environmental Inspection...........................................................................12
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ARTICLE XI.......................................................................................................12
11.1 Modifications......................................................................................12
ARTICLE XII......................................................................................................13
12.1 Warranty of Title..................................................................................13
ARTICLE XIII.....................................................................................................14
13.1 Permitted Contests Other Than in Respect of Indemnities............................................14
ARTICLE XIV......................................................................................................15
14.1 Public Liability and Workers' Compensation Insurance...............................................15
14.2 Permanent Hazard and Other Insurance...............................................................15
14.3 Coverage...........................................................................................16
ARTICLE XV.......................................................................................................17
15.1 Casualty and Condemnation..........................................................................17
15.2 Environmental Matters..............................................................................19
15.3 Notice of Environmental Matters....................................................................20
ARTICLE XVI......................................................................................................20
16.1 Termination Upon Certain Events....................................................................20
16.2 Procedures.........................................................................................20
ARTICLE XVII.....................................................................................................20
17.1 Lease Events of Default............................................................................20
17.2 Surrender of Possession............................................................................24
17.3 Reletting..........................................................................................24
17.4 Damages............................................................................................25
17.5 Power of Sale......................................................................................25
17.6 Final Liquidated Damages...........................................................................26
17.7 Environmental Costs................................................................................26
17.8 Waiver of Certain Rights...........................................................................26
17.9 Assignment of Rights Under Contracts...............................................................27
17.10 Remedies Cumulative...............................................................................27
ARTICLE XVIII....................................................................................................27
18.1 Lessor's Right to Cure Lessee's Lease Defaults.....................................................27
ARTICLE XIX......................................................................................................27
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option....................................27
19.2 No Purchase or Termination With Respect to Less than All of a Property.............................28
ARTICLE XX.......................................................................................................28
20.1 Purchase Option or Sale Option-General Provisions..................................................28
20.2 Lessee Purchase Option.............................................................................29
20.3 Third Party Sale Option............................................................................30
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ARTICLE XXI......................................................................................................30
21.1 [Intentionally Omitted]............................................................................30
ARTICLE XXII.....................................................................................................30
22.1 Sale Procedure.....................................................................................30
22.2 Application of Proceeds of Sale....................................................................33
22.3 Indemnity for Excessive Wear.......................................................................33
22.4 Appraisal Procedure................................................................................34
22.5 Certain Obligations Continue.......................................................................34
ARTICLE XXIII....................................................................................................35
23.1 Holding Over.......................................................................................35
ARTICLE XXIV.....................................................................................................35
24.1 Risk of Loss.......................................................................................35
ARTICLE XXV......................................................................................................35
25.1 Assignment.........................................................................................35
25.2 Subleases..........................................................................................36
ARTICLE XXVI.....................................................................................................36
26.1 No Waiver..........................................................................................36
ARTICLE XXVII....................................................................................................37
27.1 Acceptance of Surrender............................................................................37
27.2 No Merger of Title.................................................................................37
ARTICLE XXVIII...................................................................................................37
28.1 Incorporation of Covenants.........................................................................37
ARTICLE XXIX.....................................................................................................38
29.1 Notices............................................................................................38
ARTICLE XXX......................................................................................................38
30.1 Miscellaneous......................................................................................38
30.2 Amendments and Modifications.......................................................................39
30.3 Successors and Assigns.............................................................................39
30.4 Headings and Table of Contents.....................................................................39
30.5 Counterparts.......................................................................................39
30.6 GOVERNING LAW......................................................................................39
30.7 Calculation of Rent................................................................................39
30.8 Memoranda of Lease and Lease Supplements...........................................................39
30.9 Allocations between the Lenders and the Holders....................................................40
30.10 Limitations on Recourse...........................................................................40
30.11 WAIVERS OF JURY TRIAL.............................................................................40
30.12 Exercise of Lessor Rights.........................................................................40
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30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION....................................................40
30.14 USURY SAVINGS PROVISION...........................................................................41
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
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LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of March 30, 1998 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, not individually, but solely as the Owner Trustee under
the PHC Real Estate Trust 1998-1, as lessor (the "Lessor"), and PROVINCE
HEALTHCARE COMPANY, a Delaware corporation, having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as lessee
(the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one (1) or more third parties designated by Lessee
and (ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each Property upon
the Property Closing Date with respect thereto; provided, Basic Rent with
respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
For purposes of this Lease, capitalized terms used in this
Lease and not otherwise defined herein shall have the meanings assigned to them
in Appendix A to that certain Participation Agreement dated as of March 30, 1998
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among Lessee, Lessor, the various parties thereto
from time to time, as the Guarantors, the various banks and other lending
institutions which are parties thereto from time to time, as the Holders, the
various banks and other lending institutions which are parties thereto from time
to time, as the Lenders, and First Union National
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Bank, as agent for the Lenders and respecting the Security Documents, as the
agent for the Lenders and the Holders, to the extent of their interests. Unless
otherwise indicated, references in this Lease to articles, sections, paragraphs,
clauses, appendices, schedules and exhibits are to the same contained in this
Lease.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the
Participation Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
The term of this Lease with respect to each Property (the
"Term") shall begin upon the Property Closing Date for such Property (in each
case the "Commencement Date") and shall end on the fifth annual anniversary of
the Initial Closing Date (the "Expiration Date"), unless the Term is earlier
terminated. Notwithstanding the foregoing, Lessee shall not be obligated to pay
Basic Rent until the Rent Commencement Date with respect to such Property.
2.3 TITLE.
Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor other than those set forth in the
Participation Agreement and subject to the rights of parties in possession (if
any), the existing state of title (including without limitation the Permitted
Liens) and all applicable Legal Requirements. Lessee shall in no event have any
recourse against Lessor for any defect in Lessor's title to any Property or any
interest of Lessee therein other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS.
On or prior to each Commencement Date, Lessee and Lessor shall each
execute and deliver a Lease Supplement for the Property to be leased effective
as of such Commencement Date in substantially the form of Exhibit A hereto.
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ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent in arrears on each Payment
Date, and on any date on which this Lease shall terminate with respect
to any or all Properties during the Term; provided, however, with
respect to each individual Property Lessee shall have no obligation to
pay Basic Rent with respect to such Property until the Rent
Commencement Date with respect to such Property (notwithstanding that
Basic Rent for such Property shall accrue from and including the
Scheduled Interest Payment Date immediately preceding such Rent
Commencement Date). Basic Rent shall be adjusted with regard to amounts
expended by Lessor for any Modification.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately
available funds on the due date therefor (or within the applicable
grace period) to such account or accounts at such bank or banks as
Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall
not delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00
noon, Charlotte, North Carolina time, on the applicable date for
payment of such amount.
3.2 PAYMENT OF BASIC RENT.
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable, and if
Lessee fails to pay any Supplemental Rent within three (3) days after the same
is due, Lessor shall have all rights, powers and remedies provided for herein or
by law or equity or otherwise in the case of nonpayment of Basic Rent. All such
payments of Supplemental Rent shall be in the full amount thereof, without
setoff, deduction or reduction. Lessee shall pay to the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
to the extent permitted by applicable Legal Requirements, (a) any and all
payment obligations (except for amounts payable as Basic Rent) owing from time
to time under the Operative Agreements by any Person to the Agent, any Lender,
any Holder or any other Person and (b) interest at the applicable Overdue Rate
on any installment of Basic Rent not paid when due (subject to the applicable
grace period)
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for the period for which the same shall be overdue and on any payment of
Supplemental Rent not paid when due or demanded by the appropriate Person
(subject to any applicable grace period) for the period from the due date or the
date of any such demand, as the case may be, until the same shall be paid. It
shall be an additional Supplemental Rent obligation of Lessee to pay to the
appropriate Person all rent and other amounts when such become due and owing
from time to time under each Ground Lease and without the necessity of any
notice from Lessor with regard thereto. The expiration or other termination of
Lessee's obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of Lessee with respect to Supplemental Rent. Unless expressly
provided otherwise in this Lease, in the event of any failure on the part of
Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added for nonpayment or late payment of such Supplemental Rent, all
of which shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date. If any Supplemental Rent is required hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
Lessee shall make payment of all Basic Rent and Supplemental
Rent when due (subject to the applicable grace periods) regardless of whether
any of the Operative Agreements pursuant to which same is calculated and is
owing shall have been rejected, avoided or disavowed in any bankruptcy or
insolvency proceeding involving any of the parties to any of the Operative
Agreements. Such provisions of such Operative Agreements and their related
definitions are incorporated herein by reference and shall survive any
termination, amendment or rejection of any such Operative Agreements.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
Lessee shall pay or cause to be paid all Impositions with
respect to the Properties and/or the use, occupancy, operation, repair, access,
maintenance or operation thereof and all charges for electricity, power, gas,
oil, water, telephone, sanitary sewer service and all other rents, utilities and
operating expenses of any kind or type used in or on any Property and related
real property during the Term except those being contested by appropriate
proceedings pursuant to Section 13.1. Upon Lessor's request, Lessee shall
provide from time to time Lessor with evidence of all such payments referenced
in the foregoing sentence. Lessee shall be entitled to receive any credit or
refund with respect to any Imposition or utility charge paid by Lessee. Unless
an Event of Default shall have occurred and be continuing, the amount of any
credit or refund received by Lessor on account of any Imposition or utility
charge paid by Lessee, net of
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the costs and expenses incurred by Lessor in obtaining such credit or refund,
shall be promptly paid over to Lessee. All charges for Impositions or utilities
imposed with respect to any Property for a period during which this Lease
expires or terminates shall be adjusted and prorated on a daily basis between
Lessor and Lessee, and each party shall pay or reimburse the other for such
party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT.
Subject to the rights of Lessor contained in Sections 17.2,
17.3 and 20.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Commencement Date.
ARTICLE VI
6.1 NET LEASE.
This Lease shall constitute a net lease, and the obligations
of Lessee hereunder are absolute and unconditional. Lessee shall pay all
operating expenses arising out of the use, operation and/or occupancy of each
Property. Any present or future law to the contrary notwithstanding, this Lease
shall not terminate, nor shall Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Rent,
nor shall the obligations of Lessee hereunder be affected (except as expressly
herein permitted and by performance of the obligations in connection therewith)
for any reason whatsoever, including without limitation by reason of: (a) any
damage to or destruction of any Property or any part thereof; (b) any taking of
any Property or any part thereof or interest therein by Condemnation or
otherwise; (c) any prohibition, limitation, restriction or prevention of
Lessee's use, occupancy or enjoyment of any Property or any part thereof, or any
interference with such use, occupancy or enjoyment by any Person or for any
other reason; (d) any title defect, Lien or any matter affecting title to any
Property; (e) any eviction by paramount title or otherwise; (f) any default by
Lessor hereunder; (g) any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding relating to or affecting the Agent,
any Lender, Lessor, Lessee, any Holder or any Governmental Authority; (h) the
impossibility or illegality of performance by Lessor, Lessee or both; (i) any
action of any Governmental Authority or any other Person; (j) Lessee's
acquisition of ownership of all or part of any Property; (k) breach of any
warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or dissimilar to the foregoing and whether or not Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of Lessee
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hereunder shall be covenants, agreements and obligations that are separate and
independent from any obligations of Lessor hereunder and shall continue
unaffected unless such covenants, agreements and obligations shall have been
modified or terminated in accordance with an express provision of this Lease.
Lessor and Lessee acknowledge and agree that the provisions of this Section 6.1
have been specifically reviewed and subject to negotiation.
6.2 NO TERMINATION OR ABATEMENT.
Lessee shall remain obligated under this Lease in accordance
with its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
(a) Lessor and Lessee intend that (i) for financial accounting
purposes with respect to Lessee (A) this Lease will be treated as an
"operating lease" pursuant to Statement of Financial Accounting
Standards No. 13, as amended, (B) Lessor will be treated as the owner
and lessor of each Property and (C) Lessee will be treated as the
lessee of each Property, but (ii) for federal and all state and local
income tax purposes, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes and all other purposes (A) this
Lease will be treated as a financing arrangement and (B) Lessee will be
treated as the owner of the Properties and will be entitled to all tax
benefits ordinarily available to owners of property similar to the
Properties for such tax purposes. Notwithstanding the foregoing,
neither party hereto has made, or shall be deemed to have made, any
representation or warranty as to the availability of any of the
foregoing treatments under applicable accounting rules, tax,
bankruptcy, regulatory, commercial or real estate law or under any
other set of rules. Lessee shall claim the cost recovery deductions
associated with each Property, and Lessor shall not, to the extent not
prohibited by Law, take on its tax return a position inconsistent with
Lessee's claim of such deductions.
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(b) For all purposes other than as set forth in Section
7.1(a)(i), Lessor and Lessee intend this Lease to constitute a finance
lease and not a true lease. In order to secure the obligations of
Lessee now existing or hereafter arising under any and all Operative
Agreements, Lessee hereby conveys, grants, assigns, transfers,
hypothecates, mortgages and sets over to Lessor, for the benefit of all
Financing Parties, a first priority security interest (but subject to
the security interest in the assets granted by Lessee in favor of the
Agent in accordance with the Security Agreement) in and lien on all
right, title and interest of Lessee (now owned or hereafter acquired)
in and to all Properties, to the extent such is personal property and
irrevocably grants and conveys a lien, deed of trust and mortgage on
all right, title and interest of Lessee (now owned or hereafter
acquired) in and to all Properties to the extent such is real property,
and to secure the obligations of each Credit Party now existing or
hereafter arising under the Operative Agreements, (i) this Lease shall
be a security agreement and financing statement within the meaning of
Article 9 of the Uniform Commercial Code respecting each of the
Properties and all proceeds (including without limitation insurance
proceeds thereof) to the extent such is personal property and an
irrevocable grant and conveyance of a lien, deed of trust and mortgage
on each of the Properties and all proceeds (including without
limitation insurance proceeds thereof) to the extent such is real
property; (ii) the acquisition of title (or to the extent applicable, a
leasehold interest pursuant to a Ground Lease) in each Property
referenced in Article II constitutes a grant by Lessee to Lessor of a
security interest, lien, deed of trust and mortgage in all of Lessee's
right, title and interest in and to each Property and all proceeds
(including without limitation insurance proceeds thereof) of the
conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property, and an assignment of all
rents, profits and income produced by each Property; and (iii)
notifications to Persons holding such property, and acknowledgments,
receipts or confirmations from financial intermediaries, bankers or
agents (as applicable) of Lessee shall be deemed to have been given for
the purpose of perfecting such lien, security interest, mortgage lien
and deed of trust under applicable law. Lessor and Lessee shall
promptly take such actions as may be necessary or advisable in either
party's opinion (including without limitation the filing of Uniform
Commercial Code Financing Statements, Uniform Commercial Code Fixture
Filings and memoranda (or short forms) of this Lease and the various
Lease Supplements) to ensure that the lien, security interest, lien,
mortgage lien and deed of trust in each Property and the other items
referenced above will be deemed to be a perfected lien, security
interest, mortgage lien and deed of trust of first priority under
applicable law and will be maintained as such throughout the Term.
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ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH
PROPERTY "AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS
OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND
CLEAR OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF
TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY
STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY
MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL
REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE
APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY
HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR
COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE
AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER
AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY
WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE COMMENCEMENT DATE WILL
HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE
IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT, EACH
LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS
INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS
OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE
PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS,
ON THE ONE (1) HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
(a) At all times during the Term with respect to each
Property, such Property shall be a Permitted Facility and shall be used
by Lessee in the ordinary course of its business. Lessee shall pay, or
cause to be paid, all charges and costs required in connection with the
use of the Properties as contemplated by this Lease. Lessee shall not
commit or permit any waste of the Properties or any part thereof,
except as expressly permitted under the Operative Agreements.
(b) The address stated in Section 29.1 of this Lease is the
principal place of business and chief executive office of Lessee (as
such terms are used in Section 9-103(3) of the Uniform Commercial Code
of any applicable jurisdiction), and Lessee will provide Lessor with
prior written notice of any change of location of its principal place
of business or chief executive office. Regarding a particular Property,
each Lease Supplement correctly identifies the initial location of the
related Equipment (if any) and
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Improvements (if any) and contains an accurate legal description for
the related parcel of Land or a copy of the Ground Lease (if any). The
Equipment (other than those items in transit for repair or under
repair) and Improvements respecting each particular Property will be
located only at the location identified in the applicable Lease
Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property in a manner that could give rise to the
assertion of any Lien on such item of Equipment by reason of such
attachment or the assertion of a claim that such item of Equipment has
become a fixture if in either case such Equipment thereby becomes
subject to a Lien in favor of a third party that is prior to the Liens
thereon created by the Operative Agreements.
(d) On the Commencement Date for each Property, Lessor and
Lessee shall execute a Lease Supplement in regard to such Property
which shall contain an Equipment Schedule that generally describes the
Equipment which is then or shall be a part of the Property, an
Improvement Schedule that generally describes the Improvements which
are then or shall be a part of the Property and a legal description of
the Land which is then or shall be leased hereunder (or in the case of
any Property subject to a Ground Lease to be subleased hereunder). Each
Property subject to a Ground Lease shall be ground subleased from
Lessor to Lessee as of the Commencement Date pursuant to a ground
sublease (in form and substance satisfactory to Lessor and Lessee), and
such ground sublease shall be in effect until this Lease is terminated
or expires, in each case in accordance with the terms and provisions
hereof. Lessee shall satisfy and perform all obligations imposed on
Lessor under each Ground Lease. Simultaneously with the execution and
delivery of each Lease Supplement, such Equipment, Improvements, Land,
ground subleasehold interest, all additional Equipment and Improvements
which are financed under the Operative Agreements after the
Commencement Date and the remainder of such Property shall be deemed to
have been accepted by Lessee for all purposes of this Lease and to be
subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided that such exercise will
not materially impair the value, utility or remaining useful life of
such Property) shall be permitted to exercise all rights and remedies
under, all operation and easement agreements and related or similar
agreements applicable to such Property.
8.3 INTEGRATED PROPERTIES.
On the Rent Commencement Date for each Property, such Property
and the applicable property subject to a Ground Lease shall constitute (and for
the duration of the Term shall continue to constitute) all of the equipment,
facilities, rights, other personal property and other real property necessary or
appropriate to operate, utilize, maintain and control a Permitted Facility in a
commercially reasonable manner.
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8.4 LESSEE'S EQUIPMENT.
At Lessee's sole cost and expense, Lessee shall be entitled to remove
Lessee's Equipment from the applicable Property at any time during the Term.
Lessee shall repair any and all damage (to the satisfaction of Lessor) caused to
the applicable Property with respect to Lessee's removal of Lessee's Equipment.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all Environmental
Laws), all Insurance Requirements relating to the Properties and all
manufacturer's specifications and standards, including without limitation the
acquisition, installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property, and (b)
procure, maintain and comply with all licenses, permits, orders, approvals,
consents and other authorizations required for the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Properties, unless the failure to procure,
maintain and comply with such items identified in subparagraphs (a) and (b),
individually or in the aggregate, shall not and could not reasonably be expected
to have a Material Adverse Effect. Lessor agrees to take such actions as may be
reasonably requested by Lessee in connection with the compliance by Lessee of
its obligations under this Section 9.1.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and in the repair and condition as when originally
delivered to Lessor and make all necessary repairs thereto and
replacements thereof, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to the applicable Property, such that such Property is capable of being
immediately utilized by a third party and in compliance with standard
industry practice subject, however, to the provisions of Article XV
with respect to Casualty and Condemnation.
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(b) Lessee shall not use or locate any component of any
Property outside of any Approved State. Lessee shall not move or
relocate any component of any Property beyond the boundaries of the
Land (comprising part of such Property) described in the applicable
Lease Supplement, except for the temporary removal of Equipment and
other personal property for repair or replacement. The foregoing
provisions of this Section 10.1(b) shall not apply to Lessee's
Equipment and title thereto shall vest in Lessee or Lessee's designee.
(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered
unfit for use, Lessee, at its own expense, will within a reasonable
time replace such component with a replacement component which is free
and clear of all Liens (other than Permitted Liens and Lessor Liens)
and has a value, utility and useful life at least equal to the
component replaced (assuming the component replaced had been maintained
and repaired in accordance with the requirements of this Lease). All
components which are added to any Property shall immediately become the
property of (and title thereto shall vest in) Lessor and shall be
deemed incorporated in such Property and subject to the terms of this
Lease as if originally leased hereunder. All components of any Property
so replaced shall immediately become the property of (and title thereto
shall vest in) Lessee. The foregoing provisions of this Section 10.1(c)
shall not apply to Lessee's Equipment.
(d) Upon reasonable advance notice but only in compliance with
all applicable Law, Lessor and its agents shall have the right to
inspect each Property and all maintenance records with respect thereto
at any reasonable time during normal business hours but shall not, in
the absence of an Event of Default, materially disrupt the business of
Lessee.
(e) If, at any time, the aggregate appraised value of
Properties then subject to this Lease for which the Agent has received
an Appraisal pursuant to the terms of Section 5.3 of the Participation
Agreement is less than twenty percent (20%) of the aggregate Property
Cost at such time (the "Base Amount"), then Lessee will cause an
additional Appraisal or Appraisals to be immediately delivered to
Lessor in an amount sufficient to cause such aggregate appraised value
to equal or exceed the Base Amount. In addition, Lessee shall cause to
be delivered to Lessor (at Lessee's sole expense) one (1) or more
additional Appraisals (or reappraisals of Property) as Lessor may
request if any one (1) of Lessor, the Agent, the Trust Company, any
Lender or any Holder is required pursuant to any applicable Legal
Requirement to obtain such Appraisals (or reappraisals) and upon the
occurrence of any Event of Default.
(f) Lessor shall under no circumstances be required to build
any improvements or install any equipment on any Property, make any
repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in
connection with this Lease or maintain any Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part of
any Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild
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all or any part of any Property, or (ii) make repairs at the expense of
Lessor pursuant to any Legal Requirement, Insurance Requirement,
contract, agreement, covenant, condition or restriction at any time in
effect.
(g) Lessee shall, upon the expiration or earlier termination
of this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) to Lessor pursuant
to the exercise of the applicable remedies upon the occurrence of a
Lease Event of Default or (ii) pursuant to the second paragraph of
Section 22.1(a) hereof to Lessor, or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease
(including without limitation the obligations of Lessee at the time of
such surrender under Sections 9.1, 10.1(a) through (f), 10.2, 11.1,
12.1, 22.1 and 23.1).
10.2 ENVIRONMENTAL INSPECTION.
If Lessee has not given notice of exercise of its Purchase
Option on the Expiration Date pursuant to Section 20.1 or for whatever reason
Lessee does not purchase a Property in accordance with the terms of this Lease,
then not more than one hundred twenty (120) days nor less than sixty (60) days
prior to the Expiration Date, Lessee at its expense shall cause to be delivered
to Lessor a Phase I environmental site assessment recently prepared (no more
than thirty (30) days prior to the date of delivery) by an independent
recognized professional reasonably acceptable to the Agent, and in form, scope
and content reasonably satisfactory to the Agent.
ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense (subject to Section
11.1(c)), at any time and from time to time without the consent of
Lessor may make modifications, alterations, renovations, improvements
and additions to any Property or any part thereof and substitutions and
replacements therefor (collectively, "Modifications"), and Lessee shall
make any and all Modifications required to be made pursuant to all
Legal Requirements, Insurance Requirements and manufacturer's
specifications and standards; provided, that: (i) no Modification shall
materially impair the value, utility or useful life of any Property
from that which existed immediately prior to such Modification; (ii)
each Modification shall be done expeditiously and in a good and
workmanlike manner; (iii) no Modification shall adversely affect the
structural integrity of any Property; (iv) to the extent required by
Section 14.2(a), Lessee shall maintain builders' risk insurance at all
times when a Modification is in progress; (v) subject to the terms of
Article XIII relating to permitted contests, Lessee shall pay all costs
and expenses and discharge any Liens (that are not Permitted Liens or
Lessor Liens) arising with respect to any Modification; (vi) each
Modification shall comply with the requirements of this Lease
(including without limitation Sections 8.2 and 10.1); and (vii) no
Improvement shall be demolished or
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otherwise rendered unfit for use unless Lessee shall finance the
proposed replacement Modification outside of this lease facility;
provided, further, Lessee shall not make any Modification to the extent
any such Modification, individually or in the aggregate, shall or could
reasonably be expected to have a Material Adverse Effect. All
Modifications shall immediately and without further action upon their
incorporation into the applicable Property (1) become property of
Lessor, (2) be subject to this Lease and (3) be titled in the name of
Lessor. Lessee shall not remove or attempt to remove any Modification
from any Property. Each Ground Lease for a Property shall expressly
provide for the provisions of the foregoing sentence. Lessee, at its
own cost and expense, will pay for the repairs of any damage to any
Property caused by the removal or attempted removal of any
Modification.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor and the Agent to be consistent with
and in compliance with the terms and provisions of this Article XI.
(c) Lessor shall fund each Advance for a Modification to the
extent (i) the requirements in the Operative Agreements are satisfied
for such Advance and (ii) such Modification complies with the
requirements of this Lease.
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements,
all replacement components to each Property and all Modifications)
immediately and without further action to vest in and become the
property of Lessor and to be subject to the terms of this Lease
(provided, respecting each Property subject to a Ground Lease, Lessor's
interest therein is acknowledged to be a leasehold interest pursuant to
such Ground Lease) from and after the date hereof or such date of
incorporation into any Property. Lessee agrees that, subject to the
terms of Article XIII relating to permitted contests, Lessee shall not
directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment,
levy, title retention agreement or claim upon any Property, any
component thereof or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent or any Holder pursuant to any Operative Agreement,
other than Permitted Liens and Lessor Liens. Lessee shall promptly
notify Lessor in the event it receives actual knowledge that a Lien
other than a Permitted Lien or Lessor Lien has occurred with respect to
a Property, the Rent or any other such amounts, and Lessee represents
and warrants to, and covenants with, Lessor that the Liens in favor of
Lessor created by the Operative Agreements are (and until the financing
parties under the Operative Agreements have been paid in full shall
remain) first priority perfected Liens subject only to Permitted Liens
and Lessor Liens. At all times subsequent to the Commencement Date
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respecting a Property, Lessee shall (i) cause a valid, perfected, first
priority Lien on each applicable Property to be in place in favor of
the Agent (for the benefit of the Lenders and the Holders) and (ii)
file all necessary documents under the applicable real property law and
Article 9 of the Uniform Commercial Code to perfect such title and
Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES.
Except to the extent otherwise provided for in Section 11 of
the Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the applicable Properties, Lessor, each Holder, the Agent and each Lender; (b)
there shall not be imposed a Lien (other than Permitted Liens and Lessor Liens)
on any Property and no part of any Property nor any Rent would be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee such authorizations and other documents as may reasonably be
required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
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ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
During the Term for each Property, Lessee shall procure and
carry, at Lessee's sole cost and expense, commercial general liability and
umbrella liability insurance for claims for injuries or death sustained by
persons or damage to property while on such Property or respecting the Equipment
and such other public liability coverages as are then customarily carried by
similarly situated companies conducting business similar to that conducted by
Lessee. Such insurance shall be on terms and in amounts that are no less
favorable than insurance maintained by Lessee with respect to similar properties
and equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee, and in no event shall
have a minimum combined single limit per occurrence coverage (i) for commercial
general liability of less than $1,000,000 and (ii) for excess liability of less
than $10,000,000. The policies shall name Lessee as the insured and shall be
endorsed to name Lessor, the Holders, the Agent and the Lenders as additional
insureds. The policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, any Holder, the Agent or any
Lender may have in force. In the operation of the Properties, Lessee shall
comply with applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 PERMANENT HAZARD AND OTHER INSURANCE.
(a) During the Term for each Property, Lessee shall keep such
Property insured against all risk of physical loss or damage by fire
and other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in each case in
amounts no less than the Termination Value from time to time and on
terms that (i) are no less favorable than insurance covering other
similar properties owned by Lessee and (ii) are then carried by
similarly situated companies conducting business similar to that
conducted by Lessee. The policies shall name Lessee as the insured and
shall be endorsed to name Lessor, the Holders and the Agent (on behalf
of the Lenders and the Holders) as a named additional insured and loss
payee, to the extent of their respective interests; provided, so long
as no Event of Default exists, any loss payable under the insurance
policies required by this Section for losses up to $1,000,000 will be
paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto or is in a zone designated A or V,
then Lessee shall comply with the National Flood Insurance Program as
set forth in the Flood Disaster Protection Act of 1973. In addition,
Lessee will fully comply with the requirements of the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as
each may be amended from time to time, and with any other Legal
Requirement, concerning flood insurance to the extent that it applies
to any
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such Property. During the Term, Lessee shall, in the operation and use
of each Property, maintain workers' compensation insurance consistent
with that carried by similarly situated companies conducting business
similar to that conducted by Lessee and containing minimum liability
limits of no less than $100,000. In the operation of each Property,
Lessee shall comply with workers' compensation laws applicable to
Lessee, and protect Lessor, each Holder, the Agent and each Lender
against any liability under such laws.
14.3 COVERAGE.
(a) As of the date of this Lease and annually thereafter
during the Term, Lessee shall furnish the Agent (on behalf of Lessor
and the other beneficiaries of such insurance coverage) with
certificates prepared by the insurers or insurance broker of Lessee
showing the insurance required under Sections 14.1 and 14.2 to be in
effect, naming (to the extent of their respective interests) Lessor,
the Holders, the Agent and the Lenders as additional insureds and loss
payees and evidencing the other requirements of this Article XIV. All
such insurance shall be at the cost and expense of Lessee and provided
by nationally recognized, financially sound insurance companies having
an A+ or better rating by A.M. Best's Key Rating Guide. Lessee shall
cause such certificates to include a provision for thirty (30) days'
advance written notice by the insurer to the Agent (on behalf of Lessor
and the other beneficiaries of such insurance coverage) in the event of
cancellation or material alteration of such insurance. If an Event of
Default has occurred and is continuing and Lessor so requests, Lessee
shall deliver to the Agent (on behalf of Lessor and the other
beneficiaries of such insurance coverage) copies of all insurance
policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies
required by Sections 14.1, 14.2(a) and 14.2(b) shall include an
appropriate clause pursuant to which any such policy shall provide that
it will not be invalidated should Lessee or any Contractor, as the case
may be, waive, at any time, any or all rights of recovery against any
party for losses covered by such policy or due to any breach of
warranty, fraud, action, inaction or misrepresentation by Lessee or any
Person acting on behalf of Lessee. Lessee hereby waives any and all
such rights against Lessor, the Holders, the Agent and the Lenders to
the extent of payments made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this Article XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
Article XIV to be subject to a coinsurance exception of any kind.
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(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof or otherwise
maintain the coverage required by such Sections without any lapse in
coverage.
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is
obligated to deliver or is deemed to have delivered, a Termination
Notice), and prior to the occurrence and continuation of a Default or
an Event of Default, Lessee shall be entitled to receive (and Lessor
hereby irrevocably assigns to Lessee all of Lessor's right, title and
interest in) any condemnation proceeds, award, compensation or
insurance proceeds under Sections 14.2(a) or 14.2(b) hereof to which
Lessee or Lessor may become entitled by reason of their respective
interests in a Property (i) if all or a portion of such Property is
damaged or destroyed in whole or in part by a Casualty or (ii) if the
use, access, occupancy, easement rights or title to such Property or
any part thereof is the subject of a Condemnation; provided, however,
if a Default or an Event of Default shall have occurred and be
continuing or if such award, compensation or insurance proceeds shall
exceed $1,000,000, then such award, compensation or insurance proceeds
shall be paid directly to Lessor or, if received by Lessee, shall be
held in trust for Lessor, and shall be paid over by Lessee to Lessor
and held in accordance with the terms of this paragraph (a). All
amounts held by Lessor hereunder on account of any award, compensation
or insurance proceeds either paid directly to Lessor or turned over to
Lessor shall be applied to reduce Lessee's obligations hereunder and
under the other Operative Agreements.
(b) Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, and at Lessee's sole cost and expense, Lessor and the Agent
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed twenty-five percent
(25%) of the Property Cost of such Property, Lessee shall give notice
thereof to Lessor and to the Agent promptly after Lessee's receipt of
such notice. In the event such a Casualty or Condemnation occurs
(regardless of whether Lessee gives notice thereof), then Lessee shall
be deemed to have delivered a Termination Notice to Lessor and the
Agent and the provisions of Sections 16.1 and 16.2 shall apply.
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(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor and the Agent a notice to such
effect.
(e) If pursuant to this Section 15.1 this Lease shall continue
in full force and effect following a Casualty or Condemnation with
respect to the affected Property, Lessee shall, at its sole cost and
expense and using, if available, the proceeds of any award,
compensation or insurance with respect to such Casualty or Condemnation
(including without limitation any such award, compensation or insurance
which has been received by Lessor or the Agent which shall be turned
over to Lessee (subject to 15.1(a)) pursuant to the terms of the
Operative Agreements, and if not available or sufficient, using its own
funds), promptly and diligently repair any damage to the applicable
Property caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built Plans and
Specifications or manufacturer's specifications for the applicable
Improvements, Equipment or other components of the applicable Property
(as modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable Legal
Requirements), so as to restore the applicable Property to the same or
a greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied). In such event, title to the applicable Property shall
remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term with respect to
a Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, the applicable Property cannot
reasonably be restored, repaired or replaced on or before the day one
hundred eighty (180) days prior to the Expiration Date or the date nine
(9) months after the occurrence of such Casualty or Condemnation (if
such Casualty or Condemnation occurs during the Term) to the same or a
greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied) or on or before such day such Property is not in fact so
restored, repaired or replaced, then Lessee shall be required to
exercise its Purchase Option for such Property on the next Payment Date
(notwithstanding the limits on such exercise contained in Section 20.2)
and pay Lessor the Termination Value for such Property; provided, if
any Default or Event of Default has occurred and is continuing, Lessee
shall also promptly (and in any event within three (3) Business Days)
pay Lessor any award, compensation or insurance proceeds received on
account of any Casualty or Condemnation with respect to any Property;
provided, further, that if no Default or Event of Default has occurred
and is continuing, any Excess
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Proceeds shall be paid to Lessee. If a Default or an Event of Default
has occurred and is continuing and any Loans, Holder Advances or other
amounts are owing with respect thereto, then any Excess Proceeds (to
the extent of any such Loans, Holder Advances or other amounts owing
with respect thereto) shall be paid to Lessor, held as security for the
performance of Lessee's obligations hereunder and under the other
Operative Agreements and applied to such obligations upon the exercise
of remedies in connection with the occurrence of an Event of Default,
with the remainder of such Excess Proceeds in excess of such Loans,
Holder Advances and other amounts owing with respect thereto being
distributed to the Lessee.
15.2 ENVIRONMENTAL MATTERS.
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation and
which, in the reasonable opinion of Lessee, the cost to undertake any legally
required response, clean up, remedial or other action will or might result in a
cost to Lessee of more than $50,000, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense, promptly and diligently undertake and diligently complete any
response, clean up, remedial or other action (including without limitation the
pursuit by Lessee of appropriate action against any off-site or third party
source for contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all Environmental Laws. Any such
undertaking shall be timely completed in accordance with prudent industry
standards. If Lessee does not deliver a Termination Notice with respect to such
Property pursuant to Section 16.1, Lessee shall, upon completion of remedial
action by Lessee (to the extent such remedial action costs in excess of
$50,000), cause to be prepared by a reputable environmental consultant
acceptable to Lessor a report describing the applicable Environmental Violation
and the actions taken by Lessee (or its agents) in response to such
Environmental Violation, and a statement by the consultant that the
Environmental Violation has been remedied in full compliance with applicable
Environmental Law. Not less than sixty (60) days prior to any time that Lessee
elects to cease operations with respect to any Property or to remarket any
Property pursuant to Section 20.1 hereof or any other provision of any Operative
Agreement, Lessee at its expense shall cause to be delivered to Lessor a Phase I
environmental site assessment respecting such Property recently prepared (no
more than thirty (30) days prior to the date of delivery) by an independent
recognized professional selected by Lessee and acceptable to the Agent in its
reasonable discretion and in form, scope and content satisfactory to the Agent
in its reasonable discretion. Notwithstanding any other provision of any
Operative Agreement, if Lessee fails to comply with the foregoing obligation
regarding the Phase I environmental site assessment, Lessee shall be obligated
to purchase such Property for its Termination Value and shall not be permitted
to exercise (and Lessor shall have no obligation to honor any such exercise) any
rights under any Operative Agreement regarding a sale of such Property to a
Person other than Lessee or any Affiliate of Lessee.
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15.3 NOTICE OF ENVIRONMENTAL MATTERS.
Promptly, but in any event within five (5) Business Days from
the date Lessee has actual knowledge thereof, Lessee shall provide to Lessor
written notice of any pending or threatened claim, action or proceeding
involving any Environmental Law or any Release on or in connection with any
Property or Properties. All such notices shall describe in reasonable detail the
nature of the claim, action or proceeding and Lessee's proposed response
thereto. In addition, Lessee shall provide to Lessor, within five (5) Business
Days of receipt, copies of all material written communications with any
Governmental Authority relating to any Environmental Law in connection with any
Property. Lessee shall also promptly provide such detailed reports of any such
material Environmental Claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
If Lessee has delivered, or is deemed to have delivered,
written notice of a termination of this Lease with respect to the applicable
Property to Lessor and the Agent in the form described in Section 16.2(a) (a
"Termination Notice") pursuant to the provisions of this Lease, then following
the applicable Casualty, Condemnation or Environmental Violation, this Lease
shall terminate with respect to the affected Property on the applicable
Termination Date.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey
such Property or the remaining portion thereof, if any, to Lessee (or
Lessee's designee), all in accordance with Section 20.2.
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ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
If any one (1) or more of the following events (each a "Lease
Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) days after the
same has become due and payable or (ii) any Termination Value, on the
date any such payment is due and payable, or any payment of Basic Rent
or Supplemental Rent due on the due date of any such payment of
Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or
any other Credit Party shall fail to make any payment of any amount
under any Operative Agreement which has become due and payable within
three (3) days after receipt of notice that such payment is due;
(c) Lessee shall fail (i) to maintain insurance as required by
Article XIV of this Lease or (ii) to deliver any requisite annual
certificate with respect thereto within ten (10) days after the date
such certificate is due under the terms hereof, but only after notice
of such delinquent certificate has been provided by Lessor or the Agent
to Lessee;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease (including
without limitation the Incorporated Covenants) or any other Material
Operative Agreement to which Lessee is a party other than those set
forth in Sections 17.1(a), (b) or (c) hereof, or any other Credit Party
shall fail to observe or perform any term, covenant, obligation or
condition of such Credit Party under any Material Operative Agreement
other than those set forth in Section 17.1(b) hereof and such failure
shall continue for fifteen (15) days (or with respect to the
Incorporated Covenants, the grace period, if any, applicable thereto
under the Lessee Credit Agreement) after notice thereof to the Lessee
or such Credit Party, or (ii) any representation or warranty made by
Lessee or any other Credit Party set forth in this Lease (including
without limitation the Incorporated Representation and Warranties) or
in any other Operative Agreement or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material way when made;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) Any Credit Party or any Subsidiary of any Credit Party
shall default (beyond applicable periods of grace and/or notice and
cure) in the payment when due of any principal of or interest on any
Indebtedness having an outstanding principal amount of at least
$5,000,000; or any event or condition shall occur which results in the
acceleration of the maturity of any such Indebtedness or enables the
holder of any such Indebtedness or any Person acting on such holder's
behalf to accelerate the maturity thereof;
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(g) The liquidation or dissolution of any Credit Party, or the
suspension of the business of any Credit Party, or the filing by any
Credit Party of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under the United States Bankruptcy Code, as amended, or under
any other insolvency act or law, state or federal, now or hereafter
existing, or any other action of any Credit Party indicating its
consent to, approval of or acquiescence in, any such petition or
proceeding; the application by any Credit Party for, or the appointment
by consent or acquiescence of any Credit Party of a receiver, a trustee
or a custodian of any Credit Party for all or a substantial part of its
property; the making by any Credit Party of any assignment for the
benefit of creditors; any Credit Party is generally not paying its
debts and other financial obligations as they become due and payable;
or any Credit Party taking any corporate action to authorize any of the
foregoing;
(h) The filing of an involuntary petition against any Credit
Party in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the United
States Bankruptcy Code, as amended, or under any other insolvency act
or law, state or federal, now or hereafter existing; or the involuntary
appointment of a receiver, a trustee or a custodian of any Credit Party
for all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any
substantial part of the property of any Credit Party, and the
continuance of any of such events for ninety (90) days undismissed or
undischarged;
(i) The adjudication of any Credit Party as bankrupt or
insolvent;
(j) The entering of any order in any proceedings against any
Credit Party or any Subsidiary of any Credit Party decreeing the
dissolution, divestiture or split-up of any Credit Party or any
Subsidiary of any Credit Party, and such order remains in effect for
more than sixty (60) days;
(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of any Credit Party
pursuant to the terms of this Lease or any other Operative Agreement is
false or misleading in any material respect when made or delivered;
(l) Any Lessee Credit Agreement Event of Default shall have
occurred and be continuing and shall not have been waived;
(m) A final judgment or judgments for the payment of money
shall be rendered by a court or courts against any Credit Party or any
Subsidiary of any Credit Party or any of their assets in excess of
$500,000 in the aggregate, and (i) the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within thirty (30) days from the date of
entry thereof, or (ii) any Credit Party or such Subsidiary shall not,
within said period of thirty (30) days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal,
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or (iii) such judgment or judgments shall not be discharged (or
provisions shall not be made for such discharge) within thirty (30)
days after a decision has been reached with respect to such appeal and
the related stay has been lifted;
(n) A notice of lien, levy or assessment is filed of record
against any portion of the assets of Lessee or any of its Subsidiaries
by the United States, or any department, agency or instrumentality
thereof, or by any other Governmental Authority or any other Person,
including without limitation the PBGC, or if any taxes or debts owing
at any time or times hereafter to any one of them becomes a Lien (other
than a Permitted Lien) upon the Collateral or any other asset of Lessee
or any of its Subsidiaries, and the same is not dismissed, released,
bonded or discharged within five (5) days after the same becomes a Lien
or, in the case of ad valorem taxes, prior to the last day when payment
may be made without penalty and, if bonded, such bond (or a replacement
bond) shall not continue in effect at all times until such judgment is
dismissed or discharged, and any such event shall or could reasonably
be expected to have a Material Adverse Effect;
(o) The occurrence of a Change of Control;
(p) ▇▇▇▇▇▇ ▇. ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ shall cease to be the
Chief Executive Officer and Chief Financial Officer, respectively, of
the Lessee or cease to be involved in the day-to-day operations of the
Lessee and its Subsidiaries, and within 120 days following the
cessation of their respective involvement, the relevant executive is
not succeeded by a chief executive officer or chief financial officer,
as applicable, reasonably acceptable to the Majority Secured Parties;
(q) The Lessee or any Subsidiary, to the extent, if any,
presently participating or required by law to participate, in Medicaid,
Medicare or MediCal programs shall fail to be eligible for any reason
to participate in Medicaid, Medicare or MediCal programs or to accept
assignments or rights to reimbursement under Medicaid Regulations,
Medicare Regulations or MediCal Regulations, such failure could
reasonably be expected to have a Material Adverse Effect, and such
failure shall also continue beyond the completion of any appeal process
diligently pursued by the Lessee or such Subsidiary in good faith;
(r) Any Operative Agreement shall cease to be in full force
and effect; or
(s) The occurrence of any of the following events: (i) the
happening of a Reportable Event that could give rise to liability (that
is not waived by the PBGC or by the Majority Secured Parties, or if
such liability can be avoided by any corrective action of Lessee, such
corrective action is not completed within ninety (90) days after the
occurrence of such Reportable Event) with respect to any Pension Plan;
(ii) the termination of any Pension Plan in a "distress termination"
under the provisions of Section 4041 of ERISA; (iii) the appointment of
a trustee by an appropriate United States District Court to administer
any Pension Plan; (iv) the institution of any proceedings by the PBGC
to terminate any Pension Plan or to appoint a trustee to administer any
such plan; and (v) the failure of Lessee to notify the Lenders and the
Holders promptly upon
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receipt by Lessee of the institution of any proceeding or any other
actions that may result in the termination of any such plan;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g), (h) or (i), and this Lease shall terminate, and
all rights of Lessee under this Lease shall cease. Lessee shall, to the fullest
extent permitted by law, pay as Supplemental Rent all costs and expenses
incurred by or on behalf of Lessor or any other Financing Party, including
without limitation reasonable fees and expenses of counsel, as a result of any
Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 SURRENDER OF POSSESSION.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender to
Lessor possession of the Properties. Lessor may enter upon and repossess the
Properties by such means as are available at law or in equity, and may remove
Lessee and all other Persons and any and all personal property and Lessee's
equipment and personalty and severable Modifications from the Properties. Lessor
shall have no liability by reason of any such entry, repossession or removal
performed in accordance with applicable law. Upon the written demand of Lessor,
Lessee shall return the Properties promptly to Lessor, in the manner and
condition required by, and otherwise in accordance with the provisions of,
Section 22.1(c) hereof.
17.3 RELETTING.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
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17.4 DAMAGES.
Neither (a) the termination of this Lease as to all or any of
the Properties pursuant to Section 17.1; (b) the repossession of all or any of
the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including
without limitation the date of such termination. Thereafter, on the days on
which the Basic Rent or Supplemental Rent, as applicable, are payable under this
Lease or would have been payable under this Lease if the same had not been
terminated pursuant to Section 17.1 and until the end of the Term hereof or what
would have been the Term in the absence of such termination, Lessee shall pay
Lessor, as current liquidated damages (it being agreed that it would be
impossible accurately to determine actual damages) an amount equal to the Basic
Rent and Supplemental Rent that are payable under this Lease or would have been
payable by Lessee hereunder if this Lease had not been terminated pursuant to
Section 17.1, less the net proceeds, if any, which are actually received by
Lessor with respect to the period in question of any reletting of any Property
or any portion thereof; provided, that Lessee's obligation to make payments of
Basic Rent and Supplemental Rent under this Section 17.4 shall continue only so
long as Lessor shall not have received the amounts specified in Section 17.6. In
calculating the amount of such net proceeds from reletting, there shall be
deducted all of Lessor's, any Holder's, the Agent's and any Lender's reasonable
expenses in connection therewith, including without limitation repossession
costs, brokerage or sales commissions, fees and expenses for counsel and any
necessary repair or alteration costs and expenses incurred in preparation for
such reletting. To the extent Lessor receives any damages pursuant to this
Section 17.4, such amounts shall be regarded as amounts paid on account of Rent.
Lessee specifically acknowledges and agrees that its obligations under this
Section 17.4 shall be absolute and unconditional under any and all circumstances
and shall be paid and/or performed, as the case may be, without notice or demand
and without any abatement, reduction, diminution, setoff, defense, counterclaim
or recoupment whatsoever.
17.5 POWER OF SALE.
Without limiting any other remedies set forth in this Lease,
in the event that a court of competent jurisdiction rules that this Lease
constitutes a mortgage, deed of trust or other secured financing as is the
intent of the parties, then Lessor and Lessee agree that Lessee has granted,
pursuant to Section 7.1(b) hereof and each Lease Supplement, a Lien against the
Properties WITH POWER OF SALE, and that, upon the occurrence and during the
continuance of any Lease Event of Default, Lessor shall have the power and
authority, to the extent provided by law, after prior notice and lapse of such
time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Properties.
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17.6 FINAL LIQUIDATED DAMAGES.
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to Lessee and at Lessor's election, and Lessee shall pay to
Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 11 of the Participation Agreement (which, if requested,
shall be paid concurrently), and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages) the Termination Value. Upon payment of
the amount specified pursuant to the first sentence of this Section 17.6, Lessee
shall be entitled to receive from Lessor, either at Lessee's request or upon
Lessor's election, in either case at Lessee's cost, an assignment of Lessor's
entire right, title and interest in and to the Properties, Improvements,
Fixtures, Modifications, Equipment and all components thereof, in each case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this Lease (including without limitation the release of any
memoranda of Lease and/or the Lease Supplement recorded in connection therewith)
and any Lessor Liens. The Properties shall be conveyed to Lessee "AS-IS,
WHERE-IS" and in their then present physical condition. If any statute or rule
of law shall limit the amount of such final liquidated damages to less than the
amount agreed upon, Lessor shall be entitled to the maximum amount allowable
under such statute or rule of law; provided, however, Lessee shall not be
entitled to receive an assignment of Lessor's interest in the Properties, the
Improvements, Fixtures, Modifications, Equipment or the components thereof
unless Lessee shall have paid in full the Termination Value. Lessee specifically
acknowledges and agrees that its obligations under this Section 17.6 shall be
absolute and unconditional under any and all circumstances and shall be paid
and/or performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 ENVIRONMENTAL COSTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting any Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor. Lessee shall pay all
amounts referenced in the immediately preceding sentence within ten (10) days of
any request by Lessor for such payment. The provisions of this Section 17.7
shall not limit the obligations of Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 WAIVER OF CERTAIN RIGHTS.
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of
re-entry or the institution of legal proceedings to obtain re-entry or
possession; (b) any right of redemption, re-entry or possession; (c) the
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benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt; and (d) any other rights which might otherwise limit or
modify any of Lessor's rights or remedies under this Article XVII.
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor all of Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Properties (including without limitation
all right, title and interest of Lessee with respect to all warranty,
performance, service and indemnity provisions), as and to the extent that the
same relate to the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties or any of them.
17.10 REMEDIES CUMULATIVE.
The remedies herein provided shall be cumulative and in
addition to (and not in limitation of) any other remedies available at law,
equity or otherwise, including without limitation any mortgage foreclosure
remedies.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and, may to the fullest extent permitted by law and
notwithstanding any right of quiet enjoyment in favor of Lessee, (a) enter upon
any Property and (b) take all such action thereon as may be necessary or
appropriate therefor. No such entry shall be deemed an eviction of any lessee.
All out-of-pocket costs and expenses so incurred (including without limitation
fees and expenses of counsel), together with interest thereon at the Overdue
Rate from the date on which such sums or expenses are paid by Lessor, shall be
paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE
OPTION.
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's
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exercise of its Purchase Option, upon the date on which this Lease is to
terminate with respect to any Property, and upon tender by Lessee of the amounts
set forth in Sections 16.2(b) or 20.2, as applicable, Lessor shall execute and
deliver to Lessee (or to Lessee's designee) at Lessee's cost and expense an
assignment (by deed or other appropriate instrument) of Lessor's entire interest
in such Property, in each case in recordable form and otherwise in conformity
with local custom and free and clear of any Lessor Liens attributable to Lessor
but without any other warranties (of title or otherwise) from Lessor. Such
Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in then present
physical condition.
19.2 NO PURCHASE OR TERMINATION WITH RESPECT TO LESS THAN ALL OF A
PROPERTY.
Lessee shall not be entitled to exercise its Purchase Option or the
Sale Option separately with respect to a portion of any Property consisting of
Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease but
shall be required to exercise its Purchase Option or the Sale Option with
respect to an entire Property.
ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
Not less than one hundred twenty (120) days and no more than
one hundred eighty (180) days prior to any Payment Date or the Expiration Date
(such Payment Date or Expiration Date being hereinafter referred to as the
"Election Date"), Lessee may give Lessor irrevocable written notice (the
"Election Notice") that Lessee is electing to exercise either (a) (i) in the
case of any Payment Date prior to the Expiration Date, the option to purchase
one or more Properties (subject to the Early Termination Conditions) and (ii) in
the case of the Expiration Date, the option to purchase all, but not less than
all, the Properties (each such option may be referred to as the "Purchase
Option") or (b) (i) in the case of any Payment Date prior to the Expiration
Date, the option to sell to a Person other than Lessee or any Affiliate of the
Lessee one or more Properties (subject to the Early Termination Conditions) and
(ii) in the case of the Expiration Date, the option to sell to a Person other
than Lessee or any Affiliate of Lessee all, but not less than all, the
Properties (each such option may be referred to as that "Sale Option").
Purchases pursuant to the Purchase Option and sales pursuant to the Sale Option
shall be accomplished in a manner consistent with the provisions of the
Operative Agreement including without limitation Articles XIX, XX and XXII of
this Lease. Prior to the Expiration Date, there may be multiple purchases
pursuant to the Purchase Option and sales pursuant to the Sale Option and all
shall be subject to the Early Termination Conditions. If Lessee does not give an
Election Notice indicating the Purchase Option or the Sale Option at least one
hundred twenty (120) days and not more than one hundred eighty (180) days prior
to the Expiration Date, then Lessee shall be deemed to have elected for the
Purchase Option to apply on the Expiration Date. With respect to the Expiration
Date, if Lessee shall either (i) elect (or be deemed to have elected) to
exercise the Purchase Option or (ii) elect the Sale Option and fail to cause
all, but not less than all, the Properties to be sold in accordance with the
terms of Section 22.1 on the applicable Election Date, then in either case
Lessee shall pay to Lessor on the date on which such purchase or sale is
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scheduled to occur an amount equal to the Termination Value for all, but not
less than all, the Properties (which the parties do not intend to be a "bargain"
purchase) and, upon receipt of such amounts and satisfaction of such
obligations, Lessor shall transfer to Lessee all of Lessor's right, title and
interest in and to all, but not less than all, the Properties in accordance with
Section 20.2.
20.2 LESSEE PURCHASE OPTION.
Provided, no Default or Event of Default shall have occurred
and be continuing (other than those that will be cured by the payment of the
Termination Value for all the Properties) and provided, that the Election Notice
has been appropriately given specifying the Purchase Option, Lessee shall
purchase (in the case of any Payment Date prior to the Expiration Date) one or
more Properties or (in the case of the Expiration Date) all, but not less than
all, the Properties. All such purchases shall be made on the applicable Election
Date at a price equal to the Termination Value for all such Properties (which
the parties do not intend to be a "bargain" purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to a Property or all of the
Properties, and upon tender by Lessee of the amounts set forth in Section
16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge
(where required) and deliver to Lessee, at Lessee's cost and expense, each of
the following: (a) a termination or assignment (as requested by the Lessee) of
each applicable Ground Lease and special or limited warranty Deeds conveying
each Property (to the extent it is real property not subject to a Ground Lease)
to Lessee free and clear of the Lien of this Lease, the Lien of the Credit
Documents and any Lessor Liens; (b) a ▇▇▇▇ of Sale conveying each Property (to
the extent it is personal property) to Lessee free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed and/or the applicable Ground Lease
termination; and (d) FIRPTA affidavits. All of the foregoing documentation must
be in form and substance reasonably satisfactory to Lessor. The applicable
Property shall be conveyed to Lessee "AS-IS, WHERE-IS" and in then present
physical condition.
If any Property is the subject of remediation efforts
respecting Hazardous Substances at the applicable Election Date which could
materially and adversely impact the Fair Market Sales Value of such Property
(with materiality determined in Lessor's discretion), then Lessee shall be
obligated to repurchase each such Property pursuant to Section 20.2.
On the applicable Election Date on which Lessee has elected to
exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor,
the Agent and all other parties, as appropriate, the sum of all costs and
expenses incurred by any such party in connection with the election by Lessee to
exercise its Purchase Option and all Rent and all other amounts then due and
payable or accrued under this Lease and/or any other Operative Agreement.
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20.3 THIRD PARTY SALE OPTION.
(a) Provided, that (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake
to cause a sale (in the case of any Payment Date prior to the
Expiration Date) of one or more Properties and (in the case of the
Expiration Date) of all, but not less than all, of the Properties on
the applicable Election Date (all as specified in the Election Notice),
in accordance with the provisions of Section 22.1 hereof. Such Election
Date on which a sale is required may be hereafter referred to as the
"Sale Date".
(b) In the event Lessee exercises the Sale Option then, as
soon as practicable and in all events not less than sixty (60) days
prior to the Sale Date, Lessee at its expense shall cause to be
delivered to Lessor a Phase I environmental site assessment for each of
the Properties then subject to sale recently prepared (no more than
thirty (30) days old prior to the Sale Date) by an independent
recognized professional reasonably acceptable to the Agent and in form,
scope and content reasonably satisfactory to the Agent. In the event
that the Agent shall not have received such environmental site
assessment by the date sixty (60) days prior to the Sale Date or in the
event that such environmental assessment shall reveal the existence of
any material violation of Environmental Laws, other material
Environmental Violation or potential material Environmental Violation
(with materiality determined in each case by the Agent in its
reasonable discretion), then Lessee on the Sale Date shall pay to
Lessor an amount equal to the Termination Value for all such Properties
then subject to sale and any and all other amounts due and owing
hereunder. Upon receipt of such payment and all other amounts due under
the Operative Agreements, Lessor shall transfer to Lessee all of
Lessor's right, title and interest in and to all such Properties then
subject to sale in accordance with Section 19.1.
ARTICLE XXI
21.1 [INTENTIONALLY OMITTED].
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of (in the case of a sale
scheduled for a Payment Date prior to the Expiration Date) one or more
Properties subject to sale and (in the case of the Expiration Date)
all, but not less than all, the Properties in connection with a sale to
one or more third party purchasers to be consummated on the applicable
Sale Date for the highest price available, shall notify Lessor promptly
of the name and address of each prospective purchaser and the cash
price which each prospective purchaser shall have
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offered to pay for each such Property and shall provide Lessor with
such additional information about the bids and the bid solicitation
procedure as Lessor may reasonably request from time to time. All such
prospective purchasers must be Persons other than Lessee or any
Affiliate of Lessee. On the applicable Sale Date, Lessee shall pay (or
cause to be paid) to Lessor and all other parties, as appropriate, the
sum of all costs and expenses incurred by Lessor and/or the Agent (as
the case may be) in connection with such sale of one or more
Properties, all Rent and all other amounts then due and payable or
accrued under this Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
that notwithstanding the foregoing, Lessor may not reject the bids
submitted by Lessee if such bids, in the aggregate, are (but only
regarding a sale on or with respect to the Expiration Date) greater
than or equal to the sum of the Limited Recourse Amount for all the
Properties then subject to sale in accordance with the terms of this
Lease, and represent bona fide offers from one or more third party
purchasers. If the highest price which a prospective purchaser or the
prospective purchasers shall have offered to pay for all such
Properties on the Sale Date (but only regarding a sale on or with
respect to the Expiration Date) is less than the sum of the Limited
Recourse Amount for all the Properties or if such bids do not represent
bona fide offers from one or more third parties or if there are no
bids, Lessor may elect to retain one or more of the Properties by
giving Lessee prior written notice of Lessor's election to retain the
same, and promptly upon receipt of such notice, Lessee shall surrender,
or cause to be surrendered, each of the Properties specified in such
notice in accordance with the terms and conditions of Section 10.1.
Upon acceptance of any bid, Lessor agrees, at Lessee's request and
expense, to execute a contract of sale with respect to such sale, so
long as the same is consistent with the terms of this Article 22 and
provides by its terms that it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the
Properties then subject to sale in accordance with the terms of this
Lease and pursuant to the provisions of the preceding paragraph, Lessee
shall arrange for Lessor to sell all such Properties free and clear of
the Lien of this Lease and any Lessor Liens attributable to Lessor,
without recourse or warranty (of title or otherwise), for cash on the
applicable Sale Date to the purchaser or purchasers offering the
highest cash sales price, as identified by Lessee or Lessor, as the
case may be; provided, however, solely as to Lessor or the Trust
Company, in its individual capacity, any Lessor Lien shall not
constitute a Lessor Lien so long as Lessor or the Trust Company, in its
individual capacity, is diligently and in good faith contesting, at the
cost and expense of Lessor or the Trust Company, in its individual
capacity, such Lessor Lien by appropriate proceedings in which event
the applicable Sale Date, all without penalty or cost to Lessee, shall
be delayed for the period of such contest. To effect such transfer and
assignment, Lessor shall execute, acknowledge (where required) and
deliver to the appropriate purchaser each of the following: (a) special
or limited warranty Deeds conveying each such Property (to the extent
it is real property titled to Lessor) and an assignment of the Ground
Lease conveying the leasehold interest of Lessor in each such Property
(to the extent it is real property and subject to a Ground
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Lease) to the appropriate purchaser free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (b) a
▇▇▇▇ of Sale conveying each such Property (to the extent it is personal
property) titled to Lessor to the appropriate purchaser free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any
Lessor Liens; (c) any real estate tax affidavit or other document
required by law to be executed and filed in order to record each Deed
and/or each Ground Lease assignment; and (d) FIRPTA affidavits, as
appropriate. All of the foregoing documentation must be in form and
substance reasonably satisfactory to Lessor. Lessee shall surrender the
Properties so sold or subject to such documents to each purchaser in
the condition specified in Section 10.1, or in such other condition as
may be agreed between Lessee and such purchaser. Lessee shall not take
or fail to take any action which would have the effect of unreasonably
discouraging bona fide third party bids for any Property. If each of
the Properties (then subject to sale in accordance with the terms of
this Lease) is not either (i) sold on the applicable Sale Date in
accordance with the terms of this Section 22.1, or (ii) retained by
Lessor pursuant to an affirmative election made by Lessor pursuant to
the second sentence of the second paragraph of this Section 22.1(a),
then (x) Lessee shall be obligated to pay Lessor on the applicable Sale
Date an amount equal to the aggregate Termination Value for all such
Properties less any sales proceeds received, and (y) Lessor shall
transfer each applicable Property to Lessee in accordance with Section
20.2.
(b) If the Properties (then subject to sale in accordance with
the terms of this Lease) are sold on a Sale Date to one or more third
party purchasers in accordance with the terms of Section 22.1(a) and
the aggregate purchase price paid for all the Properties is less than
the sum of the aggregate Property Cost for all such Properties
(hereinafter such difference shall be referred to as the "Deficiency
Balance"), then Lessee hereby unconditionally promises to pay to Lessor
on the applicable Sale Date (to the extent such Sale Date is not the
Expiration Date) the Deficiency Balance and (to the extent such Sale
Date is the Expiration Date) the lesser of (i) the Deficiency Balance
or (ii) the Maximum Residual Guarantee Amount for all the Properties.
On a Sale Date if (x) Lessor receives the aggregate Termination Value
for all the Properties (then subject to sale in accordance with the
terms of this Lease) from one (1) or more third party purchasers, (y)
Lessor and such other parties receive all other amounts specified in
the last sentence of the first paragraph of Section 22.1(a) and (z) the
aggregate purchase price paid for all such Properties on such date
exceeds the sum of the aggregate Property Cost for all such Properties,
then Lessee may retain such excess. If one or more of such Properties
is retained by Lessor pursuant to an affirmative election made by
Lessor pursuant to the provisions of Section 22.1(a), then Lessee
hereby unconditionally promises to pay to Lessor on the Sale Date (but
only regarding a sale on or with respect to the Expiration Date) an
amount equal to the Maximum Residual Guarantee Amount for the
Properties so retained. Any payment of the foregoing amounts described
in this Section 22.1(b) shall be made together with a payment of all
other amounts referenced in the last sentence of the first paragraph of
Section 22.1(a).
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(c) In the event that all the Properties (then subject to sale
in accordance with the terms of this Lease) are either sold to one (1)
or more third party purchasers on the Sale Date or retained by Lessor
in connection with an affirmative election made by Lessor pursuant to
the provisions of Section 22.1(a), then in either case on the
applicable Sale Date Lessee shall provide Lessor or such third party
purchaser (unless otherwise agreed by such third party purchaser) with
(i) all permits, certificates of occupancy, governmental licenses and
authorizations necessary to use, operate, repair, access and maintain
each such Property for the purpose it is being used by Lessee, and (ii)
such manuals, permits, easements, licenses, intellectual property,
know-how, rights-of-way and other rights and privileges in the nature
of an easement as are reasonably necessary or desirable in connection
with the use, operation, repair, access to or maintenance of each such
Property for its intended purpose or otherwise as Lessor or such third
party purchaser(s) shall reasonably request (and a royalty-free license
or similar agreement to effectuate the foregoing on terms reasonably
agreeable to Lessor or such third party purchaser(s), as applicable).
All assignments, licenses, easements, agreements and other deliveries
required by clauses (i) and (ii) of this paragraph (c) shall be in form
reasonably satisfactory to the Agent or such third party purchaser(s),
as applicable, and shall be fully assignable (including without
limitation both primary assignments and assignments given in the nature
of security) without payment of any fee, cost or other charge. Lessee
shall also execute any documentation requested by Lessor or such third
party purchaser(s), as applicable, evidencing the continuation or
assignment of each Ground Lease.
22.2 APPLICATION OF PROCEEDS OF SALE.
Lessor shall apply the proceeds of sale of any Property in the
following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
the case may be) for the payment of all reasonable costs and expenses
incurred by Lessor (and/or the Agent, as the case may be) in connection
with the sale (to the extent Lessee has not satisfied its obligation to
pay such costs and expenses);
(b) SECOND, so long as the Credit Agreement is in effect and
any Loans or Holder Advances or any amount is owing to the Financing
Parties under any Operative Agreement, to the Agent to be applied
pursuant to intercreditor provisions among Lessor, the Lenders and the
Holders contained in the Operative Agreements; and
(c) THIRD, to Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR.
If the proceeds of the sale described in Section 22.1 with
respect to the Properties on the Expiration Date shall be less than the Limited
Recourse Amount with respect to the Properties, and at the time of such sale it
shall have been reasonably determined (pursuant to the Appraisal Procedure) that
the Fair Market Sales Value of the Properties shall have been impaired
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by greater than expected wear and tear during the term of the Lease, Lessee
shall pay to Lessor within ten (10) days after receipt of Lessor's written
statement (i) the amount of such excess wear and tear determined by the
Appraisal Procedure or (ii) the amount of the Sale Proceeds Shortfall, whichever
amount is less.
22.4 APPRAISAL PROCEDURE.
For determining the Fair Market Sales Value of the Properties
or any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor,
shall mutually agree thereupon, but if either party shall fail to choose an
appraiser within twenty (20) days after notice from the other party of the
selection of its appraiser, then the appraisal by such appointed appraiser shall
be binding on Lessee and Lessor. If the two (2) appraisers cannot agree within
twenty (20) days after both shall have been appointed, then a third appraiser
shall be selected by the two (2) appraisers or, failing agreement as to such
third appraiser within thirty (30) days after both shall have been appointed, by
the American Arbitration Association. The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser most different from the average of the other
two (2) shall be discarded and such average shall be binding on Lessor and
Lessee; provided, that if the highest appraisal and the lowest appraisal are
equidistant from the third appraisal, the third appraisal shall be binding on
Lessor and Lessee. The fees and expenses of the appraiser appointed by Lessee
shall be paid by Lessee; the fees and expenses of the appraiser appointed by
Lessor shall be paid by Lessor (such fees and expenses not being indemnified
pursuant to Section 13 of the Participation Agreement); and the fees and
expenses of the third appraiser shall be divided equally between Lessee and
Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
During the Marketing Period, the obligation of Lessee to pay
Rent with respect to the Properties (including without limitation the
installment of Basic Rent due on the Sale Date) shall continue undiminished
until payment in full to Lessor of the sale proceeds, if any, the Maximum
Residual Guarantee Amount, the amount due under Section 22.3, if any, and all
other amounts due to Lessor or any other Person with respect to all Properties
or any Operative Agreement. Lessor shall have the right, but shall be under no
duty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or
otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXII.
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ARTICLE XXIII
23.1 HOLDING OVER.
If Lessee shall for any reason remain in possession of a
Property after the expiration or earlier termination of this Lease as to such
Property (unless such Property is conveyed to Lessee), such possession shall be
as a tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at the Lesser of the highest lawful rate and at one hundred
ten percent (110%) of the last payment of Basic Rent due with respect to such
Property prior to such expiration or earlier termination of this Lease. Such
Basic Rent shall be payable from time to time upon demand by Lessor and such
additional amount of Basic Rent shall be applied by Lessor ratably to the
Lenders and the Holders based on their relative amounts of the then outstanding
aggregate Property Cost for all Properties. During any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be obligated
to perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to the extent given by
law to tenants at sufferance, to continue their occupancy and use of such
Property. Nothing contained in this Article XXIII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to any Property (unless such Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of such Property or
exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS.
During the Term, unless Lessee shall not be in actual
possession of any Property in question solely by reason of Lessor's exercise of
its remedies of dispossession under Article XVII, the risk of loss or decrease
in the enjoyment and beneficial use of such Property as a result of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
ARTICLE XXV
25.1 ASSIGNMENT.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor (except as provided in Section
25.2(b)).
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(b) No assignment by Lessee (referenced in this Section 25.1
or otherwise) or other relinquishment of possession to any Property
shall in any way discharge or diminish any of the obligations of Lessee
to Lessor hereunder and Lessee shall remain directly and primarily
liable under the Operative Agreements as to any rights or obligations
assigned by Lessee or regarding any Property in which rights or
obligations have been assigned or otherwise transferred.
25.2 SUBLEASES.
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor and the Agent of the execution
of such sublease. As of the date of each Lease Supplement, Lessee shall
lease the respective Properties described in such Lease Supplement from
Lessor, and any existing tenant respecting such Property shall
automatically be deemed to be a subtenant of Lessee and not a tenant of
Lessor (except as provided in Section 25.2(b)).
(b) Without the prior written consent of the Agent, any
Lender, any Holder or Lessor and subject to the other provisions of
this Section 25.2, Lessee may sublet any Property or portion thereof to
any wholly-owned Subsidiary of Lessee or to any physician or ancillary
service provider (and any such wholly-owned Subsidiary of Lessee may
enter into a second tier sublease with any physician or ancillary
service provider, in accordance with this Section 25.2); provided,
however, that (1) concurrent with the execution of such sublease,
Lessee shall certify in writing to the Agent that any such sublease of
all or any portion of a Property has been entered into in accordance
with market terms and for market rental amounts, as both relate to such
Property, and in no way diminishes the fair market value, utility or
useful life of such Property and (2) no such sublease shall be for a
term extending more than seven (7) years beyond the Expiration Date.
Except as referenced in the immediately preceding sentence, no other
subleases shall be permitted unless consented to in writing by Lessor
and the Agent.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder
and Lessee shall remain directly and primarily liable under this Lease
as to such Property, or portion thereof, so sublet.
ARTICLE XXVI
26.1 NO WAIVER.
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a
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waiver of any such default or of any such term. To the fullest extent permitted
by law, no waiver of any default shall affect or alter this Lease, and this
Lease shall continue in full force and effect with respect to any other then
existing or subsequent default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
No surrender to Lessor of this Lease or of all or any portion
of any Property or of any part of any thereof or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by Lessor and the
Agent and no act by Lessor or the Agent or any representative or agent of Lessor
or the Agent, other than a written acceptance, shall constitute an acceptance of
any such surrender.
27.2 NO MERGER OF TITLE.
There shall be no merger of this Lease or of the leasehold
estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 INCORPORATION OF COVENANTS.
Reference is made to the Lessee Credit Agreement and the
representations and warranties of Lessee contained in Article IV of the Lessee
Credit Agreement (hereinafter referred to as the "Incorporated Representations
and Warranties") and the covenants contained in Article V and Article VI of the
Lessee Credit Agreement (hereinafter referred to as the "Incorporated
Covenants"). Lessee agrees with Lessor that the Incorporated Representations and
Warranties and the Incorporated Covenants (and all other relevant provisions of
the Lessee Credit Agreement related thereto, including without limitation the
defined terms contained in Article I thereof which are used in the Incorporated
Representations and Warranties and the Incorporated Covenants, hereinafter
referred to as the "Additional Incorporated Terms") are hereby incorporated by
reference into this Lease and shall inure to the benefit of Lessor to the same
extent and with the same effect as if set forth fully herein. In the event a
waiver is granted under the Lessee Credit Agreement or an amendment or
modification is executed with respect to the Lessee Credit Agreement, and such
waiver, amendment and/or modification affects the Incorporated Representations
and Warranties, the Incorporated Covenants or the Additional Incorporated Terms,
then such waiver, amendment or modification shall be effective with respect to
the Incorporated Representations and Warranties, the Incorporated Covenants and
the Additional Incorporated Terms as incorporated by reference into this Lease
upon the date and for
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the duration of effectiveness thereof under the Lessee Credit Agreement (a)
automatically, if the financing parties in the Lessee Credit Agreement hold a
pro rata interest in both the Lessee Credit Agreement and the Commitments and
(b) if the foregoing subsection (a) is not satisfied, only if consented to in
writing by the Agent (acting upon the direction of the Majority Secured
Parties). If such consent referenced in subsection (b) of the previous sentence
is required but is not granted, then the Incorporated Representations and
Warranties, Incorporated Covenants and Additional Incorporated Terms (together
with any modification or amendments approved prior to such time in accordance
with this paragraph) shall continue to be effective hereunder. In the event of
any replacement of the Lessee Credit Agreement with a similar credit facility
(the "New Facility"), the representations and warranties, covenants and
additional terms contained in the New Facility which correspond to the
Incorporated Representations and Warranties, Incorporated Covenants and
Additional Incorporated Terms shall become the Incorporated Representations and
Warranties, the Incorporated Covenants and the Additional Incorporated Terms
hereunder (x) automatically, if the financing parties in the New Facility hold a
pro rata interest in both the New Facility and the Commitments and (y) if the
foregoing subsection (x) is not satisfied, only if consented to in writing by
the Agent (acting upon the direction of the Majority Secured Parties). If such
consent referenced in subsection (y) of the previous sentence is required but is
not granted or if the Lessee Credit Agreement is terminated and not replaced,
then the Incorporated Representations and Warranties, Incorporated Covenants and
Additional Incorporated Terms (together with any modifications or amendments
approved prior to such time in accordance with this paragraph) shall continue to
be effective hereunder.
ARTICLE XXIX
29.1 NOTICES.
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
ARTICLE XXX
30.1 MISCELLANEOUS.
Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
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30.2 AMENDMENTS AND MODIFICATIONS.
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.5 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 HEADINGS AND TABLE OF CONTENTS.
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 COUNTERPARTS.
This Lease may be executed in any number of counterparts, each
of which shall be an original, but all of which shall together constitute one
(1) and the same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE
REQUIRED TO APPLY.
30.7 CALCULATION OF RENT.
All calculation of Rent payable hereunder shall be computed
based on the actual number of days elapsed over a year of three hundred sixty
(360) days or, to the extent such Rent is based on the Prime Lending Rate, three
hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
This Lease shall not be recorded; provided, Lessor and Lessee
shall promptly record (a) a memorandum of this Lease and the applicable Lease
Supplement (in substantially the form of Exhibit B attached hereto) or a short
form lease (in form and substance reasonably satisfactory to the Agent)
regarding each Property promptly after the acquisition thereof in the local
filing office with respect thereto, in all cases at Lessee's cost and expense,
and as required under applicable law to sufficiently evidence this Lease and any
such Lease Supplement in the applicable real estate filing records.
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30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
Notwithstanding any other term or provision of this Lease to
the contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts received hereunder shall be subject to the
inter-creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 LIMITATIONS ON RECOURSE.
Notwithstanding anything contained in this Lease to the
contrary, Lessee agrees to look solely to Lessor's estate and interest in the
Properties (and in no circumstance to the Agent, the Lenders, the Holders or
otherwise to Lessor) for the collection of any judgment requiring the payment of
money by Lessor in the event of liability by Lessor, and no other property or
assets of Lessor or any shareholder, owner or partner (direct or indirect) in or
of Lessor, or any director, officer, employee, beneficiary, Affiliate of any of
the foregoing shall be subject to levy, execution or other enforcement procedure
for the satisfaction of the remedies of Lessee under or with respect to this
Lease, the relationship of Lessor and Lessee hereunder or Lessee's use of the
Properties or any other liability of Lessor to Lessee. Nothing in this Section
shall be interpreted so as to limit the terms of Sections 6.1 or 6.2 or the
provisions of Section 12.10 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY
COUNTERCLAIM THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
Lessee hereby acknowledges and agrees that the rights and
powers of Lessor under this Lease have been assigned to the Agent pursuant to
the terms of the Security Agreement and the other Operative Agreements. Lessor
and Lessee hereby acknowledge and agree that (a) the Agent shall, in its
discretion, direct and/or act on behalf of Lessor pursuant to Sections 8.2(h)
and 8.6 of the Participation Agreement, (b) all notices to be given to Lessor
shall be given to the Agent and (c) all notices to be given by Lessor may be
given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
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30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND
CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN
EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER
CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR
PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST."
ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY
EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF
THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED
FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM
NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF
THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE
AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH
AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF
THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST
WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT
INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND.
ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE
FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR
41
47
EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.
[Signature page follows]
42
48
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
PROVINCE HEALTHCARE COMPANY
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Vice President - Finance
------------------------------------
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner
Trustee under the PHC Real Estate Trust
1998-1, as Lessor
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
49
EXHIBIT A TO
THE LEASE
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
[________________] between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as the Owner Trustee under the PHC Real Estate Trust
1998-1, as lessor (the "Lessor"), and PROVINCE HEALTHCARE COMPANY, as lessee
(the "Lessee").
WHEREAS, Lessor is the owner or will be the owner of the Property
described on Schedule 1 hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of March 30, 1998, among Lessee, Lessor, not individually, except as
expressly stated therein, but solely as the Owner Trustee under the PHC Real
Estate Trust 1998-1, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and First Union National Bank, as the Agent for the Lenders and
respecting the Security Documents, as the Agent for the Lenders and Holders, to
the extent of their interests, as such may be amended, modified, extended,
supplemented, restated and/or replaced from time to time.
SECTION 2. THE PROPERTIES. Attached hereto as Schedule 1 is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule 1-A, an Improvement Schedule attached hereto as Schedule 1-B and [A
LEGAL DESCRIPTION OF THE LAND / A COPY OF THE GROUND LEASE] attached hereto as
Schedule 1-C. Effective upon the execution and delivery of this Lease Supplement
by Lessor and Lessee, the Leased Property shall be subject to the terms and
provisions of the Lease. Without further action, any and all additional
Equipment funded under the Operative Agreements and any and all additional
Improvements made to the Land shall be deemed to be titled to the Lessor and
subject to the terms and conditions of the Lease and this Lease Supplement.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to each Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided, that such exercise will not
impair the value of such Property) shall be permitted to exercise all rights and
remedies under, all operation and easement agreements and related or similar
agreements applicable to such Property.
A-1
50
SECTION 4. RATIFICATION; INCORPORATION BY REFERENCE. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NORTH CAROLINA, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR
PROPERTY IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. MORTGAGE; POWER OF SALE. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing as is the intent of the parties, then Lessor and Lessee agree that
Lessee hereby grants a Lien against the Leased Property WITH POWER OF SALE, and
that, upon the occurrence of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Leased Property.
SECTION 8. COUNTERPART EXECUTION. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one (1) and the
same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
A-2
51
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner
Trustee under the PHC Real Estate Trust
1998-1, as Lessor
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
PROVINCE HEALTHCARE
COMPANY, as Lessee
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
FIRST UNION NATIONAL BANK, as
the Agent
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
A-3
52
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not individually,
but solely as the Owner Trustee under the PHC Real Estate Trust 1998-1, on
behalf of the Owner Trustee.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of _______________, a
________________ corporation, on behalf of the corporation.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ________________ this ____ day of
___________, by _____________, as __________________ of FIRST UNION NATIONAL
BANK, a national banking association, as the Agent.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires:____________
A-4
53
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
A-5
54
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
A-6
55
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
A-7
56
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
[(LAND)/
(GROUND LEASE)]
A-8
57
EXHIBIT B TO THE LEASE
[MODIFY OR SUBSTITUTE SHORT FORM LEASE
AS NECESSARY FOR LOCAL LAW REQUIREMENTS]
Recordation requested by:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
After recordation return to:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC (WMA)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Space above this line
for Recorder's use
--------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT
AND
LEASE SUPPLEMENT NO. _____________
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO.
____________ ("Memorandum"), dated as of _____________, 1998, is by and between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the PHC Real Estate Trust
1998-1, with an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "Lessor") and PROVINCE HEALTHCARE COMPANY, a
Delaware corporation, with an office at ___________________ (hereinafter
referred to as "Lessee").
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise
and agree as follows:
1. DEMISED PREMISES AND DATE OF LEASE. Lessor has leased to Lessee, and
Lessee has leased from Lessor, for the Term (as hereinafter defined), certain
real property and other property located in ________________, which is described
in the attached Schedule 1 (the "Property"), pursuant to the terms of a Lease
Agreement between Lessor and Lessee dated as of March 30, 1998 (as such may be
amended, modified, extended, supplemented, restated and/or
B-1
58
replaced from time to time, "Lease") and a Lease Supplement No. _____ between
Lessor and Lessee dated as of ______________ (the "Lease Supplement").
2. TERM, RENEWAL, EXTENSION AND PURCHASE OPTION. The term of the
Lease for the Property ("Term") commenced as of __________, 19__ and shall end
as of _________, 19__, unless the Term is extended or earlier terminated in
accordance with the provisions of the Lease. The Lease contains provisions for
renewal and extension. The tenant has a purchase option under the Lease.
3. TAX PAYER NUMBERS.
Lessor's tax payer number: __________________.
Lessee's tax payer number: ____________________.
4. MORTGAGE; POWER OF SALE. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing as is the intent of the parties, then Lessor and Lessee agree that
Lessee has granted, pursuant to the terms of the Lease and the Lease Supplement,
a Lien against the Property WITH POWER OF SALE, and that, upon the occurrence
and during the continuance of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Property.
5. EFFECT OF MEMORANDUM. The purpose of this instrument is to
give notice of the Lease and the Lease Supplement and their respective terms,
covenants and conditions to the same extent as if the Lease and the Lease
Supplement were fully set forth herein. This Memorandum shall not modify in any
manner the terms, conditions or intent of the Lease or the Lease Supplement and
the parties agree that this Memorandum is not intended nor shall it be used to
interpret the Lease or the Lease Supplement or determine the intent of the
parties under the Lease or the Lease Supplement.
[The remainder of this page has been intentionally left blank.]
B-2
59
IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument as of the day and year first written.
LESSOR:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the Owner
Trustee under the PHC Real Estate Trust
1998-1
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
LESSEE:
PROVINCE HEALTHCARE COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
B-3
60
SCHEDULE 1
(Description of Property)
B-4
61
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
PHC Real Estate Trust 1998-1, on behalf of the Owner Trustee.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of PROVINCE HEALTHCARE COMPANY, a Delaware corporation, on
behalf of the corporation.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires:____________
B-5
