EXHIBIT (10)-58
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LEASE AGREEMENT
Dated as of December 27, 2001
between
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not individually, but solely
as Owner Trustee for Digital Hospital Trust 2001-1,
as Lessor
and
HEALTHSOUTH MEDICAL CENTER, INC.,
as Lessee
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This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Secured Parties (the "Agent") under a Security
Agreement dated as of December 27, 2001, between State Street Bank and Trust
Company of Connecticut, National Association, not individually, but solely as
Owner Trustee for Digital Hospital Trust 2001-1 and the Agent, as amended,
modified, extended, supplemented, restated and/or replaced from time to time in
accordance with the applicable provisions thereof. This Lease Agreement has been
executed in several counterparts. To the extent, if any, that this Lease
Agreement constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no security
interest in this Lease Agreement may be created through the transfer or
possession of any counterpart other than the original counterpart containing the
receipt therefor executed by the Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I.........................................................................................................1
1.1 Definitions.....................................................................................1
1.2 Interpretation..................................................................................2
ARTICLE II........................................................................................................2
2.1 Property........................................................................................2
2.2 Lease Term......................................................................................2
2.3 Title...........................................................................................3
2.4 Lease Supplements...............................................................................3
ARTICLE III.......................................................................................................3
3.1 Rent............................................................................................3
3.2 Payment of Basic Rent...........................................................................4
3.3 Supplemental Rent...............................................................................4
3.4 Performance on a Non-Business Day...............................................................4
3.5 Rent Payment Provisions.........................................................................4
3.6 Payment of Cost Overruns........................................................................5
ARTICLE IV........................................................................................................5
4.1 Taxes; Utility Charges..........................................................................5
ARTICLE V.........................................................................................................5
5.1 Quiet Enjoyment.................................................................................5
ARTICLE VI........................................................................................................6
6.1 Net Lease.......................................................................................6
6.2 No Termination or Abatement.....................................................................6
ARTICLE VII.......................................................................................................7
7.1 Ownership of the Properties.....................................................................7
ARTICLE VIII......................................................................................................8
8.1 Condition of the Properties.....................................................................8
8.2 Possession and Use of the Properties............................................................9
8.3 Integrated Properties..........................................................................10
ARTICLE IX.......................................................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements and Manufacturer's Specifications
and Standards..................................................................................10
ARTICLE X........................................................................................................11
10.1 Maintenance and Repair; Return.................................................................11
10.2 Environmental Inspection.......................................................................12
ARTICLE XI.......................................................................................................13
11.1 Modifications..................................................................................13
ARTICLE XII......................................................................................................14
12.1 Warranty of Title..............................................................................14
ARTICLE XIII.....................................................................................................15
13.1 Permitted Contests Other Than in Respect of Indemnities........................................15
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal Requirements................16
ARTICLE XIV......................................................................................................16
14.1 Public Liability and Workers' Compensation Insurance...........................................16
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14.2 Permanent Hazard and Other Insurance...........................................................16
14.3 Coverage.......................................................................................17
ARTICLE XV.......................................................................................................18
15.1 Casualty and Condemnation......................................................................18
15.2 Environmental Matters..........................................................................20
15.3 Notice of Environmental Matters................................................................21
ARTICLE XVI......................................................................................................22
16.1 Termination Upon Certain Events................................................................22
16.2 Procedures.....................................................................................22
ARTICLE XVII.....................................................................................................22
17.1 Lease Events of Default........................................................................22
17.2 Surrender of Possession........................................................................26
17.3 Reletting......................................................................................27
17.4 Damages........................................................................................27
17.5 Power of Sale..................................................................................28
17.6 Final Liquidated Damages.......................................................................28
17.7 Environmental Costs............................................................................28
17.8 Waiver of Certain Rights.......................................................................29
17.9 Assignment of Rights Under Contracts...........................................................29
17.10 Remedies Cumulative............................................................................29
17.11 Limitation Regarding Certain Lease Events of Default...........................................29
ARTICLE XVIII....................................................................................................30
18.1 Lessor's Right to Cure Lessee's Lease Defaults.................................................30
ARTICLE XIX......................................................................................................30
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option................................30
19.2 No Purchase or Termination With Respect to Less than All of a Property.........................30
ARTICLE XX.......................................................................................................31
20.1 Purchase Option or Sale Option-General Provisions..............................................31
20.2 Lessee Purchase Option.........................................................................31
20.3 Third Party Sale Option........................................................................32
ARTICLE XXI......................................................................................................32
21.1 [Intentionally Omitted]........................................................................32
ARTICLE XXII.....................................................................................................33
22.1 Sale Procedure.................................................................................33
22.2 Application of Proceeds of Sale................................................................35
22.3 Indemnity for Excessive Wear...................................................................35
22.4 Appraisal Procedure............................................................................35
22.5 Certain Obligations Continue...................................................................36
22.6 Extended Remarketing Period....................................................................36
ARTICLE XXIII....................................................................................................37
23.1 Holding Over...................................................................................37
ARTICLE XXIV.....................................................................................................37
24.1 Risk of Loss...................................................................................37
ARTICLE XXV......................................................................................................38
25.1 Assignment.....................................................................................38
25.2 Subleases......................................................................................38
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ARTICLE XXVI.....................................................................................................39
26.1 No Waiver......................................................................................39
ARTICLE XXVII....................................................................................................39
27.1 Acceptance of Surrender........................................................................39
27.2 No Merger of Title.............................................................................39
ARTICLE XXVIII...................................................................................................39
28.1 Incorporation of Covenants.....................................................................39
ARTICLE XXIX.....................................................................................................40
29.1 Notices........................................................................................40
ARTICLE XXX......................................................................................................40
30.1 Miscellaneous..................................................................................40
30.2 Amendments and Modifications...................................................................41
30.3 Successors and Assigns.........................................................................41
30.4 Headings and Table of Contents.................................................................41
30.5 Counterparts...................................................................................41
30.6 GOVERNING LAW..................................................................................41
30.7 Calculation of Rent............................................................................41
30.8 Memoranda of Lease and Lease Supplements.......................................................41
30.9 Allocations between the Lenders and the Holders................................................42
30.10 Limitations on Recourse........................................................................42
30.11 WAIVERS OF JURY TRIAL..........................................................................42
30.12 Exercise of Lessor Rights......................................................................42
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.................................................43
30.14 USURY SAVINGS PROVISION........................................................................43
30.15 Lessor Certification...........................................................................44
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
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LEASE AGREEMENT
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THIS LEASE AGREEMENT dated as of December 27, 2001 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Lease") is between State Street Bank and Trust Company of Connecticut,
National Association, a national banking association, having its principal
office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
individually, but solely as Owner Trustee for Digital Hospital Trust 2001-1, as
lessor (the "Lessor"), and HEALTHSOUTH MEDICAL CENTER, INC., an Alabama
corporation, having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as lessee (the "Lessee").
W I T N E S S E T H:
- - - - - - - - - -
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one (1) or more third parties designated by Lessee
and (ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each Property upon
the Property Closing Date with respect thereto; provided, Basic Rent with
respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
-----------
For purposes of this Lease, capitalized terms used in this
Lease and not otherwise defined herein shall have the meanings assigned to them
in Appendix A to that certain Participation Agreement dated as of December 27,
2001 (as amended, modified, extended, supplemented, restated and/or replaced
from time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among Lessee, HEALTHSOUTH Corporation, as the
Guarantor, Lessor, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and First Union National Bank, as agent for the Lenders and respecting
the Security Documents, as the agent for the Secured Parties. Unless otherwise
indicated, references in this Lease to articles, sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in this Lease.
1.2 INTERPRETATION.
--------------
The rules of usage set forth in Appendix A to the
Participation Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
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Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
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The term of this Lease with respect to each Property (the
"Term") shall begin upon the Property Closing Date for such Property (in each
case the "Commencement Date") and shall end on the date that is seven (7) years
and six (6) months after the Initial Closing Date, unless the Term is earlier
terminated or is extended pursuant to the next paragraph. Notwithstanding the
foregoing, Lessee shall not be obligated to pay Basic Rent until the Rent
Commencement Date with respect to such Property.
Lessee may, not less than two hundred forty (240) days and no
more than three hundred sixty (360) days prior to the date that is seven (7)
years and six (6) months or twelve (12) years and six (6) months after the
Initial Closing Date, as applicable, by irrevocable notice to Lessor, the
Lenders, the Holders and the Agent make written request to extend the Expiration
Date for all, but not less than all, the Properties for an additional period of
five years (a "Renewal Term"). There shall be no more than two consecutive
Renewal Terms. Lessor, each Lender, each Holder and the Agent shall each make a
determination, in the absolute and sole discretion of each such party, not later
than thirty (30) days after receipt of such notice as to whether or not such
party will agree to extend the Expiration Date as requested; provided, however,
that failure by any such party to make a timely response to Lessee's request for
extension of the Expiration Date shall be deemed to constitute a refusal by such
party to the extension of the Expiration Date. In response to a request for an
extension of the Expiration Date, if (a) Lessor, each Lender, each Holder and
the Agent shall agree to the requested extension, then the Term shall be
extended and shall expire on the date five (5) years after the then current
expiration date or (b) Lessor, any Lender, any Holder or the Agent shall refuse
(or be deemed to have refused) to agree to the requested extension, then the
Term shall not be extended and shall expire on the then current Expiration Date.
In addition to the foregoing with respect to a Renewal Term, the Financing
Parties may require certain amendments to the Operative Agreements, including
without limitation changing the interest rate, Holder Yield, any fees and the
Maximum Residual Guarantee Amount, or certain conditions to be met prior to the
effectiveness of the Renewal
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Term, including without limitation updated appraisals. In the event a Lender or
Holder does not agree to permit the Renewal Term, then the Lessee may replace
such Lender or Holder on terms mutually agreeable to the Lessee and such Lender
or Holder and in accordance with the terms and conditions of the Operative
Agreements.
2.3 TITLE.
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Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession (if any), the existing state of title (including without
limitation the Permitted Liens) and all applicable Legal Requirements. Lessee
shall in no event have any recourse against Lessor for any defect in Lessor's
title to any Property or any interest of Lessee therein other than for Lessor
Liens.
2.4 LEASE SUPPLEMENTS.
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On or prior to each Commencement Date, Lessee and Lessor shall each
execute and deliver a Lease Supplement for the Property to be leased effective
as of such Commencement Date in substantially the form of Exhibit A hereto.
ARTICLE III
3.1 RENT.
----
(a) Lessee shall pay Basic Rent in arrears on each Payment
Date, and on any date on which this Lease shall terminate with respect
to any or all Properties during the Term; provided, however, with
respect to each individual Property Lessee shall have no obligation to
pay Basic Rent with respect to such Property until the Rent
Commencement Date with respect to such Property (notwithstanding that
Basic Rent for such Property shall accrue from and including the
Scheduled Interest Payment Date immediately preceding such Rent
Commencement Date).
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately
available funds on the due date therefor (or within the applicable
grace period) to such account or accounts at such bank or banks as
Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall
not delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00
Noon, Charlotte, North Carolina time, on the applicable date for
payment of such amount.
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3.2 PAYMENT OF BASIC RENT.
---------------------
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT.
-----------------
Lessee shall pay or cause to be paid to the Agent (on behalf
of the Person entitled thereto) any and all Supplemental Rent when and as the
same shall become due and payable, and if Lessee fails to pay any Supplemental
Rent within five (5) Business Days after demand is made upon Lessee for payment,
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent. All such
payments of Supplemental Rent shall be in the full amount thereof, without
setoff, deduction or reduction. Lessee shall pay or cause to be paid to the
appropriate Person, as Supplemental Rent due and owing to such Person, among
other things, on demand, (a) any and all payment obligations (except for amounts
payable as Basic Rent) owing from time to time under the Operative Agreements by
any Person to the Agent, any Lender, any Holder or any other Person, (b)
interest at the applicable Overdue Rate on any installment of Basic Rent not
paid when due (subject to the applicable grace period) for the period for which
the same shall be overdue and on any payment of Supplemental Rent not paid when
due or demanded by the appropriate Person (subject to any applicable grace
period) for the period from the due date or the date of any such demand, as the
case may be, until the same shall be paid and (c) amounts referenced as
Supplemental Rent obligations pursuant to Section 8.3 of the Participation
Agreement. It shall be an additional Supplemental Rent obligation of Lessee to
pay to the appropriate Person all rent and other amounts when such become due
and owing from time to time under each Ground Lease and without the necessity of
any notice from Lessor with regard thereto. The expiration or other termination
of Lessee's obligations to pay Basic Rent hereunder shall not limit or modify
the obligations of Lessee with respect to Supplemental Rent. Unless expressly
provided otherwise in this Lease, in the event of any failure on the part of
Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added for nonpayment or late payment of such Supplemental Rent, all
of which shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
---------------------------------
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date or, to the extent such Basic Rent is not due on a
Scheduled Interest Payment Date, then on the next succeeding Business Day. If
any Supplemental Rent is required hereunder on a day that is not a Business Day,
then such Supplemental Rent shall be due on the next succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
-----------------------
Lessee shall make payment of all Basic Rent and Supplemental
Rent when due (subject to the applicable grace periods) regardless of whether
any of the Operative Agreements pursuant to which same is calculated and is
owing shall have been rejected, avoided or
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disavowed in any bankruptcy or insolvency proceeding involving any of the
parties to any of the Operative Agreements. Such provisions of such Operative
Agreements and their related definitions are incorporated herein by reference
and shall survive any termination, amendment or rejection of any such Operative
Agreements.
3.6 PAYMENT OF COST OVERRUNS.
------------------------
Lessee shall make payments of prepaid rent to the Lessor,
during the Construction Period, of cost overruns as directed by the Lessor in
accordance with Section 3.3. of the Agency Agreement.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
----------------------
Lessee shall pay or cause to be paid all Impositions, other
than Impositions with respect to Lessor Liens, with respect to the Properties
and/or the use, occupancy, operation, repair, access, maintenance or operation
thereof and all charges for electricity, power, gas, oil, water, telephone,
sanitary sewer service and all other rents, utilities and operating expenses of
any kind or type used in or on any Property and related real property during the
Term. Upon Lessor's reasonable request, Lessee shall provide from time to time
Lessor with evidence of all such payments referenced in the foregoing sentence.
Lessee shall be entitled to receive any credit or refund with respect to any
Imposition or utility charge paid by Lessee. Unless an Event of Default shall
have occurred and be continuing, the amount of any credit or refund received by
Lessor on account of any Imposition or utility charge paid by Lessee, net of the
costs and expenses incurred by Lessor in obtaining such credit or refund, shall
be promptly paid over to Lessee. All charges for Impositions or utilities
imposed with respect to any Property for a period during which this Lease
expires or terminates shall be adjusted and prorated on a daily basis between
Lessor and Lessee, and each party shall pay or reimburse the other for such
party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT.
---------------
Subject to the rights of Lessor contained in Sections 17.2,
17.3 and 20.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Commencement Date.
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ARTICLE VI
6.1 NET LEASE.
---------
This Lease shall constitute a net lease, and the obligations
of Lessee hereunder are absolute and unconditional. Lessee shall pay or cause to
be paid all operating expenses arising out of the use, operation and/or
occupancy of each Property. Any present or future law to the contrary
notwithstanding, this Lease shall not terminate, nor shall Lessee be entitled to
any abatement, suspension, deferment, reduction, setoff, counterclaim, or
defense with respect to the Rent, nor shall the obligations of Lessee hereunder
be affected (except as expressly herein permitted and by performance of the
obligations in connection therewith) for any reason whatsoever, including
without limitation by reason of: (a) any damage to or destruction of any
Property or any part thereof; (b) any taking of any Property or any part thereof
or interest therein by Condemnation or otherwise; (c) any prohibition,
limitation, restriction or prevention of Lessee's use, occupancy or enjoyment of
any Property or any part thereof, or any interference with such use, occupancy
or enjoyment by any Person or for any other reason; (d) any title defect, Lien
or any matter affecting title to any Property; (e) any eviction by paramount
title or otherwise; (f) any default by Lessor hereunder; (g) any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution or other
proceeding relating to or affecting the Agent, any Lender, Lessor, Lessee, any
Holder or any Governmental Authority; (h) the impossibility or illegality of
performance by Lessor, Lessee or both; (i) any action of any Governmental
Authority or any other Person; (j) Lessee's acquisition of ownership of all or
part of any Property; (k) breach of any warranty or representation with respect
to any Property or any Operative Agreement; (l) any defect in the condition,
quality or fitness for use of any Property or any part thereof; or (m) any other
cause or circumstance whether similar or dissimilar to the foregoing and whether
or not Lessee shall have notice or knowledge of any of the foregoing. The
parties intend that the obligations of Lessee hereunder shall be covenants,
agreements and obligations that are separate and independent from any
obligations of Lessor hereunder and shall continue unaffected unless such
covenants, agreements and obligations shall have been modified or terminated in
accordance with an express provision of this Lease. Lessor and Lessee
acknowledge and agree that the provisions of this Section 6.1 have been
specifically reviewed and subject to negotiation.
6.2 NO TERMINATION OR ABATEMENT.
---------------------------
Lessee shall remain obligated under this Lease in accordance
with its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
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ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
---------------------------
(a) Lessor and Lessee intend that (i) for financial accounting
purposes with respect to Lessee (A) this Lease will be treated as an
"operating lease" pursuant to Statement of Financial Accounting
Standards No. 13, as amended, (B) Lessor will be treated as the owner
and lessor of each Property and (C) Lessee will be treated as the
lessee of each Property, but (ii) for federal and all state and local
income tax purposes, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes and all other purposes (A) this
Lease will be treated as a financing arrangement and (B) Lessee will be
treated as the owner of the Properties and will be entitled to all tax
benefits ordinarily available to owners of property similar to the
Properties for such tax purposes. Notwithstanding the foregoing,
neither party hereto has made, or shall be deemed to have made, any
representation or warranty as to the availability of any of the
foregoing treatments under applicable accounting rules, tax,
bankruptcy, regulatory, commercial or real estate law or under any
other set of rules. Lessee shall claim the cost recovery deductions
associated with each Property, and Lessor shall not, to the extent not
prohibited by Law, take on its tax return a position inconsistent with
Lessee's claim of such deductions.
(b) For all purposes other than as set forth in Section
7.1(a)(i), Lessor and Lessee intend this Lease to constitute a finance
lease and not a true lease. In order to secure the obligations of
Lessee now existing or hereafter arising under any and all Operative
Agreements, Lessee hereby conveys, grants, assigns, transfers,
hypothecates, mortgages and sets over to Lessor, for the benefit of the
Secured Parties, a first priority security interest (but subject to the
security interest in the assets granted by Lessee in favor of the Agent
in accordance with the Security Agreement) in and lien on all right,
title and interest of Lessee (now owned or hereafter acquired) in and
to all Properties, to the extent such is personal property and
irrevocably grants and conveys a lien, deed of trust and mortgage on
all right, title and interest of Lessee (now owned or hereafter
acquired) in and to all Properties to the extent such is real property.
Lessor and Lessee further intend and agree that, for the purpose of
securing the obligations of Lessee and/or the Construction Agent now
existing or hereafter arising under the Operative Agreements, (i) this
Lease shall be a security agreement and financing statement within the
meaning of Article 9 of the Uniform Commercial Code respecting each of
the Properties and all proceeds (including without limitation insurance
proceeds thereof) to the extent such is personal property and an
irrevocable grant and conveyance of a lien, deed of trust and mortgage
on each of the Properties and all proceeds (including without
limitation insurance proceeds thereof) to the extent such is real
property; (ii) the acquisition of title by Lessor (or to the extent
applicable, a leasehold interest pursuant to a Ground Lease) in each
Property referenced in Article II constitutes a grant by Lessee to
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Lessor of a security interest, lien, deed of trust and mortgage in all
of Lessee's right, title and interest in and to each Property and all
proceeds (including without limitation insurance proceeds thereof) of
the conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property, and an assignment of all
rents, profits and income produced by each Property; and (iii)
notifications to Persons holding such property, and acknowledgments,
receipts or confirmations from financial intermediaries, bankers or
agents (as applicable) of Lessee shall be deemed to have been given for
the purpose of perfecting such lien, security interest, mortgage lien
and deed of trust under applicable law. Lessee shall promptly take such
actions as necessary (including without limitation the filing of
Uniform Commercial Code Financing Statements, Uniform Commercial Code
Fixture Filings and memoranda (or short forms) of this Lease and the
various Lease Supplements) to ensure that the lien, security interest,
mortgage lien and deed of trust in each Property and the other items
referenced above will be deemed to be a perfected lien, security
interest, mortgage lien and deed of trust of first priority under
applicable law and will be maintained as such throughout the Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES.
---------------------------
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH
PROPERTY "AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS
OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND
CLEAR OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF
TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY
STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY
MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL
REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE
APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY
HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR
COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE
AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER
AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY
WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE COMMENCEMENT DATE WILL
HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE
8
IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT, EACH
LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS
INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS
OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE
PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS,
ON THE ONE (1) HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
------------------------------------
(a) Subsequent to the Completion Date, at all times during the
Term (i) with respect to each Property, such Property shall be a
Permitted Facility and shall be used by Lessee in the ordinary course
of its business and (ii) with respect to the Property referenced in
Lease Supplement No. 1, such Property shall also be operated as a
hospital. Lessee shall pay, or cause to be paid, all charges and costs
required in connection with the use of the Properties as contemplated
by this Lease. Lessee shall not commit or permit any waste of the
Properties or any part thereof.
(b) The address stated in Section 12.2 of the Participation
Agreement is the principal place of business and chief executive office
of Lessee (as such terms are used in the Uniform Commercial Code of any
applicable jurisdiction), and Lessee will provide Lessor with prior
written notice of any change of location of its principal place of
business or chief executive office. The location of Lessee for purposes
of the Uniform Commercial Code is Alabama, and Lessee will provide
Lessor and the Agent with prior written notice of any change in its
location for purposes of the Uniform Commercial Code. Regarding a
particular Property, each Lease Supplement correctly identifies the
initial location of the related Equipment (if any) and Improvements (if
any) and contains an accurate legal description for the related parcel
of Land or a copy of the Ground Lease (if any). The Equipment and
Improvements respecting each particular Property will be located only
at the location identified in the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property in a manner that could give rise to the
assertion of any Lien on such item of Equipment by reason of such
attachment or the assertion of a claim that such item of Equipment has
become a fixture and is subject to a Lien in favor of a third party
that is prior to the Liens thereon created by the Operative Agreements.
(d) On the Commencement Date for each Property, Lessor and
Lessee shall execute a Lease Supplement in regard to such Property
which shall contain an Equipment Schedule that has a general
description of the Equipment which shall comprise the Property, an
Improvement Schedule that has a general description of the Improvements
which shall comprise the Property and a legal description of the Land
to be leased hereunder (or in the case of any Property subject to a
Ground Lease to be subleased hereunder) as of such date. Each Property
subject to a Ground Lease shall be deemed to be ground subleased from
Lessor to Lessee as of the Commencement Date, and such ground sublease
9
shall be in effect until this Lease is terminated or expires, in each
case in accordance with the terms and provisions hereof. Lessee shall
satisfy and perform all obligations imposed on Lessor under each Ground
Lease. Simultaneously with the execution and delivery of each Lease
Supplement, such Equipment, Improvements, Land, ground subleasehold
interest, all additional Equipment and all additional Improvements
which are financed under the Operative Agreements after the
Commencement Date and the remainder of such Property shall be deemed to
have been accepted by Lessee for all purposes of this Lease and to be
subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided that such exercise will
not impair the value, utility or remaining useful life of such
Property) shall be permitted to exercise all rights and remedies under,
all operation and easement agreements and related or similar agreements
applicable to such Property.
8.3 INTEGRATED PROPERTIES.
---------------------
On the Rent Commencement Date for each Property, Lessee shall,
at its sole cost and expense, cause such Property and the applicable property
subject to a Ground Lease to constitute (and for the duration of the Term shall
continue to constitute) all of the equipment, facilities, rights, other personal
property and other real property necessary or appropriate to operate, utilize,
maintain and control a Permitted Facility in a commercially reasonable manner.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
--------------------------------------------------------------
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
-------------------------------------------
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all Environmental
Laws) and all Insurance Requirements relating to the Properties, (b) procure,
maintain and comply with all licenses, permits, orders, approvals, consents and
other authorizations required for the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of the Properties, and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property. Lessor agrees
to take such actions as may be reasonably requested by Lessee in connection with
the compliance by Lessee of its obligations under this Section 9.1.
10
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
------------------------------
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and in the repair and condition as when originally
delivered to Lessor, subject to Modifications made or required to be
made pursuant to the Operative Agreements, and make all necessary
repairs thereto and replacements thereof, of every kind and nature
whatsoever, whether interior or exterior, ordinary or extraordinary,
structural or nonstructural or foreseen or unforeseen, in each case as
required by Section 9.1 and on a basis consistent with the operation
and maintenance of properties or equipment comparable in type and
function to the applicable Property, such that such Property is capable
of being immediately utilized by a third party and in compliance with
standard industry practice subject, however, to the provisions of
Article XV with respect to Casualty and Condemnation.
(b) Lessee shall not use or locate any component of any
Property outside of the Approved State therefor. Lessee shall not move
or relocate any component of any Property beyond the boundaries of the
Land (comprising part of such Property) described in the applicable
Lease Supplement, except for the temporary removal of Equipment and
other personal property for repair or replacement.
(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered
unfit for use, Lessee, at its own expense, will within a reasonable
time replace such component with a replacement component which is free
and clear of all Liens (other than Permitted Liens) and has a value,
utility and useful life at least equal to the component replaced
(assuming the component replaced had been maintained and repaired in
accordance with the requirements of this Lease); provided, however,
that nothing in this Section shall prevent the Lessee from
discontinuing the use, operation or maintenance of any Equipment or
disposing of such if, in all such cases such Equipment is obsolete or
no longer necessary for the operation of the Permitted Facility and
such discontinuance or disposal does not, in the aggregate with all
prior discontinuances and disposals, decrease the value of the Property
by more than $500,000 or adversely affect the utility or useful life of
the Property. All components which are added to any Property shall
immediately become the property of (and title thereto shall vest in)
Lessor and shall be deemed incorporated in such Property and subject to
the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not, in the absence of an Event of Default,
materially disrupt the business of Lessee.
(e) Lessee shall cause to be delivered to Lessor (at Lessee's
sole expense) one (1) or more additional Appraisals (or reappraisals of
Property) as Lessor may request if any one (1) of Lessor, the Agent,
the Trust Company, any Lender or any Holder is required pursuant to any
11
applicable Legal Requirement to obtain such Appraisals (or
reappraisals) and upon the occurrence of any Event of Default.
(f) Lessor shall under no circumstances be required to build
any improvements or install any equipment on any Property, make any
repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in
connection with this Lease or maintain any Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part of
any Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of any Property, or (ii)
make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenant,
condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination
of this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) to Lessor pursuant
to the exercise of the applicable remedies upon the occurrence of a
Lease Event of Default or (ii) pursuant to the second paragraph of
Section 22.1(a) hereof, to Lessor or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease
(including without limitation the obligations of Lessee at the time of
such surrender under Sections 9.1, 10.1(a) through (f), 10.2, 11.1,
12.1, 22.1 and 23.1).
(h) [Intentionally Omitted].
(i) [Intentionally Omitted].
(j) The provisions of this Section 10.1 are essential to this
Lease, and upon application to any court of law or equity having
jurisdiction in the premises, Lessor shall be entitled to a decree
against Lessee requiring specific performance of the covenants of
Lessee set forth in this Section 10.1.
10.2 ENVIRONMENTAL INSPECTION.
------------------------
If Lessee has not given notice of exercise of its Purchase
Option on the Expiration Date pursuant to Section 20.1 or for whatever reason
Lessee does not purchase a Property in accordance with the terms of this Lease,
then not more than one hundred eighty (180) days nor less than sixty (60) days
prior to the Expiration Date, Lessee at its expense shall cause to be delivered
to Lessor a Phase I environmental site assessment recently prepared (no more
than thirty (30) days prior to the date of delivery) by an independent
recognized professional reasonably acceptable to Lessor, and in form, scope and
content reasonably satisfactory to Lessor.
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ARTICLE XI
11.1 MODIFICATIONS.
-------------
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make modifications,
alterations, renovations, improvements and additions to any Property or
any part thereof and substitutions and replacements therefor
(collectively, "Modifications"), and Lessee shall make any and all
Modifications required to be made pursuant to all Legal Requirements,
Insurance Requirements and manufacturer's specifications and standards;
provided, that: (i) no Modification shall materially impair the value,
utility or useful life of any Property from that which existed
immediately prior to such Modification; (ii) each Modification shall be
done expeditiously and in a good and workmanlike manner; (iii) no
Modification shall adversely affect the structural integrity of any
Property; (iv) to the extent required by Section 14.2(a), Lessee shall
maintain builders' risk insurance at all times when a Modification is
in progress; (v) subject to the terms of Article XIII relating to
permitted contests, Lessee shall pay all costs and expenses and
discharge any Liens arising with respect to any Modification; (vi) each
Modification shall comply with the requirements of this Lease
(including without limitation Sections 8.2 and 10.1); and (vii) no
Improvement shall be demolished or otherwise rendered unfit for use
unless Lessee shall finance the proposed replacement Modification
outside of this lease facility; provided, further, Lessee shall not
make any Modification (unless required by any Legal Requirement) to the
extent any such Modification, individually or in the aggregate, shall
or could reasonably be expected to have a Material Adverse Effect.
Except as expressly provided in this Section, all Modifications shall
immediately and without further action upon their incorporation into
the applicable Property (1) become property of Lessor, (2) be subject
to this Lease and (3) be titled in the name of Lessor. Lessee shall not
remove or attempt to remove any Modification from any Property. Each
Ground Lease for a Property shall expressly provide for the provisions
of the foregoing sentence. Lessee, at its own cost and expense, will
pay for the repairs of any damage to any Property caused by the removal
or attempted removal of any Modification.
Modifications made by Lessee that (A) are not required to be
made pursuant to Legal Requirements, Insurance Requirements or
manufacturer's specifications or standards, (B) are not financed or
paid for wholly or partially by the Lessor or with proceeds of any
Casualty or Condemnation, (C) are not required replacements pursuant to
Article 15 of the Lease or any other provision of any Operative
Agreement and (D) can be removed without adversely affecting the value,
utility or useful life of the Property or the operation of the Property
as a Permitted Facility, may be removed by Lessee prior to the
Expiration Date, provided, if such Modifications are not removed by
such date then title to such Modifications shall revert to Lessor.
Lessee at its sole cost and expense shall repair in a good and
workmanlike manner any and all damage done to any Property due to the
removal, detachment, attempted removal or attempted detachment of any
Modification from a Property and all such repairs shall be completed by
the earlier of (Y) thirty (30) days after such removal, detachment,
attempted removal or attempted detachment of the applicable
Modification from the applicable Property and (Z) the Expiration Date.
13
Lessee shall not remove or attempt to remove any Modification titled to
Lessor from any Property.
Lessee may install any removable trade fixtures, machinery,
equipment, inventory or other property (and all right, title and
interest in and to such property shall belong to the Lessee or a third
party other than any Financing Party) that (A) is not required to be
made pursuant to Legal Requirements, Insurance Requirements or
manufacturer's specifications or standards, (B) is not financed or paid
for wholly or partially by the Lessor or with proceeds of any Casualty
or Condemnation, (C) is not a required replacement pursuant to Article
15 of the Lease or any other provision of any Operative Agreement and
(D) can be removed without adversely affecting the value, utility or
useful life of the Property or the operation of the Property as a
Permitted Facility, may be removed by Lessee prior to the Expiration
Date, provided, if such property is not removed by such date then title
to such property shall automatically transfer to and vest in the
Lessor. Lessee at its sole cost and expense shall repair in a good and
workmanlike manner any and all damage done to any Property due to the
removal, detachment, attempted removal or attempted detachment of any
property from a Property and all such repairs shall be completed by the
earlier of (Y) thirty (30) days after such removal, detachment,
attempted removal or attempted detachment of the applicable
Modification from the applicable Property and (Z) the Expiration Date.
Lessee shall not remove or attempt to remove any Modification titled to
Lessor from any Property.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 WARRANTY OF TITLE.
-----------------
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements,
all replacement components to each Property and all Modifications)
immediately and without further action to vest in and become the
property of Lessor and to be subject to the terms of this Lease
(provided, respecting each Property subject to a Ground Lease, Lessor's
interest therein is acknowledged to be a leasehold interest pursuant to
such Ground Lease) from and after the date hereof or such date of
incorporation into any Property. Lessee agrees that, subject to the
terms of Article XIII relating to permitted contests, Lessee shall not
directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment,
levy, title retention agreement or claim upon any Property, any
component thereof or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent, any Lender or any Holder pursuant to any Operative
Agreement, other than Permitted Liens. Lessee shall promptly notify
Lessor in the event it receives actual knowledge that a Lien other than
a Permitted Lien has occurred with respect to a Property, the Rent or
14
any other such amounts, and Lessee represents and warrants to, and
covenants with, Lessor that the Liens in favor of Lessor and/or the
Agent created by the Operative Agreements are (and until the Financing
Parties under the Operative Agreements have been paid in full shall
remain) first priority perfected Liens subject only to Permitted Liens
and Lessor Liens. At all times subsequent to the Commencement Date
respecting a Property, Lessee shall (i) cause a valid, perfected, first
priority Lien on each applicable Property to be in place in favor of
the Agent (for the benefit of the Secured Parties) and (ii) file, or
cause to be filed, all necessary documents under the applicable real
property law and Article 9 of the Uniform Commercial Code to perfect
such title and Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities.
--------------------------------------------------------
Except to the extent otherwise provided for in Section 11 of
the Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the applicable Properties, Lessor, each Holder, the Agent and each Lender; (b)
there shall not be imposed a Lien (other than Permitted Liens) on any Property
and no part of any Property nor any Rent would be in any danger of being sold,
forfeited, lost or deferred; (c) at no time during the permitted contest shall
there be a risk of the imposition of criminal liability or material civil
liability on Lessor, any Holder, the Agent or any Lender for failure to comply
therewith; and (d) in the event that, at any time, there shall be a material
risk of extending the application of such item beyond the end of the Term, then
Lessee shall deliver to Lessor an Officer's Certificate certifying as to the
matters set forth in clauses (a), (b) and (c) of this Section 13.1. Lessor, at
Lessee's sole cost and expense, shall execute and deliver to Lessee such
15
authorizations and other documents as may reasonably be required in connection
with any such contest and, if reasonably requested by Lessee and required under
local procedural rules or regulations, shall join as a party therein at Lessee's
sole cost and expense; provided, however, Lessor shall not join as a party
therein in the event each Lender, each Holder and the Lessor agrees that the
Lessor shall forfeit the benefit of its indemnity under the Operative Agreements
with respect to such contest.
13.2 IMPOSITIONS, UTILITY CHARGES, OTHER MATTERS; COMPLIANCE WITH
------------------------------------------------------------
LEGAL REQUIREMENTS.
------------------
Except with respect to Impositions, Legal Requirements,
utility charges and such other matters referenced in Section 13.1 which are the
subject of ongoing proceedings contesting the same in a manner consistent with
the requirements of Section 13.1, subject to the obligation of Lessor to pay
Impositions required to remove any Lessor Lien, Lessee shall cause (a) all
Impositions, utility charges and such other matters to be timely paid, settled
or compromised, as appropriate, with respect to each Property and (b) each
Property to comply with all applicable Legal Requirements.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
----------------------------------------------------
During the Term for each Property, Lessee shall procure and
carry, at Lessee's sole cost and expense, commercial general liability and
umbrella liability insurance for claims for injuries or death sustained by
persons or damage to property while on such Property or respecting the Equipment
and such other public liability coverages as are then customarily carried by
similarly situated companies conducting business similar to that conducted by
Lessee. Such insurance shall be on terms and in amounts that are no less
favorable than insurance maintained by Lessee with respect to similar properties
and equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee, and in no event shall
have a minimum combined single limit per occurrence coverage (i) for commercial
general liability of less than $1,000,000 and (ii) for umbrella liability of
less than $25,000,000. The policies shall name Lessee as the insured and shall
be endorsed to name Lessor, the Holders, the Agent and the Lenders as additional
insureds. The policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, any Holder, the Agent or any
Lender may have in force. In the operation of the Properties, Lessee shall
comply with applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 PERMANENT HAZARD AND OTHER INSURANCE.
------------------------------------
(a) During the Term for each Property, Lessee shall keep such
Property insured against all risk of physical loss or damage by fire
and other risks and shall maintain all risk builders' risk insurance
during construction of any Improvements or Modifications in each case
in amounts no less than the Property Cost of such Property from time to
16
time and on terms that (i) are no less favorable than insurance
covering other similar properties owned by Lessee, (ii) subject to
subsection (iii) below, are then carried by similarly situated
companies conducting business similar to that conducted by Lessee and
(iii) regarding builder's all risk insurance, shall cover all Casualty
and all Force Majeure Events except Uninsurable Force Majeure Events.
Such all risk builder's risk insurance shall not have a deductible in
excess of $100,000 per occurrence (provided, from and after the earlier
to occur of the delivery of the insurance certificate referenced in
Section 17.1(a) and January 15, 2002, such deductible shall not be in
excess of $25,000 per occurrence) with respect to any Construction
Period Property and, with respect to each Construction Period Property
as of the applicable Property Closing Date, such insurance shall be in
effect for a term covering the period from such Property Closing Date
through and including the Completion Date of such Property. The
policies shall name Lessee as the insured and shall be endorsed to name
Lessor and the Agent (on behalf of the Secured Parties) as an
additional insured and loss payee; provided, so long as no Event of
Default exists, any loss payable under the insurance policies required
by this Section for losses up to $1,000,000 will be paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto or is in a zone designated A or V,
then Lessee shall comply with the National Flood Insurance Program as
set forth in the Flood Disaster Protection Act of 1973. In addition,
Lessee will fully comply with the requirements of the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as
each may be amended from time to time, and with any other Legal
Requirement, concerning flood insurance to the extent that it applies
to any such Property. During the Term, Lessee shall, in the operation
and use of each Property, maintain workers' compensation insurance
consistent with that carried by similarly situated companies conducting
business similar to that conducted by Lessee and containing minimum
liability limits of no less than $100,000. In the operation of each
Property, Lessee shall comply with workers' compensation laws
applicable to Lessee, and protect Lessor, each Holder, the Agent and
each Lender against any liability under such laws.
14.3 COVERAGE.
--------
(a) As of the date of this Lease and annually thereafter
during the Term, Lessee shall furnish the Agent (on behalf of Lessor,
and the other beneficiaries of such insurance coverage) and Lessor with
certificates prepared by the insurers or insurance broker of Lessee
showing the insurance required under Sections 14.1 and 14.2 to be in
effect, naming (to the extent of their respective interests) Lessor, in
its individual and trust capacity, the Holders, the Agent and the
Lenders as additional insureds and loss payees and evidencing the other
requirements of this Article XIV. All such certificates must be in form
and substance satisfactory to Lessor and the Agent. All such insurance
shall be at the cost and expense of Lessee and provided by nationally
recognized, financially sound insurance companies having an A+ or
better rating by A.M. Best's Key Rating Guide. Lessee shall cause such
certificates to include a provision for thirty (30) days' advance
17
written notice by the insurer to the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) and Lessor in the event
of cancellation or material alteration of such insurance. If an Event
of Default has occurred and is continuing and the Agent (on behalf of
Lessor and the other beneficiaries of such insurance coverage) so
requests, Lessee shall deliver to the Agent (on behalf of Lessor and
the other beneficiaries of such insurance coverage) and Lessor copies
of all insurance policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies
required by Sections 14.1, 14.2(a) and 14.2(b) shall include an
appropriate clause pursuant to which any such policy shall provide that
it will not be invalidated should Lessee or any Contractor, as the case
may be, waive, at any time, any or all rights of recovery against any
party for losses covered by such policy or due to any breach of
warranty, fraud, action, inaction or misrepresentation by Lessee or any
Person acting on behalf of Lessee. Lessee hereby waives any and all
such rights against Lessor, the Holders, the Agent and the Lenders to
the extent of payments made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this Article XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
Article XIV to be subject to a coinsurance exception of any kind. This
provision shall not limit the Agent, any Lender or any Holder from
carrying separate insurance.
(d) Lessee shall pay or cause to be paid as they become due
all premiums for the insurance required by Section 14.1 and Section
14.2, shall renew or replace each policy prior to the expiration date
thereof or otherwise maintain the coverage required by such Sections
without any lapse in coverage.
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
-------------------------
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is
obligated to deliver or is deemed to have delivered, a Termination
Notice), and prior to the occurrence and continuation of a Default or
an Event of Default, Lessee shall be entitled to receive (and Lessor
hereby irrevocably assigns to Lessee all of Lessor's right, title and
interest in) any condemnation proceeds, award, compensation or
insurance proceeds under Sections 14.2(a) or 14.2(b) hereof to which
Lessee or Lessor may become entitled by reason of their respective
interests in a Property (i) if all or a portion of such Property is
damaged or destroyed in whole or in part by a Casualty or (ii) if the
use, access, occupancy, easement rights or title to such Property or
18
any part thereof is the subject of a Condemnation; provided, however,
if a Default or an Event of Default shall have occurred and be
continuing or if such award, compensation or insurance proceeds shall
exceed $1,000,000, then such award, compensation or insurance proceeds
shall be paid directly to Lessor or, if received by Lessee, shall be
held in trust for Lessor, and shall be paid over by Lessee to Lessor
and held in accordance with the terms of this paragraph (a). All
amounts held by Lessor hereunder on account of any award, compensation
or insurance proceeds either paid directly to Lessor or turned over to
Lessor shall be held as security for the performance of Lessee's
obligations hereunder and under the other Operative Agreements and when
all such obligations of Lessee with respect to such matters (and all
other obligations of Lessee which should have been satisfied pursuant
to the Operative Agreements as of such date) have been satisfied, all
amounts so held by Lessor shall be paid over to Lessee.
(b) To the extent no Lease Event of Default shall have
occurred and be continuing, Lessee may appear in any proceeding or
action to negotiate, prosecute, adjust or appeal any claim for any
award, compensation or insurance payment on account of any such
Casualty or Condemnation. Lessee shall pay all expenses regarding each
such proceeding or action referenced in the previous sentence. At
Lessee's reasonable request, and at Lessee's sole cost and expense,
Lessor and the Agent shall participate in any such proceeding, action,
negotiation, prosecution or adjustment. Lessor and Lessee agree that
this Lease shall control the rights of Lessor and Lessee in and to any
such award, compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed twenty-five percent
(25%) of the Property Cost of such Property, Lessee shall give notice
thereof to Lessor promptly after Lessee's receipt of such notice. In
the event such a Casualty or Condemnation occurs (regardless of whether
Lessee gives notice thereof), then Lessee shall be deemed to have
delivered a Termination Notice to Lessor and the provisions of Sections
16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall continue
in full force and effect following a Casualty or Condemnation with
respect to the affected Property, Lessee shall, at its sole cost and
expense (subject to reimbursement in accordance with Section 15.1(a))
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built Plans and
Specifications or manufacturer's specifications for the applicable
Improvements, Equipment or other components of the applicable Property
(as modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable Legal
Requirements), so as to restore the applicable Property to the same or
a greater remaining economic value, useful life, utility, condition,
19
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied). In such event, title to the applicable Property shall
remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term with respect to
a Property to which Section 15.1(c) does not apply a Casualty occurs
with respect to such Property or Lessee receives notice of a
Condemnation with respect to such Property, and following such Casualty
or Condemnation, the applicable Property cannot reasonably be restored,
repaired or replaced on or before the day one hundred eighty (180) days
prior to the Expiration Date or the date nine (9) months after the
occurrence of such Casualty or Condemnation (if such Casualty or
Condemnation occurs during the Term) to the same or a greater remaining
economic value, useful life, utility, condition, operation and function
as existed immediately prior to such Casualty or Condemnation (assuming
all maintenance and repair standards have been satisfied) or on or
before such day such Property is not in fact so restored, repaired or
replaced, then Lessee shall be required to exercise its Purchase Option
for such Property on the next Payment Date (notwithstanding the limits
on such exercise contained in Section 20.2) and pay Lessor the
Termination Value for such Property; provided, if any Default or Event
of Default has occurred and is continuing, Lessee shall also promptly
(and in any event within three (3) Business Days) pay Lessor any award,
compensation or insurance proceeds received on account of any Casualty
or Condemnation with respect to any Property; provided, further, that
if no Default or Event of Default has occurred and is continuing, any
Excess Proceeds shall be paid to Lessee. If a Default or an Event of
Default has occurred and is continuing and any Loans, Holder Advances
or other amounts are owing with respect thereto, then any Excess
Proceeds (to the extent of any such Loans, Holder Advances or other
amounts owing with respect thereto) shall be paid to Lessor, held as
security for the performance of Lessee's obligations hereunder and
under the other Operative Agreements and applied to such obligations
upon the exercise of remedies in connection with the occurrence of an
Event of Default, with the remainder of such Excess Proceeds in excess
of such Loans, Holder Advances and other amounts owing with respect
thereto being distributed to the Lessee.
(h) The provisions of Sections 15.1(a)-15.1(g) shall only
apply to a Property after the Completion Date for such Property.
15.2 ENVIRONMENTAL MATTERS.
---------------------
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation and
which, in the reasonable opinion of Lessee, the cost to undertake any legally
required response, clean up, remedial or other action will or might result in a
cost to Lessee of more than $100,000, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
20
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense, promptly and diligently undertake and diligently complete any
response, clean up, remedial or other action (including without limitation the
pursuit by Lessee of appropriate action against any off-site or third party
source for contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all Environmental Laws. Any such
undertaking shall be timely completed in accordance with prudent industry
standards. If Lessee does not deliver a Termination Notice with respect to such
Property pursuant to Section 16.1, Lessee shall, upon completion of remedial
action by Lessee, cause to be prepared by a reputable environmental consultant
acceptable to Lessor a report describing the Environmental Violation and the
actions taken by Lessee (or its agents) in response to such Environmental
Violation, and a statement by the consultant that the Environmental Violation
has been remedied in full compliance with applicable Environmental Law. Not less
than sixty (60) days and not more than one hundred eighty (180) days prior to
any time that Lessee elects to cease operations with respect to any Property or
to remarket any Property pursuant to Section 20.1 hereof or any other provision
of any Operative Agreement, Lessee at its expense shall cause to be delivered to
Lessor a Phase I environmental site assessment respecting such Property recently
prepared (no more than thirty (30) days prior to the date of delivery) by an
independent recognized professional acceptable to Lessor in its reasonable
discretion and in form, scope and content satisfactory to Lessor in its
reasonable discretion. Notwithstanding any other provision of any Operative
Agreement, if Lessee fails to comply with the foregoing obligation regarding the
Phase I environmental site assessment, Lessee shall be obligated to purchase
such Property for its Termination Value and shall not be permitted to exercise
(and Lessor shall have no obligation to honor any such exercise) any rights
under any Operative Agreement regarding a sale of such Property to a Person
other than Lessee or any Affiliate of Lessee.
15.3 NOTICE OF ENVIRONMENTAL MATTERS.
-------------------------------
Promptly, but in any event within thirty (30) days from the
date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
notice of any pending or threatened claim, action or proceeding involving any
Environmental Law or any Release on or in connection with any Property or
Properties. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within thirty (30) days of receipt,
copies of all material written communications with any Governmental Authority
relating to any Environmental Law in connection with any Property. Lessee shall
also promptly provide such detailed reports of any such material environmental
claims as may reasonably be requested by Lessor.
21
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
-------------------------------
If Lessee has delivered, or is deemed to have delivered,
written notice of a termination of this Lease with respect to the applicable
Property to Lessor in the form described in Section 16.2(a) (a "Termination
Notice") pursuant to the provisions of this Lease, then following the applicable
Casualty, Condemnation or Environmental Violation, this Lease shall terminate
with respect to the affected Property on the applicable Termination Date.
16.2 PROCEDURES.
----------
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey
such Property or the remaining portion thereof, if any, to Lessee (or
Lessee's designee), all in accordance with Section 20.2.
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
-----------------------
If any one (1) or more of the following events (each a "Lease
Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii) within five (5) Business Days after
the same has become due and payable or (ii) any Termination Value, on
the date any such payment is due and payable, or any payment of Basic
Rent or Supplemental Rent due on the due date of any such payment of
Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or
any other Credit Party shall fail to make any payment of any amount
under any Operative Agreement which has become due and payable within
five (5) Business Days after receipt of notice that such payment is
due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or to deliver any requisite annual
certificate with respect thereto within ten (10) days of the date after
22
receipt of notice of Lessee's failure to provide such certificate when
due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease (including
without limitation the Incorporated Covenants) or any other Operative
Agreement to which Lessee is a party other than those set forth in
Sections 17.1(a), (b) or (c) hereof, or any other Credit Party shall
fail to observe or perform any term, covenant, obligation or condition
of such Credit Party under any Operative Agreement other than those set
forth in Section 17.1(b) hereof and such failure shall continue for
thirty (30) days (or with respect to the Incorporated Covenants, the
grace period, if any, applicable thereto) after the earlier of (A)
notice thereof to the Lessee or such Credit Party and (B) the date the
Lessee or such Credit Party otherwise has notice thereof, or (ii) any
representation or warranty made by Lessee or any other Credit Party set
forth in this Lease (including without limitation the Incorporated
Representations and Warranties) or in any other Operative Agreement or
in any document entered into in connection herewith or therewith or in
any document, certificate or financial or other statement delivered in
connection herewith or therewith shall be false or inaccurate in any
material way when made;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) Any Credit Party or any Subsidiary of any Credit Party
shall default (beyond applicable periods of grace and/or notice and
cure) in the payment when due of any principal of or interest on any
Indebtedness having an outstanding principal amount of at least
$25,000,000; or any other event or condition shall occur which results
in a default of any such Indebtedness or enables the holder of any such
Indebtedness or any Person acting on such holder's behalf to accelerate
the maturity thereof;
(g) The liquidation or dissolution of any Credit Party, or the
suspension of the business of any Credit Party, or the filing by any
Credit Party of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under the United States Bankruptcy Code, as amended, or under
any other insolvency act or law, state or federal, now or hereafter
existing, or any other action of any Credit Party indicating its
consent to, approval of or acquiescence in, any such petition or
proceeding; the application by any Credit Party for, or the appointment
by consent or acquiescence of any Credit Party of a receiver, a trustee
or a custodian of any Credit Party for all or a substantial part of its
property; the making by any Credit Party of any assignment for the
benefit of creditors; the inability of any Credit Party or the
admission by any Credit Party in writing of its inability to pay its
debts as they mature or any Credit Party is generally not paying its
debts and other financial obligations as they become due and payable;
or any Credit Party taking any corporate action to authorize any of the
foregoing;
(h) The filing of an involuntary petition against any Credit
Party in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the United
23
States Bankruptcy Code, as amended, or under any other insolvency act
or law, state or federal, now or hereafter existing; or the involuntary
appointment of a receiver, a trustee or a custodian of any Credit Party
for all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any
substantial part of the property of any Credit Party, and the
continuance of any of such events for ninety (90) days undismissed or
undischarged;
(i) The adjudication of any Credit Party as bankrupt or
insolvent;
(j) The entering of any order in any proceedings against any
Credit Party or any Subsidiary of any Credit Party decreeing the
dissolution, divestiture or split-up of any Credit Party or any
Subsidiary of any Credit Party, and such order remains in effect for
more than sixty (60) days;
(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of any Credit Party
pursuant to the terms of this Lease or any other Operative Agreement is
false or misleading in any material respect when made or delivered;
(l) Any Parent Credit Agreement Event of Default shall have
occurred and be continuing and shall not have been waived;
(m) A final judgment or judgments for the payment of money
shall be rendered by a court or courts against any Credit Party or any
Subsidiary of any Credit Party in excess of $1,000,000, in the
aggregate, over amounts paid by insurance policies (other than
self-insurance), and (i) the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within thirty (30) days from the date of entry
thereof, or (ii) any Credit Party or any such Subsidiary shall not,
within said period of thirty (30) days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal, or
(iii) such judgment or judgments shall not be discharged (or provisions
shall not be made for such discharge) within thirty (30) days after a
decision has been reached with respect to such appeal and the related
stay has been lifted;
(n) Any Credit Party or any member of the Controlled Group
shall fail to pay when due an amount or amounts aggregating in excess
of $2,000,000 which it shall have become liable to pay to the PBGC or
to a Pension Plan under Title IV of ERISA; or notice of intent to
terminate a Pension Plan or Pension Plans having aggregate Unfunded
Liabilities in excess of $2,000,000 shall be filed under Title IV of
ERISA by any Credit Party or any member of the Controlled Group, any
plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Pension Plan or
Pension Plans or a proceeding shall be instituted by a fiduciary of any
such Pension Plan or Pension Plans against any Credit Party or any
member of the Controlled Group to enforce Section 515 or 4219(c)(5) of
ERISA; or a condition shall exist by reason of which the PBGC would be
24
entitled to obtain a decree adjudicating that any such Pension Plan or
Pension Plans must be terminated;
(o) (i) As a result of one (1) or more transactions after the
date of this Lease, any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), who are not as of the
Initial Closing Date owners of one percent (1%) or more of the voting
stock of the Parent, either (A) becomes the "beneficial owner" (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
voting stock of the Parent (or securities convertible into or
exchangeable for such voting stock) representing 15% or more of the
combined voting power of all voting stock of the Parent (on a fully
diluted basis) or (B) otherwise has the ability, directly or
indirectly, to elect a majority of the board of directors of the
Parent; or (ii) during any period of up to 24 consecutive months,
commencing on the Initial Closing Date, individuals who at the
beginning of such period were directors of the Parent shall cease for
any reason (other than the death, disability or retirement of an
officer of the Parent that is serving as a director at such time so
long as another officer of the Parent replaces such Person as a
director) to constitute a majority of the board of directors of the
Parent; or (iii) any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation thereof, will
result in its or their acquisition, of the power to exercise, directly
or indirectly, a controlling influence on the management or policies of
the Parent;
(p) Any Operative Agreement shall cease to be in full force
and effect;
(q) Except as to any Credit Party which is released in
connection with the Operative Agreements, the guaranty given by the
Guarantor under the Participation Agreement or any provision thereof
shall cease to be in full force and effect, or the Guarantor or any
Person acting by or on behalf of the Guarantor shall deny or disaffirm
the Guarantor's obligations under such guaranty, or the Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty;
(r) Lessee shall fail to deposit or maintain Cash Equivalents
equal to the amount required by Section 5.11 of the Participation
Agreement in the Cash Collateral Account;
(s) Lessee shall fail to purchase all Tranche A Notes in
accordance with the terms of the Operative Agreements, including
without limitation Section 8.3(w) of the Participation Agreement;
(t) there shall occur (i) any cancellation, revocation,
suspension or termination of any Medicare Certification, Medicare
Provider Agreement, Medicaid Certification or Medicaid Provider
Agreement affecting the Parent, any Subsidiary or any Contract
Provider, or (ii) the loss of any other permits, licenses,
authorizations, certifications or approvals from any federal, state or
local Governmental Authority or termination of any contract with any
such authority, in either case which cancellation, revocation,
25
suspension, termination or loss (X) in the case of any suspension or
temporary loss only, continues for a period greater than 60 days and
(Y) results in the suspension or termination of operations of the
Parent or any Subsidiary or in the failure of the Parent or any
Subsidiaries or any Contract Provider to be eligible to participate in
Medicare or Medicaid programs or to accept assignments of rights to
reimbursement under Medicaid Regulations or Medicare Regulations, if
and only if such Person, in the ordinary course of business,
participates in the Medicare or Medicare programs or accepts
assignments of rights to reimbursement thereunder; provided that any
such events described in this Section 17.1(t) shall constitute an Event
of Default only if such event shall result either singly or in the
aggregate in the termination, cancellation, suspension or material
impairment of operations or rights to reimbursement which produce 5% or
more of the Parent's gross revenues (on an annualized basis); or
(u) Lessee shall fail to deliver to Lessor and the Agent an
insurance certificate on or prior to January 15, 2002 that evidences
all risk builder's risk and all risk of physical loss or damage
insurance with respect to the Digital Hospital Property including (i) a
deductible amount of $25,000 or less per occurrence, (ii) coverage from
January 15, 2002 through the Completion Date, (iii) policy limit
amounts of not less than $200,000,000 per occurrence and (iv) all other
terms and conditions required pursuant to the Lease which are not in
conflict with or less stringent than (i), (ii) or (iii) above.
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination (provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g), (h), (i) or (j)), and this Lease shall
terminate, and all rights of Lessee under this Lease shall cease. Lessee shall,
to the fullest extent permitted by law, pay as Supplemental Rent all costs and
expenses incurred by or on behalf of Lessor or any other Financing Party,
including without limitation reasonable fees and expenses of counsel, as a
result of any Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 SURRENDER OF POSSESSION.
-----------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender to
Lessor possession of the Properties. Lessor may enter upon and repossess the
Properties by such means as are available at law or in equity, and may remove
Lessee and all other Persons and any and all personal property and Lessee's
equipment and personalty and severable Modifications from the Properties. Lessor
shall have no liability by reason of any such entry, repossession or removal
performed in accordance with applicable law. Upon the written demand of Lessor,
Lessee shall return the Properties promptly to Lessor, in the manner and
26
condition required by, and otherwise in accordance with the provisions of,
Section 22.1(c) hereof.
17.3 RELETTING.
---------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
17.4 DAMAGES.
-------
Neither (a) the termination of this Lease as to all or any of
the Properties pursuant to Section 17.1; (b) the repossession of all or any of
the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including
without limitation the date of such payment. Thereafter, on the days on which
the Basic Rent or Supplemental Rent, as applicable, are payable under this Lease
or would have been payable under this Lease if the same had not been terminated
pursuant to Section 17.1 and until the end of the Term hereof or what would have
been the Term in the absence of such termination, Lessee shall pay Lessor, as
current liquidated damages (it being agreed that it would be impossible
accurately to determine actual damages) an amount equal to the Basic Rent and
Supplemental Rent that are payable under this Lease or would have been payable
by Lessee hereunder if this Lease had not been terminated pursuant to Section
17.1, less the net proceeds, if any, which are actually received by Lessor with
respect to the period in question of any reletting of any Property or any
portion thereof; provided, that Lessee's obligation to make payments of Basic
Rent and Supplemental Rent under this Section 17.4 shall continue only so long
as Lessor shall not have received the amounts specified in Section 17.6. In
calculating the amount of such net proceeds from reletting, there shall be
deducted all of Lessor's, any Holder's, the Agent's and any Lender's reasonable
expenses in connection therewith, including without limitation repossession
costs, brokerage or sales commissions, fees and expenses for counsel and any
necessary repair or alteration costs and expenses incurred in preparation for
such reletting. To the extent Lessor receives any damages pursuant to this
Section 17.4, such amounts shall be regarded as amounts paid on account of Rent.
Lessee specifically acknowledges and agrees that its obligations under this
Section 17.4 shall be absolute and unconditional under any and all circumstances
and shall be paid and/or performed, as the case may be, without notice or demand
and without any abatement, reduction, diminution, setoff, defense, counterclaim
or recoupment whatsoever.
27
17.5 POWER OF SALE.
-------------
Without limiting any other remedies set forth in this Lease,
Lessor and Lessee agree that Lessee has granted, pursuant to Section 7.1(b)
hereof and each Lease Supplement, a Lien against the Properties WITH POWER OF
SALE, and that, upon the occurrence and during the continuance of any Lease
Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be foreclosed) in all
or any part of the Properties.
17.6 FINAL LIQUIDATED DAMAGES.
------------------------
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to Lessee and at Lessor's election, and Lessee shall pay to
Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 11 of the Participation Agreement (which, if requested,
shall be paid concurrently), and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages) the Termination Value. Upon payment of
the amount specified pursuant to the first sentence of this Section 17.6, Lessee
shall be entitled to receive from Lessor, either at Lessee's request or upon
Lessor's election, in either case at Lessee's cost, an assignment of Lessor's
entire right, title and interest in and to the Properties, Improvements,
Fixtures, Modifications, Equipment and all components thereof, in each case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this Lease (including without limitation the release of any
memoranda of Lease and/or the Lease Supplement recorded in connection therewith)
and any Lessor Liens. The Properties shall be conveyed to Lessee "AS-IS,
WHERE-IS" and in their then present physical condition. If any statute or rule
of law shall limit the amount of such final liquidated damages to less than the
amount agreed upon, Lessor shall be entitled to the maximum amount allowable
under such statute or rule of law; provided, however, Lessee shall not be
entitled to receive an assignment of Lessor's interest in the Properties, the
Improvements, Fixtures, Modifications, Equipment or the components thereof
unless Lessee shall have paid in full the Termination Value. Lessee specifically
acknowledges and agrees that its obligations under this Section 17.6 shall be
absolute and unconditional under any and all circumstances and shall be paid
and/or performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 ENVIRONMENTAL COSTS.
-------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting any Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor, and shall indemnify and
hold harmless Lessor and each other Indemnified Person therefrom. Lessee shall
pay all amounts referenced in the immediately preceding sentence within ten (10)
days of any request by Lessor for such payment. The provisions of this Section
28
17.7 shall not limit the obligations of Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 WAIVER OF CERTAIN RIGHTS.
------------------------
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of
re-entry or the institution of legal proceedings to obtain re-entry or
possession; (b) any right of redemption, re-entry or possession; (c) the benefit
of any laws now or hereafter in force exempting property from liability for rent
or for debt; and (d) any other rights which might otherwise limit or modify any
of Lessor's rights or remedies under this Article XVII.
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
------------------------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor all of Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Properties (including without limitation
all right, title and interest of Lessee with respect to all warranty,
performance, service and indemnity provisions), as and to the extent that the
same relate to the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties or any of them.
17.10 REMEDIES CUMULATIVE.
-------------------
The remedies herein provided shall be cumulative and in addition to
(and not in limitation of) any other remedies available at law, equity or
otherwise, including without limitation any mortgage foreclosure remedies.
17.11 LIMITATION REGARDING CERTAIN LEASE EVENTS OF DEFAULT.
----------------------------------------------------
Notwithstanding anything contained herein or in any other Operative
Agreement to the contrary, upon the occurrence and during the continuance of a
Lease Event of Default attributable solely to Sections 17.1(o) or (t) or any
other Lease Event of Default that occurs as a direct result of the occurrence of
a Material Adverse Effect pursuant to subsections (a), (b) or (e) of the
definition of Material Adverse Effect, the maximum aggregate amount that the
Lessor, or any Person acting by or through the Lessor, including without
limitation the Agent, the Lenders and the Holders, shall be entitled to recover
from the Credit Parties on account of such Lease Event of Default attributable
solely to Sections 17.1(o) or (t) shall be an amount equal to 89.9% of the
aggregate Property Cost for all Properties, provided, this Section 17.11 shall
not in any way limit any Full Recourse Event of Default or any indemnity payment
to any Indemnified Person, including without limitation, the indemnities set
forth in Sections 11.1 through 11.7 of the Participation Agreement and such
indemnity payment shall not be included in the calculation set forth above. The
Lessee nonetheless acknowledges and agrees that even though the maximum
29
aggregate recovery from the Credit Parties is limited as aforesaid, the Lessor's
right of recovery from the Properties (as opposed to any recovery from the
Credit Parties) is not so limited and the Lessor shall be entitled to recover
100% of the amounts owed to the Lessor in accordance with the Operative
Agreements from its interest in the Properties.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
----------------------------------------------
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon any
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All
out-of-pocket costs and expenses so incurred (including without limitation fees
and expenses of counsel), together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid by Lessor, shall be paid
by Lessee to Lessor on demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE
--------------------------------------------------------
OPTION.
------
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to any Property, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by deed or other appropriate instrument) of
Lessor's entire interest in such Property, in each case in recordable form and
otherwise in conformity with local custom and free and clear of any Lessor Liens
attributable to Lessor but without any other warranties (of title or otherwise)
from Lessor. Such Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in
then present physical condition.
19.2 NO PURCHASE OR TERMINATION WITH RESPECT TO LESS THAN ALL OF A
-------------------------------------------------------------
PROPERTY.
--------
Lessee shall not be entitled to exercise its Purchase Option
or the Sale Option separately with respect to a portion of any Property
consisting of Land, Equipment, Improvements and/or any interest pursuant to a
Ground Lease but shall be required to exercise its Purchase Option or the Sale
Option with respect to an entire Property.
30
ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
-------------------------------------------------
The provisions of this Section 20.1 regarding the Sale Option
are subject to the provisions of Section 22.6. Not less than one hundred eighty
(180) days and no more than two hundred forty (240) days prior to the Expiration
Date (as such may have been extended beyond the seventh annual anniversary of
the Initial Closing Date pursuant to Section 2.2) or, respecting the Purchase
Option only not less than sixty (60) days prior to the applicable Payment Date
(such Expiration Date or, respecting the Purchase Option only, any such Payment
Date being hereinafter referred to as the "Election Date"), Lessee may give
Lessor irrevocable written notice (the "Election Notice") that Lessee is
electing to exercise either (a) the option to purchase all, but not less than
all, the Properties on the applicable Election Date (the "Purchase Option") or
(b) with respect to an Election Notice given in connection with the Expiration
Date only, the option to remarket all, but not less than all, the Properties to
a Person other than Lessee or any Affiliate of Lessee and cause a sale of such
Properties to occur on the applicable Election Date (subject to Section 22.6)
pursuant to the terms of Section 22.1 (the "Sale Option"). If Lessee does not
give an Election Notice indicating the Purchase Option or the Sale Option at
least one hundred eighty (180) days and not more than two hundred forty (240)
days prior to the Expiration Date, then Lessee shall be deemed to have elected
for the Purchase Option to apply on the Expiration Date.
20.2 LESSEE PURCHASE OPTION.
----------------------
Provided, no Default or Event of Default shall have occurred
and be continuing (other than those that will be cured by the payment of the
Termination Value for all the Properties) and provided, that the Election Notice
has been appropriately given specifying the Purchase Option, Lessee shall
purchase all the Properties on the applicable Election Date at a price equal to
the Termination Value for such Properties (which the parties do not intend to be
a "bargain" purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to a Property or all of the
Properties, and upon tender by Lessee of the amounts set forth in Section
16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge
(where required) and deliver to Lessee, at Lessee's cost and expense, each of
the following: (a) a termination or assignment (as requested by the Lessee) of
each applicable Ground Lease and special or limited warranty Deeds conveying
each Property (to the extent it is real property not subject to a Ground Lease)
to Lessee free and clear of the Lien of this Lease, the Lien of the Credit
Documents and any Lessor Liens; (b) a ▇▇▇▇ of Sale conveying each Property (to
the extent it is personal property) to Lessee free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed and/or the applicable Ground Lease
termination; and (d) FIRPTA affidavits. All of the foregoing documentation must
31
be in form and substance reasonably satisfactory to Lessor. The applicable
Property shall be conveyed to Lessee "AS-IS, WHERE-IS" and in then present
physical condition.
If any Property is the subject of remediation efforts
respecting Hazardous Substances at the applicable Election Date which could
materially and adversely impact the Fair Market Sales Value of such Property
(with materiality determined in Lessor's discretion), then Lessee shall be
obligated to purchase each such Property pursuant to Section 20.2.
On the applicable Election Date on which Lessee has elected to
exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor,
the Agent and all other parties, as appropriate, the sum of all costs and
expenses incurred by any such party in connection with the election by Lessee to
exercise its Purchase Option and all Rent and all other amounts then due and
payable or accrued under this Lease and/or any other Operative Agreement.
20.3 THIRD PARTY SALE OPTION.
-----------------------
(a) Provided, that (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake
to cause a sale of the Properties on the applicable Election Date (all
as specified in the Election Notice), in accordance with the provisions
of Section 22.1 hereof.
(b) In the event Lessee exercises the Sale Option then, as
soon as practicable and in all events not less than sixty (60) days and
not more than one hundred eighty (180) days prior to the Sale Date,
Lessee at its expense shall cause to be delivered to Lessor a Phase I
environmental site assessment for each of the Properties recently
prepared (no more than thirty (30) days old prior to the date of
delivery) by an independent recognized professional reasonably
acceptable to Lessor and in form, scope and content reasonably
satisfactory to Lessor. In the event that Lessor shall not have
received such environmental site assessment by the date sixty (60) days
prior to the Sale Date or in the event that such environmental
assessment shall reveal the existence of any material violation of
Environmental Laws, other material Environmental Violation or potential
material Environmental Violation (with materiality determined in each
case by Lessor in its reasonable discretion), then Lessee on the Sale
Date shall pay to Lessor an amount equal to the Termination Value for
all the Properties and any and all other amounts due and owing
hereunder. Upon receipt of such payment and all other amounts due under
the Operative Agreements, Lessor shall transfer to Lessee all of
Lessor's right, title and interest in and to all the Properties in
accordance with Section 19.1.
ARTICLE XXI
21.1 [INTENTIONALLY OMITTED].
32
ARTICLE XXII
22.1 SALE PROCEDURE.
--------------
(a) The provisions of this Section 22.1 are subject to the
provisions of Section 22.6. During the Marketing Period, Lessee, on
behalf of Lessor, shall obtain bids for the cash purchase of all the
Properties in connection with a sale to one (1) or more third party
purchasers to be consummated on the Sale Date for the highest price
available, shall notify Lessor promptly of the name and address of each
prospective purchaser and the cash price which each prospective
purchaser shall have offered to pay for each such Property and shall
provide Lessor with such additional information about the bids and the
bid solicitation procedure as Lessor may reasonably request from time
to time. All such prospective purchasers must be Persons other than
Lessee or any Affiliate of Lessee. On the Sale Date, Lessee shall pay
(or cause to be paid) to Lessor and all other parties, as appropriate,
the sum of all costs and expenses incurred by Lessor and/or the Agent
(as the case may be) in connection with such sale of one or more
Properties, all Rent and all other amounts then due and payable or
accrued under this Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect. Lessor may elect
to retain one or more of the Properties by giving Lessee prior written
notice of Lessor's election to retain the same, and promptly upon
receipt of such notice, Lessee shall surrender, or cause to be
surrendered, each of the Properties specified in such notice in
accordance with the terms and conditions of Section 10.1. Upon
acceptance of any bid, Lessor agrees, at Lessee's request and expense,
to execute a contract of sale with respect to such sale, so long as the
same is consistent with the terms of this Article 22 and provides by
its terms that it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the
Properties pursuant to the provisions of the preceding paragraph,
Lessee shall arrange for Lessor to sell all the Properties free and
clear of the Lien of this Lease and any Lessor Liens attributable to
Lessor, without recourse or warranty (of title or otherwise), for cash
on the Sale Date to the purchaser or purchasers offering the highest
cash sales price, as identified by Lessee or Lessor, as the case may
be. To effect such transfer and assignment, Lessor shall execute,
acknowledge (where required) and deliver to the appropriate purchaser
each of the following: (a) special or limited warranty Deeds conveying
each such Property (to the extent it is real property titled to Lessor)
and an assignment of the Ground Lease conveying the leasehold interest
of Lessor in each such Property (to the extent it is real property and
subject to a Ground Lease) to the appropriate purchaser free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any
Lessor Liens; (b) a ▇▇▇▇ of Sale conveying each such Property (to the
extent it is personal property) titled to Lessor to the appropriate
purchaser free and clear of the Lien of this Lease, the Lien of the
Credit Documents and any Lessor Liens; (c) any real estate tax
affidavit or other document required by law to be executed and filed in
order to record each Deed and/or each Ground Lease assignment; and (d)
FIRPTA affidavits, as appropriate. All of the foregoing documentation
33
must be in form and substance reasonably satisfactory to Lessor. Lessee
shall surrender the Properties so sold or subject to such documents to
each purchaser in the condition specified in Section 10.1, or in such
other condition as may be agreed between Lessee and such purchaser.
Lessee shall not take or fail to take any action which would have the
effect of unreasonably discouraging bona fide third party bids for any
Property. If any Property (i) is not sold on the Sale Date in
accordance with the terms of this Section 22.1, or (ii) is retained by
Lessor pursuant to an affirmative election made by Lessor pursuant to
the second sentence of the second paragraph of this Section 22.1(a),
then (x) Lessee shall be obligated to pay Lessor on the Sale Date an
amount equal to the Maximum Residual Guarantee Amount and (y) Lessor
shall retain each applicable Property for subsequent marketing in
accordance with the provisions of Section 22.6.
(b) If the Properties are sold on a Sale Date to one (1) or
more third party purchasers in accordance with the terms of Section
22.1(a), Lessee hereby unconditionally promises to pay to Lessor on the
Sale Date all Rent and all other amounts then due and owing pursuant to
the Operative Agreements. If the aggregate purchase price paid for all
the Properties is less than the sum of the aggregate Property Cost for
all the Properties (hereinafter such difference shall be referred to as
the "Deficiency Balance"), then Lessee hereby unconditionally promises
to pay to Lessor on the Sale Date the lesser of (i) the Deficiency
Balance, or (ii) the Maximum Residual Guarantee Amount for all the
Properties. On a Sale Date if (x) Lessor receives the aggregate
Termination Value for all the Properties from one (1) or more third
party purchasers, (y) Lessor and such other parties receive all other
amounts specified in the last sentence of the first paragraph of
Section 22.1(a) and (z) the aggregate purchase price paid for all the
Properties on such date exceeds the sum of the aggregate Property Cost
for all the Properties, then Lessee may retain such excess. If one or
more of the Properties are retained by Lessor pursuant to an
affirmative election made by Lessor pursuant to the provisions of
Section 22.1(a), then Lessee hereby unconditionally promises to pay to
Lessor on the Sale Date all Rent and all other amounts then due and
owing pursuant to the Operative Agreements and an amount equal to the
Maximum Residual Guarantee Amount for the Properties so retained. Any
payment of the foregoing amounts described in this Section 22.1(b)
shall be made together with a payment of all other amounts referenced
in the last sentence of the first paragraph of Section 22.1(a).
(c) In the event that all the Properties are either sold to
one (1) or more third party purchasers on the Sale Date or retained by
Lessor in connection with an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then in either case on
the applicable Sale Date Lessee shall provide Lessor or such third
party purchaser (unless otherwise agreed by such third party purchaser)
with (i) all permits, certificates of occupancy, governmental licenses
and authorizations necessary to use, operate, repair, access and
maintain each such Property for the purpose it is being used by Lessee,
and (ii) such manuals, permits, easements, licenses, intellectual
property, know-how, rights-of-way and other rights and privileges in
the nature of an easement as are reasonably necessary or desirable in
connection with the use, operation, repair, access to or maintenance of
each such Property for its intended purpose or otherwise as Lessor or
such third party purchaser(s) shall reasonably request (and a
34
royalty-free license or similar agreement to effectuate the foregoing
on terms reasonably agreeable to Lessor or such third party
purchaser(s), as applicable). All assignments, licenses, easements,
agreements and other deliveries required by clauses (i) and (ii) of
this paragraph (c) shall be in form reasonably satisfactory to Lessor
or such third party purchaser(s), as applicable, and to the extent
lawfully assignable shall be fully assignable (including without
limitation both primary assignments and assignments given in the nature
of security) without payment of any fee, cost or other charge. Lessee
shall also execute any documentation requested by Lessor or such third
party purchaser(s), as applicable, evidencing the continuation or
assignment of each Ground Lease.
22.2 APPLICATION OF PROCEEDS OF SALE.
-------------------------------
Lessor shall transfer to the Agent the proceeds of sale of any
Property for application and distribution in accordance with Section 8.7 of the
Participation Agreement.
22.3 INDEMNITY FOR EXCESSIVE WEAR.
----------------------------
If the sum of (a) the proceeds of the sale described in Section 22.1
with respect to the Properties, if any, plus (b) the amount previously paid by
the Lessee with respect to the Maximum Residual Guarantee Amount (less any
portion of the Maximum Residual Guarantee Amount repaid to the Lessee pursuant
to the Operative Agreements, including without limitation Section 8.7(b)(viii)
of the Participation Agreement) shall be less than the Termination Value with
respect to the Properties, and on the Expiration Date it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Properties shall have been impaired by greater than expected
wear and tear during the term of the Lease, Lessee shall pay to Lessor within
ten (10) days after receipt of Lessor's written statement the amount of such
excess wear and tear determined by the Appraisal Procedure.
22.4 APPRAISAL PROCEDURE.
-------------------
For determining the Fair Market Sales Value of the Properties
or any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor,
shall mutually agree thereupon, but if either party shall fail to choose an
appraiser within twenty (20) days after notice from the other party of the
selection of its appraiser, then the appraisal by such appointed appraiser shall
be binding on Lessee and Lessor. If the two (2) appraisers cannot agree within
twenty (20) days after both shall have been appointed, then a third appraiser
shall be selected by the two (2) appraisers or, failing agreement as to such
third appraiser within thirty (30) days after both shall have been appointed, by
the American Arbitration Association. The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser most different from the average of the other
two (2) shall be discarded and such average shall be binding on Lessor and
35
Lessee; provided, that if the highest appraisal and the lowest appraisal are
equidistant from the third appraisal, the third appraisal shall be binding on
Lessor and Lessee. The fees and expenses of the appraiser appointed by Lessee
shall be paid by Lessee; the fees and expenses of the appraiser appointed by
Lessor shall be paid by Lessor (such fees and expenses not being indemnified
pursuant to Section 11 of the Participation Agreement); and the fees and
expenses of the third appraiser shall be divided equally between Lessee and
Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
----------------------------
During the Marketing Period, the obligation of Lessee to pay
Rent with respect to the Properties (including without limitation the
installment of Basic Rent due on the Sale Date) shall continue undiminished
until payment in full to Lessor of the sale proceeds, if any, the Maximum
Residual Guarantee Amount, the amount due under Section 22.3, if any, and all
other amounts due to Lessor or any other Person with respect to all Properties
or any Operative Agreement. Lessor shall have the right, but shall be under no
duty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or
otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXII.
22.6 EXTENDED REMARKETING PERIOD.
---------------------------
To the extent Lessee has properly elected the Sale Option and
not caused each of the Properties to be sold to a third party purchaser by the
Expiration Date in accordance with the provisions of Sections 20.1, 20.3 and
22.1 through 22.5, then on the Expiration Date Lessee shall pay to Lessor the
Maximum Residual Guarantee Amount and all Rent and all other amounts then due
and owing pursuant to the Operative Agreements. For a period not to exceed one
(1) year beginning on the Expiration Date (the "Extended Remarketing Period"),
Lessor shall have a right to market and offer for sale its right, title and
interest in the Properties to third party purchasers and during such time,
Lessor shall have exclusive control of the bid process. During the Extended
Remarketing Period, Lessee shall have vacated the Properties and relinquished
all of its right, title and interest therein, but Lessee shall continue to be
responsible for the satisfaction of all matters described in (and compliance
with) Section 3.3.
To the extent Lessor sells one or more of the Properties to a
third party purchaser during the Extended Remarketing Period, Lessor shall
deliver the documentation specified in the third paragraph of Section 22.1(a)
and the sales proceeds paid by such third party purchaser for each such Property
shall be paid to the Agent (on behalf of Lessor) for allocation and distribution
in accordance with Section 8.7(b)(iii) of the Participation Agreement. If with
respect to any of the Properties so sold, Advances were used to pay for Excluded
Costs while any such Property was a Construction Period Property, then Section
8.7(b)(viii) shall apply.
To the extent Lessor does not sell any particular Property
during the Extended Remarketing Period, then the Fair Market Sales Value of each
such Property as of the Expiration Date shall be determined pursuant to the
Appraisal Procedure. Lessor shall cause the Lenders and the Holders to
contribute ratably (based on such Lender's or such Holder's proportion of the
aggregate Loans or aggregate Holder Advances, respectively), but not jointly and
severally, to the Agent (on behalf of Lessor) an aggregate amount equal to the
36
portion of such appraised value of each such Property (as determined pursuant to
the Appraisal Procedure) which would be payable to Lessee pursuant to Section
8.7(b)(viii) of the Participation Agreement if such Property had been sold for
such appraised value on the Expiration Date.
ARTICLE XXIII
23.1 HOLDING OVER.
------------
If Lessee shall for any reason remain in possession of a
Property after the expiration or earlier termination of this Lease as to such
Property (unless such Property is conveyed to Lessee), such possession shall be
as a tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at the lesser of the highest lawful rate and one hundred ten
percent (110%) of the last payment of Basic Rent due with respect to such
Property prior to such expiration or earlier termination of this Lease. Such
Basic Rent shall be payable from time to time upon demand by Lessor and such
additional amount of Basic Rent shall be applied by Lessor ratably to the
Lenders and the Holders based on their relative amounts of the then outstanding
aggregate Property Cost for all Properties. During any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be obligated
to perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to the extent given by
law to tenants at sufferance, to continue their occupancy and use of such
Property. Nothing contained in this Article XXIII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to any Property (unless such Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of such Property or
exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS.
------------
During the Term, unless Lessee shall not be in actual
possession of any Property in question solely by reason of Lessor's exercise of
its remedies of dispossession under Article XVII, the risk of loss or decrease
in the enjoyment and beneficial use of such Property as a result of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
37
ARTICLE XXV
25.1 ASSIGNMENT.
----------
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1
or otherwise) or other relinquishment of possession to any Property
shall in any way discharge or diminish any of the obligations of Lessee
to Lessor hereunder and Lessee shall remain directly and primarily
liable under the Operative Agreements as to any rights or obligations
assigned by Lessee or regarding any Property in which rights or
obligations have been assigned or otherwise transferred.
25.2 SUBLEASES.
---------
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Property described in such Lease Supplement from Lessor,
and any existing tenant respecting such Property shall automatically be
deemed to be a subtenant of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any
Lender, any Holder or Lessor and subject to the other provisions of
this Section 25.2, Lessee may sublet any Property or portion thereof to
any Subsidiary of the Parent or up to thirty percent (30%), in the
aggregate, of the square footage of the applicable Property to any
healthcare providers or businesses related to the operations of the
Property in accordance with market and industry practices and
standards, provided in all cases the Lessee shall remain primarily
liable with respect to the Company Obligations. Except as referenced in
the immediately preceding sentence, no other subleases shall be
permitted unless consented to in writing by Lessor. All subleasing
shall be done on market terms and shall in no way diminish the fair
market value or useful life of any applicable Property.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder
and Lessee shall remain directly and primarily liable under this Lease
as to such Property, or portion thereof, so sublet. The term of any
such sublease shall not extend beyond the Term. Each sublease shall be
expressly subject and subordinate to this Lease.
38
ARTICLE XXVI
26.1 NO WAIVER.
---------
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
-----------------------
No surrender to Lessor of this Lease or of all or any portion
of any Property or of any part of any thereof or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by Lessor and no
act by Lessor or the Agent or any representative or agent of Lessor or the
Agent, other than a written acceptance, shall constitute an acceptance of any
such surrender.
27.2 NO MERGER OF TITLE.
------------------
There shall be no merger of this Lease or of the leasehold
estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 INCORPORATION OF COVENANTS.
--------------------------
Reference is made to the Parent Credit Agreement and the
representations and warranties of Lessee contained in Article VI of the Parent
Credit Agreement (hereinafter referred to as the "Incorporated Representations
and Warranties") and the covenants contained in Articles VII and VIII of the
Parent Credit Agreement (hereinafter referred to as the "Incorporated
Covenants"). Lessee agrees with Lessor that the Incorporated Representations and
Warranties and the Incorporated Covenants (and all other relevant provisions of
the Parent Credit Agreement related thereto, including without limitation the
defined terms contained in Section 1.1 thereof which are used in the
Incorporated Representations and Warranties and the Incorporated Covenants,
hereinafter referred to as the "Additional Incorporated Terms") are hereby
incorporated by reference into this Lease to the same extent and with the same
effect as if set forth fully herein and shall inure to the benefit of Lessor,
39
without giving effect to any waiver, amendment, modification or replacement of
the Parent Credit Agreement or any term or provision of the Incorporated
Representations and Warranties or the Incorporated Covenants occurring
subsequent to the date of this Lease, except to the extent otherwise
specifically provided in the following provisions of this paragraph. In the
event a waiver is granted under the Parent Credit Agreement or an amendment or
modification is executed with respect to the Parent Credit Agreement, and such
waiver, amendment and/or modification affects the Incorporated Representations
and Warranties, the Incorporated Covenants or the Additional Incorporated Terms,
then such waiver, amendment or modification shall be effective with respect to
the Incorporated Representations and Warranties, the Incorporated Covenants and
the Additional Incorporated Terms as incorporated by reference into this Lease
only if consented to in writing by the Agent (acting upon the direction of the
Majority Secured Parties). In the event of any replacement of the Parent Credit
Agreement with a similar credit facility (the "New Facility") the
representations and warranties, covenants and additional terms contained in the
New Facility which correspond to the representations and warranties, covenants
contained in Article VI and Articles VII and VIII, respectively, and such
additional terms (each of the foregoing contained in the Parent Credit
Agreement) shall become the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms only if consented
to in writing by the Agent (acting upon the direction of the Majority Secured
Parties) and, if such consent is not granted or if the Parent Credit Agreement
is terminated and not replaced, then the representations and warranties and
covenants contained in Article VI and Articles VII and VIII, respectively, and
such additional terms (each of the foregoing contained in the Parent Credit
Agreement (together with any modifications or amendments approved in accordance
with this paragraph)) shall continue to be the Incorporated Representations and
Warranties, the Incorporated Covenants and the Additional Incorporated Terms
hereunder.
ARTICLE XXIX
29.1 NOTICES.
-------
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
ARTICLE XXX
30.1 MISCELLANEOUS.
-------------
Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
40
30.2 AMENDMENTS AND MODIFICATIONS.
----------------------------
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
----------------------
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 HEADINGS AND TABLE OF CONTENTS.
------------------------------
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 COUNTERPARTS.
------------
This Lease may be executed in any number of counterparts, each
of which shall be an original, but all of which shall together constitute one
(1) and the same instrument.
30.6 GOVERNING LAW.
-------------
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA
(WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW),
EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS
LOCATED ARE REQUIRED TO APPLY.
30.7 CALCULATION OF RENT.
-------------------
All calculation of Rent payable hereunder shall be computed
based on the actual days elapsed over a year of three hundred sixty (360) days
or, to the extent such Rent is based on the Prime Lending Rate, the actual days
elapsed over a year of three hundred sixty-five (365) (or three hundred
sixty-six (366), as applicable) days.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
----------------------------------------
This Lease shall not be recorded; provided, Lessor and Lessee
shall promptly record (a) a memorandum of this Lease and the applicable Lease
Supplement (in substantially the form of Exhibit B attached hereto) or a short
form lease (in form and substance reasonably satisfactory to Lessor) regarding
each Property promptly after the acquisition thereof in the local filing office
with respect thereto, in all cases at Lessee's cost and expense, and as required
under applicable law to sufficiently evidence this Lease and any such Lease
Supplement in the applicable real estate filing records.
41
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
-----------------------------------------------
Notwithstanding any other term or provision of this Lease to
the contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts received hereunder shall be subject to the
inter-creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 LIMITATIONS ON RECOURSE.
-----------------------
Notwithstanding anything contained in this Lease to the
contrary, except for Lessor Liens arising by, through or under the Trust Company
which shall be the responsibility of the Trust Company and Lessor Liens arising
by, through or under the Lessor which shall be the responsibility of the Lessor,
Lessee agrees to look solely to Lessor's estate and interest in the Properties
(and in no circumstance to the Agent, the Lenders, the Holders or otherwise to
Lessor) for the collection of any judgment requiring the payment of money by
Lessor in the event of liability by Lessor, and no other property or assets of
Lessor or any shareholder, owner or partner (direct or indirect) in or of
Lessor, or any director, officer, employee, beneficiary, Affiliate of any of the
foregoing shall be subject to levy, execution or other enforcement procedure for
the satisfaction of the remedies of Lessee under or with respect to this Lease,
the relationship of Lessor and Lessee hereunder or Lessee's use of the
Properties or any other liability of Lessor to Lessee. Nothing in this Section
shall be interpreted so as to limit the terms of Sections 6.1 or 6.2 or the
provisions of Section 12.9 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
---------------------
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY
COUNTERCLAIM THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
-------------------------
Lessee hereby acknowledges and agrees that the rights and
powers of Lessor under this Lease have been assigned to the Agent pursuant to
the terms of the Security Agreement and the other Operative Agreements. Lessor
and Lessee hereby acknowledge and agree that (a) the Agent shall, in its
discretion, direct and/or act on behalf of Lessor pursuant to the provisions of
Sections 8.2(h) and 8.6 of the Participation Agreement, (b) all notices to be
given to Lessor shall be given to the Agent and (c) all notices to be given by
Lessor may be given by the Agent, at its election.
42
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
----------------------------------------------
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
30.14 USURY SAVINGS PROVISION.
-----------------------
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND
CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN
EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER
CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR
PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST."
ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY
EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF
THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED
FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM
NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF
THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE
AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH
AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF
THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST
WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT
43
INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND.
ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE
FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS
LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED
THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
30.15 LESSOR CERTIFICATION.
--------------------
It is Lessee's policy not to contract with "Ineligible Persons". An
"Ineligible Person" is defined as any individual or entity who: (a) is currently
excluded, debarred or otherwise ineligible to participate in the Federal
healthcare programs or in the Federal procurement or non-procurement programs;
and (b) has been convicted of a criminal offense related to the provision of
healthcare items or services, but has not yet been excluded, debarred or
otherwise declared ineligible. In connection therewith, Lessee is required to
verify that its contractors are not listed on the General Services
Administration's List of Parties Excluded from Federal Programs and the list of
Excluded Individuals/Entities maintained by the Office of Inspector General of
the Department of Health and Human Services. Lessor hereby certifies that it (a)
has not received written notice that it is currently excluded, debarred or
otherwise ineligible to participate in the Federal healthcare programs or in the
Federal procurement or non-procurement programs; and (b) has not been convicted
of a criminal offense related to the provision of healthcare items or services.
[signature pages follow]
44
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not individually, but solely as Owner
Trustee for Digital Hospital Trust
2001-1, as Lessor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Assistant Secretary
------------------------------
[signature pages continue]
HEALTHSOUTH MEDICAL CENTER, INC., as
Lessee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice President and Treasurer
------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Jr.
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Jr.
-------------------------------------
Title: Vice President
------------------------------------
[signature pages end]