EXHIBIT (10)-57
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PARTICIPATION AGREEMENT
Dated as of October 31, 2000
among
HEALTHSOUTH Corporation
as Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as Owner Trustee
under the HEALTHSOUTH Corporation Trust 2000-1,
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME,
as the Holders,
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH
ARE PARTIES HERETO FROM TIME TO TIME,
as the Lenders,
THE CHASE MANHATTAN BANK,
as Documentation Agent,
UBS WARBURG LLC,
and
DEUTSCHE BANK SECURITIES, INC.,
as Joint Lead Arrangers,
DEUTSCHE BANK AG NEW YORK BRANCH,
as Syndication Agent,
and
UBS AG, STAMFORD BRANCH,
as Administrative Agent for the
Lenders
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of October 31, 2000 (as
further amended or supplemented from time to time, this "Agreement"), is by and
among HEALTHSOUTH Corporation., as Lessee (the "Lessee"), FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not individually (in its
individual capacity, the "Trust Company"), except as expressly stated herein,
but solely as Owner Trustee under the HEALTHSOUTH Corporation Trust 2000-1 (the
"Owner Trustee" or the "Lessor"), THE CHASE MANHATTAN BANK, as Documentation
Agent; UBS WARBURG LLC and DEUTSCHE BANK SECURITIES, INC., as Joint Lead
Arrangers; DEUTSCHE BANK AG NEW YORK BRANCH, as Syndication Agent; UBS AG,
Stamford Branch, as Administrative Agent (in such capacity, the "Agent") for the
Lenders and the Holders; UBS AG, Stamford Branch, and the various other banks
and lending institutions which are parties hereto from time to time as Holders,
and UBS AG, Stamford Branch and the various other banks and lending institutions
which are parties hereto from time to time as Lenders. Capitalized terms used
but not otherwise defined in this Agreement shall have the meanings set forth in
Appendix A hereto.
In consideration of the mutual agreements herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
The Lenders have agreed to make Loans in an aggregate
principal amount of up to the aggregate amount of the Commitments of the Lenders
in order for the Lessor to acquire the Properties and certain Improvements, and
in consideration of the receipt of such Loan proceeds, the Lessor, upon the
request of the relevant Lenders, will issue the Notes (together with any note or
notes issued in exchange or substitution therefor in accordance with the Credit
Agreement, the "Notes"). The Loans shall be made and the Notes shall be issued
pursuant to the Credit Agreement. Pursuant to Section 5 of this Agreement and
Section 2 of the Credit Agreement, the Loans will be made to the Lessor on the
Closing Date and in accordance with this Agreement and the other Operative
Agreements. The Loans and the obligations of the Lessor under the Credit
Agreement are secured by the Collateral.
SECTION 2. HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement and in
reliance on the representations and warranties of each of the parties hereto
contained herein or made pursuant hereto on each date Advances are made in
accordance with Section 5 hereof, each Holder shall make a Holder Advance on a
pro rata basis to the Owner Trustee with respect to the HEALTHSOUTH Corporation
Trust 2000-1 based on its Holder Commitment in an amount in immediately
available funds such that the aggregate of all Holder Advances shall be three
percent (3%) of the amount of the Advances being funded on such date; provided,
no Holder shall be obligated for any Holder Advance in excess of its pro rata
share of the Available Holder Commitment. The aggregate amount of Holder
Advances shall be up to the aggregate amount of the Holder Commitments. No
prepayment or any other payment with respect to any Advance shall be permitted
such that the Holder Advance with respect to such Advance is less than 3% of
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the outstanding amount of such Advance, except in connection with termination or
expiration of the Term or in connection with the exercise of remedies relating
to the occurrence of a Lease Event of Default. The representations, warranties,
covenants and agreements of the Holders herein and in the other Operative
Agreements are several, and not joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1 Operative Agreements. On the date hereof (the "Closing Date"), each
of the respective parties hereto and thereto shall execute and deliver this
Agreement, the Lease, the Credit Agreement, the Notes (if applicable), the
Certificates, the Trust Agreement, the Security Agreement and such other
documents, instruments, certificates and opinions of counsel as agreed to by the
parties hereto.
3.2 Closing Date. On the Closing Date and subject to the terms and
conditions of this Agreement (a) each Holder will make available to UBS AG,
Stamford Branch, the amount set forth for such Holder on Schedule 1 to the
Holder Addendum, executed and delivered by such Holder pursuant to Section 14.18
hereof, constituting the principal amount of the Holder Advance to be made by
such Holder hereunder, and (b) each Lender will make available to UBS AG,
Stamford Branch, the amount set forth for such Lender on such Lender's Lender
Addendum executed and delivered by such Lender pursuant to Section 14.18 hereof,
as the principal amount of the Loan to be made by such Lender thereunder. The
Lessor will purchase pursuant to a Deed or lease pursuant to a Ground Lease each
Property, as the case may be, as of the Closing Date, and a Lien on each
Property for the benefit of the Agent shall be in full force and effect before
and after the execution of the required Security Documents. After giving effect
to the Advances on the Closing Date, there shall no longer be any Commitments
outstanding.
SECTION 4. THE CLOSING.
4.1 Closing Date. All documents and instruments required to be
delivered on the Closing Date shall be delivered at the offices of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 425 Lexington Avenue, New York, New York, or at such other
location as may be determined by the Lessor, the Agent and the Lessee.
SECTION 5. MAKING OF ADVANCES.
5.1 General.
The Lessor has used and will use the proceeds of the Advances made
on the date hereof to acquire the Properties, repay the existing loans and
advances.
5.2 Intentionally Deleted.
5.3 Conditions to the Holders' and the Lenders' Obligations to Make
Advances on the Closing Date.
Subject to Section 6, the obligations of each Holder to make
Holder Advances, and each Lender to make Loans on the Closing Date are subject
to the prior or contemporaneous satisfaction or waiver of the following
conditions precedent:
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(a) the correctness in all material respects on such date of the representations
and warranties of the Owner Trustee, the Lessee and the Holders contained herein
and in each of the other Operative Agreements;
(b) the performance in all material respects by the Lessee of its agreements
contained herein and in the other Operative Agreements which covenants are to be
performed by it on or prior to such date;
(c) the satisfaction of all conditions to any such making of Holder Advance or
Loan set forth in any Operative Agreement;
(d) no Default or Event of Default under any of the Operative Agreements shall
have occurred after giving effect to the making of Holder Advances and Loans;
(e) title to each Property shall conform to the representations and warranties
set forth in Section 7.2(l) and 7.3(l) hereof;
(f) the Lessor shall have good and marketable title to each Property in fee
simple, subject only to the Permitted Exceptions. The Lessor shall have the
right to grant the Mortgage Instruments on the Properties;
(g) the Lessee shall have delivered to the Agent and the Owner Trustee, a title
insurance policy in favor of the Agent and Owner Trustee with respect to each
Property, such policy being in form and substance reasonably acceptable to the
Owner Trustee and the Agent, with such title exceptions thereto as are
reasonably acceptable to the Owner Trustee and the Agent;
(h) the Lessee shall have delivered to the Agent and the Owner Trustee (A) a
"Phase I" environmental site assessment with respect to each Property, prepared
by an independent recognized professional reasonably acceptable to the Agent and
the Owner Trustee and in a form and substance that is reasonably acceptable to
the Agent and the Owner Trustee, and (B) the Agent shall have received letters
from such environmental professional stating, among other things, that the
Agent, the Lenders, the Owner Trustee and the Holders may rely on the
Environmental Report with respect to each Property which were prepared by such
firm as if they were originally addressed to them in all respects;
(i) the Lessee shall have delivered to the Agent, the Owner Trustee and the
Title Company an as-built survey of each Property certified to the Agent, the
Holders, the Owner Trustee and the Title Company, prepared by an independent
recognized professional meeting the then current minimum standard detail
requirements for American Land Title Association and the American Congress of
Surveying and Mapping (ALTA/ACSM) Land Title Surveys certified to the Agent and
otherwise reasonably acceptable to the Agent;
(j) the Lessee shall have caused to be delivered to the Agent and the Owner
Trustee a legal opinion (in the form attached hereto as Exhibit A) from counsel
located in the state where each Property is located;
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(k) the Owner Trustee and the Agent shall be satisfied, in their discretion,
that the execution of the Mortgage Instruments and the other Security Documents
will not adversely affect in any material respect the rights of the Owner
Trustee, the Holders, the Agent or the Lenders under or with respect to the
other Operative Agreements in effect as of the Closing Date (it being understood
and acknowledged that the Agent and the Owner Trustee may require that the
Lessee deliver an acceptable legal opinion in connection with this condition);
(l) the Lessee shall have delivered to the Agent and the Owner Trustee,
respecting each Property, Invoices for the various Transaction Expenses and
other fees, expenses and disbursements referenced in Section 9.1 of this
Agreement (to the extent paid from Loan proceeds) and an Officer's Certificate
in the form attached hereto as Exhibit B specifying the Property Cost for each
Property;
(m) the Lessee shall have delivered to the Agent and the Owner Trustee,
respecting each Property, certificates of insurance meeting the requirements of
Section 14.3 of the Lease;
(n) the Lessor shall have delivered to the Agent a Mortgage Instrument and
Lender Financing Statements with respect to each Property in a form reasonably
acceptable to the Agent and Lessee and all necessary recording fees, documentary
stamp taxes or similar amounts will be paid in connection with the related
Mortgage Instrument in an amount sufficient to cover such maximum total Property
Cost, or (in the case of the recording tax with respect to the Mortgage
Instrument) in an amount required to be paid at the time of recording of such
instrument (provided that the Lessee shall promptly pay or reimburse any
Indemnified Person for payment of, any additional recording tax that may be due
at any time with respect to such instrument);
(o) the Lessee shall have delivered to the Lessor with respect to each Property,
a Memorandum of Lease (such memorandum to be substantially in the form attached
to the Lease as Exhibit B and in form suitable for recording);
(p) the Lessee shall have delivered to the Lessor, with respect to each
Property, Lessor Financing Statements executed by the Lessee and the Lessor;
(q) all necessary (or in the reasonable opinion of the Owner Trustee, the Agent,
or their respective counsel, advisable) Governmental Actions, in each case
required by any law or regulation enacted, imposed or adopted on or prior to
each such date or by any change in facts or circumstances on or prior to each
such date, shall have been obtained or made and be in full force and effect;
(r) if any such Property is subject to a Ground Lease, the Lessee shall have
caused a lease memorandum (in form and substance satisfactory to the Agent) to
be delivered to the Agent for such Ground lease;
(s) the Lessee shall cause (i) Uniform Commercial Code lien searches, tax lien
searches and judgment lien searches regarding each of the Lessee and the Lessor
to be conducted (and copies thereof to be delivered to the Agent and the Owner
Trustee) in the
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state and county (or other Jurisdiction) in which each Property is located, by a
nationally recognized search company acceptable to the Owner Trustee and the
Agent, and (ii) the liens referenced in such lien searches which are
objectionable to the Owner Trustee or the Agent to be either removed or
otherwise handled in a manner reasonably satisfactory to the Owner Trustee and
the Agent;
(t) the Agent shall have received an Appraisal for each Property showing that
each Property has an enterprise value, when taken together with the enterprise
value of all other Properties, equal to at least fifty percent (50%) of the
Total Property Cost of all Properties and all Improvements constructed thereon;
(u) The Agent shall have received a certificate of the chief financial officer
of the Lessee (i) attaching copies of all consents, authorizations and filings
required to consummate the transactions contemplated by this Agreement, and (ii)
stating that such consents, licenses and filings are in full force and effect,
and each such consent, authorization and filing shall be in form and substance
reasonably satisfactory to the Agent; and
(v) all conditions set forth in Section 5.1 of the Existing HEALTHSOUTH
Corporation Credit Agreement shall have been satisfied.
5.4 Inspection of Documents; Hold Harmless; Removal of Property.
Any document or item (including without limitation any
environmental report) delivered to the Agent shall be available for inspection
at any time during ordinary business hours upon reasonable notice by any Lender
or Holder. The Agent shall not incur any liability to any Lender, any Holder,
the Owner Trustee or any other Person (and each Lender, each Holder, the Owner
Trustee and the Lessee hereby holds the Agent harmless from any such liability)
as a result of any such document or item, any information contained therein, the
failure to receive any such document, or the Agent's approval of any Property.
In the event the Majority Lenders determine that any environmental site
assessment reveals an Environmental Violation and they or the Agent so notify
the Lessee, then the Lessee shall remedy or purchase such Property in accordance
with Sections 15.2. 16.1 and 16.2 of the Lease.
SECTION 6. CONDITIONS OF THE CLOSING.
6.1 Conditions to the Lessor's and the Holders' Obligations.
The obligations of the Lessor and the Holders to consummate the
transactions contemplated by this Agreement on the Closing Date, including the
obligation to execute and deliver the applicable Operative Agreements to which
each is a party on the Closing Date, are subject to (i) the accuracy and
correctness on the Closing Date of the representations and warranties of the
other parties hereto contained herein, (ii) the accuracy and correctness on the
Closing Date of the representations and warranties of the other parties hereto
contained in any other Operative Agreement or certificate delivered pursuant
hereto or thereto, (iii) the performance by the other parties hereto of their
respective agreements contained herein and in the other Operative Agreements and
to be performed by them on or prior to the Closing Date and
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(iv) the satisfaction, or waiver by the Lessor and the Holders, of all of the
following conditions on or prior to the Closing Date:
(a) Each of the Operative Agreements shall have been duly authorized,
executed and delivered by the parties thereto, other than the Lessor,
and shall be in full force and effect, and no Default or Event of
Default shall exist thereunder (both before and after giving effect to
the transactions contemplated by the Operative Agreements), and the
Lessor shall have received a fully executed copy of each of the
Operative Agreements (other than the Notes of which it shall have
received specimens). The Operative Agreements (or memoranda thereof),
any supplements thereto and any financing statements and fixture
filings in connection therewith required under the Uniform Commercial
Code shall have been filed or shall be promptly filed, if necessary, in
such manner as to enable the Lessee's counsel to render its opinion
referred to in Section 6.1(g) hereof;
(b) All taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of the Operative
Agreements shall have been paid or provision for such payment shall
have been made to the reasonable satisfaction of the Lessor and the
Agent;
(c) No action or proceeding shall have been instituted, nor shall any
action or proceeding be threatened, before any Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to
be issued by any Governmental Authority (i) to set aside, restrain,
enjoin or prevent the full performance of this Agreement, any other
Operative Agreement or any transaction contemplated hereby or thereby
or (ii) which is reasonably likely to have a Material Adverse Effect;
(d) In the reasonable opinion of the Lessor and the Holders and their
counsel, the transactions contemplated by the Operative Agreements do
not and will not violate any material Legal Requirements and do not and
will not subject the Lessor or the Holders to any materially adverse
regulatory prohibitions or constraints, in each case enacted, imposed,
adopted or proposed since the date hereof;
(e) The Lessor and the Agent shall each have received an Officer's
Certificate of the Lessee, dated as of the Closing Date, in the form
attached hereto as Exhibit C or in such other form as is reasonably
acceptable to such parties stating that (a) each and every
representation and warranty of the Lessee contained in the Operative
Agreements to which it is a party is true and correct in all material
respects on and as of the Closing Date; (ii) no Default or Event of
Default has occurred and is continuing under any Operative Agreement;
(iii) each Operative Agreement to which Lessee is a party is in full
force and effect with respect to it; and (iv) the Lessee has performed
and complied with all covenants, agreements and conditions contained
herein or in any Operative Agreement required to be performed or
complied with by it on or prior to the Closing Date;
(f) The Lessor and the Agent shall each have received (i) a certificate
of the Secretary or an Assistant Secretary of the Lessee in the form
attached hereto as Exhibit D or in such other form as is reasonably
acceptable to such parties attaching and certifying
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as to (A) the resolutions of the Board of Directors of Lessee duly
authorizing the execution, delivery and performance by Lessee of each
of the Operative Agreements to which it is or will be a party and a
statement that the resolutions have not been amended, modified, revoked
or rescinded, (B) its certificate of incorporation and by-laws, in each
case certified as of a recent date by the Secretary of State of the
State of its incorporation, as correct and complete copies and (C) the
incumbency and signature of persons authorized to execute and deliver
on its behalf the Operative Agreements to which it is a party and (ii)
a good standing certificate from the appropriate officer of each state
in which any Property is located as to its good standing in such state;
(g) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.C., counsel for the Lessee, shall
have issued to the Lessor, the Agent, the Lenders and the Holders an
opinion in the form attached hereto as Exhibit A;
(h) As of the Closing Date, there shall not have occurred any event,
condition, situation or status since December 31, 1999 that has had or
could reasonably be expected to result in a Material Adverse Effect;
and
(i) The Agent and the Joint Lead Arrangers shall have received the fees
to be paid on the Closing Date pursuant to the Fee Letter, or any other
Lender or Holder entitled to fees to be paid on the Closing Date by
Lessee have received fees; which fees shall not be paid using the
proceeds, if any, of the Loans or Holder Advances.
6.2 Conditions to the Lessee's Obligations.
The obligation of the Lessee to consummate the transactions
contemplated by this Agreement on the Closing Date, including the obligation to
execute and deliver the Operative Agreements to which it is a party on the
Closing Date, is subject to (i) the accuracy and correctness on the Closing Date
of the representations and warranties of the other parties hereto contained
herein, (ii) the accuracy and correctness on the Closing Date of the
representations and warranties of the other parties hereto contained in any
other Operative Agreement or certificate delivered pursuant hereto or thereto,
(iii) the performance by the other parties hereto of their respective agreements
contained herein and in the other Operative Agreements, in each case to be
performed by them on or prior to the Closing Date, and (iv) the satisfaction or
waiver by the Lessee of all of the following conditions on or prior to the
Closing Date:
(a) Each of the Operative Agreements to be entered into on the Closing
Date shall have been duly authorized, executed and delivered by the
parties thereto, other than the Lessee, and shall be in full force and
effect, and no Default, other than Defaults of the Lessee, shall exist
thereunder, and the Lessee shall have received a fully executed copy of
each of the Operative Agreements (other than Notes of which it shall
have received a specimen);
(b) In the reasonable opinion of the Lessee and its counsel, the
transactions contemplated by the Operative Agreements do not violate
any material Legal Requirements and will not subject Lessee to any
materially adverse regulatory prohibitions or constraints;
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(c) No action or proceeding shall have been instituted, nor shall any
action or proceeding be threatened, before any Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to
be issued by any Governmental Authority (i) to set aside, restrain,
enjoin or prevent the full performance of this Agreement, any other
Operative Agreement or any transaction contemplated hereby or thereby
or (ii) which is reasonably likely to have a Material Adverse Effect;
(d) The Lessee and the Agent shall each have received an Officer's
Certificate of the Lessor dated as of such Closing Date in the form
attached hereto as Exhibit E or in such other form as is reasonably
acceptable to Lessee and the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Closing Date; (ii) each Operative Agreement to which the Lessor is a
party is in full force and effect with respect to it, and (iii) the
Lessor has duly performed and complied with all covenants, agreements
and conditions contained herein or in any Operative Agreement required
to be performed or complied with by it on or prior to the Closing Date;
(e) The Lessee and the Agent shall each have received (i) a certificate
of the Secretary, an Assistant Secretary, Trust Officer or Vice
President of the Trust Company in the form attached hereto as Exhibit F
or in such other form as is reasonably acceptable to Lessee and the
Agent, attaching and certifying as to (A) the signing resolutions, (B)
its articles of incorporation or other equivalent charter documents, as
the case may be, certified as of a recent date by an appropriate
officer of the Trust Company, (C) its bylaws and (D) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Agreements to which it is a party and (ii) a good
standing certificate from the state of incorporation of the Trust
Company; and
(f) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Lessor, shall have issued
to the Lessee, the Holders, the Lenders and the Agent an opinion in the
form attached hereto as Exhibit G.
6.3 Conditions to the Agent's and Lenders' Obligations.
The obligation of each of the Agent and the Lenders to consummate
the transactions contemplated by this Agreement on the Closing Date, including
the obligation to execute and deliver each of the Operative Agreements to which
it is a party on the Closing Date, is subject to (i) the accuracy and
correctness on the Closing Date of the representations and warranties of the
other parties hereto contained herein, (ii) the accuracy and correctness on the
Closing Date of the representations and warranties of the other parties hereto
contained in any other Operative Agreement or certificate delivered pursuant
hereto or thereto, (iii) the performance by the other parties hereto of their
respective agreements contained herein and in the other Operative Agreements, in
each case to be performed by them on or prior to the Closing Date, and (iv) the
satisfaction, or waiver by the Agent, of all of the following conditions on or
prior to the Closing Date:
(a) Each of the Operative Agreements to be entered into on the Closing
Date shall have been duly authorized, executed and delivered by the
parties thereto, other than the
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Agent, and shall be in full force and effect, and no Default or Event
of Default shall exist thereunder (both before and after giving effect
to the transactions contemplated by the Operative Agreements), and the
Agent shall have received a fully executed copy of each of the
Operative Agreements (including the Notes). The Operative Agreements
(or memoranda thereof), any supplements thereto and any financing
statements and fixture filings in connection therewith required under
the Uniform Commercial Code shall have been filed or shall be promptly
filed, if necessary, in such manner as to enable the Lessor's counsel
to render its opinion referred to in Section 6.2(f) hereof;
(b) The satisfaction of each of the conditions set forth in Sections 6.
1(b), (c), (e), (f), (g), (h) and (i) and Sections 6.2(d), (e) and (f)
hereof, and
(c) In the reasonable opinion of the Agent and its counsel, the
transactions contemplated by the Operative Agreements do not and will
not violate any material Legal Requirements and do not and will not
subject the Agent or the Lenders to any materially adverse regulatory
prohibitions or constraints.
SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE CLOSING DATE.
7.1 Representations and Warranties of the Holders.
Effective as of the Closing Date, each of the Holders represents
and warrants to each of the other parties hereto that:
(a) It is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, and has the power and
authority to carry on its business as now conducted and to enter into
and perform its obligations under each Operative Agreement to which it
is or will be a party and each other agreement, instrument and document
to be executed and delivered by it on or before each Closing Date in
connection with or as contemplated by each such Operative Agreement to
which it is or will be a party;
(b) The execution, delivery and performance of each Operative Agreement
to which it is or will be a party have been duly authorized by all
necessary corporate, limited liability company or partnership action on
its part and neither the execution and delivery thereof, nor the
consummation of the transactions contemplated thereby, nor compliance
by it with any of the terms and provisions thereof (i) requires or will
require any approval of the stockholders of, or approval or consent of
any trustee or holder of any indebtedness or obligations of, such
Holder which has not been obtained or is not in full force and effect,
(ii) violates or will violate any Legal Requirement applicable to or
binding on it (except no representation or warranty is made as to any
Legal Requirement to which it may be subject solely as a result of the
activities of the Lessee) as of the date hereof, (iii) violates or will
violate or result in any breach of or constitute any default under, or
result in the creation of any Lien upon any Property or any of the
Improvements (other than Liens created by the Operative Agreements)
under its certificate of incorporation or other equivalent charter
documents, or any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement or other
agreement or
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instrument to which it is a party or by which it or its properties is
bound or affected or (iv) requires or will require any Governmental
Action by any Governmental Authority (other than arising solely by
reason of the business, condition or activities of the Lessee or any
Affiliate thereof or the construction or use of the Properties or the
Improvements);
(c) This Agreement and each other Operative Agreement to which it is or
will be a party has been, or will be, duly executed and delivered by it
and constitutes, or upon execution and delivery will constitute, a
legal, valid and binding obligation enforceable against it in
accordance with the terms thereof, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
(d) There is no action or proceeding pending or, to its knowledge,
threatened against it before any Governmental Authority that questions
the validity or enforceability of any Operative Agreement to which it
is or will become a party or that, if adversely determined, would
materially and adversely affect its ability to perform its obligations
under the Operative Agreements to which it is a party;
(e) It has not assigned or transferred any of its right, title or
interest in or under the Lease except in accordance with the Operative
Agreements;
(f) No Default or Event of Default under the Operative Agreements
attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated by the Operative Agreements, it
has not, it shall not, and it did not, nor shall it direct the Owner
Trustee to, use the proceeds of any Loan or Holder Advance for any
purpose other than the payment of Transaction Expenses and the fees,
expenses and other disbursements referenced in Section 9.1of this
Agreement; and
(h) It is acquiring its interest in the Trust Estate for its own
account for investment and not with a view to any distribution (as such
term is used in Section 2(11) of the Securities Act) thereof, and no
part of such amount constitutes the assets of any Employee Benefit Plan
and if in the future it should decide to dispose of its interest in the
Trust Estate, it understands that it may do so only in compliance with
the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder and any applicable state securities
laws. Neither it nor anyone authorized to act on its behalf has taken
or will take any action which would subject, as a direct result of such
action alone, the issuance or sale of any interest in any Property, the
Trust Estate or the Lease to the registration requirements of Section 5
of the Securities Act. No representation or warranty contained in this
Section 7.1(g) shall include or cover any action or inaction of the
Lessee or any Affiliate thereof whether or not purportedly on behalf of
the Holders, the Owner Trustee or any of their Affiliates.
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7.2 Representations and Warranties of the Owner Trustee.
Effective as of the Closing Date, the Trust Company in its
individual capacity and as the Owner Trustee, as indicated, represents and
warrants to each of the other parties hereto as follows, provided, that the
representations in paragraphs (h), (i), (j) and (k) below are made solely in its
capacity as the Owner Trustee:
(a) It is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America and has the power and authority to enter into and perform its
obligations under the Trust Agreement and (assuming due authorization,
execution and delivery of the Trust Agreement by the Holders) has the
corporate and trust power and authority to act as the Owner Trustee and
to enter into and perform the obligations under each of the other
Operative Agreements to which Trust Company or the Owner Trustee, as
the case may be, is or will be a party and each other agreement,
instrument and document to be executed and delivered by it on or before
each Closing Date in connection with or as contemplated by each such
Operative Agreement to which Trust Company or the Owner Trustee, as the
case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative Agreement
to which it is or will be a party, either in its individual capacity or
(assuming due authorization, execution and delivery of the Trust
Agreement by the Holders) as the Owner Trustee, as the case may be, has
been duly authorized by all necessary action on its part and neither
the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) requires or will require any approval
of its stockholders, or any approval or consent of any trustee or
holders of any of its indebtedness or obligations, (ii) violates or
will violate any current law, governmental rule or regulation relating
to its banking or trust powers, (iii) violates or will violate or
result in any breach of or constitute any default under, or result in
the creation of any Lien upon any of its property under, (A) its
charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected, which violation,
breach, default or Lien under clause (B) would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or (iv) requires or will require any Governmental Action by any
Governmental Authority regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is the legal,
valid and binding obligation of the Holders, each other Operative
Agreement to which the Trust Company or the Owner Trustee, as the case
may be, is or will be a party have been, or will be, duly executed and
delivered by Trust Company or the Owner Trustee, as the case may be,
and the Trust Agreement and each such other Operative Agreement to
which Trust Company or the Owner Trustee, as the case may be, is a
party constitutes, or upon execution and delivery will constitute, a
legal, valid and binding obligation enforceable against Trust Company
or the Owner Trustee, as the case may be, in accordance with the terms
thereof;
11
(d) There is no action or proceeding pending or, to its knowledge,
threatened to which it is or will be a party, either in its individual
capacity or as the Owner Trustee, before any Governmental Authority
that, if adversely determined, would materially and adversely affect
its ability, in its individual capacity or as Owner Trustee, to perform
its obligations under the Operative Agreements to which it is a party
or would question the validity or enforceability of any of the
Operative Agreements to which it is or will become a party;
(e) It has not assigned or transferred any of its right, title or
interest in or under the Lease, any other Operative Agreement or any
Property, except in accordance with the Operative Agreements;
(f) The Lessor is not in default under or with respect to any of its
Contractual Obligations in any respect which could have a material
adverse effect on the assets, liabilities, operations, business or
financial condition of the Lessor. No Default or Event of Default under
the Operative Agreements attributable to the Owner Trustee has occurred
and is continuing;
(g) Except as otherwise contemplated in the Operative Agreements, the
Owner Trustee shall not use the proceeds of the Loans and Holder
Advances for any purpose other than solely in accordance with the
provisions of the Operative Agreements;
(h) Neither the Owner Trustee nor any Person authorized by the Owner
Trustee to act on its behalf has offered or sold any interest in the
Trust Estate or the Notes, or in any similar security relating to any
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Lenders, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take
any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the
Notes to the provisions of Section 5 of the Securities Act, or require
the qualification of any Operative Agreement under the Trust Indenture
Act of 1939, as amended;
(i) The Owner Trustee's chief place of business, chief executive office
and office where the documents, accounts and records relating to the
transactions contemplated by this Agreement and each other Operative
Agreement are kept are located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇;
(j) The Owner Trustee is not engaged principally in, and does not have
as one of its important activities, the business of extending credit
for the purpose of purchasing or carrying any margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal
Reserve System of the United States), and no part of the proceeds of
the Loans or the Holder Advances will be used by it to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulations T, U,
or X of the Federal Reserve Board;
12
(k) The Owner Trustee is not a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or a "public utility" within
the meaning of the Federal Power Act, as amended. The Owner Trustee is
not an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act or an
"investment adviser" within the meaning of the Investment Advisers Act
of 1940, as amended; and
(l) The Properties are free and clear of all Lessor Liens.
7.3 Representations and Warranties of the Lessee.
Effective as of the Closing Date, the Lessee represents and
warrants to each of the other parties hereto that:
(a) It and each of its Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization and is duly qualified to do business in each other
jurisdiction where the nature of its business makes such qualification
necessary, except where such failure to so qualify would not have a
Material Adverse Effect. The Lessee and each of its Subsidiaries has
the power and authority to carry on its business as now conducted and
to enter into and perform its obligations under each Operative
Agreement to which it is or will be a party and each other agreement,
instrument and document to be executed and delivered by it on or before
the Closing Date in connection with or as contemplated by each such
Operative Agreement to which it is or will be a party;
(b) The execution, delivery and performance by the Lessee and each of
its relevant Subsidiaries of this Agreement and the other Operative
Agreements to which each is or will be a party (i) have been duly
authorized by all necessary corporate action on the part of the Lessee
and each such Subsidiary (including any necessary shareholder action),
(ii) have received all necessary governmental approval, and (iii) do
not and will not (A) violate any Legal Requirement, decree, judgment or
award or order of any Governmental Authority, (B) violate or conflict
with, or result in a breach of, any provision of the Certificate of
Incorporation, By-Laws or other organizational documents of the Lessee
or any of its Subsidiaries, or any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan, credit
agreement or other agreement, instrument or document to which the
Lessee or any of its Subsidiaries is a party or which is binding on the
Lessee or any of its Subsidiaries or any of their respective
properties, or (C) result in, or require, the creation or imposition of
any Lien (other than pursuant to the. terms of the Operative
Agreements) on any asset of the Lessee or any of its Subsidiaries;
(c) Each of this Agreement and each other Operative Agreement to which
the Lessee or any of its Subsidiaries is or will be a party has been,
or will be, duly executed and delivered by it and constitutes, or upon
execution and delivery will constitute, the legal, valid and binding
obligation of the Lessee or such Subsidiary, as the case may be,
enforceable against it in accordance with the terms thereof. The Lessee
and each of its
13
relevant Subsidiaries have each executed the various Operative
Agreements required to be executed as of the Closing Date;
(d) Except as disclosed in the Lessee's annual report on Form 10-K for
the year ended December 31, 1999, there are no actions, suits or
proceedings (including, without limitation, any derivative action)
pending or, to the knowledge of the Lessee, threatened with respect to
the Lessee or any of its Subsidiaries which, if adversely decided, are
reasonably likely to result, either individually or collectively, in a
Material Adverse Effect. None of the Lessee or any of its Subsidiaries
has any material contingent liabilities not provided for or disclosed
in the financial statements referred to in Section 7.3(f), which are
required in accordance with GAAP to be reported in such financial
statements;
(e) No Governmental Action by any Governmental Authority or
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person is required to authorize or is
required in connection with (i) the leasing of the Properties, (ii) the
execution, delivery or performance of any Operative Agreement, or (iii)
the legality, validity, binding effect or enforceability of any
Operative Agreement, in each case except those which have been obtained
and are in full force and effect;
(f) (i) The audited consolidated financial statements of the
Consolidated Entities as of December 31, 1999, copies of which have
been furnished to the Agent and the Owner Trustee, were prepared in
accordance with GAAP applied on a consistent basis and fairly present
the financial condition of the Lessee and the other Consolidated
Entities on a consolidated basis as of such date and their consolidated
results of operations for the fiscal year then ended and (ii) the
unaudited consolidated financial statements as at June 30, 2000, copies
of which have been furnished to the Agent and the Owner Trustee, were
prepared in accordance with GAAP applied on a consistent basis (subject
to normal year-end adjustments) and fairly present in all material
respects the financial condition of the Lessee and its Consolidated
Entities on a consolidated basis as of such date and its consolidated
results of operations for the fiscal period then ended and such
two-quarter period, respectively;
(g) Since the date of the audited financial statements described in
Section 7.3(f) there has been no event or occurrence which has had or
is reasonably likely to have a Material Adverse Effect;
(h) The Lessee knows of no proposed material tax assessments against it
or any of its Subsidiaries. No extension of time for assessment or
payment of any material federal, state or local tax by the Lessee or
any of its Subsidiaries is in effect;
(i) Each of the Lessee and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder. The execution and
delivery of the Operative Agreements will not involve any prohibited
transaction within the meaning of ERISA, the Lessee and each ERISA
Affiliate has fulfilled its obligations under the minimum funding
standards imposed by ERISA and each is in compliance in all material
respects with the applicable
14
provisions of ERISA, and no "Reportable Event," as defined in Section
4043(b) of Title IV of ERISA, has occurred with respect to any plan
maintained by the Lessee or any of its ERISA Affiliates. No Reportable
Event has occurred as to which the Lessee or any ERISA Affiliate was
required to file a report with the PBGC, and the present value of all
benefit liabilities under each Plan (based on those assumptions used to
fund such Plan) did not, as of the last annual valuation date
applicable thereto, exceed by more than $1,000,000 the value of the
assets of such Plan. Neither the Lessee nor any ERISA Affiliate has
incurred any Withdrawal Liability which remains unpaid and that could
result in a Material Adverse Effect. Neither the Lessee nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is
in reorganization or has been terminated within the meaning of Title IV
of ERISA, and to the best knowledge of the Lessee no Multiemployer Plan
is reasonably expected to be in reorganization or to be
terminated,where such reorganization or termination has resulted or
could reasonably be expected to result, through increases in the
contributions required to be made to such Plan or otherwise, in a
Material Adverse Effect;
(j) Upon the execution and delivery of the Lease, (i) the Lessee will
have unconditionally accepted the Properties and will have a valid and
subsisting leasehold interest in the Properties, subject only to the
Permitted Exceptions, and (ii) no offset will exist with respect to any
Rent or other sums payable under the Lease;
(k) Neither the Lessee nor any of its Subsidiaries has filed a
voluntary petition in bankruptcy or been adjudicated a bankrupt or
insolvent, or filed any petition or answer seeking any reorganization,
liquidation, receivership, dissolution or similar relief under any
bankruptcy, receivership, insolvency, or other law relating to relief
for debtors, or sought or consented to or acquiesced in the appointment
of any trustee, receiver, conservator or liquidator of all or any part
of its properties or its interest in any Property. No court of
competent jurisdiction has entered an order, judgment, or decree
approving a petition filed against the Lessee or any of its
Subsidiaries seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
federal or state bankruptcy, receivership, insolvency or other law
relating to relief for debtors, and no other liquidator has been
appointed for the Lessee or any of its Subsidiaries or all or any part
of its properties or its interest in any Property, and no such action
is pending. Neither the Lessee nor any of its Subsidiaries has given
notice to any Governmental Authority or any Person of insolvency or
pending insolvency, or suspension or pending suspension of operations;
(l) The Lessee has a subsisting leasehold interest in all of the
Properties free and clear of all Liens, except Permitted Liens. The
Lessee has complied with all obligations under all leases relating to
the Properties to which it is a party and all such leases are in full
force and effect. Each of the Lessee and its Subsidiaries enjoys
peaceful and undisturbed possession under all such leases;
(m) Neither the Lessee nor any of its Subsidiaries is (a) an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act or an
"investment adviser" within the meaning of the Investment Advisers Act
of 1940, as amended, or (b) a "holding company", or a
15
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company",
or a "public utility", within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended;
(n) Neither the Lessee nor any of its Subsidiaries is engaged
principally in, or has as one of its important activities, the business
of extending credit for the purpose of purchasing or carrying any
margin stock (within the meaning of Regulation U of the Federal Reserve
Board), and no part of the proceeds of the Loans or the Holder Advances
will be used for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any margin stock or maintaining or
extending credit to others for such purpose, or for any purpose that
violates, or is inconsistent with Regulations T, U, or X of the Federal
Reserve Board;
(o) The Lessee and each of its Subsidiaries has filed all material tax
returns and reports required by Law to have been filed by it and has
paid all Taxes and governmental charges thereby shown to be owing,
except any such Taxes or charges which are being diligently contested
in good faith by appropriate proceedings and for which adequate
reserves shall in accordance with GAAP have been set aside on its
books;
(p) To the best of the knowledge of the Lessee, after reasonable
inquiry, the Lessee and each Subsidiary is in material compliance with
all Environmental Laws and Occupational Safety and Health Laws where
failure to comply could have a Material Adverse Effect. Neither the
Lessee nor any of its Subsidiaries has received notice of any claims
that any of them is not in compliance in all material respects with any
Environmental Law where failure to comply could have a Material Adverse
Effect;
(q) The Lessee and each of its Subsidiaries is in compliance with all
statutes, judicial and administrative orders, permits and governmental
rules and regulations which are material to its business except for
such non-compliance as would not have a Material Adverse Effect;
(r) No financial statement, document, certificate or other written
communication furnished to the Agent, the Owner Trustee, any Lender or
any Holder by or on behalf of the Lessee or any Consolidated Entity, or
to the extent not a Consolidated Entity any Subsidiary, in connection
with any Operative Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading. There is no fact
known to the Lessee that materially adversely affects the business or
condition of the Lessee or any Material Group that has not been
disclosed herein or in such financial statements;
(s) Each of the Arizona Ground Lease Documents has been duly executed
and delivered by each of the parties thereto and constitute the legal,
valid and binding obligation enforceable against each such party in
accordance with the terms thereof;
(t) The Properties consist of (i) Land and existing Improvements
thereon which Improvements are suitable for occupancy and (ii)
Equipment;
16
(u) Each of the Deeds, the Memoranda of Lease and the Mortgages has
been recorded with, or delivered for recording to, the appropriate
Governmental Authorities;
(v) Upon recording, each of the Mortgage Instruments and the Memorandum
of Lease will constitute a valid and perfected first lien on the
Property described thereto in an amount not less than the Loans,
subject only to the Permitted Exceptions;
(w) Upon filing of each of the UCC Financing Statements (with respect
to each Property) in the filing offices designated by the Lessee, such
UCC Financing Statements will have been filed with the appropriate
Governmental Authorities in order to perfect a security interest in the
Property described therein (to the extent perfection can be obtained by
filing under the UCC);
(x) Upon filing in the filing offices designated by the Lessee, the
Lender Financing Statements, together with an assignment to the Agent
of the filed Lessor Financing Statements, will perfect a valid first
priority security interest (in favor of the Agent, for the benefit of
itself, the Lenders and the Holders) in the Properties and other
collateral described therein in which a security interest or mortgage
can be perfected by filing under the UCC, and upon filing, the Lessor
Financing Statements will protect Lessor's interest under the Lease to
the extent the Lease is a security agreement and mortgage;
(y) No portion of any Property is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or
other applicable agency, or if any Property is located in an area
identified as a special flood hazard area by any such agency, then
flood insurance has been obtained for the Property in accordance with
Section 14.2(b) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended;
(z) None of the Properties consists of Tangible Personal Property;
(aa) The Lessee has obtained insurance coverage for each Property which
meets the requirements of Article XIV of the Lease and all of such
coverage is in full force and effect;
(bb) The Properties comply with all Legal Requirements (including,
without limitation, all zoning and land use laws and Environmental
Laws), except to the extent that failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect;
(cc) All consents, licenses, permits, authorizations, assignments and
building permits required, as of the Closing Date, by a Legal
Requirement or pursuant to the terms of any contract, indenture,
instrument or agreement for construction, completion, occupancy,
operation, leasing or subleasing of the Properties have been obtained
and are in full force and effect, except to the extent that the failure
to so obtain would not, individually or in the aggregate, have a
Material Adverse Effect;
(dd) All Improvements comply with all applicable Legal Requirements and
Insurance Requirements (including, without limitation, all zoning and
land use laws and
17
Environmental Laws), except to the extent the failure to comply
therewith would not, individually or in the aggregate, have a Material
Adverse Effect. Such Improvements do not encroach in any manner onto
any adjoining land (except as permitted by express written easements)
and such Improvements and the use thereof by the Lessee and its agents,
assignees, employees, invitees, lessees, licensees and tenants comply
in all respects with all applicable Legal Requirements (including,
without limitation, all applicable Environmental Laws and building,
planning, zoning and fire codes), except to the extent the failure to
comply therewith would not, individually or in the aggregate, have a
Material Adverse Effect. There are no material defects to such
Improvements including, without limitation, the plumbing, heating, air
conditioning and electrical systems thereof and all water, sewer,
electric, gas, telephone and drainage facilities and all other
utilities required to adequately service such Improvements for their
intended use are available pursuant to adequate permits (including any
that may be required under applicable Environmental Laws), except to
the extent that failure to obtain any such permit would not,
individually or in the aggregate, have a Material Adverse Effect. There
is no action, suit or proceeding (including any proceeding in
condemnation or eminent domain or under any Environmental Law) pending
or, to the best knowledge of the Lessee, threatened which adversely
affects the title to, or the use, operation or value of, the
Properties. No fire or other casualty with respect to the Properties
has occurred which has had a Material Adverse Effect. All utilities
serving the Properties are located in and vehicular access to such
Improvements is provided by (or will be provided by), either public
rights-of-way abutting each related Property or Appurtenant Rights. All
licenses, approvals, authorizations, consents, permits (including,
without limitation, building, demolition and environmental permits,
licenses, approvals, authorizations and consents), easements and
rights-of-way, including proof of dedication, required for (i) the use,
treatment, storage, transport, disposal or disposition of any Hazardous
Substance on, at, under or from the real property underlying such
Improvements during the use and operation of such Improvements, and
(ii) the use and operation of such Improvements with the applicable
Equipment which such Improvements support for the purposes for which
they were intended have been obtained from the appropriate Governmental
Authorities or from private parties, as the case may be;
(ee) Construction of Improvements has been performed in a good and
workmanlike manner in compliance with all Insurance Requirements and
Legal Requirements, except to the extent noncompliance with any Legal
Requirements would not, individually or in the aggregate, have a
Material Adverse Effect;
(ff) The Improvements are wholly within any building restriction lines
(unless consented to by applicable Government Authorities), however
established;
(gg) The Advance is secured by the Lien of the Security Documents, and
the Lessee has not received any notice of, or taken any action to
incur, any Lien against the applicable Improvements other than
Permitted Liens;
(hh) All conditions precedent contained in this Agreement and in the
other Operative Agreements relating to the Closing Date have been
substantially satisfied; and
18
(ii) All utility services and facilities necessary for the use of the
Improvements (including gas, electrical, water and sewage services and
facilities) are available to the Properties.
7.4 Representations and Warranties of the Agent.
Effective as of the Closing Date, the Agent represents and warrants
to each of the other parties hereto that:
(a) It has the full power and authority to enter into and perform its
obligations under this Agreement and each other Operative Agreement to
which it is or will be a party;
(b) The execution, delivery and performance by the Agent of this
Agreement and each other Operative Agreement to which it is or will be
a party are not, and will not be, inconsistent with the charter
documents of the Agent, do not and will not contravene any applicable
Law of the State of Connecticut or of the United States of America
governing its activities and will not contravene any provision of, or
constitute a default under any indenture, mortgage, contract or other
instrument to which it is a party or by which it or its properties are
bound, or require any consent or approval of any Governmental Authority
under any applicable law, rule or regulation of the State of
Connecticut or any federal law, rule or regulation of the United States
of America governing its activities;
(c) Each of this Agreement and each other Operative Agreement to which
it is a party has been, or when executed and delivered will be, duly
authorized by all necessary corporate action on the part of the Agent
and has been, or on such Closing Date will be, duly executed and
delivered by the Agent and, assuming the due authorization, execution
and delivery hereof and thereof by the other parties hereto and
thereto, will constitute a legal, valid and binding obligation
enforceable against the Agent in accordance with the terms thereof; and
(d) Except as otherwise contemplated by the Operative Agreements, the Agent
shall not, nor shall it direct the Owner Trustee to, use the proceeds
of any Loan for any purpose other than the payment of Transaction
Expenses and the fees, expenses and other disbursements referenced in
Section 9.1 of this Agreement.
SECTION 8. INTENTIONALLY DELETED.
SECTION 9. PAYMENT OF CERTAIN EXPENSES.
9.1 Transaction Expenses.
Lessee agrees on the Closing Date, to pay, or cause to be paid, all
reasonable fees, expenses and disbursements of the various legal counsels for
the Lessor and the Agent in connection with the transactions contemplated by the
Operative Agreements and incurred in connection with the Closing Date, including
all Transaction Expenses, all fees, expenses and disbursements incurred with
respect to the various items referenced in Sections 5.3 (including without
limitation the cost of any Appraisals or environmental site assessments, any
developer's fees, any premiums for title insurance policies and charges for any
updates to such policies) and
19
all other reasonable fees, expenses and disbursements in connection with the
Closing Date, and including, without limitation, all expenses relating to and
all fees (including brokers' fees), taxes (including any and all stamp, transfer
or similar taxes) and expenses for the recording, registration and filing of
documents.
9.2 Certain Fees and Expenses.
The Lessee agrees to pay or cause to be paid (i) the initial and
annual Owner Trustee's fee and all reasonable expenses of the Owner Trustee and
any necessary co-trustees (including without limitation reasonable counsel fees
and expenses) or any successor owner trustee, for acting as owner trustee under
the Trust Agreement, (ii) all reasonable costs and expenses incurred by the
Lessee, the Agent, the Lenders, the Holders or the Lessor (including without
limitation reasonable counsel fees and expenses) in entering into any actual or
proposed future amendments or supplements requested by the Lessee with respect
to any of the Operative Agreements, whether or not such amendments or
supplements are ultimately entered into, or giving or withholding of waivers of
consents hereto or thereto which have been requested by the Lessee, and (iii)
all reasonable costs and expenses incurred by the Lessor, the Lessee, the
Holders, the Lenders or the Agent in connection with the enforcement of any
Operative Agreement or any exercise of remedies under any Operative Agreement or
any purchase of the Property by the Lessee pursuant to Article XX of the Lease.
SECTION 10. OTHER COVENANTS AND AGREEMENTS.
10.1 Cooperation with the Lessee.
The Holders, the Owner Trustee (at the direction of the Holders)
and the Agent shall, to the extent reasonably requested by the Lessee (but
without assuming additional liabilities on account thereof), at the Lessee's
expense, cooperate with the Lessee in connection with its covenants contained
herein including, without limitation, at any time and from time to time, upon
the request of the Lessee, promptly and duly executing and delivering any and
all such further instruments, documents and financing statements (and
continuation statements related thereto) as the Lessee may reasonably request in
order to perform such covenants.
10.2 Covenants of the Owner Trustee and the Holders.
Each of the Owner Trustee and each of the Holders, each
individually and not jointly, hereby agree that so long as this Agreement is in
effect:
(a) None of the Holders and the Owner Trustee (both in its trust
capacity and in its individual capacity) will create or permit to exist
at any time, and each of the Holders and the Owner Trustee will, at its
own cost and expense, promptly take such action (and notify Lessee of
such action) as may be necessary duly to discharge, or to cause to be
discharged, all Lessor Liens attributable to it on the Properties;
provided, however, that the Holders and the Owner Trustee shall not be
required to discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently
prosecuted so long as (a) such proceedings shall not involve any
material danger of impairment of the Liens of the Security Documents or
of the sale, forfeiture or loss of, the Properties or title thereto or
any interest therein or the payment of Rent, and
20
(b) such proceedings shall not materially interfere with the
disposition of any Property or title thereto or interest therein or the
payment of Rent or the possession and use of the Properties by the
Lessee;
(b) Without prejudice to any right of the Owner Trustee under the Trust
Agreement to resign (subject to the requirement set forth in the Trust
Agreement that such resignation shall not be effective until a
successor shall have agreed to accept such appointment), or the
Holders' rights under the Trust Agreement to remove the institution
acting as Owner Trustee (after consent to such removal by the Agent as
provided in the Trust Agreement), each of the Holders and the Owner
Trustee hereby agrees with the Lessee and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of
the Trust Agreement in such a manner as to adversely affect the rights
of the Lessee or the Agent without the prior written consent of such
party and (iii) to comply with all of the terms of the Trust Agreement,
the nonperformance of which would adversely affect any such party;
(c) The Owner Trustee or any successor may resign or be removed by the
Holders as Owner Trustee, a successor Owner Trustee may be appointed
and a corporation may become the Owner Trustee under the Trust
Agreement, only in accordance with the provisions of Article IX of the
Trust Agreement and, with respect to such appointment, with the consent
of the Lessee, which consent shall not be unreasonably withheld,
conditioned or delayed;
(d) The Owner Trustee, in its capacity as Owner Trustee under the Trust
Agreement, and not in its individual capacity, shall not contract for,
create, incur or assume any indebtedness, or enter into any business or
other activity, other than pursuant to or under the Operative
Agreements;
(e) The Holders will not instruct the Owner Trustee to take any action
in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i) commence any
case, proceeding or other action with respect to the Owner Trustee
under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official with respect to
the Owner Trustee or for all or any substantial benefit of the
creditors of the Owner Trustee; and neither any Holder nor the Owner
Trustee shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee and the
Agent if the Owner Trustee's chief place of business or chief executive
office, or the office where the records concerning the accounts or
contract rights relating to any Property are kept, shall cease to be
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or if it
shall change its name;
21
(h) Provided that no Lease Default or Lease Event of Default has
occurred and is continuing, neither the Owner Trustee nor any Holder
shall, without the prior written consent of the Lessee, consent to or
permit any amendment, supplement or other modification of the terms and
provisions of the Credit Agreement or the Notes;
(i) Neither the Owner Trustee nor any Holder shall consent to or permit
any amendment, supplement or other modification of the terms and
provisions of any Operative Agreement, in each case without the prior
written consent of the Agent except as described in Section 10.5 of
this Agreement; and
(j) The Owner Trustee (i) shall take such actions and shall refrain
from taking such actions with respect to the Operative Agreements or
the Properties and shall grant such approvals and otherwise act or
refrain from acting with respect to the Operative Agreements or the
Properties in each case as directed in writing by the Agent or, to the
extent required by Section 10.5 hereof, the Lessee, notwithstanding any
contrary instruction or absence of instruction by any Holder or
Holders; and (ii) shall not take any action, grant any approvals or
otherwise act under or with respect to the Operative Agreements or any
matters relating to the Properties without first obtaining the prior
written consent of the Agent (and without regard to any contrary
instruction or absence of instruction by any Holder); provided,
however, that notwithstanding the foregoing provisions of this
subparagraph (j) the Owner Trustee, the Agent and the Holders each
acknowledge, covenant and agree that, with respect to all matters under
the Operative Agreements that require the consent or concurrence of all
of the Lenders pursuant to the terms of Section 9.1 of the Credit
Agreement (the "Unanimous Vote Matters"), neither the Owner Trustee nor
the Agent shall act or refrain from acting with respect to any
Unanimous Vote Matter until such party has received the approval of
each Lender and each Holder with respect thereto.
10.3 Lessee Covenants, Consents, Acknowledgments and Representation.
(a) Lessee acknowledges and agrees that the Owner Trustee, pursuant to
the terms and conditions of the Security Agreement and the Mortgage
Instruments, shall create Liens respecting the various personal
property, fixtures and real property described therein in favor of the
Agent. Lessee hereby irrevocably consents to the creation, perfection
and maintenance of such Liens;
(b) Lessor hereby instructs Lessee, and Lessee hereby acknowledges and
agrees, that until such time as the Loans are paid in full and the
Liens evidenced by the Security Agreement and the Mortgage Instruments
have been released, (i) any and all Rent and any and all other amounts
of any kind or type under any of the Operative Agreements due and owing
or payable to the Lessor or the Owner Trustee shall instead be paid
directly to the Agent or as the Agent may direct from time to time and
(ii) Lessee shall cause all notices, certificates, financial
statements, communications and other information which is delivered, or
is required to be delivered, to the Lessor, the Owner Trustee or any
Holder also to be delivered at the same time to the Agent;
22
(c) Lessee shall not consent to or permit any amendment, supplement or
other modification of the terms or provisions of any Operative
Agreement without, in each case, obtaining the prior written consent of
the Agent and, to the extent required by the proviso at the end of
Section 10.2(j) hereof, each of the Holders;
(d) Except as otherwise contemplated by the Operative Agreements,
neither the Owner Trustee nor the Lessee has used or shall use the
proceeds of any Holder Advance for any purpose other than the payment
of (i) the Property Cost and (ii) Transaction Expenses and the fees,
expenses and other disbursements referenced in Section 9.1 of this
Agreement;
(e) The Lessee shall not permit any of the Property to consist of
Tangible Personal Property; and, without limiting the generality of the
first clause of this paragraph (e), the Lessee shall not permit the
aggregate Property Cost of any "Personal Property" (as defined in the
Arizona Ground Lease) located at, or included in, the Arizona Property
to exceed $3,000,000;
(f) The Lessee covenants and agrees that aggregate appraised enterprise
value of all Properties as shown in the most recent Appraisals of each
Property received by the Agent pursuant to Section 5.3 or otherwise
shall at all times be greater than or equal to 50% of the aggregate
Property Cost of all Properties; and any Appraisal obtained to comply
with this provision shall be at the Lessee's sole cost and expense; and
to confirm compliance with this provision, the Lessee expressly agrees
to provide an Appraisal to the Agent from time to time at the request
of the Agent within sixty (60) days of such request, at the expense of
Lessee, but not more often than once per calendar year;
(g) The Lessee agrees to perform each of the Incorporated Covenants and
any other covenants set forth in (or incorporated by reference into)
Article XXVIII of the Lease, in accordance with their respective terms;
(h) The Lessee shall not create or permit to exist at any time (and the
Lessee shall, at its own expense, take such action as may be necessary
to duly discharge, or cause to be discharged) any Lien against any
Property other than Permitted Liens and Lessor Liens;
(i) The Lessee has performed or has caused to be performed all actions
recommended or required by the Environmental Reports, or has undertaken
to perform such actions, such performance to be reasonably satisfactory
to the Agent;
(j) The Lessee shall pay (when and as due) any fees pursuant to the Fee
Letter; and
(k) The Lessee agrees that the provisions of the Fee Letter or any
other letter entitling any Lender to fees to be paid by Lessee shall
remain in full force and effect after the Closing Date.
10.4 Sharing of Certain Payments.
The parties hereto acknowledge and agree that all payments due and
owing by the Lessee to the Lessor under the Lease or any of the other Operative
Agreements shall be made by
23
the Lessee directly to the Agent as more particularly provided in Section 10.3
hereof. The Holders and the Agent, on behalf of the Lenders, acknowledge the
terms of Section 8 of the Credit Agreement regarding the allocation of payments
and other amounts made or received from time to time under the Operative
Agreements and agree all such payments and amounts are to be allocated as
provided in Section 8 of the Credit Agreement. In connection therewith the
Holders hereby (a) appoint the Agent to act as collateral agent for the Holders
in connection with the Lien granted by the Mortgage Instruments and other
Security Documents to secure the Holder Amount and (b) acknowledge and agree and
direct that the rights and remedies of the beneficiaries of the Lien of the
Mortgage Instruments and other Security Documents shall be exercised by the
Agent on behalf of the Lenders and the Holders as directed from time to time by
the Lenders without notice to or consent from the Holders.
10.5 Grant of Easements, etc.
The Agent and the Holders hereby agree that, so long as no Event
of Default shall have occurred and be continuing, and until such time as the
Agent gives instructions to the contrary to the Owner Trustee, the Owner Trustee
shall, from time to time at the request of the Lessee, in connection with the
transactions contemplated by the Lease or the other Operative Agreements, (i)
grant easements and other rights in the nature of easements with respect to any
Property, (ii) release existing easements or other rights in the nature of
easements which are for the benefit of any Property, (iii) execute and deliver
to any Person any instrument appropriate to confirm or effect such grants or
releases, and (iv) execute and deliver to any Person such other documents or
materials in connection with the operation of any Property, including, without
limitation, reciprocal easement agreements, operating agreements, development
agreements, plats, replats or subdivision documents; provided, that each of the
agreements and documents referred to in this Section 10.5 shall be of the type
normally executed by the Lessee in the ordinary course of the Lessee's business,
or consistent with local practice or as required by local Governmental
Authorities, and shall be on commercially reasonable terms so as not to diminish
the value of any Property in any material respect.
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT.
11.1 Lessee's Credit Agreement Rights.
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Agent, the Lessee and the Owner Trustee hereby agree that, prior
to the occurrence and continuation of any Lease Default or Lease Event of
Default the Lessee (as designated below) shall have the following rights:
(a) The Lessee shall have the right to give the notice referred to in
Section 2.3 of the Credit Agreement, to designate the account to which
a borrowing under the Credit Agreement is to be credited pursuant to
Section 2.3 of the Credit Agreement;
(b) the Lessee shall have the right to exercise the conversion and
continuation options pursuant to Section 2.7 of the Credit Agreement;
(c) the Lessee shall have the right to approve any successor agent
pursuant to Section 7.8 of the Credit Agreement;
24
(d) the Lessee shall have the right to consent to any assignment by a
Lender to which the Lessor has the right to consent pursuant to Section
9.8 of the Credit Agreement; and
(e) without limiting the foregoing clauses (a) through (d), and in
addition thereto, provided that no Event of Default then exists, the
Lessee shall have the right to exercise any other right of the Owner
Trustee under the Credit Agreement upon not less than five (5) Business
Days' prior written notice from the Lessee to the Owner Trustee and the
Agent.
11.2 Lessee's Trust Agreement Rights.
Notwithstanding anything to the contrary contained in the
Trust Agreement, the Lessee, the Owner Trustee and the Holders hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default the Lessee (as designated below) shall have the following
rights:
(a) the Lessee shall have the right to exercise the conversion and
continuation options pursuant to Section 3.8 of the Trust Agreement;
(b) no removal of the Owner Trustee and appointment of a successor
Owner Trustee pursuant to Section 9.1 of the Trust Agreement shall be
made without the prior written consent (not to be unreasonably withheld
or delayed) of the Lessee; and
(c) the Holders and the Owner Trustee shall not amend, supplement or
otherwise modify any provision of the Trust Agreement in such a manner
as to adversely affect the rights of the Lessee without the prior
written consent (not to be unreasonably withheld or delayed) of the
Lessee.
SECTION 12. TRANSFER OF INTEREST.
12.1 Restrictions on Transfer.
The Holders may, directly or indirectly, assign, convey or
otherwise transfer any of their right, title or interest in or to the Trust
Estate or the Trust Agreement with the prior written consent of the Agent, and
(provided no Default or Event of Default has occurred and is continuing) the
Lessee (which consent in each case shall not be unreasonably withheld or
delayed); provided that such consents shall not be required for an assignment to
a Lender or an affiliate of a Lender. The Owner Trustee may, subject to the Lien
of the applicable Security Documents, but only with the prior written consent of
the Agent, the Holders (which consent may be withheld by the Agent or the
Holders in their sole discretion) and (provided no Default or Event of Default
has occurred and is continuing) the Lessee, directly or indirectly, assign,
convey, appoint an agent with respect to enforcement of, or otherwise transfer
any of the Owner Trustee's right, title or interest in or to any Property, the
Lease, the Trust Agreement, this Agreement (including, without limitation, any
right to indemnification thereunder), or any other document relating to a
Property or any interest in a Property as provided in the Trust Agreement and
the Lease. The provisions of the immediately preceding sentence shall not apply
to the obligations of the Owner Trustee to transfer the Properties to the Lessee
or a third party
25
purchaser pursuant to Article XXII of the Lease upon payment for such Properties
in accordance with each of the terms and conditions of the Lease.
12.2 Effect of Transfer.
From and after any transfer effected in accordance with this
Section 12, the transferor shall be released, to the extent of such transfer,
from its liability hereunder and under the other documents to which it is a
party in respect of obligations to be performed on or after the date of such
transfer; provided, however, that any transferor Holder shall remain liable
under Article XI of the Trust Agreement to the extent that the transferee Holder
shall not have assumed the obligations of the transferor Holder thereunder. Upon
any transfer by the Owner Trustee or a Holder as above provided, any such
transferee shall assume the obligations of the Owner Trustee and Lessor or the
obligations of a Holder, as the case may be, and shall be deemed an "Owner
Trustee", "Lessor" or "Holder", as the case may be, for all purposes of such
documents and each reference herein to the transferor shall thereafter be deemed
a reference to such transferee for all purposes, except as provided in the
preceding sentence. Notwithstanding any transfer of all or a portion of the
transferor's interest as provided in this Section 12, the transferor shall be
entitled to all benefits accrued and all rights vested prior to such transfer
including, without limitation, rights to indemnification under any such
document.
SECTION 13. INDEMNIFICATION.
13.1 General Indemnity.
(a) Whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and
agrees to defend, indemnify and hold harmless each Indemnified Person
on an After Tax Basis from and against any Claims which may be imposed
on, incurred by or asserted against an Indemnified Person by any other
Person in any way relating to or arising or alleged to arise out of the
execution, delivery, performance or enforcement of this Agreement, the
Lease or any other Operative Agreement or on or with respect to any
Property or any part thereof, including, without limitation, Claims in
any way relating to or arising or alleged to arise out of (i) the
financing, refinancing, purchase, acceptance, rejection, ownership,
design, construction, refurbishment, development, delivery, acceptance,
nondelivery, leasing, subleasing, possession, use, operation,
maintenance, repair, modification, transportation, condition, sale,
return, repossession (whether by summary proceedings or otherwise), or
any other disposition of any Property, or any part thereof, including
the acquisition, holding or disposition of any interest in any
Property, lease or agreement comprising a portion of any thereof; (ii)
any latent or other defect in any Property whether or not discoverable
by an Indemnified Person or the Indemnity Provider; (iii) any
Environmental Claim, any violation of Environmental Laws, or any other
loss of or damage to any Property or the environment relating to any
Property, the Lease or the Indemnity Provider; (iv) the Operative
Agreements, or any transaction contemplated thereby; (v) any breach by
the Lessee of any of its representations or warranties under the
Operative Agreements to which it is a party or failure by the Lessee to
perform or observe any covenant or agreement to be performed by it
under any of the Operative Agreements; (vi) the transactions
contemplated hereby or by any other Operative
26
Agreement, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA; (vii) any personal injury, death or property
damage, including without limitation Claims based on strict or absolute
liability in tort; (viii) any easement, right, agreement or document
referred to in Section 10.5 of this Agreement; or (ix) any Lien on any
Property (other than Liens created by the Operative Agreements). The
foregoing indemnity shall not apply to a Claim imposed on, incurred by
or asserted against an Indemnified Person to the extent such Claim
arises from the gross negligence or willful misconduct of such
Indemnified Person as determined by a final judgment of a court of
competent jurisdiction;
(b) If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person
(including a written notice of such proceeding) for any Claim, such
Indemnified Person shall promptly notify the Indemnity Provider in
writing and shall not take action with respect to such Claim without
the consent of the Indemnity Provider for thirty (30) days after the
receipt of such notice by the Indemnity Provider; provided, however,
that, in the case of any such Claim, if action shall be required by law
or regulation to be taken prior to the end of such 30-day period, such
Indemnified Person shall endeavor, in such notice to the Indemnity
Provider, to inform the Indemnity Provider of such shorter period, and
no action shall be taken with respect to such Claim without the consent
of the Indemnity Provider before seven (7) days before the end of such
shorter period; provided, further, that the failure of such Indemnified
Person to give the notices referred to in this sentence shall not
diminish the Indemnity Provider's obligation hereunder except to the
extent such failure materially precludes the Indemnity Provider from
contesting such Claim;
(c) If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person
has notified the Indemnity Provider is required by law or regulation
for the Indemnified Person to respond to such Claim), the Indemnity
Provider shall request in writing that such Indemnified Person respond
to such Claim, the Indemnified Person shall, at the expense of the
Indemnity Provider, in good faith conduct and control such action
(including, without limitation by pursuit of appeals) provided,
however, that (A) if such Claim can be pursued by the Indemnity
Provider on behalf of or in the name of such Indemnified Person, the
Indemnified Person, at the Indemnity Provider's request, shall allow
the Indemnity Provider to conduct and control the response to such
Claim and (B) in the case of any Claim, the Indemnified Person may
request the Indemnity Provider to conduct and control the response to
such Claim (with counsel to be selected by the Indemnity Provider and
consented to by such Indemnified Person, such consent not to be
unreasonably withheld, conditioned or delayed; provided however, that
any Indemnified Person may retain separate counsel at the expense of
the Indemnity Provider in the event of a conflict)) by, in the sole
discretion of the Person conducting and controlling the response to
such Claim, (1) resisting payment thereof, (2) not paying the same
except under protest, if protest is necessary and proper, (3) if the
payment be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4) taking such
other action as is reasonably requested by the Indemnity Provider from
time to time;
27
(d) The party controlling the response to any Claim shall consult in
good faith with the non-controlling party and shall keep the
non-controlling party reasonably informed as to the conduct of the
response to such Claim; provided, that all decisions ultimately shall
be made in the discretion of the controlling party, except that the
Indemnity Provider may not agree to any dismissal or settlement of, or
other agreement in connection with, any claim without the prior written
consent of such Indemnified Person, if such dismissal, settlement or
agreement would require any admission or acknowledgment of any
culpability or wrongdoing by such Indemnified Person or provide for any
nonmonetary relief to be performed by such Indemnified Person. The
parties agree that an Indemnified Person may at any time decline to
take further action with respect to the response to such Claim and may
settle such Claim if such Indemnified Person shall waive its rights to
any indemnity from the Indemnity Provider that otherwise would be
payable in respect of such Claim (and any future Claim, the pursuit of
which is precluded by reason of such resolution of such Claim) and
shall pay to the Indemnity Provider any amount previously paid or
advanced by the Indemnity Provider pursuant to this Section 13.1 by way
of indemnification or advance for the payment of any amount regarding
such Claim other than expenses of the action relating to such Claim;
and
(e) Notwithstanding the foregoing provisions of this Section 13.1, an
Indemnified Person shall not be required to take any action and no
Indemnity Provider shall be permitted to respond to any Claim in its
own name or that of the Indemnified Person unless (i) the Indemnity
Provider shall have agreed to pay and shall pay to such Indemnified
Person on demand and on an After Tax Basis all reasonable costs, losses
and expenses that such Indemnified Person actually incurs in connection
with such Claim, including, without limitation, all reasonable legal,
accounting and investigatory fees and disbursements, (ii) the
Indemnified Person shall have reasonably determined that the action to
be taken will not result in any material danger of sale, forfeiture or
loss of any Property, or any part thereof or interest therein, will not
interfere with the payment of Rent, and will not result in risk of
criminal liability, (iii) if such Claim shall involve the payment of
any amount prior to the resolution of such Claim, the Indemnity
Provider shall provide to the Indemnified Person an interest-free
advance in an amount equal to the amount that the Indemnified Person is
required to pay (with no additional net after-tax cost to such
Indemnified Person), (iv) in the case of a Claim that must be pursued
in the name of an Indemnified Person (or an Affiliate thereof), the
Indemnity Provider shall have provided to such Indemnified Person an
opinion of independent counsel selected by the Indemnified Person and
reasonably satisfactory to the Indemnity Provider stating that a
reasonable basis exists to contest such Claim and (v) such claim is
covered by insurance and no Default or Event of Default shall have
occurred and be continuing. In addition, an Indemnified Person shall
not be required to contest any Claim in its name (or that of an
Affiliate) if the subject matter thereof shall be of a continuing
nature and shall have previously been decided adversely by a court of
competent jurisdiction pursuant to the contest provisions of this
Section 13.1, unless there shall have been a change in law (or
interpretation thereof) and the Indemnified Person shall have received,
at the Indemnity Provider's expense, an opinion of independent counsel
selected by the Indemnified Person and reasonably acceptable to the
Indemnity Provider stating that as a result of such change in law (or
interpretation thereof), it is more likely than not that the
Indemnified Person will prevail in such contest.
28
13.2 General Tax Indemnity.
(a) The Indemnity Provider shall pay and assume liability for, and does
hereby agree to indemnify, protect and defend each Property and all
Indemnified Persons, and hold them harmless against, all Impositions on
an After Tax Basis;
(b) (i) Subject to the terms of Section 13.2(f), the Indemnity Provider
shall pay or cause to be paid all Impositions directly to the taxing
authorities where feasible and otherwise to the Indemnified Person, as
appropriate, and the Indemnity Provider shall at its own expense, upon
such Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other satisfactory
proof evidencing such payment;
(ii) In the case of Impositions for which no contest is conducted
pursuant to Section 13.2(f) and which the Indemnity Provider pays
directly to the taxing authorities, the Indemnity Provider shall pay
such Impositions prior to the latest time permitted by the relevant
taxing authority for timely payment. In the case of Impositions for
which the Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after receipt by
the Indemnity Provider of demand by such Indemnified Person describing
in reasonable detail the nature of the Imposition and the basis for the
demand (including the computation of the amount payable). In the case
of Impositions for which a contest is conducted pursuant to Section
13.2(f), the Indemnity Provider shall pay such Impositions or reimburse
such Indemnified Person for such Impositions, to the extent not
previously paid or reimbursed pursuant to subsection (a), prior to the
latest time permitted by the relevant taxing authority for timely
payment after conclusion of all contests under Section 13.2(f).
(iii) Impositions imposed with respect to a Property for a billing
period during which the Lease expires or terminates with respect to
such Property (unless the Lessee has exercised the Purchase Option with
respect to such Property or the Lessee has otherwise purchased such
Property) shall be adjusted and prorated on a daily basis between the
Indemnity Provider and the Lessor, whether or not such Imposition is
imposed before or after such expiration or termination and each such
party shall pay its pro rata share thereof; and
(iv) At the Indemnity Provider's request, the amount of any
indemnification payment by the Indemnity Provider pursuant to
subsection (a) shall be verified and certified by an independent public
accounting firm mutually acceptable to the Indemnity Provider and the
Indemnified Person. The fees and expenses of such independent public
accounting firm shall be paid by the Indemnity Provider unless such
verification shall result in an adjustment in the Indemnity Provider's
favor of 15% or more of the payment as computed by the Indemnified
Person, in which case such fee shall be paid by the Indemnified Person;
(c) The Indemnity Provider shall be responsible for preparing and
filing any real and personal property or ad valorem tax returns with
respect to each Property. In case any other report or tax return shall
be required to be made with respect to any obligations of
29
the Indemnity Provider under or arising out of subsection (a) and of
which the Indemnity Provider has knowledge or should have knowledge,
the Indemnity Provider, at its sole cost and expense, shall notify the
relevant Indemnified Person of such requirement and (except if such
Indemnified Person notifies the Indemnity Provider that such
Indemnified Person intends to file such report or return) (A) to the
extent required or permitted by and consistent with Legal Requirements,
make and file in Indemnity Provider's name such return, statement or
report; and (B) in the case of any other such return, statement or
report required to be made in the name of such Indemnified Person,
advise such Indemnified Person of such fact and prepare such return,
statement or report for filing by such Indemnified Person or, where
such return, statement or report shall be required to reflect items in
addition to any obligations of the Indemnity Provider under or arising
out of subsection (a), provide such Indemnified Person at the Indemnity
Provider's expense with information sufficient to permit such return,
statement or report to be properly made with respect to any obligations
of the Indemnity Provider under or arising out of subsection (a). Such
Indemnified Person shall, upon the Indemnity Provider's request and at
the Indemnity Provider's expense, provide any data maintained by such
Indemnified Person (and not otherwise available to or within the
control of the Indemnity Provider) with respect to each Property which
the Indemnity Provider may reasonably require to prepare any required
tax returns or reports;
(d) If as a result of the payment or reimbursement by the Indemnity
Provider of any Imposition or other reasonable expenses of the Lessor
or the payment of any Transaction Expenses incurred in connection with
the transactions contemplated by the Operative Agreements, the Lessor,
the Holders, partners of any Holder, or shareholders of such partners
of a partnership which is a partner of such Holder, shall suffer a net
increase in any federal, state or local income tax liability, the
Indemnity Provider shall indemnify such Persons (without duplication of
any indemnification required by subsection (a)) on an After Tax Basis
for the amount of such increase. The calculation of any such net
increase shall take into account any current or future tax savings
(including any net operating loss carry-forward) realized or reasonably
expected to be realized by such Person in respect thereof, as well as
any interest, penalties and additions to tax payable by such Lessor, or
such Holder, or such Affiliate, in respect thereof;
(e) As between the Indemnity Provider on one hand, and the Lessor or
the Agent, any Lender or any Holder on the other hand, the Indemnity
Provider shall be responsible for, and the Indemnity Provider shall
indemnify and hold harmless the Lessor, the Agent, the Lenders and each
Holder (without duplication of any indemnification required by
subsection (a)) on an After Tax Basis against, any obligation for
United States or foreign withholding taxes imposed in respect of
payments on the Notes or Certificates or with respect to Rent payments
under the Lease (and, if the Lessor, the Agent, any Lender or any
Holder receives a demand for such payment from any taxing authority,
the Indemnity Provider shall discharge such demand on behalf of the
Lessor, the Agent, such Lender or such Holder); provided, however, that
the right of any Lender to make a claim for indemnification under this
Section 13.2(e) is subject to the compliance by such Lender with the
requirements of Section 2.13 of the Credit Agreement, but only to the
extent that such claim is attributable to noncompliance by such Lender
under such Section 2.13; and
30
(f) (i) If a written Claim is made against any Indemnified Person, or
if any proceeding shall be commenced against such Indemnified Person
(including a written notice of such proceeding), for any Impositions,
such Indemnified Person shall promptly notify the Indemnity Provider in
writing and shall not take action with respect to such Claim or
proceeding without the consent of the Indemnity Provider for thirty
(30) days after the receipt of such notice by the Indemnity Provider;
provided, however, that, in the case of any such Claim or proceeding,
if action shall be required by law or regulation to be taken prior to
the end of such 30-day period, such Indemnified Person shall, in such
notice to the Indemnity Provider, inform the Indemnity Provider of such
shorter period, and no action shall be taken with respect to such Claim
or proceeding without the consent of the Indemnity Provider before
seven (7) days before the end of such shorter period; provided,
further, that the failure of such Indemnified Person to give the
notices referred to this sentence shall not diminish the Indemnity
Provider's obligation hereunder except to the extent such failure
materially precludes the Indemnity Provider from contesting such Claim;
(ii) If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person
has notified the Indemnity Provider is required by law or regulation
for the Indemnified Person to commence such contest), the Indemnity
Provider shall request in writing that such Indemnified Person contest
such Imposition, the Indemnified Person shall, at the expense of the
Indemnity Provider, in good faith conduct and control such contest
(including, without limitation, by pursuit of appeals) relating to the
validity, applicability or amount of such Imposition (provided,
however, that (A) if such contest can be pursued independently from any
other proceeding involving a tax liability of such Indemnified Person,
the Indemnified Person, at the Indemnity Provider's request, shall
allow the Indemnity Provider to conduct and control such contest and
(B) in the case of any contest, the Indemnified Person may request the
Indemnity Provider to conduct and control such contest (with counsel to
be selected by the Indemnity Provider and consented to by such
Indemnified Person, such consent not to be unreasonably withheld,
conditioned or delayed; provided, however, that any Indemnified Person
may retain separate counsel at the expense of the Indemnity Provider in
the event of a conflict)) by, in the sole discretion of the Person
conducting and controlling such contest, (1) resisting payment thereof,
(2) not paying the same except under protest, if protest is necessary
and proper, (3) if the payment be made, using reasonable efforts to
obtain a refund thereof in appropriate administrative and judicial
proceedings, or (4) taking such other action as is reasonably requested
by the Indemnity Provider from time to time;
(iii) The party controlling any contest shall consult in good faith
with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of such contest; provided, that
all decisions ultimately shall be made in the sole discretion of the
controlling party. The parties agree that an Indemnified Person may at
any time decline to take further action with respect to the contest of
any Imposition and may settle such contest if such Indemnified Person
shall waive its rights to any indemnity from the Indemnity Provider
that otherwise would be payable in respect of such Imposition (and any
future Claim by any taxing authority, the contest of which is precluded
by reason of such resolution of such contest) and shall pay to the
Indemnity
31
Provider any amount previously paid or advanced by the Indemnity
Provider pursuant to this Section 13.2 by way of indemnification or
advance for the payment of any amount regarding such Imposition other
than expenses of such contest; and
(iv) Notwithstanding the foregoing provisions of this Section 13.2,
an Indemnified Person shall not be required to take any action and no
Indemnity Provider shall be permitted to contest any Imposition in its
own name or that of the Indemnified Person unless (A) the Indemnity
Provider shall have agreed to pay and shall pay to such Indemnified
Person on demand and on an After Tax Basis all reasonable costs, losses
and expenses that such Indemnified Person actually incurs in connection
with contesting such Imposition, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements,
(B) the Indemnified Person shall have reasonably determined that the
action to be taken will not result in any material danger of sale,
forfeiture or loss of any Property, or any part thereof or interest
therein, will not interfere with the payment of Rent, and will not
result in risk of criminal liability, (C) if such contest shall involve
the payment of the Imposition prior to or during the contest, the
Indemnity Provider shall provide to the Indemnified Person an
interest-free advance in an amount equal to the Imposition that the
Indemnified Person is required to pay (with no additional net after-tax
cost to such Indemnified Person), (D) in the case of a Claim that must
be pursued in the name of an Indemnified Person (or an Affiliate
thereof), the Indemnity Provider shall have provided to such
Indemnified Person an opinion of independent tax counsel selected by
the Indemnified Person and reasonably satisfactory to the Indemnity
Provider stating that a reasonable basis exists to contest such Claim
and (E) no Default or Event of Default shall have occurred and be
continuing. In addition, an Indemnified Person shall not be required to
contest any claim in its name (or that of an Affiliate) if the subject
matter thereof shall be of a continuing nature and shall have
previously been decided adversely by a court of competent jurisdiction
pursuant to the contest provisions of this Section 13.2, unless there
shall have been a change in law (or interpretation thereof) and the
Indemnified Person shall have received, at the Indemnity Provider's
expense, an opinion of independent tax counsel selected by the
Indemnified Person and reasonably acceptable to the Indemnity Provider
stating that as a result of such change in law (or interpretation
thereof), it is more likely than not that the Indemnified Person will
prevail in such contest.
13.3 Environmental Indemnity.
Without limiting the generality of the foregoing, whether or not
the transactions contemplated hereby shall be consummated, the Indemnity
Provider hereby assumes liability for and agrees to defend, indemnify and hold
harmless each Indemnified Person on an After Tax Basis from and against any
Claims which may be imposed on, incurred by or asserted against an Indemnified
Person by any other Person (but not to the extent such Claims arise from the
gross negligence or willful misconduct of such Indemnified Person as determined
by a final judgment of a court of competent jurisdiction) in any way relating to
or arising, or alleged (by any Person asserting such a Claim against an
Indemnified Person) to arise, out of any Environmental Claim, any violation of
Environmental Laws, or any other loss of or damage to any Property or the
environment (including without limitation the presence on any Property of
wetlands, tidelands or swamp or overflow lands, or any condition arising from
32
or affecting any Property or arising from or affecting any lands nearby or
adjacent to any Property that has or threatens to have any adverse effect upon
human health or the environment at any Property or upon the use or value of such
Property), in each case relating to any Property, the Lease or the Indemnity
Provider.
SECTION 14. MISCELLANEOUS.
14.1 Survival of Agreements.
The representations, warranties, covenants, indemnities and
agreements of the parties provided for in the Operative Agreements, and the
parties' obligations under any and all thereof, shall survive the execution and
delivery of this Agreement, the transfer of any Property to the Owner Trustee,
the acquisition of any additional Equipment, the construction of any additional
Improvements, any disposition of any interest of the Owner Trustee in any
Property or any interest of the Holders in the Owner Trust, the payment of the
Notes and any disposition thereof, and shall be and continue in effect
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions or conditions of
any of the Operative Agreements. Except as otherwise expressly set forth herein
or in other Operative Agreements, the indemnities of the parties provided for in
the Operative Agreements shall survive the expiration or termination of any
thereof.
14.2 No Broker, etc.
Each of the parties hereto represents to the others that it has
not retained or employed any broker, finder or financial adviser to act on its
behalf in connection with this Agreement, nor has it authorized any broker,
finder or financial adviser retained or employed by any other Person so to act.
Any party who is in breach of this representation shall indemnify and hold the
other parties harmless from and against any liability arising out of such breach
of this representation.
14.3 Notices.
Unless otherwise specifically provided herein, all notices,
consents, directions, approvals, instructions, requests and other communications
required or permitted by the terms hereof to be given to any Person shall be
given in writing by United States certified or registered mail (postage
prepaid), by nationally recognized courier service, by hand or by telecopy with
confirming notice and any such notice shall become effective upon receipt and
shall be directed to the address of such Person as indicated:
If to the Lessee, to it at the following address:
HEALTHSOUTH Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
33
With a copy to:
HEALTHSOUTH Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to UBS AG, Stamford Branch, as a Holder or a Lender, to it at the following
address:
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇)▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
if to any other Holder, to it at the address set forth for such Holder on each
Holder's Holder Addendum hereto or in the applicable Assignment and Assumption;
If to any other Lender, to it at the address for notice set forth on such
Lender's Lender Addendum hereto or in the applicable Assignment and Assumption,
the form of which is attached as a schedule to the Credit Agreement;
If to the Agent, to it at the following address:
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇)▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
with all notices of borrowing, conversion, continuation or prepayment of any
Loan to be delivered to the address set forth in Section 9.2 of the Credit
Agreement.
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From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
14.4 Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
14.5 Amendments and Termination.
Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified except by an instrument in
writing signed by the Lessor, the Lessee and (subject to Section 9.1 of the
Credit Agreement) the Agent. This Agreement may be terminated by an agreement
signed in writing by the Owner Trustee, the Holders, the Lenders, the Lessee and
the Agent.
14.6 Headings, etc.
The Table of Contents and headings of the various Articles and
Sections of this Agreement are for convenience of reference only and shall not
modify, define, expand or limit any of the terms or provisions hereof.
14.7 Parties in Interest.
Except as expressly provided herein, none of the provisions of
this Agreement are intended for the benefit of any Person except the parties
hereto; provide, that the Lenders are intended to be third-party beneficiaries
of this Agreement.
14.8 GOVERNING LAW; WAIVERS OF JURY TRIAL.
(i) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(ii) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THERETO.
14.9 Submission to Jurisdictions Waivers.
Each of the parties hereto irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative
Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
35
jurisdiction of the courts of the State of New York and the courts of
the United States located in the Southern District of New York and
appellate courts thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail) postage prepaid, to the
respective party at its address set forth in Section 14.3 hereof or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred
to in this Section 14.9 any special, exemplary, punitive or
consequential damages.
14.10 Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render such provision unenforceable in any
other jurisdiction.
14.11 Liability Limited.
(a) The Agent, the Lessee and the Holders each acknowledge and agree
that the Owner Trustee is (except as otherwise expressly provided
herein or therein) entering into this Agreement and the other Operative
Agreements to which it is a party (other than the Trust Agreement and
other than as set forth in Section 7.2 of this Agreement), solely in
its capacity as trustee under the Trust Agreement and not in its
individual capacity and that Trust Company shall not be liable or
accountable under any circumstances whatsoever in its individual
capacity for or on account of any statements, representations,
warranties, covenants or obligations stated to be those of the Owner
Trustee, except for its own gross negligence or willful misconduct and
except as otherwise expressly provided herein or in the other Operative
Agreements.
(b) Anything to the contrary contained in this Agreement, the Credit
Agreement, the Notes or in any other Operative Agreement
notwithstanding, neither the Lessor nor any Holder (in its capacity as
a Holder) nor any officer, director, shareholder, or partner thereof,
nor any of the successors or assigns of the foregoing (all such Persons
being hereinafter referred to collectively as the "Exculpated
Persons"), shall be personally liable in any respect for any liability
or obligation hereunder or under any other Operative
36
Agreement including the payment of the principal of, or interest on,
the Notes, or for monetary damages for the breach of performance of any
of the covenants contained in the Credit Agreement, the Notes, this
Agreement, the Security Agreement or any of the other Operative
Agreements. The Agent (for itself and on behalf of the Lenders) agrees
that, in the event the Agent or any Lender pursues any remedies
available to them under the Credit Agreement, the Notes, this
Agreement, the Security Agreement, the Mortgage Instruments or under
any other Operative Agreement, neither the Lenders nor the Agent shall
have any recourse against any Exculpated Person, for any deficiency,
loss or Claim for monetary damages or otherwise resulting therefrom,
and recourse shall be had solely and exclusively against the Trust
Estate and the Lessee (with respect to the Lessee's obligations under
the Lease, the Participation Agreement and any other Operative
Agreement); but nothing contained herein shall be taken to prevent
recourse against or the enforcement of remedies against the Trust
Estate in respect of any and all liabilities, obligations and
undertakings contained herein, in the Credit Agreement, in the Notes,
in the Security Agreement, the Mortgage Instruments or in any other
Operative Agreement. Notwithstanding the provisions of this Section,
nothing in this Agreement, the Credit Agreement, the Notes, the
Security Agreement, the Mortgage Instruments or any other Operative
Agreement shall: (i) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Notes or arising under this
Agreement, the Security Agreement, the Mortgage Instruments or the
Credit Agreement or secured by the Security Agreement, the Mortgage
Instruments or any other Operative Agreement, but the same shall
continue until paid or discharged; (ii) relieve the Lessor or any
Exculpated Person from liability and responsibility for (but only to
the extent of the damages arising by reason of): (a) active waste
knowingly committed by such Lessor or such Exculpated Person with
respect to the Properties or (b) any fraud, gross negligence, willful
misconduct or willful breach as determined by a final judgment of a
court of competent jurisdiction, on the part of such Lessor or such
Exculpated Person; (iii) relieve such Lessor or such Exculpated Person
from liability and responsibility for (but only to the extent of the
moneys misappropriated, misapplied or not turned over) (a)
misappropriation or misapplication by such Lessor (i.e., application in
a manner contrary to any Operative Agreement) of any insurance proceeds
or condemnation award paid or delivered to such Lessor by any Person
other than the Agent or (b) any rents or other income received by such
Lessor from the Lessee that are not turned over to the Agent; or (iv)
affect or in any way limit the Agent's rights and remedies under any
Operative Agreement with respect to the Rents and its rights thereunder
or its right to obtain a judgment against the Lessor's interest in the
Properties.
14.12 Rights of Lessee.
Notwithstanding any provision of the Operative Agreements, if at
any time all obligations (i) of the Owner Trustee under the Credit Agreement,
the Security Documents, the Trust Agreement and the other Operative Agreements
and (ii) of the Lessee under the Operative Agreements have in each case been
satisfied or discharged in full, then the Lessee shall be entitled to (a)
terminate the Lease and (b) receive all amounts then held under the Operative
Agreements and all proceeds with respect to any of the Properties. Upon the
termination of the Lease pursuant to the foregoing clause (a), the Lessor shall
transfer to the Lessee all of its right, title and interest free and clear of
the Lien of the Lease and all Lessor Liens in and to the
37
Properties and any amounts or proceeds referred to in the foregoing clause (b)
shall be paid over to the Lessee.
14.13 Further Assurances.
The parties hereto shall promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of the Lessee, all such further
acts, conveyances, documents and assurances as the other parties may from time
to time reasonably request in order to carry out and effectuate the intent and
purposes of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected). The Lessee, at its own
expense and without need of any prior request from any other party, shall take
such action as may be necessary (including any action specified in the preceding
sentence), or (if Owner Trustee shall so request) as so requested, in order to
maintain and protect all security interests provided for hereunder or under any
other Operative Agreement.
14.14 Calculations under Operative Agreements.
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Owner Trustee
shall be made by the Agent and that such calculations and determinations shall
be conclusive and binding on the parties hereto in the absence of manifest
error.
14.15 Confidentiality.
Each of the Owner Trustee, the Holders, the Agent and the Lenders
severally agrees to use reasonable efforts to keep confidential all non-public
information pertaining to the Lessee or its Subsidiaries which is provided to it
by the Lessee or its Subsidiaries, provided that nothing herein shall prohibit
the disclosure by any such Person of such information:
(a) to the extent such information is public when received by such
Person or becomes public thereafter due to the act or omission of any
party other than such Person;
(b) to the extent such information is independently obtained from a
source other than the Lessee or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
(c) to counsel, auditors or accountants retained by any such Person or
any Affiliates of any such Person provided they agree to keep such
information. confidential as if such Person or Affiliate were party to
this Agreement and to financial institution regulators, including
examiners of any Lender, the Agent or the Owner Trustee, any Holder or
any Affiliate in the course of examinations of such Persons;
38
(d) in connection with any litigation or the enforcement or
preservation of the rights of the Agent, the Owner Trustee, the Lessor,
any Lender or any Holder under the Operative Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including, without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over such Person; provided, however, that
such Person shall endeavor (if not otherwise prohibited by Law) to
notify the Lessee prior to any disclosure made pursuant to this clause
(e), except that no such Person shall be subject to any liability
whatsoever for any failure to so notify the Lessee;
(f) the Agent may disclose such information to the Owner Trustee, any
Lender or any Holder; or
(g) to the extent disclosure to any other financial institution or
other Person is appropriate in connection with any proposed or actual
(i) assignment or grant of a participation by any of the Lenders of
interests in the Credit Agreement or (ii) assignment by any Holder of
interests in the Trust Agreement to another Person.
14.16 Calculation of Rent, Interest, Holder Yield and Fees.
Except as otherwise expressly set forth in the Operative
Agreements, all calculation of Rent, interest, Holder Yield, Overdue Rate,
Holder Overdue Rate, Commitment Fees, or Holder Commitment Fees payable
hereunder shall be computed based on the actual number of days elapsed over a
year of 360 days.
14.17 Responsibilities and Liabilities.
The Joint Lead Arrangers, the Documentation Agent and the
Syndication Agent, in such respective capacities, shall have no
responsibilities, and shall incur no liabilities under this Agreement or any of
the Operative Agreements.
14.18 Holder and Lender Addenda.
Each Holder shall become a party to this Agreement by delivering
to the Administrative Agent a Holder Addendum, substantially in the form of
Exhibit H, duly executed by such Holder, the Owner Trustee and the
Administrative Agent. Each Lender shall become a party to this Agreement by
delivering to the Administrative Agent a Lender Addendum, substantially in the
form of Exhibit I, duly executed by such Lender, the Borrower and the
Administrative Agent.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
HEALTHSOUTH Corporation., as Lessee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, except as
expressly stated herein, but solely as
Owner Trustee under the HEALTHSOUTH
Corporation Trust 2000-1
By: /s/ Arge Pavlos
-------------------------------------
Name: Arge Pavlos
Title: Trust Officer
UBS AG, STAMFORD BRANCH, as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Title: Executive Director
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
40