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EXHIBIT 10.2
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PARTICIPATION AGREEMENT
dated as of March 21, 1997
among
VANTAGE HEALTHCARE CORPORATION, ▇▇▇▇▇▇▇▇ HEALTH CARE, INC., ▇▇▇▇▇▇▇ SAVANA
CAY MANOR, INC., ▇▇▇▇▇▇▇ ENTERPRISES-GEORGIA,
INC., and ▇▇▇▇▇▇▇ ENTERPRISES-CALIFORNIA, INC.
as Lessees and Structural Guarantors
▇▇▇▇▇▇▇ ENTERPRISES, INC.
as Representative, Construction Agent
and Parent Guarantor,
BMO LEASING (U.S.), INC.,
as Agent Lessor and Lessor,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
and
BANK OF MONTREAL,
as Lenders,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
as Arranger and Administrative Agent for the Lenders
and
BANK OF MONTREAL,
as Co-Arranger and Syndication Agent
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Lease Financing of Assisted Living and Nursing Facilities
for
▇▇▇▇▇▇▇ Enterprises, Inc.
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS; INTERPRETATION . . . . . . . . . . . . . 2
ARTICLE II DOCUMENTATION DATE . . . . . . . . . . . . . . . . . . . 2
Section 2.1 Documentation Date . . . . . . . . . . . . . . 2
ARTICLE III FUNDING OF ADVANCES . . . . . . . . . . . . . . . . . . 5
Section 3.1 Advances . . . . . . . . . . . . . . . . . . . 5
Section 3.2 Lessors' Commitments . . . . . . . . . . . . . 6
Section 3.3 Lenders' Commitments . . . . . . . . . . . . . 7
Section 3.4 Procedures for Advances . . . . . . . . . . . 7
Section 3.5 Interest Rate; Yield Rate . . . . . . . . . . 8
Section 3.6 Interest Period Selection/
Continuation/Conversion Elections . . . . . . 8
ARTICLE IV YIELD; INTEREST; FEES . . . . . . . . . . . . . . . . . 9
Section 4.1 Yield . . . . . . . . . . . . . . . . . . . . 9
Section 4.2 Interest on Loans . . . . . . . . . . . . . . 10
Section 4.3 Reductions in Commitments
and Prepayments . . . . . . . . . . . . . . . 11
Section 4.4 Fees . . . . . . . . . . . . . . . . . . . . . 12
Section 4.5 Place and Manner of Payments . . . . . . . . . 13
Section 4.6 Pro Rata Treatment . . . . . . . . . . . . . . 14
Section 4.7 Sharing of Payments . . . . . . . . . . . . . 14
ARTICLE V CERTAIN INTENTIONS OF THE PARTIES . . . . . . . . . . 15
Section 5.1 Nature of Transaction . . . . . . . . . . . . 15
Section 5.2 Amounts Due Under the Lease . . . . . . . . . 16
ARTICLE VI CONDITIONS PRECEDENT: ACQUISITION DATES;
FUNDING DATES . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.1 Acquisition Dates . . . . . . . . . . . . . . 17
Section 6.2 Funding Dates . . . . . . . . . . . . . . . . 22
Section 6.3 Conditions to Completion Date . . . . . . . . 24
ARTICLE VII DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 25
Section 7.1 Basic Rent . . . . . . . . . . . . . . . . . . 25
Section 7.2 Purchase Payments by the
Representative and the Lessees . . . . . . . . 25
Section 7.3 Payment of Loan Balance . . . . . . . . . . . 26
Section 7.4 Sales Proceeds of Remarketing of
Properties . . . . . . . . . . . . . . . . . . 26
Section 7.5 Supplemental Rent . . . . . . . . . . . . . . 27
Section 7.6 Distribution of Payments after Lease
Event of Default . . . . . . . . . . . . . . . 27
Section 7.7 Other Payments . . . . . . . . . . . . . . . . 30
Section 7.8 Casualty and Condemnation Amounts . . . . . . 31
Section 7.9 Order of Application . . . . . . . . . . . . . 31
Section 7.10 Payments to Account . . . . . . . . . . . . . 31
(i)
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ARTICLE VIII REPRESENTATIONS . . . . . . . . . . . . . . . . . . . 31
Section 8.1 Representations of the Participants . . . . . 31
Section 8.2 Representations of the ▇▇▇▇▇▇▇
Entities. . . . . . . . . . . . . . . . . . . 32
Section 8.3 Representations with Respect to each
Funding Date and Acquisition Date . . . . . . 40
ARTICLE IX PAYMENT OF CERTAIN EXPENSES . . . . . . . . . . . . . . 41
Section 9.1 Transaction Expenses . . . . . . . . . . . . . 41
Section 9.2 Brokers' Fees and Stamp Taxes . . . . . . . . 42
ARTICLE X OTHER COVENANTS AND AGREEMENTS . . . . . . . . . . . . . 42
Section 10.1 Affirmative Covenants of the
Representative. . . . . . . . . . . . . . . 42
Section 10.2 Negative Covenants of the
Representative . . . . . . . . . . . . . . . . 48
ARTICLE XI RENEWALS . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.1 Extensions of Maturity Date
and Expiration Date; Replacement
of Participants . . . . . . . . . . . . . . . 60
Section 11.2 Replacement of Defaulting
Participant . . . . . . . . . . . . . . . . . 62
ARTICLE XII TRANSFERS OF PARTICIPANTS' INTERESTS . . . . . . . . . 62
Section 12.1 Assignments . . . . . . . . . . . . . . . . . 62
Section 12.2 Participations . . . . . . . . . . . . . . . . 63
Section 12.3 Withholding Taxes; Disclosure
of Information; Pledge Under
Regulation A . . . . . . . . . . . . . . . . . 64
ARTICLE XIII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 65
Section 13.1 General Indemnification . . . . . . . . . . . 65
Section 13.2 End of Term Indemnity . . . . . . . . . . . . 68
Section 13.3 Environmental Indemnity . . . . . . . . . . . 69
Section 13.4 Proceedings in Respect
of Claims . . . . . . . . . . . . . . . . . . 71
Section 13.5 General Tax Indemnity . . . . . . . . . . . . 72
Section 13.6 Indemnity Payments in Addition
to Lease Obligations . . . . . . . . . . . . . 77
Section 13.7 Eurodollar Rate Lending Unlawful . . . . . . . 77
Section 13.8 Deposits Unavailable . . . . . . . . . . . . . 78
Section 13.9 Increased Costs, etc. . . . . . . . . . . . . 78
Section 13.10 Funding Losses . . . . . . . . . . . . . . . . 80
Section 13.11 Capital Adequacy . . . . . . . . . . . . . . . 81
ARTICLE XIV THE AGENT LESSOR . . . . . . . . . . . . . . . . . . . 82
Section 14.1 Appointment and Authorization . . . . . . . . 82
Section 14.2 Delegation of Duties . . . . . . . . . . . . . 83
Section 14.3 Agent Lessor and Affiliates . . . . . . . . . 83
Section 14.4 Action by Agent Lessor . . . . . . . . . . . . 83
Section 14.5 Consultation with Experts . . . . . . . . . . 84
(ii)
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Section 14.6 Exculpatory Provisions . . . . . . . . . . . . 84
Section 14.7 Reliance on Communications . . . . . . . . . . 84
Section 14.8 Notice of Default . . . . . . . . . . . . . . 85
Section 14.9 Non-Reliance on Agent Lessor
and Other Participants . . . . . . . . . . . . 85
Section 14.10 Indemnification . . . . . . . . . . . . . . . 86
Section 14.11 Failure to Act . . . . . . . . . . . . . . . . 87
Section 14.12 Resignation and Removal . . . . . . . . . . . 87
Section 14.13 Distributions . . . . . . . . . . . . . . . . 88
Section 14.14 Rights of Each ▇▇▇▇▇▇▇ Entity . . . . . . . . 88
ARTICLE XV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 88
Section 15.1 Survival of Agreements . . . . . . . . . . . . 88
Section 15.2 No Broker, etc. . . . . . . . . . . . . . . . 89
Section 15.3 Notices . . . . . . . . . . . . . . . . . . . 89
Section 15.4 Counterparts . . . . . . . . . . . . . . . . . 89
Section 15.5 Amendments, etc . . . . . . . . . . . . . . . 89
Section 15.6 Headings, etc. . . . . . . . . . . . . . . . . 91
Section 15.7 Parties in Interest . . . . . . . . . . . . . 91
Section 15.8 GOVERNING LAW . . . . . . . . . . . . . . . . 91
Section 15.9 Severability . . . . . . . . . . . . . . . . . 91
Section 15.10 Liability Limited . . . . . . . . . . . . . . 92
Section 15.11 Further Assurances . . . . . . . . . . . . . . 92
Section 15.12 SUBMISSION TO JURISDICTION . . . . . . . . . . 93
Section 15.13 Setoff . . . . . . . . . . . . . . . . . . . . 93
Section 15.14 WAIVER OF JURY TRIAL . . . . . . . . . . . . . 93
Section 15.15 No Participant Responsible for
Other Participants . . . . . . . . . . . . . . 94
Section 15.16 Each Lessor to Have an Undivided
Interest . . . . . . . . . . . . . . . . . . . 94
APPENDIX A - DEFINITIONS
SCHEDULE I - COMMITMENTS
SCHEDULE II - NOTICE INFORMATION, WIRE INSTRUCTIONS AND FUNDING OFFICES
SCHEDULE III - SUBSIDIARIES, LIENS, LITIGATION, INDEBTEDNESS AND
RESTRICTIONS ON SUBSIDIARY DIVIDENDS
SCHEDULE IV - PRICING CATEGORY
EXHIBIT A - FORM OF LEGAL OPINION OF LESSEE AND GUARANTORS
EXHIBIT B - FORM OF FUNDING REQUEST
EXHIBIT C - FORM OF INTEREST PERIOD SELECTION/CONTINUATION/CONVERSION
NOTICE
EXHIBIT D-1 - FORM OF OFFICER'S CERTIFICATE
EXHIBIT D-2 - FORM OF SECRETARY'S CERTIFICATE
EXHIBIT D-3 - FORM OF RESPONSIBLE OFFICER'S CERTIFICATE
EXHIBIT E - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT G - FORM OF LEGAL OPINION OF LOCAL COUNSEL TO LESSEE
EXHIBIT H - FORM OF COMPLETION CERTIFICATE
(iii)
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Participation Agreement"),
dated as of March 21, 1997, is entered into by and among ▇▇▇▇▇▇▇ ENTERPRISES,
INC., a Delaware corporation, as the Representative, Construction Agent and
Parent Guarantor (in its capacity as Representative, the "Representative"; in
its capacity as Construction Agent, the "Construction Agent"; and, in its
capacity as Parent Guarantor, the "Parent Guarantor") and together with the
Guarantors listed on the signature page to the Guaranty (each a "Guarantor")
and the Structural Guarantors, the "Guarantors"); BMO LEASING (U.S.), INC., a
Delaware corporation, as a Lessor (together with any permitted successors and
assigns thereto, each a "Lessor" and collectively the "Lessors"); BMO LEASING
(U.S.), INC., as Agent Lessor for the Lessors (in such capacity, the "Agent
Lessor"); THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS ANGELES AGENCY
("LTCB"), BANK OF MONTREAL, a Canadian banking organization ("BMO"), and the
other various financial institutions as are or may from time to time become
lenders (the "Lenders") under the Loan Agreement; LTCB as Administrative Agent
(in such capacity, the "Administrative Agent") for the Lenders and as Arranger
(in such capacity, the "Arranger"); and BMO, as Co-Arranger and Syndication
Agent.
W I T N E S S E T H:
WHEREAS, on each Acquisition Date, the Agent Lessor will either
(a) purchase from one or more third parties designated by the Construction
Agent, or (b) lease pursuant to a ground lease, parcels of Land, together with
any Improvements thereon;
WHEREAS, the Representative, as Construction Agent, will
construct additional Improvements on such Property which as constructed will be
the property of the Agent Lessor and will become part of such Property;
WHEREAS, the Agent Lessor desire to lease to the respective
Lessees, and the respective Lessees desire to lease from the Agent Lessor, such
Property; and
WHEREAS, the Lessors are willing to provide a portion of the
funding of the costs of the acquisition of Land, all Improvements thereon and
the construction of such other Improvements;
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WHEREAS, the Lenders are willing to provide financing for the
remaining portion of the costs of acquisition of Land, all Improvements thereon
and the construction of such other Improvements and;
WHEREAS, to secure such financing (a) the Lessors will have the
benefit of (i) the Parent Guaranty from the Parent Guarantor and the Guaranty
from the other Guarantors (other than the Structural Guarantors) and (ii) a
first priority Lien on the Properties and (b) the Lenders will have the benefit
of (i) the Structural Guaranties from the Structural Guarantors, the Parent
Guaranty from the Parent Guarantor and the Guaranty from the other Guarantors,
(ii) a Lien on the Agent Lessor's right, title and interest in the Properties,
and (iii) an assignment of certain of the Agent Lessor's rights against the
Lessees under the Lease and against the Construction Agent under the
Construction Agency Agreement;
NOW THEREFORE, in consideration of the mutual agreements
contained in this Participation Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms
used and not defined herein shall have the meanings assigned thereto in
Appendix A hereto for all purposes hereof (as such Appendix A may be amended,
supplemented, amended and restated or otherwise modified from time to time,
"Appendix A to this Participation Agreement"); and the rules of interpretation
set forth in Appendix A to this Participation Agreement shall apply to this
Participation Agreement.
ARTICLE II
DOCUMENTATION DATE
Section 2.1 Documentation Date. The Documentation Date (the
"Documentation Date") shall be deemed to have occurred and all rights and
obligations of the parties to the Operative Documents (each subject to any
conditions specified therein) shall be in effect, upon satisfaction or waiver
of each of the following conditions precedent:
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(a) Participation Agreement. This Participation
Agreement shall have been duly authorized, executed and delivered by the
parties hereto.
(b) Master Lease. The Master Lease shall have been duly
authorized, executed and delivered by the parties thereto.
(c) Construction Agency Agreement. The Construction
Agency Agreement shall have been duly authorized, executed and delivered by the
parties thereto.
(d) Construction Agency Agreement Assignment;
Construction Documents Assignment. The Construction Agency Agreement
Assignment and the Construction Documents Assignment shall have been duly
authorized, executed and delivered by the Agent Lessor and consented to and
acknowledged by the Construction Agent.
(e) Loan Agreement and Notes. The Loan Agreement and
each Lender's Note shall have been duly authorized, executed and delivered by
the parties thereto.
(f) Assignment of Lease and Rent. The Assignment of
Lease and Rent shall have been duly authorized, executed and delivered by the
Agent Lessor, as assignor, to the Administrative Agent, as assignee, and the
Assignment of Lease and Rent shall have been consented to and acknowledged by
the Lessees.
(g) Guaranties. The Structural Guaranties shall have
been duly authorized, executed and delivered by each Structural Guarantor, the
Parent Guaranty shall have been duly authorized, executed and delivered by the
Parent Guarantor and the Guaranty shall have been duly authorized, executed and
delivered by each of the other Guarantors.
(h) Fees. The Administrative Agent and each Participant,
as applicable, shall have received all fees then due and payable pursuant to
Section 4.4.
(i) Certain Transaction Expenses. Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇, LLP ("SASM&F") as counsel for each of the Arranger and the
Administrative Agent, and ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ ("MBP"), as counsel for the
Agent Lessor, shall have received, to the extent then invoiced, payment in full
in cash of all Transaction Expenses payable to such counsel pursuant to Section
9.1.
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(j) Corporate Documents; Certificates; Acceptance Letter.
Each of the Lessees and the Representative shall have delivered, or shall have
caused to be delivered, to the Administrative Agent, the Agent Lessor, each
Lender and each Lessor the following:
(i) Articles of Incorporation. Copies of its
articles of incorporation or charter documents, certified to be true and
complete as of a recent date by the appropriate governmental authority
of the state of its incorporation.
(ii) Resolutions. Copies of resolutions of its
Board of Directors approving and adopting the Operative Documents, the
transactions contemplated therein and authorizing execution and delivery
thereof, certified by its secretary or assistant secretary as of the
Documentation Date to be true and correct and in full force and effect
as of such date.
(iii) Bylaws. A copy of its bylaws certified by
its secretary or assistant secretary as of the Documentation Date to be
true and correct and in full force and effect as of such date.
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent, certified as of a recent
date by the appropriate governmental authorities of the state of its
incorporation and, for each Lessee, of the state where the Property
leased to it is located.
(v) Opinions of Counsel. An opinion of (i) Weil,
Gotshal & ▇▇▇▇▇▇ LLP, New York counsel, (ii) the vice president and
deputy general counsel for the ▇▇▇▇▇▇▇ Entities, and (iii) ▇▇▇▇▇, ▇▇▇▇▇
& ▇▇▇▇▇, counsel to the Agent Lessor, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.,
internal counsel for the Agent Lessor, each dated the Documentation Date
and, with respect to (i) and (ii), addressed to the Administrative
Agent, the Agent Lessor, each of the Lenders and each of the Lessors,
covering the matters set forth in Exhibit A.
(vi) Officer's and Secretary's Certificates from
each ▇▇▇▇▇▇▇ Entity. An Officer's Certificate substantially in the form
of Exhibit D-1, dated the Documentation Date, and a Secretary's
Certificate substantially in the form of Exhibit D-2, dated the
Documentation Date.
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(k) Representations and Warranties. On the Documentation
Date, the representations and warranties of each Structural Guarantor contained
in Section 3 of the Structural Guaranty, of the Parent Guarantor contained in
Section 3 of the Parent Guaranty and of each other Guarantor contained in
Section 3 of the Guaranty and the representations of each applicable ▇▇▇▇▇▇▇
Entity contained in Section 8.2 shall be true and correct in all material
respects as though made on and as of such date, except to the extent such
representations or warranties relate solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(l) No Default. No Default or Event of Default shall
have occurred and be continuing on the Documentation Date unless such Default
or Event of Default shall have been waived in accordance with the Operative
Documents.
(m) Governmental Approvals. All Governmental Actions
required by any Requirement of Law for the purpose of authorizing each ▇▇▇▇▇▇▇
Entity, the Agent Lessor, the Administrative Agent and each Participant to
enter into the Operative Documents shall have been obtained or made and be in
full force and effect.
(n) Lessor Letter Agreement. Agent Lessor shall have
delivered to the Representative the Lessor Letter Agreement.
All documents and instruments required to be delivered pursuant to this Section
2.1 shall be delivered at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or at such other location as
may be determined by the Agent Lessor, the Administrative Agent and the
Representative, and in such numbers as shall be reasonably requested by the
Administrative Agent.
ARTICLE III
FUNDING OF ADVANCES
Section 3.1 Advances. Subject to the conditions and terms
hereof, the Agent Lessor shall take the following actions at the written
request of the Representative from time to time during the Commitment Period
with respect to each Property:
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(a) the Agent Lessor shall make Advances (out of funds
provided by the Lessors and the Lenders) to the Construction Agent, for the
purpose of financing the acquisition of Land or leasehold interests therein
(and Improvements existing thereon, if any) and the Construction of
Improvements thereon, and the proceeds of such Advances shall be made directly
to the Construction Agent or to such parties designated in writing by the
Construction Agent to the Agent Lessor;
(b) the Agent Lessor shall acquire the Land or leasehold
interests therein, and Improvements, if any (using funds provided by the
Lessors and the Lenders); and
(c) the Agent Lessor shall lease (or in the case of
leaseholds, sublease) the Land and Improvements to the relevant Lessee under
the Master Lease and the respective Lease Supplement.
Notwithstanding any other provision hereof, the Agent Lessor shall not be
obligated to make any Advance with respect to any Property if, after giving
effect thereto, (i) the aggregate outstanding amounts of the Loans and the
Lessor Amounts would exceed the Aggregate Commitment Amount, or (ii) the
Property Balance for such Property would exceed the lesser of (x) 110% of the
Estimated Improvements Costs plus Land Acquisition Cost, as set forth in the
Funding Request relating to the Acquisition Date for such Property, and (y) the
Fair Market Sales Value of such Property as set forth in (A) the As-Built
Appraisal thereof delivered pursuant to clause (i) or (ii) of Section 6.2(b).
Furthermore, until the Unavailable Commitment Termination Date, no Lessor or
Lender shall be obligated to make available any Lessor Amount or Loan if, after
giving effect to the proposed Lessor Amount or Loan, the outstanding aggregate
amount of the Lessor Amounts and Loans would exceed the difference between (x)
the Aggregate Commitment Amount and (y) the Unavailable Commitment.
Section 3.2 Lessors' Commitments. Subject to the conditions and
terms hereof, each of the Lessors shall make available to the Agent Lessor at
the request of the Construction Agent from time to time during the Commitment
Period on any Funding Date or Acquisition Date, as appropriate, an amount
(relative to such Lessor, a "Lessor Amount") in immediately available funds
equal to such Lessor's Commitment Percentage of the amount of the Advance being
funded on such Funding Date or Acquisition Date. Notwithstanding any other
provision hereof, no Lessor shall be obligated to make available
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any Lessor Amount if, after giving effect to the proposed Lessor Amount, the
outstanding aggregate amount of the Lessor Amounts of such Lessor would exceed
such Lessor's Commitment.
Section 3.3 Lenders' Commitments. Subject to the conditions and
terms hereof, each of the Lenders shall make Loans to the Agent Lessor at the
request of the Construction Agent from time to time during the Commitment
Period on any Funding Date or Acquisition Date, as appropriate, an amount
(relative to such Lender, a "Loan") in immediately available funds equal to
such Lender's Commitment Percentage of the amount of the Advance being funded
on such Funding Date or Acquisition Date. Notwithstanding any other provision
hereof, no Lender shall be obligated to make any Loan if, after giving effect
to the proposed Loan, the outstanding aggregate amount of such Lender's Loans
would exceed such Lender's Commitment.
Section 3.4 Procedures for Advances.
(a) With respect to each Advance, the Construction Agent
shall give the Agent Lessor and the Administrative Agent prior written notice
pursuant to a Funding Request substantially in the form of Exhibit B (a
"Funding Request"), which Funding Request shall be delivered not later than
10:00 a.m. (New York City time), three (3) Business Days prior to the proposed
Acquisition Date or the proposed Funding Date, specifying: (i) the proposed
Acquisition Date or Funding Date, (ii) the amount of Advance requested,(iii)
whether such proposed Funding Date will also be an Acquisition Date, and (iv)
the Properties to which such Advance is being allocated and the amount
allocated to each Property. With respect to any Funding Request related to the
acquisition of a Property (or leasehold interest therein), in addition to the
foregoing, the Representative shall also specify: (i) the Property to be
acquired or leased, (ii) the seller or lessor of the Property and the related
Land Acquisition Cost, and (iii) the Estimated Improvement Costs for such
Property. Such Loans and Lessor Amounts made with respect to each Advance (i)
if made on a day other than a Scheduled Payment Date or the Initial Acquisition
Date, shall be Base Rate Loans/Lessor Amounts and (ii) if made on a Scheduled
Payment Date or the Initial Acquisition Date shall be Eurodollar Loans/Lessor
Amounts, and the duration of the initial Interest Period with respect to such
Advance shall begin on the proposed Acquisition Date or Funding Date and end on
the next succeeding Scheduled Payment Date (the "Initial Interest Period").
Subject to timely delivery of a Funding Request and the other terms
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and conditions of the Operative Documents, each Participant shall make its
Commitment Percentage of the requested Advance available to the Agent Lessor by
2:00 p.m., Eastern time, on the requested Acquisition Date or Funding Date, as
applicable, and the Agent Lessor will forward any such amounts so received to
the Construction Agent not later than 3:00 p.m., Eastern time, on the same day.
The Agent Lessor and the Administrative Agent shall calculate the amounts of
the Lessor Amounts and the Loans required to fund the requested Advance as it
relates to each Property. No more than one (1) Funding Request shall be made
during each Interest Period other than Funding Requests made pursuant to
Section 6.1.
(b) Except as the Participants may otherwise agree in
writing, Advances shall be made solely to provide the Construction Agent with
funds with which to pay any Land Acquisition Costs or pay or reimburse itself
for Property Improvement Costs, as the case may be.
Section 3.5 Interest Rate; Yield Rate. Each Loan and Lessor
Amount shall accrue interest or Yield, as the case may be, by reference to the
Base Rate or the Adjusted Eurodollar Rate in accordance with Section 3.6.
Section 3.6 Interest Period Selection/ Continuation/Conversion
Elections. (a) By delivering an Interest Period
Selection/Continuation/Conversion Notice to the Agent Lessor and Administrative
Agent with respect to Loans and Lessor Amounts, the Representative may from
time to time during the Basic Lease Term irrevocably select, on not less than
three (3) nor more than five (5) Business Days' notice, that all or any portion
of the outstanding Loans and Lessor Amounts be, in the case of Base Rate
Loans/Lessor Amounts, converted into Eurodollar Loans/Lessor Amounts or, in the
case of Eurodollar Loans/Lessor Amounts, converted into Base Rate Loans/Lessor
Amounts or continued as Eurodollar Rate Loans/Lessor Amounts and, with respect
to Eurodollar Loans/Lessor Amounts, select the duration for the next succeeding
Interest Period; provided, however, that (a) in the absence of a delivery of an
Interest Period Selection/Continuation/Conversion Notice with respect to any
Eurodollar Loan/Lessor Amount at least three (3) Business Days before the last
day of the then current Interest Period with respect thereto, the
Representative (on behalf of all Lessees) shall be deemed to have selected that
such Eurodollar Loan/Lessor Amount be converted into a Base Rate Loan/Lessor
Amount on such last day, (b) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans and
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Lessor Amounts of all Participants, (c) no portion of any Loan or Lessor Amount
may be continued as, or converted into, a Eurodollar Loan/Lessor Amount when
any Lease Default has occurred and is continuing, and (d) the outstanding Loans
and Lessor Amounts may not be apportioned into more than three (3) separate
Loans and Lessor Amounts pursuant to this Section 3.6(a) at any one time.
(b) the Representative, with respect to any Loans and
Lessor Amounts outstanding during the Interim Lease Term, shall be deemed to
have (i) converted Base Rate Loans/Lessor Amounts into Eurodollar Loans/Lessor
Amounts at the end of the Initial Interest Period, (ii) as of each Scheduled
Payment Date (other than the Interim Termination Date), continued all
outstanding Eurodollar Loans/Lessor Amounts as Eurodollar Loans/Lessor Amounts
and (iii) as of each Scheduled Payment Date (other than the Interim Termination
Date) selected an Interest Period ending on the earlier of the next succeeding
Scheduled Payment Date and the Interim Termination Date.
Each Interest Period Selection/Continuation/Conversion Notice so delivered or
deemed delivered by the Representative shall be deemed an effective election by
the Lessors of the method for computing interest on the Loans under the Loan
Agreement.
ARTICLE IV
YIELD; INTEREST; FEES
Section 4.1 Yield.
(a) The amount of the Lessor Amounts outstanding from
time to time shall accrue yield ("Yield") at the Yield Rate, calculated using
the actual number of days elapsed and, when the Yield Rate is based on the
Adjusted Eurodollar Rate, a 360-day year basis and, if calculated at the Base
Rate, a 360-day year basis if the Base Rate is calculated at the Federal Funds
Rate, and a 365-, or, if applicable, 366-, day year basis if the Base Rate is
calculated at the Prime Rate. If all or any portion of the Lessor Amounts, any
Yield payable thereon or any other amount payable hereunder shall not be paid
when due (whether at stated maturity, acceleration thereof or otherwise), such
overdue amount shall bear interest at a rate per annum which is equal to the
Overdue Rate. Upon the occurrence, and during the continuance of an Event of
Default, the principal of and,
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to the extent permitted by law, interest on (or Yield on) the Lessor Amounts
and any other amounts owing hereunder or under the other Operative Documents
shall bear interest, payable on demand, at a per annum rate of 2% greater than
the rate which would otherwise be applicable (or if no rate is applicable,
whether in respect of interest, fees or other amounts, then 2% greater than the
Base Rate). The Administrative Agent shall, as soon as practicable, but in no
event later than 1:00 p.m., Eastern time, two Business Days before the
effectiveness of each Adjusted Eurodollar Rate, cause to be determined such
Adjusted Eurodollar Rate, the resulting Yield and Lessor Basic Rent, and notify
each Lessor thereof.
(b) The Administrative Agent shall distribute, in
accordance with Article VII, the Lessor Basic Rent and all other amounts due
with respect to the Lessor Amounts paid to the Administrative Agent by the
Lessees under the Lease from time to time.
(c) Yield on outstanding Lessor Amounts made with respect
to each Property shall be paid from Advances by the Lessors deemed to have been
requested by the Representative pursuant to Section 3.4 on each Scheduled
Payment Date occurring prior to the earlier of the Completion Date and the
Outside Completion Date for such Property, and the Property Improvement Costs
of such Property shall be increased on the date of each such Advance by an
amount equal to such Advance; provided that if a Completion Certificate is
delivered less than three (3) Business Days prior to a Scheduled Payment Date,
solely for purposes of this clause (c) such Completion Certificate shall not be
effective until the day after such Scheduled Payment Date.
(d) After the earlier of the Completion Date and the
Outside Completion Date for any Property, Yield on outstanding Lessor Amounts
made with respect to such Property shall be due and payable in cash on each
Scheduled Payment Date and not funded pursuant to deemed Advances as referred
to in clause (c) above.
(e) If not repaid sooner, the outstanding aggregate
Lessor Amounts shall be repaid in full on the Maturity Date.
Section 4.2 Interest on Loans.
(a) Each Loan shall accrue interest computed and payable
in accordance with the terms of the Loan Agreement. Each Loan shall become due
and payable at the dates and times provided under the Loan Agreement.
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(b) The Administrative Agent shall distribute, in
accordance with Article VII, the Lender Basic Rent and all other amounts due
with respect to the Loans paid to the Administrative Agent by any Lessees under
the Lease from time to time.
Section 4.3 Reductions in Commitments and Prepayments.
(a) Voluntary Reduction of Commitments. The
Representative may from time to time permanently reduce the Aggregate
Commitment Amount in whole or in part (in each such case in a minimum aggregate
amount of $2,000,000 and integral multiples of $1,000,000 in excess thereof)
upon three (3) Business Days' prior written notice to the Administrative Agent;
provided, however, that no such reduction shall be effective if the aggregate
amount of outstanding Loans and Lessor Amounts exceeds the remaining Loan
Commitment or Lessor Commitment, as the case may be.
(b) Voluntary Prepayments. The Representative shall have
the right to prepay an amount equal to the aggregate outstanding Property
Balance in whole, but not in part, in respect of any one or more of the
Properties pursuant to the exercise of purchase options permitted under the
Lease without premium or penalty, provided that such prepayment is in
connection with the sale of such Property to a Person other than a ▇▇▇▇▇▇▇
Entity or any Affiliate thereof and that no ▇▇▇▇▇▇▇ Entity shall operate or
manage such Property after its sale (other than on a temporary basis in
connection with such sale).
(c) Mandatory Prepayments.
(i) If at any time the sum of the aggregate amount
of outstanding Loans and Lessor Amounts shall exceed the Available
Commitments or the Aggregate Commitment Amount, each of Lessees shall
immediately make payment on the Loans or Lessor Amounts in an amount
sufficient to eliminate their pro rata share of such excess. Payments
required to be made hereunder shall be applied to Base Rate Loans or
Lessor Amounts and then to Eurodollar Loans or Lessor Amounts in direct
order of their Interest Period maturities.
(ii) All amounts payable by the Representative or
any Lessee pursuant to Article XV, XVI, XVIII or XX of the Master Lease
shall be
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applied to the Loans and the Lessor Amounts in the manner set forth in
Article VII.
(d) Notice. The Representative will provide notice to
the Administrative Agent of any prepayment by 11:00 A.M. (New York City time)
at least three (3) Business Days prior to the date of prepayment.
Section 4.4 Fees. The Representative agrees to pay the fees set
forth in this Section 4.4.
(a) Commitment Fees. The Representative agrees to pay to
the Administrative Agent for the account of each Participant, for the period
(including any portion thereof when its Commitment is suspended by reason of
any Lessee's inability to satisfy any condition of Article VI) commencing on
the Documentation Date and continuing through the Interim Termination Date, a
Commitment fee (collectively, the "Commitment Fees") as follows:
(i) from the Documentation Date to and excluding
the Unavailable Commitment Termination Date, the Commitment Fee, with
respect to each Participant, shall be calculated (x) at a rate per annum
of 0.25% on such Participant's Commitment Percentage of the average
daily Available Commitments and (y) at a rate per annum of 0.125% on
such Participant's Commitment Percentage of the Unavailable Commitments;
and
(ii) from and including the Unavailable
Commitment Termination Date to and including the Interim Termination
Date, the Commitment Fee, with respect to each Participant, shall be at
a rate per annum of 0.25% on such Participant's Commitment Percentage of
the average daily Available Commitments from and including the
Unavailable Commitment Termination Date to and including the Interim
Termination Date.
The Commitment Fees shall be payable by the Representative in arrears on each
Quarterly Payment Date, commencing with the first such day following the
Documentation Date, and on the Interim Termination Date; provided, however, in
the event the Unavailable Commitment Termination Date occurs prior to August 1,
1997, the Commitment Fees shall be immediately payable by the Representative in
arrears on the Unavailable Commitment Termination Date, together with an amount
equal to the difference between (x) the Commitment Fees as calculated from the
Documentation Date to but
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excluding the Unavailable Commitment Termination Date pursuant to the method
under clause (ii) above less (y) the Commitment Fees paid to the Administrative
Agent from the Documentation Date through the Unavailable Commitment
Termination Date (such difference, the "Commitment Fee Shortfall Amounts").
The Commitment Fees and Commitment Fee Shortfall Amounts, as applicable, shall
be computed on the basis of the actual number of days (including the first day
but excluding the last day) occurring during the period for which such
Commitment Fees and Commitment Fee Shortfall Amounts, as applicable, are
payable over a year of 360 days.
(b) Up-Front Fees. The Representative agrees to pay to
the Arranger and the Co-Arranger the Up-Front Fees in accordance with the
Arranger's Fee Letter.
(c) Administrative Agent's Fees. The Representative
agrees to pay to the Administrative Agent for its own account the
non-refundable fees set forth in the Arranger's Fee Letter annually in arrears
on each anniversary of the Documentation Date during the Lease Term and on the
Expiration Date.
Section 4.5 Place and Manner of Payments. Except as otherwise
specifically provided herein, all payments by any ▇▇▇▇▇▇▇ Entity hereunder,
under the Master Lease or under any other Operative Document shall be made to
the Administrative Agent in Dollars in immediately available funds, without
offset, deduction, counterclaim or withholding of any kind, to the Account in
New York, New York not later than 1:00 p.m. (New York City time) on the date
when due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. Each ▇▇▇▇▇▇▇ Entity shall, at
the time it makes any payment under any Operative Document, specify to the
Administrative Agent the Loans and Lessor Amounts, fees or other amounts
payable by the Lessees or the Representative, as the case may be, hereunder to
which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof,
the Administrative Agent shall distribute such payment to the Lenders and the
Lessors in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by such ▇▇▇▇▇▇▇ Entity, subject to
the terms of Section 4.6). The Administrative Agent will distribute such
payments to such Lenders and Lessors in accordance with Article VII, if any
such payment is received prior to 3:00 p.m. (New York City time) on a Business
Day in like funds as received prior to such time, and otherwise the
Administrative Agent will
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distribute such payment to such Lenders and Lessors on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day (subject to accrual of interest and fees for the
period of such extension), except that in the case of Eurodollar Loans or
Lessor Amounts, if the extension would cause the payment to be made in the next
following calendar month, then such payment shall instead be made on the next
preceding Business Day.
Section 4.6 Pro Rata Treatment. Except to the extent otherwise
provided herein, each Advance, each payment or repayment of principal on any
outstanding Loan or Lessor Amount, each payment of interest or Yield, and each
reduction of the Aggregate Commitment Amount, shall be allocated pro rata among
the relevant Lenders and Lessors, as the case may be, in accordance with the
respective applicable Commitments (or, if the Commitments of such Lenders or
Lessors have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans or Lessor Amounts, as the case may
be).
Section 4.7 Sharing of Payments. The Participants agree among
themselves that, in the event that any Participant shall obtain payment in
respect of any Loan or Lessor Amount or any other obligation owing to such
Participant under the Operative Documents through the exercise of a right of
setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Participant
under any applicable bankruptcy, insolvency or other similar law or otherwise,
or by any other means, in excess of its pro rata share of such payment as
provided for in this Agreement, such Participant shall promptly purchase from
the other Participants a participation in such Loans or Lessor Amounts and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Participants share such payment
in accordance with their respective ratable shares as provided for in this
Agreement. The Participants further agree among themselves that if payment to
a Participant obtained by such Participant through the exercise of a right of
setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each Participant which shall have
shared the benefit of such payment shall, by repurchase of a participation
theretofore sold,
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return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Participant whose payment shall
have been rescinded or otherwise restored. Each ▇▇▇▇▇▇▇ Entity agrees that any
Participant so purchasing such a participation may, to the fullest extent
permitted by law, exercise all rights of payment, including setoff, banker's
lien or counterclaim, with respect to such participation as fully as if such
Participant were a holder of such Loan or Lessor Amount or other obligation in
the amount of such participation. Except as otherwise expressly provided
herein, if any Participant, the Agent Lessor or the Administrative Agent shall
fail to remit to the Administrative Agent, the Agent Lessor or any other
Participant an amount payable by such party to the Administrative Agent, the
Agent Lessor or such other Participant pursuant to the Operative Documents on
the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent, the Agent Lessor or such other
Participant at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Participant
receives a secured claim in lieu of a setoff to which this Section 4.7 applies,
such Participant shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Participants under this Section 4.7 to share in the benefits of any recovery on
such secured claim.
ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
Section 5.1 Nature of Transaction.
(a) The parties hereto intend that (i) for financial
accounting purposes with respect to the Lessees, the Agent Lessor will be
treated as the owner and the lessor of the Properties and the Lessees will be
treated as the lessees of their respective Properties and (ii) for all other
purposes, including federal and all state and local income tax purposes, state
real estate and commercial law and bankruptcy purposes,
(i) the Lease will be treated as a financing
arrangement,
(ii) the Lessors and the Lenders will be deemed
lenders making loans to the Lessees
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in an amount equal to the sum of the Lessor Amounts and the outstanding
principal amount of the Loans, which amounts are secured by the
Properties, and
(iii) the Lessees will be treated as the owners of
the Properties described in their respective Lease Supplements and will
be entitled to all tax benefits ordinarily available to an owner of
properties like the Properties for such tax purposes. Nevertheless, the
Lessees acknowledge and agree that (other than the representations and
covenants of the Agent Lessor and its parent to the Representative in
the Lessor Letter Agreement) neither the Agent Lessor, the
Administrative Agent nor any of the Lessors or Lenders has made any
representations or warranties to the Lessees concerning the tax,
accounting or legal characteristics of the Operative Documents and that
the Lessees have obtained and relied upon such tax, accounting and legal
advice concerning the Operative Documents as they deem appropriate.
(b) Specifically, without limiting the generality of
clause (a) of this Section 5.1, the parties hereto intend and agree that in the
event of any insolvency or receivership proceedings or a petition under the
United States bankruptcy laws or any other applicable insolvency laws or
statute of the United States of America or any State or Commonwealth thereof
affecting any ▇▇▇▇▇▇▇ Entity, the Lessors, or the Lenders or any collection
actions, the transactions evidenced by the Operative Documents shall be
regarded as loans made by the Lessors and the Lenders as unrelated third party
lenders of the Lessees.
Section 5.2 Amounts Due Under the Lease. Anything herein or
elsewhere to the contrary notwithstanding, it is the intention of Lessee, the
Lessors and the Lenders that: (i) with respect to each Lessee, the amount and
timing of installments of Basic Rent due and payable from time to time from
such Lessee under the Lease shall be equal to the aggregate payments due and
payable as interest on the Loans and Yield on the Lessor Amounts on each
Scheduled Payment Date; (ii) if the Representative elects the Purchase Option
or any Lessee becomes obligated to purchase any of the Properties under the
Lease, the Loans, the Lessor Amounts, and all interest, Yield and Commitment
Fees thereon and all other obligations of the Representative and the Lessor or
Lessees with respect to such Property, as the case may be, owing to the
Administrative Agent, the Agent Lessor, the Lessors and the Lenders shall be
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immediately due and payable in full by such parties; (iii) if the
Representative properly elects the Remarketing Option, the Representative shall
only be required to pay to the Administrative Agent the proceeds of the sale of
each of the Properties, the Loan Balance, Lessor Amounts that are allocable to
Qualified Land and any amounts due pursuant to Article XIII hereof and Section
20.2 of the Master Lease (which aggregate amounts may be less than the Lease
Balance); and (iv) upon an Event of Default resulting in an acceleration of the
Representative's obligation to purchase the Properties under the Lease, the
amounts then due and payable by the Representative under the Lease shall
include all amounts necessary to pay in full the Lease Balance, plus all other
amounts then due from the Representative and the Lessees to the Participants
under the Operative Documents.
ARTICLE VI
CONDITIONS PRECEDENT: ACQUISITION DATES; FUNDING DATES
Section 6.1 Acquisition Dates. Each closing date with respect
to an acquisition of Land or leasehold interests therein (and the Improvements
existing thereon, if any) (each an "Acquisition Date") shall occur on the date
on which all the conditions precedent thereto set forth in this Section 6.1
with respect to such acquisition of Land or leasehold interests therein shall
have been satisfied or waived by the applicable parties as set forth herein;
provided that no Acquisition Date shall occur within six months of the Interim
Termination Date. The obligation of the Lessors to acquire any Land or
leasehold interests therein on an Acquisition Date, the obligation of each
Lessor to make available any related Lessor Amount on such Acquisition Date and
the obligation of each Lender to make any related Loan on such Acquisition
Date, are subject to satisfaction or waiver of the following conditions
precedent:
(a) Funding Request. Each of the Administrative Agent
and the Agent Lessor shall have received a fully executed counterpart of the
applicable Funding Request in accordance with Section 3.4. Each of the
delivery of a Funding Request and the acceptance of the proceeds of such
Advance shall constitute a representation and warranty by the ▇▇▇▇▇▇▇ Entities
that on the applicable Acquisition Date (both immediately before and after
giving effect to the making of such Advance and the application of the proceeds
thereof), the statements made in Section 8.2 are true and correct.
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(b) Fees. All fees due and payable pursuant to this
Participation Agreement shall have been paid, and the Participants shall have
received all Commitment Fees due and payable pursuant to Section 4.4(a).
(c) Representations and Warranties. On the applicable
Acquisition Date, the representations and warranties of each ▇▇▇▇▇▇▇ Entity in
this Agreement and in each of the other Operative Documents shall be true and
correct in all material respects as though made on and as of such date, except
to the extent such representations or warranties relate solely to an earlier
date, in which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date.
(d) Appraisal. At least three (3) Business Days prior to
such Acquisition Date, the Agent Lessor and the Administrative Agent shall have
received an Appraisal of the applicable Property, in form and substance
satisfactory to the Administrative Agent and the Agent Lessor, which Appraisal
shall show that the Fair Market Sales Value of such Land is not less than the
Land Acquisition Cost for such Property.
(e) Governmental Approvals. All necessary Governmental
Actions required by any Requirement of Law for the purpose of authorizing the
Lessors to acquire the applicable Property shall have been obtained or made and
be in full force and effect.
(f) Responsible Officer's Certificate. The Agent Lessor
and the Administrative Agent shall have received a Responsible Officer's
Certificate of the Representative, in substantially the form of Exhibit D-3
attached hereto, addressed to the Administrative Agent, the Agent Lessor, each
Lender and each Lessor and dated as of the applicable Acquisition Date, stating
that (i) to such Responsible Officer's knowledge the representations and
warranties of each ▇▇▇▇▇▇▇ Entity contained in the Participation Agreement and
each other Operative Document to which it is a party is true and correct in all
material respects on and as of the respective Acquisition Date; (ii) to such
Responsible Officer's knowledge no Default or Event of Default has occurred and
is continuing under any Operative Document to which it is a party with respect
to each ▇▇▇▇▇▇▇ Entity; (iii) to such Responsible Officer's knowledge each
Operative Document to which each ▇▇▇▇▇▇▇ Entity is a party is in full force and
effect with respect to it; and (iv) each ▇▇▇▇▇▇▇ Entity has duly performed and
complied
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with all conditions contained herein or in any other Operative Document
required to be performed or complied with by it on or prior to the respective
Acquisition Date.
(g) Evidence of Property Insurance. The Agent Lessor and
the Administrative Agent shall have received evidence that the insurance
maintained by the applicable Lessee with respect to such Property satisfies the
requirements set forth in Article XIII of the Master Lease, setting forth the
respective coverage, limits of liability, carrier, policy number and period of
coverage.
(h) Environmental Audit. At least ten (10) Business Days
prior to such Acquisition Date, the Agent Lessor and the Administrative Agent
shall have received an Environmental Audit with respect to the Property in form
and substance reasonably satisfactory to the Agent Lessor and the
Administrative Agent.
(i) Deed or Ground Lease. The Agent Lessor shall have
received either (A) in the case of Land being acquired from a third-party
Seller, at least one (1) Business Day prior to such Acquisition Date a Deed
with respect to such Property (and/or all Improvements located thereon) being
purchased on such Acquisition Date, conveying fee simple title to such Property
(and/or all Improvements located thereon) to the Agent Lessor and containing
all customary seller's warranties and subject only to Permitted Property Liens
or (B) in the case of Land owned in fee simple by the applicable Lessee or an
Affiliate of any Guarantor, at least ten (10) days prior to such Acquisition
Date, a ground lease, in form and substance satisfactory to the Agent Lessor,
duly executed by such Lessee or such Affiliate as the case may be, as ground
Lessor thereunder, conveying to the Agent Lessor a leasehold interest in such
Land, which Land shall be a separate tax lot and a legal subdivision under all
applicable zoning laws.
(j) ▇▇▇▇ of Sale. On or prior to such Acquisition Date,
the Agent Lessor shall have received a special warranty ▇▇▇▇ of sale (a "▇▇▇▇
of Sale"), conveying title to the Agent Lessor in any Improvements and other
personal property (other than inventory) comprising part of the applicable
Property.
(k) Construction Agency Agreement Supplement. On or
prior to such Acquisition Date, the Construction Agent and the Agent Lessor
shall have delivered to the Lessors and the Lenders a Construction Agency
Agreement Supplement with respect to the
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applicable Property fully executed by the Construction Agent and the Agent
Lessor.
(l) Supplement to Assignment of Lease and Rent. On or
prior to such Acquisition Date, the Agent Lessor shall have delivered to the
Administrative Agent a supplement to the Assignment of Lease and Rent with
respect to the applicable Property substantially in the form of Exhibit A
thereto, together with a consent to and acknowledgement of such supplement duly
executed by the applicable Lessee.
(m) Lease Supplement. On or prior to such Acquisition
Date, the applicable Lessee and the Agent Lessor shall have delivered the
original counterpart of the Lease Supplement executed by such Lessee and the
Agent Lessor with respect to the applicable Property to the Lenders.
(n) Lessor Financing Statements. On or prior to such
Acquisition Date, the applicable Lessee shall have delivered to the Agent
Lessor all Lessor Financing Statements relating to such Property as the Agent
Lessor or any other Lessor may reasonably request in order to protect the
interests of the Agent Lessor and each of the Lessors under the Master Lease
and the Lease Supplement relating to the applicable Property to the extent the
Master Lease and such Lease Supplement constitute security agreements.
(o) Recordation of Lessor Mortgage and Lessor Financing
Statements; Search Results. Each of the Participants shall have received (x)
evidence reasonably satisfactory to it that each of (i) the Lease Supplement
and any other instrument constituting a Lessor Mortgage and (ii) the Lessor
Financing Statements, in each case relating to such Property, has been, or are
being, recorded in a manner sufficient to properly perfect each of their
interests therein and (y) copies of file search reports from the Uniform
Commercial Code filing officer in the jurisdiction (i) in which is located such
Property or (ii) in which is located a place of business or the chief executive
office of the applicable Lessee that owns or holds any right, title or interest
in any Property, setting forth the results of such Uniform Commercial Code file
searches.
(p) Property Survey. At least five (5) Business Days
prior to such Acquisition Date, the Representative shall have delivered to each
of the Agent Lessor and the Administrative Agent an American Land Title
Association ("ALTA")/1992 (Urban) Survey of such
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Property certified to the Participants and the title company and otherwise in
form reasonably acceptable to the Participants.
(q) Title Insurance. On or prior to such Acquisition
Date, the Representative shall have delivered to the Administrative Agent and
the Agent Lessor a commitment to deliver an ALTA extended owners and lenders
title insurance policy covering such Property in favor of the Agent Lessor, the
Administrative Agent and the Participants, respectively, such policy in an
amount not less than the sum of the related Land Acquisition Cost and Estimated
Improvement Costs and to be reasonably satisfactory to the Required Lenders and
the Lessors with such customary endorsements and affirmative assurances issued
by the title company as a routine matter, if requested by the Agent Lessor or
the Administrative Agent.
(r) No Default. There shall not have occurred and be
continuing any Default or Event of Default under any of the Operative
Documents, and no Default or Event of Default under any of the Operative
Documents will have occurred after giving effect to the acquisition of the Land
requested by such Funding Request.
(s) Opinion of Counsel and of Local Counsel to the
Lessee. The Agent Lessor and the Administrative Agent shall have received (i)
an opinion of counsel qualified with respect to the laws of the jurisdiction in
which the applicable Property is situated, addressed to the Administrative
Agent, the Agent Lessor, each Lender and each Lessor, substantially in the form
of Exhibit G and (ii) if requested by the Agent Lessor and the Administrative
Agent, opinions from such other counsel and covering such issues as they may
reasonably request.
(t) Approval of Proposed Acquisition. The applicable
Property shall have been disclosed to and approved by the Agent Lessor and
Administrative Agent prior to the twelve-month anniversary of the Documentation
Date.
All documents and instruments required to be delivered pursuant to this Section
6.1 shall be delivered at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other location as
may be determined by the Agent Lessor, the Administrative Agent and the Lessee.
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Section 6.2 Funding Dates. The obligations of the Agent Lessor
to make an Advance on each Funding Date occurring after an Acquisition Date,
the obligation of the Lessors to make any related Lessor Amount on such Funding
Date, and the obligation of the Lenders to make available any related Loan on
such Funding Date, are subject to satisfaction or waiver of the following
conditions precedent:
(a) Funding Request. Each of the Administrative Agent
and the Agent Lessor shall have received a fully executed counterpart of the
applicable Funding Request in accordance with Section 3.4. Each of the
delivery of a Funding Request and the acceptance of the proceeds of such
Advance shall constitute a representation and warranty by the ▇▇▇▇▇▇▇ Entities
that on the applicable Funding Date (both immediately before and after giving
effect to the making of such Advance and the application of the proceeds
thereof), the statements made in Section 8.3 are true and correct.
(b) As-Built Appraisal. At least three (3) Business Days
prior to (i) the Initial Construction Date for each Property, the Agent Lessor
and the Administrative Agent shall have received an As-Built Appraisal of the
applicable Property, in form and substance satisfactory to the Administrative
Agent and the Agent Lessor, which As-Built Appraisal shall show that as of each
of the Completion Date, the last day of the Base Term and the last day of any
Renewal Term for such Property, the Fair Market Sales Value of such Land and
the Improvements to be constructed thereon in accordance with the Plans and
Specifications for such Property shall not be less than 100% of the sum of the
Land Acquisition Cost and Estimated Improvement Costs for such Property and
(ii) the Funding Date in the event the Property Balance for any Property, after
giving effect to such Advance, would be greater than the Fair Market Sales
Value for any date indicated in the As-Built Appraisal delivered under clause
(i) and subject to Section 3.1 of the Construction Agency Agreement, a
subsequent As-Built Appraisal which shall show that as of each of the
Completion Date, the last day of the Base Term and the last day of any Renewal
Term for such Property, the Fair Market Sales Value of such Property shall not
be less than the Property Balance after giving effect to such Advance. In the
event such subsequent As-Built Appraisal shall show that the Fair Market Sales
Value of such property as of any of the Completion Date, the last day of the
Base Term or the last day of any Renewal Term shall be less than the Property
Balance after giving effect to such Advance, the Lessee of such Property shall
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promptly remit to the Administrative Agent the difference between the Property
Balance as of the Funding Date and the smallest of the Fair Market Sales Value
of such Property as of the Completion Date, the last day of the Base Term and
the last day of any Renewal Term as determined in such subsequent As-Built
Appraisal. The Administrative Agent shall apply such remitted amounts pursuant
to Section 7.7(a) hereof.
(c) Lease Supplement Covering Improvements. If (x) such
Funding Date is an Initial Construction Date for any Property and (y) the Fair
Market Sales Value for such Property as of the Completion Date therefor, as set
forth in the As-Built Appraisal delivered with respect to such Property
pursuant to clause (b), is greater than or equal to four times the Land
Acquisition Cost for the related Land, then, on or prior to such Initial
Construction Date, the applicable Lessee and the Agent Lessor shall have
delivered to the Lenders the original counterpart of a Lease Supplement
executed by such Lessee and the Agent Lessor covering the Improvements then
located on the applicable Property and all additional Improvements thereafter
located on such Property.
(d) Fees. All fees due and payable pursuant to this
Participation Agreement shall have been paid, and the Participants shall have
received all Commitment Fees due and payable pursuant to Section 4.4(a).
(e) Representations and Warranties. On the applicable
Funding Date, the representations and warranties of each ▇▇▇▇▇▇▇ Entity in this
Agreement and in each of the other Operative Documents shall be true and
correct in all material respects as though made on and as of such date, except
to the extent such representations or warranties relate solely to an earlier
date, in which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date.
(f) Litigation. On the applicable Funding Date, there
shall not be any actions, suits or proceedings pending or, to the knowledge of
any ▇▇▇▇▇▇▇ Entity, threatened with respect to any ▇▇▇▇▇▇▇ Entity (i) that are
reasonably likely to have a Material Adverse Effect, or (ii) that could
reasonably be expected to have a Material Adverse Effect on the title to, or
the use, operation or value of, the Property which is the subject of the
current Advance.
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(g) No Default. There shall not have occurred and be
continuing any Default or Event of Default, and no Default or Event of Default
will have occurred after giving effect to the making of the Advance requested
by such Funding Request.
(h) Available Commitments. After giving effect to the
applicable Advance, the conditions set forth in Article III shall not be
violated.
(i) Construction Costs. After giving effect to the
applicable Advance, the estimated as yet unpaid cost to the Construction Agent
of completing the Construction pursuant to the Construction Documents shall not
exceed the Available Commitments, net of any portion of the Available
Commitments that shall be allocated for Advances deemed to have been requested
pursuant to Section 4.1(c).
(j) Construction Budget. On or prior to the Initial
Construction Date with respect to each Property, the Construction Agent shall
have delivered a construction budget to the Administrative Agent and Agent
Lessor in such detail with respect to the Construction of such Property as the
Administrative Agent and Agent Lessor may reasonably request, and such
construction budget shall be reasonably satisfactory to the Administrative
Agent and the Agent Lessor.
(k) Taxes. All taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
the Operative Documents shall have been paid or provisions for such payment
shall have been made by the Representative to the reasonable satisfaction of
the Agent Lessor, the Administrative Agent, the Lessors and the Lenders.
Section 6.3 Conditions to Completion Date. The Completion Date
with respect to any Property shall be deemed to have occurred for purposes of
the Operative Documents on the earliest date on which each of the following
events shall have occurred:
(a) the Construction relating to such Property shall have
been substantially completed in accordance with the applicable Plans and
Specifications and all Applicable Law;
(b) such Property shall be ready for occupancy and
operation in accordance with the Plans and Specifications therefor, and all
appropriate Governmental Action (including the issuance by the appropriate
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Governmental Authority of a permanent certificate of occupancy) shall have been
taken for the occupancy and operation of such Property;
(c) the Representative shall have provided to the
Administrative Agent and the Agent Lessor an updated title report for such
Property in form and substance reasonably satisfactory to each of the
Administrative Agent and the Agent Lessor; and
(d) the Agent Lessor, the Administrative Agent, the
Lessors and the Lenders shall have received a Completion Certificate from the
Construction Agent substantially in the form of Exhibit H hereto (a "Completion
Certificate").
ARTICLE VII
DISTRIBUTIONS
Section 7.1 Basic Rent. Each payment of Basic Rent (and any
payment of interest on overdue installments of Basic Rent) received by the
Administrative Agent shall be distributed by the Administrative Agent to the
Lessors and the Lenders pro rata in accordance with, and for application to,
the Lender Basic Rent and Lessor Basic Rent then due, as well as any overdue
interest or Yield due to the Lessors or the Lenders (to the extent permitted by
Applicable Law).
Section 7.2 Purchase Payments by the Representative and the
Lessees. Any payment received by the Administrative Agent as a result of:
(a) the purchase of any or all of the Properties in
connection with the exercise of the Purchase Option under Section 18.1 of the
Master Lease, or compliance with the obligation to purchase (or cause its
designee to purchase) all of the Properties in accordance with Section 18.2 or
18.3 of the Master Lease, or
(b) compliance with the obligation to purchase all unsold
Properties in accordance with Section 16.2(f) of the Master Lease, or
(c) any amounts received pursuant to Section 20.3(b) of
the Master Lease, or
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(d) the payment of the Property Balance with respect to
any Property in accordance with Section 15.1 of the Master Lease or Section
4.3(b) of the Participation Agreement, or
(e) the payment of the Property Balance with respect to
any Property in accordance with Section 5.3 of the Construction Agency
Agreement,
shall be distributed by the Administrative Agent to the Lessors and the Lenders
pro rata without priority of one over the other, in the proportion that the
Participant Balance of each of the Lenders and the Lessor bears to the
aggregate of all of the Participant Balances.
Section 7.3 Payment of Loan Balance. In accordance with Section
20.2(f) of the Master Lease upon the exercise of the Remarketing Option, the
payment of the Loan Balance to the Administrative Agent shall be distributed to
the Lenders for application to pay in full the Participant Balance of each
Lender, and the payment of the aggregate amount of Lessor Amounts that are
allocable to Qualified Land shall be distributed to the Lessors.
Section 7.4 Sales Proceeds of Remarketing of Properties. Any
payments received by the Administrative Agent as proceeds from the sale of the
Properties sold pursuant to the exercise of the Remarketing Option pursuant to
Article XX of the Master Lease, together with any payment made as a result of
an appraisal pursuant to Section 13.2, shall be distributed by the
Administrative Agent in the funds so received in the following order of
priority:
first, to the Lessors in an amount equal to (x) the aggregate
Lessor Balance minus (y) 3% of the sum of (i) the largest principal amount
outstanding of Lessor Amounts at any one time prior to the distribution
hereunder and (ii) the largest principal amount outstanding of Loans at any one
time prior to the distribution hereunder (such amount under clause (y), the
"Equity Amount"), shall be distributed to the Lessors for application to the
Participant Balance of each Lessor, pro rata among the Lessors without priority
of one over the other in the proportion that the Participant Balance of each
such Lessor bears to the aggregate Participant Balances of all Lessors and, in
the case where the amounts so distributed shall be insufficient to pay in full
as aforesaid, then pro rata among the Lessors without priority of one over the
other in the proportion
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that the Participant Balance of each such Lessor bears to the aggregate
Participant Balances of all Lessors;
second, an amount equal to the Equity Amount shall be distributed
to the Lessors for application to pay in full the Participant Balance of each
Lessor, pro rata among the Lessors without priority of one over the other in
the proportion that the Participant Balance of each such Lessor bears to the
aggregate Participant Balance of all Lessors,
third, the balance, if any, shall be promptly paid to the Lessors
to be distributed as provided in the Lease.
Section 7.5 Supplemental Rent. All payments of Supplemental
Rent received by the Administrative Agent (excluding any amounts payable
pursuant to the preceding provisions of this Article VII) shall be distributed
promptly by the Administrative Agent upon receipt thereof to the Persons
entitled thereto pursuant to the Operative Documents.
Section 7.6 Distribution of Payments after Lease Event of
Default.
(a) During the continuance of a Lease Event of Default
and subject to clauses (b) and (c) below, all proceeds from the sale of all or
any part of any one or more Properties shall be distributed by the
Administrative Agent in the following order of priority:
first, so much of such payment or amount as shall be required to
pay or reimburse the Administrative Agent and the Agent Lessor for any tax,
fees, expense, indemnification or other loss incurred by the Administrative
Agent or the Agent Lessor (to the extent incurred in connection with any duties
as the Administrative Agent or Agent Lessor, as the case may be), shall be
distributed to the Administrative Agent and the Agent Lessor without priority
of one over the other for their own accounts in accordance with the amount of
such payment or amount payable to such Person;
second, so much of such payments or amounts as shall be required
to pay the Lenders and the Lessors the amounts payable to them pursuant to any
expense reimbursement or indemnification provisions of the Operative Documents
shall be distributed to each such Lender and Lessor without priority of one
over the other in accordance with the amount of such payment or payments
payable to each such Person;
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third, to the Lessors in an amount equal to the aggregate Lessor
Balance minus the Equity Amount shall be distributed to the Lessors for
application to the Participant Balance of each Lessor, pro rata among the
Lessors without priority of one over the other in the proportion that the
Participant Balance of each such Lessor bears to the aggregate Participant
Balances of all Lessors and, in the case where the amounts so distributed shall
be insufficient to pay in full as aforesaid, then pro rata among the Lessors
without priority of one over the other in the proportion that the Participant
Balance of each such Lessor bears to the aggregate Participant Balances of all
Lessors;
fourth, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders without priority of one over the other in
the proportion that the Participant Balance of each such Lender bears to the
aggregate Participant Balances of all Lenders and, in the case where the
amounts so distributed shall be insufficient to pay in full as aforesaid, then
pro rata among the Lenders without priority of one over the other in the
proportion that the Participant Balance of each such Lender bears to the
aggregate Participant Balances of all Lenders;
fifth, an amount equal to the Equity Amount shall be distributed
to the Lessors for application to pay in full the Participant Balance of each
Lessor, pro rata among the Lessors without priority of one over the other in
the proportion that the Participant Balance of each such Lessor bears to the
aggregate Participant Balance of all Lessors,
sixth, the balance, if any, of such payment or amounts remaining
thereafter shall be promptly distributed to, or as directed by, the
Representative.
(b) All payments received and amounts realized by the
Administrative Agent in connection with any Casualty or Condemnation during the
continuance of a Lease Event of Default shall be distributed by the
Administrative Agent as follows:
(i) in the event that the Agent Lessor (at the
direction of the Lessors) and the Administrative Agent elect to pay all
or a portion of such amounts to the appropriate Lessee for the repair of
damage caused by such Casualty or Condemnation in accordance with
Section 14.1(a) of the Master Lease, then such amounts shall be
distributed to such Lessee, and
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(ii) in the event that the Agent Lessor (at the
direction of the Lessors) and the Administrative Agent elect to apply
all or a portion of such amounts to the purchase price of the related
Property in accordance with Section 14.1(a) and Article XV of the Master
Lease, then such amounts shall be distributed in accordance with clause
(a).
(c) During the continuance of a Lease Event of Default
during which recourse is limited by Section 26.11 of the Master Lease and
Section 15.19 of the Participation Agreement, all payments received and amounts
realized with respect to the relevant Properties by the Administrative Agent
shall be distributed by the Administrative Agent as follows:
first, so much of such payment or amount as shall be required to
pay or reimburse the Administrative Agent and the Agent Lessor for any tax,
fees, expense, indemnification or other loss incurred by the Administrative
Agent or the Agent Lessor (to the extent incurred in connection with any duties
as the Administrative Agent or Agent Lessor, as the case may be), shall be
distributed to the Administrative Agent and the Agent Lessor without priority
of one over the other for their own accounts in accordance with the amount of
such payment or amount payable to such Person;
second, so much of such payments or amounts as shall be required
to pay the Lenders and the Lessors the amounts payable to them pursuant to any
expense reimbursement or indemnification provisions of the Operative Documents
shall be distributed to each such Lender and Lessor without priority of one
over the other in accordance with the amount of such payment or payments
payable to each such Person;
third, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders without priority of one over the other in
the proportion that the Participant Balance of each such Lender bears to the
aggregate Participant Balances of all Lenders and, in the case where the
amounts so distributed shall be insufficient to pay in full as aforesaid, then
pro rata among the Lenders without priority of one over the other in the
proportion that the Participant Balance of each such Lender bears to the
aggregate Participant Balances of all Lenders;
fourth, to the Lessors in an amount equal to the aggregate Lessor
Balance minus the Equity Amount shall be distributed to the Lessors for
application to
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the Participant Balance of each Lessor, pro rata among the Lessors without
priority of one over the other in the proportion that the Participant Balance
of each such Lessor bears to the aggregate Participant Balances of all Lessors
and, in the case where the amounts so distributed shall be insufficient to pay
in full as aforesaid, then pro rata among the Lessors without priority of one
over the other in the proportion that the Participant Balance of each such
Lessor bears to the aggregate Participant Balances of all Lessors;
fifth, an amount equal to the Equity Amount shall be distributed
to the Lessors for application to pay in full the Participant Balance of each
Lessor, pro rata among the Lessors without priority of one over the other in
the proportion that the Participant Balance of each such Lessor bears to the
aggregate Participant Balance of all Lessors,
sixth, the balance, if any, of such payment or amounts remaining
thereafter shall be promptly distributed to, or as directed by, the
Representative.
Section 7.7 Other Payments.
(a) Except as otherwise provided in Sections 7.1, 7.2,
7.6 and clause (b) below, any payment received by the Administrative Agent for
which no provision as to the application thereof is made in the Operative
Documents or elsewhere in this Article VII (including any balance remaining
after the application in full of amounts to satisfy any expressed provision)
shall be distributed pro rata among the Lenders and the Lessors without
priority of one over the other, in the proportion that the Participant Balance
of each bears to the aggregate of all the Participant Balances.
(b) Except as otherwise provided in Sections 7.1, 7.2 and
7.6, all payments received and amounts realized by the Administrative Agent or
the Agent Lessor under the Master Lease or otherwise with respect to the
Properties to the extent received or realized at any time after indefeasible
payment in full of the Participant Balances of all of the Lenders and the
Lessors and any other amounts due and owing to the Lenders or the Lessors,
shall be distributed forthwith by the Administrative Agent or the Agent Lessor,
as the case may be, in the order of priority set forth in Section 7.6(a).
(c) Except as otherwise provided in Sections 7.1 and 7.2,
any payment received by the
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Administrative Agent or the Agent Lessor for which provision as to the
application thereof is made in an Operative Document but not elsewhere in this
Article VII shall be distributed forthwith by the Agent Lessor or the
Administrative Agent to the Person and for the purpose for which such payment
was made in accordance with the terms of such Operative Document.
Section 7.8 Casualty and Condemnation Amounts. Subject to
Section 7.6(b), any amounts payable to the Administrative Agent as a result of
a Casualty or Condemnation pursuant to Section 14.1 of the Master Lease and the
Assignment of Lease and Rent shall be distributed as follows:
(a) all amounts payable to the appropriate Lessee for the
repair of damage caused by such Casualty or Condemnation in accordance with
Section 14.1(a) of the Master Lease shall be distributed to such Lessee, and
(b) all amounts that are to be applied to the purchase
price of the related Property in accordance with Section 14.1(a) and Article XV
of the Master Lease shall be distributed by the Administrative Agent to the
Lenders and the Lessors pro rata without priority of one over the other, in the
proportion that the Participant Balance of each bears to the aggregate of all
of the Participant Balances.
Section 7.9 Order of Application. To the extent any payment
made to any Lender or any Lessor pursuant to sections 7.2, 7.3, 7.4, 7.6 or 7.7
is insufficient to pay in full the Participant Balance of such Lender or
Lessor, then each such payment shall first be applied to accrued interest or
Yield and then to principal on the Loans or the Lessor Amounts, as applicable.
Section 7.10 Payments to Account. All payments made to the
Administrative Agent pursuant to the Operative Documents shall be made to the
Account.
ARTICLE VIII
REPRESENTATIONS
Section 8.1 Representations of the Participants. Each
Participant represents and warrants to each other Participant, the Agent
Lessor, the
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Administrative Agent, the Representative and each Lessee that:
(a) ERISA. Such Participant is not and will not be
making its Loans or funding its Lessor Amounts hereunder, and is not performing
its obligations under the Operative Documents, with the assets of an "employee
benefit plan" (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA, or "plan" (as defined in Section 4975(e)(1) of the Code).
(b) Status. Such Participant meets at least one of the
definitions (other than as a "Lessor" or a "Lender") of the term "Eligible
Assignee".
(c) Securities. Each Participant is participating in the
Transactions for its own account and not with a view toward redistribution;
provided that disposition of its rights hereunder shall remain in its control
and the foregoing shall not affect the ability of any Participant to assign or
sell participations in its rights in accordance with the Operative Documents.
Section 8.2 Representations of the ▇▇▇▇▇▇▇ Entities. Each of
the Lessees and the Representative hereby represents and warrants to each
Participant, the Agent Lessor and the Administrative Agent that:
(a) Organization; Powers. Each ▇▇▇▇▇▇▇ Entity and their
respective Subsidiaries (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(ii) has all requisite power and authority to own its property and assets and
to carry on its business as now conducted and as proposed to be conducted,
(iii) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would not
result in a Material Adverse Effect, (iv) has the corporate power and authority
to execute, deliver and perform its obligations under each of the Operative
Documents and each other agreement or instrument contemplated thereby to which
it is or will be a party hereunder, and (v) has its chief executive office
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Authorization. The execution, delivery and
performance by each ▇▇▇▇▇▇▇ Entity of each of the Operative Documents to which
it is a party (i) have been duly authorized by all requisite corporate and, if
required, stockholder action and (ii) will not (A) violate (x) any provision of
law, statute, rule or
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regulation, or of the certificate or articles of incorporation or other
constitutive documents or bylaws of such ▇▇▇▇▇▇▇ Entity or any of its
Subsidiaries (y) any order, writ, ruling, injunction or decree of any
Governmental Authority or (z) any provision of any indenture, agreement or
other instrument to which such ▇▇▇▇▇▇▇ Entity or any of its Subsidiaries is a
party or by which any of them, or any of their property is or may be bound, (B)
be in conflict with, result in a breach of or constitute (alone or with notice
or lapse of time or both) a default under any such indenture, agreement or
other instrument or (C) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon or with respect to any property
or assets now owned or hereafter acquired by such ▇▇▇▇▇▇▇ Entity or any of its
Subsidiaries.
(c) Enforceability.
(i) This Participation Agreement has been duly
executed and delivered by the Representative and each Lessee and
constitutes, and each other Operative Document to which a ▇▇▇▇▇▇▇ Entity
is a party when executed and delivered by such party will constitute, a
legal, valid and binding obligation of such ▇▇▇▇▇▇▇ Entity enforceable
against it in accordance with its terms.
(ii) Each of the Lessor Financing Statements,
Lessor Mortgages and the Lease Supplements relating to each Property
create valid security interests in and mortgage liens on the Property
purported to be covered thereby, which security interests and mortgage
liens are and will remain perfected security interests and mortgage
liens, prior to all Liens other than Permitted Property Liens.
(d) Governmental and Other Approvals. No action, consent
or approval of, registration or filing with or any other action by any
Governmental Authority or any third party is or will be required in connection
with the activities of any ▇▇▇▇▇▇▇ Entity pursuant to the Transactions or the
enforceability of any Operative Document against any ▇▇▇▇▇▇▇ Entity to which
such ▇▇▇▇▇▇▇ Entity is a party, except such as have been made or obtained and
are in full force and effect and except with respect to Properties for which
Advances have not been made.
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(e) Financial Statements. The Representative has
heretofore furnished to the Administrative Agent, the Agent Lessor and each
Participant the consolidated balance sheet of the Representative and its
Consolidated Subsidiaries as of December 31, 1995 and the related consolidated
statements of operations, stockholders' equity and cash flows for the year then
ended, together with the notes thereto, included in the Representative's 1995
Form 10-K and reported on by Ernst & Young LLP (the "Submitted Financial
Statements"). Such financial statements present fairly the consolidated
financial condition and consolidated results of operations of the
Representative and its Consolidated Subsidiaries (including the Lessees) as of
such date and for such period. Such financial statements were prepared in
conformity with GAAP.
(f) No Material Adverse Change. There has been no
material adverse change in the business, financial position, results of
operations or prospects of the Representative and its Consolidated
Subsidiaries, considered as a whole, since September 30, 1996.
(g) Title to Properties; Possession Under Leases.
(i) The Representative and its Subsidiaries have
good and marketable title to all of the properties and other assets
(real or personal, tangible, intangible or mixed) they own or purport to
own.
(ii) All leases to which the Representative or any
of its Subsidiaries is a party as lessee or sublessee are in full force
and effect, except for such defects in title and such invalidity or
unenforceability of leases as, in the aggregate, could not materially
adversely affect the condition (financial or otherwise), earnings,
business affairs or business prospects of the Representative and its
Subsidiaries taken as a whole.
(h) Subsidiaries. Item 8.2(h) of Schedule III sets forth
as of the Documentation Date a list of the Representative's Subsidiaries and
the percentage ownership interest of the Representative therein. The capital
stock of each such Subsidiary is duly authorized, validly issued and fully paid
and nonassessable. Each Guarantor (other than the Parent Guarantor) and each
Lessee is a Wholly-Owned Subsidiary of the Representative, and each Wholly-
Owned Subsidiary of the Representative (other than ▇▇▇▇▇▇▇ Funding, Inc.,
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▇▇▇▇▇▇▇ Indemnity, Limited and Pharmacy and its Subsidiaries) is a Guarantor.
(i) Litigation; Compliance with Laws.
Except as disclosed in the Representative's 1995
Form 10-K or the Representative's quarterly report for the fiscal quarter ended
September 30, 1996 as filed with the Securities and Exchange Commission on Form
10-Q, there are no actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of any
▇▇▇▇▇▇▇ Entity threatened against or affecting the Representative or any of its
Subsidiaries or any business, property or rights of any such Person (A) which
involve any Operative Document or the Transactions or (B) as to which there is
a reasonable possibility of in adverse determination and which, if adversely
determined, could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Representative
and its Consolidated Subsidiaries.
(j) Federal Reserve Regulations.
(i) No ▇▇▇▇▇▇▇ Entity or any of its respective
Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
(ii) No part of the proceeds of any Advance will
be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (A) to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or carrying Margin
Stock or to refund indebtedness originally incurred for such purpose, or
(B) for any purpose which entails a violation of, or which is
inconsistent with the provisions of the Regulations of the F.R.S. Board,
including Regulation G, U or X.
(k) Governmental Regulation. No ▇▇▇▇▇▇▇ Entity or any
of its respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940 or (ii) subject to regulation under
the Public Utility Holding Company Act of 1935.
(l) Use of Proceeds. The proceeds of each Advance will
be used only for the purpose of
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financing the acquisition of Land or leasehold interests therein (and
Improvements existing thereon, if any) and the payment of Property Improvement
Costs incurred in connection therewith.
(m) Tax Returns. United States Federal income tax
returns of the Representative and its Subsidiaries have been closed through the
fiscal year ended December 31, 1992. The Representative and its respective
Subsidiaries have filed or caused to be filed all United Stated Federal income
tax returns and all other material tax returns which are required to have been
filed by it and has paid or caused to be paid all Taxes shown to be due and
payable on such returns or on any assessments received by it, except Taxes that
are being contested in good faith by appropriate proceedings and for which such
▇▇▇▇▇▇▇ Entity or such Subsidiary shall have set aside on its respective books
adequate reserves in conformity with GAAP. The charges, accruals and reserves
on the books of the Representative and its Subsidiaries in respect of Taxes or
other governmental charges are, in the opinion of the Representative, adequate.
(n) No Material Misstatements. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of any
▇▇▇▇▇▇▇ Entity or any of its respective Subsidiaries to the Administrative
Agent, the Agent Lessor or any Participant in connection with the negotiation
of any Operative Document or included therein or delivered pursuant thereto
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were,
are or will be made, not misleading.
(o) Employee Benefit Plan. Each member of the ERISA
Group has complied with its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standards under Section 412 of the Code in
respect of any Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan, or made any amendment to any Plan, which has
resulted or could reasonable be expected to result, prior to the first
anniversary of the Expiration Date, in the imposition of a Lien or the posting
of a bond or other security under Section 302(f) of ERISA or Section
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401(a)(29) or 412(n) of the Code, (iii) incurred any liability under Title IV
of ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA or (iv) within the preceding five plan years, with respect to any Other
Plan, engaged in any transaction described in Section 4069 or Section 4212(c)
of ERISA.
(p) Environmental and Safety Matters. (a) In the
ordinary course of its business, the Representative conducts an ongoing review
of the effect of Environmental Laws on the business, operations and properties
of the Representative and its Subsidiaries, in the course of which it
identifies and evaluates associated liabilities and costs. On the basis of
this review, the Representative has reasonably concluded that Environmental
Laws are unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Representative and its
Consolidated Subsidiaries, considered as a whole.
(b) As of the Documentation Date, to the knowledge of the
Representative and its Subsidiaries no material claim, investigation or written
inquiry has been made, and the Representative is not aware of any circumstance
which would warrant or give rise to such a claim, investigation or inquiry,
with regard to the Representative or any of its Subsidiaries, in respect of any
facility owned, or to the knowledge of the Representative and its Subsidiaries,
leased or operated, either now or in the past, by the Representative or any of
its Subsidiaries, under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended and in effect, or pursuant to any other
Environmental Law, or by the Environmental Protection Agency or by any state,
local, municipal or foreign enforcement agency having jurisdiction over the
protection of the environment, or by any other Person in respect of or under
any Environmental Law.
(q) Patents, Licenses, Franchises and Formulas. Each
▇▇▇▇▇▇▇ Entity and its respective Subsidiaries own all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises and
formulas, or rights with respect to the foregoing, and has obtained assignments
of all leases and other rights of whatever nature, necessary for the present
conduct of its business, without any known conflict with the rights of others
which, or the failure to obtain which, as the case may be, would result in a
Material Adverse Effect on the business, operations, property, assets,
condition (financial or otherwise) or
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prospects of such Person or of the ▇▇▇▇▇▇▇ Entities and their respective
Subsidiaries taken as a whole.
(r) Offer of Securities, etc. No ▇▇▇▇▇▇▇ Entity or any
of its respective Subsidiaries or any Person authorized to act on their behalf
has, directly or indirectly, offered any interest in any Property or any other
interest similar thereto (the sale or offer of which would be integrated with
the sale or offer of such interest in each such Property), for sale to, or
solicited any offer to acquire any of the same from, any Person other than each
Participant and the Administrative Agent, the Agent Lessor and other
"accredited investors" (as defined in Regulation D of the Securities and
Exchange Commission).
(s) Property. Each Property as improved in accordance
with the applicable Plans and Specifications and the contemplated use thereof
by the applicable Lessee and its agents, assignees, employees, lessees,
licensees and tenants will comply with all Requirements of Law (including,
without limitation, all zoning and land use laws and Environmental Laws) and
Material Insurance Requirements, except for such Requirements of Law as it
shall be contesting in good faith by appropriate proceedings. There is no
action, suit or proceeding (including any proceeding in condemnation or eminent
domain or under any Environmental Law) pending or, to the best of its
knowledge, threatened with respect to it, its Affiliates, or any Property which
materially adversely affects the title to, or the use, operation or value of,
any Property.
(t) Plans and Specifications. Upon Completion of the
applicable Construction for each Property, all water, sewer, electric, gas,
telephone and drainage facilities and all other utilities required to
adequately service the applicable Improvements for such Property's intended use
will be available pursuant to adequate permits (including any that may be
required under applicable Environmental Laws). No fire or other casualty with
respect to any Property has occurred which fire or other casualty has had a
Material Adverse Effect on any such Property. Upon Completion of the
applicable Construction, each Property will have available all Material
services of public facilities and other utilities necessary for use and
operation of each Property and the other Improvements for their primary
intended purposes including, without limitation, adequate water, gas and
electrical supply, storm and sanitary sewerage facilities, telephone, other
required public utilities and means of access between such Improvements
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and public highways for pedestrians and motor vehicles. All utilities serving
each Property, or proposed to serve each Property in accordance with the
applicable Plans and Specifications, are located in, and vehicular access to
the Improvements on each Property is provided by, either public rights-of-way
abutting each Property or Appurtenant Rights. All Material licenses,
approvals, authorizations, consents, permits (including, without limitation,
building, demolition and environmental permits, licenses, approvals,
authorizations and consents), easements and rights-of-way, including proof and
dedication, required for (x) the use, treatment, storage, transport, disposal
or disposition of any Hazardous Substance on, at, under or from each Property
during the construction of the Improvements thereon, and (y) construction of
the Improvements on each Property in accordance with the applicable Plans and
Specifications and the Construction Agency Agreement have either been
irrevocably obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be, or will be
irrevocably obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be, prior to commencing
any such construction or use and operation, as applicable. Prior to any Advance
with respect of any Land or Improvements, each Lessee has obtained (or will
obtain prior to the Completion Date of the respective Property) all appropriate
Governmental Action, and has and will keep in full force and effect, all
operating permits necessary to allow for Property to be operated in accordance
with its intended use.
(u) Deeds; Ground Leases. Each Deed is in form and
substance sufficient to convey good and marketable title to the applicable
Property in fee simple. Each ground lease conveys to the Agent Lessor a
leasehold interest in the Land covered thereby, which Land is a separate tax
lot and a legal subdivision under all applicable zoning laws, and the term of
each ground lease is for a term not less than the reasonably estimated useful
life of the Improvements to be constructed on the applicable Land.
(v) Insurance. Each Lessee has obtained insurance
coverage covering its Properties which meets the requirements of the Master
Lease, and such coverage is in full force and effect. Each ▇▇▇▇▇▇▇ Entity
carries insurance with reputable insurers in respect of its material assets in
such manner, in such amounts and against such risks as is customarily
maintained by other Persons of similar size engaged in similar business.
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(w) Flood Hazard Areas. Except as otherwise identified
on the applicable survey delivered pursuant to Section 6.1(p), no portion of
any Property is located in an area identified as a special flood hazard area by
the Federal Emergency Management Agency or other applicable agency. If any
Property is located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency, then flood
insurance has been obtained for such Property in accordance with Article XIII
of the Master Lease and in accordance with the National Flood Insurance Act of
1968, as amended.
(x) Title to Assets. Each ▇▇▇▇▇▇▇ Entity and its
respective Subsidiaries have good and marketable title to all of its Material
assets reflected on the balance sheets in the Submitted Financial Statements,
except for such assets as have been disposed of in the ordinary course of
business (or as have been disclosed to the Participants on or prior to the
Documentation Date), and all such assets are free and clear of any Lien, except
as reflected in the Submitted Financial Statements and/or notes thereto or as
otherwise permitted by the provisions hereof or under the Operative Documents,
and except for Permitted Property Liens. Each ▇▇▇▇▇▇▇ Entity and its
respective Subsidiaries have such trademarks, trademark rights, trade names,
trade name rights, franchises, copyrights, patents, patent rights and licenses
as to allow it to conduct its business as now operated, without known conflict
with the rights of others.
(y) Solvency. The Representative and its Consolidated
Subsidiaries, taken as a whole, are Solvent.
Section 8.3 Representations with Respect to each Funding Date
and Acquisition Date. Each of the Lessees and the Representative represents
and warrants to the Administrative Agent, the Agent Lessor and each Participant
as of each Funding Date and Acquisition Date as follows:
(a) Representations and Warranties. The representations
and warranties set forth in Section 8.2 are true and correct on and as of such
Funding Date or Acquisition Date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct on and as of such earlier date.
Each ▇▇▇▇▇▇▇ Entity is in compliance with its obligations under the Operative
Documents and there exists no Default or Event of Default. No Default or
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Event of Default will occur as a result of, or after giving effect to, the
Advance requested by the Funding Request on such date.
(b) Improvements. The Construction of the Improvements
on the applicable Land to date has, to the best of each ▇▇▇▇▇▇▇ Entity's
knowledge, been performed in a good and workmanlike manner, substantially in
accordance with the applicable Plans and Specifications and in compliance with
all Insurance Requirements and Requirements of Law.
(c) Liens. No ▇▇▇▇▇▇▇ Entity has permitted any Liens to
be placed against any Property other than Permitted Property Liens.
(d) Advance. The amount of the Advance requested
represents amounts advanced or to be advanced by the Construction Agent to
third parties (except for the Construction Agency Fee) in connection with Land
Acquisition Costs or Property Improvement Costs or amounts paid by the
Construction Agent in respect of Property Improvements Costs. With respect to
each Advance, the conditions precedent to such Advance and the related Lessor
Amounts and Loans set forth in Article VI have been satisfied.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
The Representative agrees, for the benefit of the Arranger, the
Agent Lessor, the Administrative Agent, the Lessors and the Lenders, that:
Section 9.1 Transaction Expenses.
(a) The Representative shall pay, or cause to be paid,
from time to time all Transaction Expenses in respect of the transactions on
the Documentation Date, each Acquisition Date and each Funding Date; provided,
however, that, if the Representative has not received written invoices therefor
at least two (2) Business Days prior to such date, such Transaction Expenses
shall be paid within thirty (30) days after the Representative has received
written invoices therefor.
(b) The Representative shall pay or cause to be paid (i)
all Transaction Expenses incurred by the Agent Lessor, the Administrative Agent
or the Arranger in
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entering into any future amendments or supplements with respect to any of the
Operative Documents, whether or not such amendments or supplements are
ultimately entered into, or giving or withholding of waivers or consents hereto
or thereto, in each case which have been requested by or approved by the
Representative, (ii) all Transaction Expenses incurred by the Arranger, the
Agent Lessor, the Administrative Agent, the Lenders or the Lessors in
connection with any purchase of the Property by the Lessee or other Person
pursuant to Articles XVIII and XXI of the Master Lease and (iii) after the
occurrence and during the continuance of a Lease Event of Default or a
Construction Agency Event of Default all Transaction Expenses incurred by any
of the Participants, the Agent Lessor, the Administrative Agent or the Arranger
in respect of enforcement of any of their rights or remedies against any
▇▇▇▇▇▇▇ Entity of any of the foregoing in respect of the Operative Documents.
Section 9.2 Brokers' Fees and Stamp Taxes. The Representative
shall pay or cause to be paid any brokers' fees and any and all stamp, transfer
and other similar taxes, fees and excises, if any, including any interest and
penalties, which are payable in connection with the transactions contemplated
by this Participation Agreement and the other Operative Documents.
Section 9.3 Loan Agreement and Related Obligations. The
Representative shall pay, without duplication of any other obligation of the
Representative to pay any such amount under the Operative Documents, before the
due date thereof, all costs, expenses and other amounts (other than principal
and interest on the Loans which are payable to the extent otherwise required by
the Operative Documents) required to be paid by the Agent Lessor,
Administrative Agent or any of the Lenders or Lessors under the Loan Agreement,
the Assignment of Lease and Rent and the Construction Agency Agreement
Assignment.
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
Section 10.1 Affirmative Covenants of the Representative. The
Representative covenants and agrees with the Arranger, the Agent Lessor, the
Administrative Agent, the Lessors and the Lenders that, so long as this
Participation Agreement shall remain in effect or the principal or interest on
any Loan, any Lessor Amount or Yield thereon, or any Commitment Fees, other
fees or any
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other expenses or amounts payable under any Operative Document shall be unpaid,
and until all Commitments shall have been permanently terminated, unless the
Required Participants shall otherwise consent in writing, the Representative
will, and will cause each of its Subsidiaries (including all other ▇▇▇▇▇▇▇
Entities) to:
(a) Existence; Businesses and Properties. The
Representative will keep, and will cause each of its Subsidiaries to keep, all
property necessary in its business in good working order and condition,
ordinary wear and tear excepted.
(b) Insurance. The Representative will, and will cause
each of its Subsidiaries to, maintain (either in the name of the Representative
or in such Subsidiary's own name) with financially sound and responsible
insurance companies, insurance on all their respective properties in at least
such amounts and against at least such risks (and with such risk retention and
self insurance) as are usually insured against in the same general area by
companies of established repute engaged in the same or a similar business at a
substantial number of different facilities. The Representative will furnish to
the Participants, upon request from the Administrative Agent or Agent Lessor,
information presented in reasonable detail as to the insurance so carried.
(c) Compliance with Laws. The Representative will
comply, and will cause each of its Subsidiaries to comply, with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder)(except (i) where the failure to so comply
would not materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Representative and its
Subsidiaries and would not in any manner draw into question the validity of any
Operative Document or (ii) where the necessity of compliance therewith is
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with generally accepted accounting
principles) and will maintain and cause each of its Subsidiaries to maintain
all governmental licenses, approvals, authorizations and consents necessary for
the conduct of the business of the Representative and its Subsidiaries (except
where the failure to maintain such governmental licenses, approvals,
authorizations and consents would not materially adversely affect the business,
consolidated
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financial position or consolidated results of operations of the Representative
and its Subsidiaries and would not in any manner draw into question the
validity of any Operative Documents).
(d) Financial Statements, Reports, etc. In the case of
the Representative, furnish to the Administrative Agent, each Lender, each
Lessor and the Agent Lessor:
(i) as soon as available and in any event within
forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year of the Representative, consolidated balance
sheets of the Representative and its Consolidated Subsidiaries
(including the other ▇▇▇▇▇▇▇ Entities), as at the end of such period,
and the related consolidated statements of operations and cash flows for
such fiscal quarter and for the portion of the Representative's fiscal
year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding periods of the
previous fiscal year, all certified by a Financial Officer of the
Representative that they fairly present the financial condition of the
Representative and its Consolidated Subsidiaries and that they
consistently comply with Section C of Appendix A to this Participation
Agreement, subject to changes resulting from normal year-end adjustment;
(ii) as soon as available and in any event within
ninety (90) days after the end of each fiscal year of the
Representative, consolidated balance sheets of the Representative and
its Consolidated Subsidiaries, as at the end of such year, and the
related consolidated statements of operations, stockholders' equity and
cash flows for such fiscal year, setting forth in each case, in
comparative form the consolidated figures for the previous year, all in
reasonable detail and reported in a manner acceptable to the Securities
and Exchange Commission by Ernst & Young LLP or other independent
certified public accountants of recognized national standing selected by
the Representative and certified by a Financial Officer of the
Representative that they fairly present the financial condition of the
Representative and its Consolidated Subsidiaries and that they
consistently comply with Section C of Appendix A to this Participation
Agreement;
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(iii) together with each delivery of financial
statements of the Representative and its Subsidiaries pursuant to
Sections 10.1(d)(i) and 10.1(d)(ii) above, (A) a certificate of a
Financial Officer (x) stating that the signer thereof has reviewed the
terms of this Participation Agreement and the Master Lease and has made,
or caused to be made under his supervision, a review in reasonable
detail of the transactions and condition of the Representative and its
Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signer does not have knowledge of the
existence as at the date of such certificate, of any condition or event
which constitutes a Lease Event of Default or Lease Default, or, if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Representative has
taken, is taking and proposes to take with respect thereto and (y)
setting forth in reasonable detail calculations of the Pricing Ratio as
of the date of the Balance Sheet contained therein and for the period of
four fiscal quarters ending on such date; and (B) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of such accounting periods with the restrictions contained in
Section 10.2(a), Section 10.2(b), Section 10.2(c), clause v of Section
10.2(e), Section 10.2(f), Section 10.2(g), Section 10.2(i) and Section
10.2(l);
(iv) promptly upon (i) the mailing thereof to the
shareholders of the Representative generally, copies of all financial
statements, reports and proxy statements so mailed and (ii) the filing
thereof, copies of all registration statements (other than the exhibits
thereto and any registration statement on Form S-8 or its equivalent)
and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the
Representative shall have filed with the Securities and Exchange
Commission;
(v) forthwith upon the occurrence of any Default
or Event of Default, a certificate of a Financial Officer setting forth
the details thereof and the action the Representative has taken, is
taking and proposes to take with respect thereto; and
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(vi) with reasonable promptness, such other
information with respect to the financial position or business of the
Representative or any of its Subsidiaries (including the other ▇▇▇▇▇▇▇
Entities) as from time to time may be reasonably requested by any
Participant.
(e) ERISA. If and when any member of the ERISA
Group (i) provides or is required to provide notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has provided or
is required to provide notice of any such reportable event, a copy of the
notice of such reportable event provided or required to be provided to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV or ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standards under Section 412 of the
Code with respect to any Plan, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and such other information as is filed with the PBGC in connection
therewith; (vi) gives notice of withdrawal from any Plan pursuant to Section
4063 of ERISA, a copy of such notice; (vii) receives notice from the PBGC or
any plan administrator of an intent to impose liability on any member of the
ERISA Group with respect to any Other Plan on account of a transaction
described in Section 4069 or 4212(c) of ERISA, a copy of such notice; (viii)
receives notice from the PBGC or any plan administrator of an intent to impose
liability on any member of the ERISA Group with respect to any Other Plan on
the basis that such member of the ERISA Group is a member of the "controlled
group" with respect to such Other Plan under Section 412(c)(11) of the Code or
Section 4001(a)(14) of ERISA, a copy of such notice; or (ix) fails to make any
payment or contribution to any Plan or Multiemployer Plan or makes any
amendment to any Plan which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under Section 302(f) of ERISA
or Section 401(a)(29) or 412(n) of the Code, a certificate of an Authorized
Financial Officer of the Representative setting forth all material and relevant
details as to such occurrence or
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event and the action, if any, which the Representative, the Representative or
the applicable member of the ERISA Group proposes or, after consultation with
counsel, believes that it is required to take.
(f) Maintaining Records; Access to Properties and
Inspections. The Representative will keep, and will cause each of its
Subsidiaries to keep, proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities and will permit, and will cause each such
Subsidiary to permit, representatives of any Participant to visit and inspect
any of its properties, to examine and make abstracts from any of its books and
records and to discuss its affairs, finances and accounts with its officers,
employees and independent public accountants, all at such reasonable times and
upon reasonable notice to the Representative and as often as may reasonably be
desired; provided that (i) subject to the provisions of Article IX, the
Representative shall not be obligated to pay the expenses of the Participants'
respective representatives and (ii) the Representative will have an opportunity
to participate in any discussions that take place between representatives of
any Participant and the Representative's independent public accountants.
(g) Use of Proceeds. Use the proceeds of Advances only
as contemplated by the Operative Documents.
(h) Corporate Franchises, Patents and Licenses. Do or
cause to be done, all things necessary to preserve and keep in full force and
effect its existence and its material rights, franchises, licenses and patents;
provided, however, that nothing in this Section 10.1(h) shall prevent the
withdrawal by the Representative or any of its Subsidiaries (including the
other ▇▇▇▇▇▇▇ Entities) of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not have a Material Adverse Effect on
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Representative or such Subsidiary.
(i) Additional Lessees and Guarantors. The
Representative agrees to cause each Person, other than a Special Purpose
Receivables Financing Subsidiary, that shall, at any time after the date
hereof, become a Wholly-Owned Subsidiary of the Representative to enter into
the Guaranty promptly (and in any event within 10 Business Days thereafter)
after becoming a Wholly-Owned Subsidiary, and to provide written evidence
thereof
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reasonably satisfactory to the Administrative Agent. Upon written request from
the Representative, the Agent Lessor and the Administrative Agent may in their
sole discretion permit a wholly-owned Subsidiary of the Representative to enter
into the Operative Documents as a "Lessee" in place of a then current Lessee
provided the Agent Lessor and Administrative Agent shall have received executed
documentation reasonably satisfactory to it confirming such substitution.
(j) Construction with respect to each Property. The
Representative, as Construction Agent, agrees to cause Construction for each
Property within the period specified in Section 2.7(g) of the Construction
Agency Agreement.
(k) Liquidity Facility. The Representative shall at all
times maintain sufficient undrawn credit facilities to ensure adequate
liquidity to meet working capital and other needs.
Section 10.2 Negative Covenants of the Representative. The
Representative covenants and agrees with the Arranger, the Agent Lessor, the
Administrative Agent, the Lessors and the Lenders that, so long as this
Participation Agreement shall remain in effect or the principal of or interest
on any Loan, any Lessor Amount or Yield thereon, or any Commitment Fees, other
fees or any other expenses or amounts payable under any Operative Document
shall be unpaid, and until all Commitments have been permanently terminated,
unless Required Participants shall otherwise consent in writing, the
Representative and each Lessee will not, and will not cause or permit any of
their Subsidiaries (including all other ▇▇▇▇▇▇▇ Entities) to:
(a) Minimum Consolidated Net Worth. Permit Consolidated
Net Worth of the Representative to be less than the sum of (i) $715,000,000
plus (ii) 50% of the aggregate positive Consolidated Net Income of the
Representative and its Consolidated Subsidiaries(excluding any consolidated net
loss) for each fiscal quarter ending after December 31, 1996.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio at any date during the periods specified below to be less than
the ratio set forth below opposite the period in which such date falls:
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=====================================================================================
Period Ratio
-------------------------------------------------------------------------------------
Documentation Date through (and including) March 30, 1998 1.15 to 1.0
-------------------------------------------------------------------------------------
March 31, 1998 through (and including) March 30, 1999 1.25 to 1.0
-------------------------------------------------------------------------------------
March 31, 1999 through (and including) March 30, 2000 1.35 to 1.0
-------------------------------------------------------------------------------------
March 31, 2000 through (and including) March 30, 2001 1.45 to 1.0
-------------------------------------------------------------------------------------
March 31, 2001 and thereafter 1.50 to 1.0
=====================================================================================
(c) Adjusted Consolidated Debt Ratio. Permit the
Adjusted Consolidated Debt Ratio at any date during the periods specified below
to be more than the ratio set forth below opposite the period in which such
date falls:
=======================================================================================
Period Ratio
---------------------------------------------------------------------------------------
Documentation Date through (and including) December 31, 1997 2.55 to 1.0
---------------------------------------------------------------------------------------
January 1, 1998 through (and including) December 31, 1998 2.45 to 1.0
---------------------------------------------------------------------------------------
January 1, 1999 through (and including) December 31, 1999 2.35 to 1.0
---------------------------------------------------------------------------------------
January 1, 2000 through (and including) December 31, 2000 2.25 to 1.0
---------------------------------------------------------------------------------------
January 1, 2001 and thereafter 2.15 to 1.0
=======================================================================================
(d) Ownership of Stock of Wholly-Owned Subsidiaries.
Fail to at all times maintain, or cause a Wholly-Owned Subsidiary of the
Representative to maintain, ownership of 100% of each class of voting
securities of, and all other equity securities (except for directors'
qualifying shares) in, each of their Subsidiaries that are Wholly-Owned
Subsidiaries of the Representative on the date hereof and each Person that
shall become a Wholly-Owned Subsidiary of the Representative after the date
hereof, except in each case (i) any such Wholly-Owned Subsidiary that shall
hereafter be disposed of in its entirety, consolidated or merged with or into
the Representative or another such Wholly-Owned Subsidiary or liquidated, (ii)
any Subsidiary of
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Pharmacy that shall hereafter be consolidated or merged with or into Pharmacy
or any Wholly-Owned Subsidiary of Pharmacy or liquidated, in each case in
accordance with the provisions hereof, or (iii) sales or dispositions of
Pharmacy and any Subsidiary of Pharmacy in whole or in part at any time.
(e) Investments. Make or acquire after the date hereof
any Investment in any Person other than:
(i) Investments in the Representative or in
Persons that are Subsidiaries of the Representative (including any other
▇▇▇▇▇▇▇ Entity) on the date hereof;
(ii) Investments in Persons that are (i) primarily
engaged in the health-care business and (ii) after the making of such
Investment, are Subsidiaries of the Representative;
(iii) Temporary Cash Investments;
(iv) extensions of credit or Guarantees of
obligations of one or more other Persons (other than Encore Nursing
Center Partners, Ltd.-85 and Encore Retirement Partners, Ltd.-85) as an
integral part of the financing of the acquisition, construction,
equipping or improving of facilities from which the Representative or
its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) will provide
medical or related services;
(v) other miscellaneous Investments related to the
acquisition and financing (in the ordinary course of the
Representative's business) of health-care facilities through industrial
development revenue bonds issued for the benefit of the Representative
and its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities);
(vi) capital contributions required to be made by
the Representative to ▇▇▇▇▇▇▇ Indemnity, Ltd. in accordance with
applicable law and insurance regulations;
(vii) stock, obligations or securities received
from nursing home patients in the ordinary course of business of the
Representative and its Subsidiaries;
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(viii) negotiable instruments endorsed for deposit
or collection or similar instruments in the ordinary course of business;
(ix) promissory notes and other Investments
received as consideration for facilities sold, provided that the
aggregate net book value of all outstanding Investments permitted by
this clause (ix) shall not, at any time, exceed $25,000,000;
(x) Guarantees permitted by Section 10.2(i);
(xi) any Investment made by the Representative or
any of its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) in
connection with and as part of a Workout Transaction;
(xii) Investments made by the Representative or
any of its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) in one or
more Special Purpose Receivables Financing Subsidiaries by means of the
sale of, or the granting of security interests in, Medicare, Medicaid or
other patient accounts receivable owing to the Representative or such
Subsidiary (including the other ▇▇▇▇▇▇▇ Entities), in either case to
such Special Purpose Receivables Financing Subsidiaries pursuant to a
Receivables Financing Program, provided that the net amount of all
uncollected accounts receivable owing to the Representative or any of
its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) that have been
so sold or in which a security interest has been so granted shall not
exceed 200% of the aggregate principal or redemption amount of all
Permitted Receivables Financing Securities then outstanding;
(xiii) Investments made in ▇▇▇▇▇▇▇ Japan
Corporation in an aggregate amount outstanding at any time not to exceed
$10,000,000;
(xiv) Investments made in Persons that are
primarily engaged in the health-care business, the consideration for
which consists exclusively of common stock of the Representative or
Permitted Preferred Stock; and
(xv) any Investment not otherwise permitted by the
foregoing clauses of this Section (other than promissory notes and other
Investments received as consideration for facilities sold) in
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any Person engaged primarily in the health-care business if, immediately
after such Investment is made or acquired, the aggregate net book value
of all such Investments then held by the Representative or its
Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) and permitted by
this clause (xv) does not exceed $75,000,000.
(f) Restricted Payments on Stock. (x) Declare or make
any dividend payment or other distribution on any capital stock of the
Representative (other than dividends payable solely in shares of the
Representative's capital stock) or (y) declare or make any payment on account
of the purchase, redemption, retirement or acquisition of the Representative's
capital stock; provided that, so long as at the time of and after giving effect
to any such payment no Event of Default shall have occurred and be continuing,
(i) the Representative may make any such payment
or distribution from the proceeds of the sale by the Representative
(other than a sale to a Subsidiary of the Representative, including any
other ▇▇▇▇▇▇▇ Entity) after the date hereof of its common stock,
(ii) the Representative may make dividend payments
with respect to its preferred stock (A) from any source in an amount not
to exceed an aggregate of $2,500,000 in any fiscal quarter and (B) from
proceeds of the sale by the Representative (other than a sale to a
Subsidiary of the Representative, including the other ▇▇▇▇▇▇▇ Entities)
after the date hereof of Permitted Preferred Stock in any amount,
(iii) the Representative may make payments on
account of the purchase, redemption, retirement or acquisition of its
preferred stock from the proceeds of the sale by the Representative
(other than a sale to a Subsidiary of the Representative) after the date
hereof of any Permitted Preferred Stock,
(iv) the Representative may make odd-lot
repurchases of their common stock for an aggregate consideration not
exceeding $10,000 in any calendar year, and
(v) the Representative may make any such payment
or distribution, in addition to those permitted pursuant to clauses (i)
throughout (iv),
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if, after giving effect thereto, the aggregate amount of all such
payments or distributions made after February 9, 1996 (including,
without limitation, any such payments or distributions permitted under
subclause (ii)(A) or clause (iv) above) does not exceed the sum of
$20,000,000 plus 50% of Consolidated Net Income for the period after
December 31, 1995 through the date of such declaration, payment or
distribution.
Nothing in this Section shall prohibit the payment of any dividend or
distribution within 45 days after the declaration thereof if such declaration
was not prohibited by this Section.
(g) Negative Pledge. (i) Create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired by it, except:
(1) Liens existing on the Documentation
Date securing Indebtedness and other obligations outstanding on
the Documentation Date;
(2) Liens created by the Operative
Documents;
(3) any Lien on any asset of any
corporation that becomes a Consolidated Subsidiary of the
Representative after the Documentation Date that exists at the
time such corporation becomes such a Consolidated Subsidiary and
(other than in a Workout Transaction) not created in
contemplation thereof;
(4) any Lien existing on any asset prior to
the acquisition thereof, acquired after the Documentation Date by
the Representative or a Subsidiary of the Representative
(including any other ▇▇▇▇▇▇▇ Entity) and (other than in a Workout
Transaction) not created in contemplation thereof;
(5) any Lien on any asset securing
Indebtedness or lease obligations incurred or assumed for the
purpose of financing all or any part of the cost of acquiring or
constructing such asset or reconstructing substantially all of
such asset, provided that such Lien attaches to such asset
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concurrently with or within one year after such acquisition,
construction or reconstruction;
(6) any Lien on any asset securing
Indebtedness or lease obligations incurred or assumed for the
purpose of improving or making any addition to such asset,
provided that (x) such Lien attaches to such asset concurrently
with or within one year after the completion of the improvement
thereof or addition thereto and (y) the aggregate outstanding
principal amount of all such Indebtedness incurred after the date
hereof secured by such Liens shall not, at any time, exceed
$30,000,000;
(7) Liens securing Indebtedness incurred in
connection with Lease Cancellation Payments, provided that the
aggregate amount of all such Indebtedness incurred after the date
hereof secured by such Liens shall not, at any time, exceed
$20,000,000;
(8) Liens securing industrial development
revenue bonds (or securing contingent obligations to issuers of
letters of credit issued to support industrial development
revenue bonds) arising in connection with the conversion of the
interest rate on such bonds from floating to long-term fixed
rates or from fixed rates to other long-term fixed rates;
(9) any Lien arising out of the
refinancing, extension, renewal or refunding of any Indebtedness
secured by any Lien permitted by any of the foregoing clauses of
this Section, provided that the principal amount of such
Indebtedness is not increased and such Indebtedness is not
secured by any additional assets other than assets that relate
directly to the facility subject to the original financing;
(10) Liens on Medicare, Medicaid or other
patient accounts receivable of the Representative or any of its
Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities), or on
Permitted Receivables Financing Securities, granted to secure
Permitted Receivables Financing Securities, provided that the net
amount of all uncollected accounts receivable owing to the
Representative or any
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of its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) over
which such a Lien is granted, together, without duplication, with
the net amount of all uncollected accounts receivable owing to
the Representative or any of its Subsidiaries (including the
other ▇▇▇▇▇▇▇ Entities) that are assigned to secure such
Permitted Receivables Financing Securities, shall not exceed, at
any time, 200% of the aggregate principal or redemption amount of
all Permitted Receivables Financing Securities then outstanding;
(11) Liens incidental to the conduct of its
business or the ownership of its assets which (x) do not secure
Indebtedness or Derivatives Obligations and (y) do not in the
aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its
business;
(12) Liens on cash and cash equivalents
securing Derivatives Obligations, provided that the aggregate
amount of cash and cash equivalents subject to such Liens may at
no time exceed $10,000,000;
(13) Liens on nursing homes and related
real estate improvements and equipment ("Mortgage Assets") given
in substitution for Liens on Mortgage Assets existing on the date
hereof or for Liens on Mortgage Assets incurred pursuant to this
clause (13) or clause (15) below, provided that the sum of (x)
the excess of the Appraised Value of all Mortgage Assets
subjected to Liens pursuant to this clause (13) over the
Appraised Value of all such Mortgage Assets released from Liens
on or after the date hereof and (y) all Indebtedness incurred
after the date hereof and secured by Liens permitted under clause
(15) below shall not at any time exceed $75,000,000;
(14) Liens on the capital stock of Pharmacy
and its Subsidiaries securing the ▇▇▇▇▇▇ Credit Agreement and
Liens consisting of the pledge of the capital stock of the
Subsidiaries of the Representative in favor of the lenders under
the ▇▇▇▇▇▇ Credit Agreement in the event that Pharmacy and its
Subsidiaries are no longer Wholly-Owned Subsidiaries of the
Representative and the capital stock of
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Pharmacy and its Subsidiaries is released from such Liens; and
(15) Liens not otherwise permitted under
clauses (1) through (14) of this Section, provided that the sum
of the amounts set forth in subclause (x) of clause (13) above
and the aggregate principal amount of all Indebtedness incurred
after the date hereof and secured by Liens permitted under this
clause (15) shall not at any time exceed $75,000,000.
(ii) So long as Pharmacy is a Wholly-Owned
Subsidiary of the Representative, the Representative will not permit
Pharmacy or any of its Subsidiaries to create, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired by it, except (i)
Liens permitted by clauses (1), (2), (3), (4), (9) (to the extent that
it relates to the extension, renewal or refunding of Indebtedness
secured by any such Liens) and (11) of Section 10.2(a) above, (ii) Liens
on telephone, computer or other office equipment securing indebtedness
incurred to finance such equipment, provided that the aggregate
principal amount of Indebtedness secured by Liens permitted under this
clause (ii) shall not exceed $15,000,000, and, (iii) Liens not otherwise
permitted under this subsection provided that the aggregate principal
amount of all Indebtedness secured by Liens permitted under this clause
(iii) shall not at any time exceed $5,000,000.
(h) Consolidations, Mergers and Sales of Assets. (i)(A)
Consolidate or merge with or into any other Person, unless the Representative
or, except in the case of a merger or consolidation to which the Representative
is a party, a Wholly-Owned Subsidiary of the Representative is the surviving
corporation, or (B) sell, lease or otherwise transfer all or any substantial
part of the assets of the Representative and its Subsidiaries (including the
other ▇▇▇▇▇▇▇ Entities), taken as a whole, to any other Person, provided that
(I) this Section shall not apply to mergers, dissolutions, reorganizations or
liquidations of Subsidiaries of the Representative that have disposed of all or
substantially all of their assets in accordance with the terms of this
Agreement and (II) the Representative and its Subsidiaries (other than Pharmacy
or any of its Subsidiaries) may assign or grant security interests in their
Medicare, Medicaid or other patient accounts
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receivable to a Special Purpose Receivables Financing Subsidiary to secure
Permitted Receivables Financing Securities (provided that the net amount at any
time of all uncollected accounts receivable owing to the Representative or any
of its Subsidiaries that are so assigned or in which a security interest is so
granted shall not exceed 200% of the aggregate principal or redemption amount
of all Permitted Receivables Financing Securities then outstanding).
(ii) So long as Pharmacy is a Wholly-Owned Subsidiary of the
Representative, permit Pharmacy or any of its Subsidiaries to (A) consolidate
or merge with or into any other Person, unless Pharmacy or, except in the case
of a merger or consolidation to which Pharmacy is a party, a Wholly-Owned
Subsidiary of Pharmacy is the surviving corporation or (B) sell, lease or
otherwise transfer all or any substantial part of its assets to any Person
other than Pharmacy.
(i) Incurrence of Indebtedness.
(i) Incur, assume or suffer to exist any
Indebtedness, except:
(1) Indebtedness outstanding on the date
hereof and included in the Base Financials or listed under item
10.2(i) in Schedule III hereto;
(2) Indebtedness incurred after the date
hereof in connection with Lease Cancellation Payments, provided
that the aggregate principal amount of all such Indebtedness
outstanding at any time shall not exceed $20,000,000;
(3) Indebtedness secured by a Lien
permitted pursuant to clause (4) of Section 10.2(g);
(4) Indebtedness of any corporation that
becomes a Consolidated Subsidiary of the Representative after the
Documentation Date that exists at the time such corporation
becomes such a Consolidated Subsidiary and (other than in a
Workout Transaction) not created in contemplation thereof;
(5) Indebtedness ("Refinancing
Indebtedness") incurred to refinance
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Indebtedness ("Refinanced Indebtedness") permitted under clauses
(1) through (4) above, provided that (I) the principal amount of
such Refinancing Indebtedness shall not exceed the principal
amount of such Refinanced Indebtedness and (II) such Refinancing
Indebtedness shall have a weighted average life of not less than
the remaining weighted average life of such Refinanced
Indebtedness or such Refinancing Indebtedness shall not have any
required payments of principal prior to the fifth anniversary of
the Documentation Date;
(6) Permitted Receivables Financing
Securities, provided that the aggregate principal and redemption
amount of all Permitted Receivables Financing Securities
outstanding at any time shall not exceed $150,000,000;
(7) Indebtedness incurred under the
Operative Documents;
(8) guarantees by any Subsidiary of the
Representative of any obligation of the Representative or any of
its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) that such
guaranteeing Subsidiary would have been permitted to incur
hereunder as a primary obligation;
(9) Indebtedness consisting of advances
from the Representative or any of its Subsidiaries in connection
with the normal operation of the business of the Representative
and its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities);
(10) Indebtedness incurred in connection
with and as part of a Workout Transaction;
(11) Indebtedness incurred or assumed for
the purpose of financing the cost of acquiring, constructing or
improving an asset of the Representative or any of its
Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities);
(12) Permitted Preferred Stock;
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(13) Indebtedness under the ▇▇▇▇▇▇ Credit
Agreement; and
(14) Indebtedness not otherwise permitted
under clauses (1) through (13) of this Section, provided that the
aggregate principal amount of all Indebtedness permitted under
this clause (14) shall not at any time exceed $75,000,000.
(ii) So long as Pharmacy is a Wholly-Owned
Subsidiary of the Representative, the Representative will not permit
Pharmacy or any of its Subsidiaries to incur, assume or suffer to exist
Indebtedness, except (I) Indebtedness permitted under clauses (1), (3),
(4), (5) (to the extent the Refinanced Indebtedness referred to therein
is Indebtedness referred to in clauses (1), (3) and (4)), (7) and (9) of
subsection 10.2(i)(i) above, (II) Indebtedness incurred to finance the
acquisition of telephone, computer and other office equipment, provided
that the aggregate outstanding principal amount of all Indebtedness
permitted under this clause (ii) shall not at any time exceed
$15,000,000, (III) Guarantees by Pharmacy or any of its Subsidiaries of
any obligation of the Representative or any of its Subsidiaries
(including the other ▇▇▇▇▇▇▇ Entities) that Pharmacy or such
guaranteeing Subsidiary would have been permitted to incur as a primary
obligation under clause (I) of this subsection (ii), and (IV)
Indebtedness not otherwise permitted under this subsection (ii),
provided that the aggregate outstanding principal amount of all
Indebtedness permitted under this clause (IV) shall not at any time
exceed $5,000,000.
(j) Lease Conversions. Make any Lease Conversion in any
calendar year unless:
(i) the aggregate consideration paid or to be paid
by the Representative and its Subsidiaries (including the other ▇▇▇▇▇▇▇
Entities) in connection with the termination of leases or the
acquisition of facilities and related property pursuant to such Lease
Conversion and all other Lease Conversions made during such calendar
year would not exceed $100,000,000;
(ii) to the extent such Lease Conversion is
financed or will be financed with Indebtedness of the Representative or
any of its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities),
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such Indebtedness is incurred within one year of such Lease Conversion;
and
(iii) such Lease Conversion, after giving effect
thereto, will not result in an Event of Default.
(k) Transactions with Affiliates. Enter into any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of
any service by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Representative's or such
Subsidiary's (as the case may be) business and upon fair and reasonable terms
no less favorable to the Representative or such Subsidiary than would be
obtained in a comparable arm's-length transaction with a Person other than an
Affiliate.
(l) Minimum EBITDA. As determined at the end of each
fiscal quarter of the Representative, permit Consolidated EBITDA of the
Representative and its Consolidated Subsidiaries (excluding Pharmacy and its
Subsidiaries) for the immediately preceding four fiscal quarters to be less
than $200,000,000.
Section 10.3 Affirmative Covenant of the Agent Lessor. The
Agent Lessor covenants and agrees with the Arranger, the Representative, the
Administrative Agent and the Lenders that, so long as this Participation
Agreement shall remain in effect or the principal or interest on any Loan, or
any Commitment Fees, other fees or any other expenses or amounts payable under
any Operative Document to the Administrative Agent or the Lenders shall be
unpaid, and until all Commitments of the Lenders shall have been permanently
terminated, unless the Required Lenders shall otherwise consent in writing, the
Agent Lessor will, upon the written request of the Required Lenders after the
occurrence and during the continuance of an Event of Default qualify to do
business in every jurisdiction where such qualification is necessary for the
Agent Lessor to exercise its remedies under the Master Lease or any other
Operative Document.
ARTICLE XI
RENEWALS
Section 11.1 Extensions of Maturity Date and Expiration Date;
Replacement of Participants.
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(a) So long as the Representative has not elected the
Remarketing Option on behalf of the Lessees, the Representative may, not
earlier than six months and not later than three months prior to the Maturity
Date, direct a written request to the Agent Lessor and the Administrative Agent
that the Expiration Date then in effect under the Master Lease be extended to
the date occurring one year after such Expiration Date and concurrently
therewith request that the Administrative Agent and the Agent Lessor direct a
written request to the Lessors and the Lenders that the applicable Maturity
Date be extended to the same date (each such additional year, a "Renewal
Term"). In no event may the Expiration Date or the Maturity Date be extended
more than twice pursuant to this Section 11.1(a). Each Participant may grant
or deny its consent to a Renewal Term in its sole discretion by notifying the
Administrative Agent and the Agent Lessor in writing (with a copy to the
Representative); provided, however, that any Participant that fails to respond
to such request for a Renewal Term within sixty (60) days after its receipt
thereof shall be deemed to have denied such request for a Renewal Term.
(b) In connection with a written request of the
Representative for a Renewal Term, upon the request of the Representative, the
Administrative Agent and the Agent Lessor shall be permitted to replace any
non-consenting Participant and any Participant that fails to respond to the
Administrative Agent's and the Agent Lessor's written request for a Renewal
Term within the time period specified in clause (a) above (each, a
"Non-Consenting Participant") with a replacement bank or other financial
institution (a "Replacement Participant") satisfactory to the Representative,
the Lessors and the Lenders, with such replacement to be effective as of the
Expiration Date and Maturity Date in effect prior to the requested Renewal
Term; provided, however, that (i) such replacement does not conflict with any
Requirement of Law, (ii) the Replacement Participant shall purchase from the
Non-Consenting Participant (A) at par, all Loans, in the case of a Lender, and
all Lessor Amounts, in the case of a Lessor, (B) all accrued interest, in the
case of a Lender, and all accrued Yield, in the case of a Lessor, and (C) all
other amounts owing to such Non-Consenting Participant on or prior to the date
of replacement, in each case, (iii) the Representative shall be liable to such
Non-Consenting Participant under Section 13.10 if any Loan or Lessor Amount, as
the case may be, owing to such Non-Consenting Participant shall be prepaid (or
purchased) other than on the last day of the Interest Period or Interest
Periods relating thereto, (iv) such replacement shall be made in accordance
with the
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provisions of Article XII (provided that the Representative or the relevant
Replacement Participant shall be obligated to pay the Transaction Expenses
arising in connection therewith), and (v) the Replacement Participant shall
have agreed to be subject to all of the terms and conditions of the applicable
Operative Documents (including the extension of the Maturity Date contemplated
by the relevant request for a Renewal Term and the related extension). The
Administrative Agent and the Agent Lessor hereby agree to cooperate with the
Representative in its efforts to arrange one or more Replacement Participants
as contemplated by this Section 11.1(b).
(c) Any Renewal Term and extension of the Maturity Date
and the Expiration Date as contemplated by Section 11.1(a) shall be effective
only upon the consent of all Participants after giving effect to the provisions
of Section 11.1(b). Except as otherwise provided in this Article XI, all other
terms of the Operative Documents shall remain unchanged and with the same force
and effect (including the Pricing Categories and Pricing Ratios), and there
shall not be any additional up-front fee in connection with such Renewal Term.
Section 11.2 Replacement of Defaulting Participant. The
Representative shall have the right (but not the obligation) to require any
Defaulting Participant to assign and delegate in accordance with Section 12.1
all of such Lender's or Lessor's total Loans or Lessor Amounts, as the case may
be, and Commitment to any other financial institution selected by the
Representative that, in each case, is willing to accept such assignment and
delegation and shall be satisfactory to the Administrative Agent and the Agent
Lessor.
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
Section 12.1 Assignments. Each Participant may, with the prior
written consent of the Representative, the Administrative Agent and the Agent
Lessor (which consents shall not be unreasonably withheld), assign all or a
portion of its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Exhibit F to one or more Eligible Lender
Assignees, with respect to Lender Commitments and Loans, and/or Eligible Lessor
Assignees with respect to Lessor Commitments and Lessor Amounts, each such
assignment shall be of a constant, not varying, percentage of all of the
assigning Participant's rights
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and obligations under the Operative Documents. In the case of assignments made
by a Lender, any such assignment shall be in a minimum aggregate amount of
$5,000,000 of its Loan Commitment (or the balance of such Loan Commitment, if
less) and the aggregate remaining Loan Commitment of the assigning Lender
shall, after giving effect to the proposed assignment, be at least $5,000,000
or if less, zero. In the case of assignments made by a Lessor, any such
assignment shall be in a minimum aggregate amount of $1,000,000 of its Lessor
Commitment (or the balance of such Lessor Commitment, if less) and the
aggregate remaining Lessor Commitment of the assigning Lessor shall, after
giving effect to the proposed assignment, be at least $1,000,000 or if less,
zero. Any assignment hereunder shall be effective upon delivery to the
Administrative Agent and the Agent Lessor of written notice of the assignment
together with a transfer fee of $2,500 payable by the assignor Participant or
the assignee Participant to the Administrative Agent for its own account. The
assigning Participant will give prompt notice to the Administrative Agent of
any such assignment. Upon the effectiveness of any such assignment (and after
notice to and consent of the Lessee, the Administrative Agent and the Agent
Lessor, as provided herein), the assignee shall become a "Lender" or "Lessor",
as the case may be, for all purposes of the Operative Documents and, to the
extent of such assignment, the assigning Participant shall be relieved of its
obligations hereunder to the extent of the Loans or Lessor Amounts, as the case
may be, and Commitment components being assigned. The Administrative Agent
agrees that upon notice of any such assignment and surrender of the appropriate
Note or Notes, it will promptly provide to the assigning Lender and to the
assignee separate promissory notes in the amount of their respective interests
substantially in the form of the original Note (but with notation thereon that
it is given in substitution for and replacement of the original Note or any
replacement notes thereof). The Representative shall not be responsible for
any costs or expenses incurred by any Participant in connection with an
assignment of all or any of its rights and obligations in connection with an
assignment pursuant to this Section 12.1.
Section 12.2 Participations. Each Participant may sell,
transfer, grant or assign participations in all or any part of such
Participant's interests and obligations hereunder; provided that (i) such
selling Participant shall remain a "Lender" or "Lessor", as the case may be,
for all purposes under the Operative Documents (such selling Participant's
obligations under
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the Operative Documents remaining unchanged) and the sub-participant shall not
constitute a Lender or a Lessor, as the case may be, hereunder, (ii) no such
sub-participant shall have, or be granted, rights to approve any amendment or
waiver relating to the Operative Documents except to the extent any such
amendment or waiver would (A) reduce the principal of or rate of interest on or
fees in respect of any Loans or Lessor Amounts in which the sub-participant is
participating, (B) postpone the date fixed for any payment of principal
(including extension of the Expiration Date or the date of any mandatory
prepayment), interest or fees in which the sub-participant is participating, or
(C) release all or substantially all of the collateral or guarantees (except as
expressly provided in the Operative Documents) supporting any of the Loans or
Lessor Amounts or Commitments in which the sub-participant is participating,
and (iii) sub-sub-participations by the sub-participant (except to an
Affiliate, parent company or Affiliate of a parent company of the participant)
shall be prohibited. In the case of any such participation, the
sub-participant shall not have any rights under the Operative Documents (the
sub-participant's rights against the selling Participant in respect of such
participation to be those set forth in the participation agreement with such
Participant creating such participation) and all amounts payable by any ▇▇▇▇▇▇▇
Entity hereunder shall be determined as if such Participant had not sold such
participation; provided, however, that such sub-participant shall be entitled
to receive additional amounts under Sections 13.5, 13.10 and 13.11 on the same
basis as if it were a Participant (but only to the extent that the Participant
would have been entitled to receive such additional amounts with respect to the
interest participated had it not sold such participation). No ▇▇▇▇▇▇▇ Entity
shall be responsible for any costs or expenses incurred by any Participant in
connection with a sale, transfer, grant or assignment of participations
pursuant to this Section 12.2.
Section 12.3 Withholding Taxes; Disclosure of Information;
Pledge Under Regulation A.
(a) If any Participant (or the assignee of or
subparticipant of a Participant, each a "Transferee") is organized under the
laws of any jurisdiction other than the United States or any State thereof,
then such Participant or the Transferee of such Participant, as applicable,
shall (as a condition precedent to acquiring or participating in such Loan or
Lessor Amount and as a continuing obligation to the
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Lessor and the Lender) (i) furnish to each of the Administrative Agent, the
Agent Lessor and the Representative in duplicate, for each taxable year of such
Participant or Transferee during the term of the Lease, a properly completed
and executed copy of either Internal Revenue Service Form 4224 or Internal
Revenue Service Form 1001 and Internal Revenue Service Form W-8 or Internal
Revenue Service Form W-9 and any additional form (or such other form) as is
necessary to claim complete exemption from United States withholding taxes
(wherein such Transferee claims entitlement to complete exemption from United
States withholding taxes on all payments hereunder), and (ii) provide to each
of the Administrative Agent, the Agent Lessor and the Representative a new
Internal Revenue Service Form 4224 or Internal Revenue Service Form 1001 and
Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9 and any
such additional form (or any successor form or forms) upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable United States laws and regulations and amendments
duly executed and completed by such Participant or Transferee, and to comply
from time to time with all applicable United States laws and regulations with
regard to such withholding tax exemption. By its acceptance of a participation
or assignment hereunder, each Transferee shall be deemed bound by the
provisions set forth in this Article XII.
(b) Any Participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Article XII, disclose to such assignee or participant or proposed assignee
or participant, any information relating to any ▇▇▇▇▇▇▇ Entity or the
Transactions, subject to appropriate confidentiality requirements relating to
such information.
(c) Anything in this Article XII to the contrary
notwithstanding, any Participant may without the consent of any ▇▇▇▇▇▇▇ Entity,
the Administrative Agent or the Agent Lessor, assign and pledge all or any
portion of the Notes held by it to any Federal Reserve Bank, the United States
Treasury or to any other financial institution as collateral security pursuant
to Regulation A of the F.R.S. Board and any operating circular issued by the
Federal Reserve System and/or the Federal Reserve Bank or otherwise; provided,
any payment by any ▇▇▇▇▇▇▇ Entity for the benefit of the assigning or pledging
Participant shall be deemed to satisfy such ▇▇▇▇▇▇▇ Entity's obligations with
respect thereto.
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ARTICLE XIII
INDEMNIFICATION
Section 13.1 General Indemnification. The Representative agrees
whether or not any of the transactions contemplated hereby shall be
consummated, to assume liability for, and to indemnify, protect, defend, save
and keep harmless each Indemnitee, on an After Tax Basis, from and against any
and all Claims that may be imposed on, incurred by or asserted against such
Indemnitee (whether because of action or omission by such Indemnitee or
otherwise), whether or not such Indemnitee shall also be indemnified as to any
such Claim by any other Person and whether or not such Claim arises or accrues
prior to the applicable Acquisition Date or after the Expiration Date, in any
way relating to or arising out of:
(a) any of the Operative Documents or any of the
transactions contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(b) the Properties or any part thereof or interest
therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, nondelivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition or
substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to Section 16.2(d) or 16.2(f) of the Master Lease
or any sale pursuant to Article XV, XVIII or XX of the Master Lease), return or
other disposition of all or any part or any interest in the Properties or the
imposition of any Lien (or incurring of any liability to refund or pay over any
amount as a result of any Lien) thereon, including, without limitation: (1)
Claims or penalties arising from any violation of law or in tort (on the basis
of strict liability or otherwise), (2) latent or other defects, whether or not
discoverable, (3) any Claim based upon a violation or alleged violation of the
terms of any restriction, easement, condition or covenant or other matter
affecting title to the Properties, (4) the making of any Modifications in
violation of any standards imposed by any insurance policies required to be
maintained by each Lessee pursuant to the Lease which are in effect at any time
with respect to the Properties or
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any part thereof, (5) any Claim for patent, trademark or copyright
infringement, and (6) Claims arising from any public improvements with respect
to the Properties resulting in any change or special assessments being levied
against the Property or any plans to widen, modify or realign any street or
highway adjacent to any of the Properties, or any Claim for utility "tap-in"
fees;
(d) the breach by any ▇▇▇▇▇▇▇ Entity of any covenant,
representation or warranty made by it or deemed made by it in any Operative
Document or any certificate reclaimed to be delivered by any Operative
Document;
(e) the retaining or employment of any broker, finder or
financial advisor by any ▇▇▇▇▇▇▇ Entity to act on its behalf in connection with
this Participation Agreement or any other Operative Document;
(f) the existence of any Lien on or with respect to the
Properties, the Improvements, any Basic Rent or Supplemental Rent, title
thereto, or any interest therein including any Liens which arise out of the
possession, use, occupancy, construction, repair or rebuilding of the Property
or by reason of labor or materials furnished or claimed to have been furnished
to any Lessee, or any of its contractors or agents or by reason of the
financing of any personalty or equipment purchased or leased by any Lessee or
Modifications constructed by such Lessee, except Lessor Liens and Liens in
favor of the Lenders or the Lessors;
(g) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative Document, in
respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA
and any prohibited transaction described in Section 4975(c) of the Code.
Provided, however, that the Representative shall not be required to indemnify
any Indemnitee under this Section 13.1 for any of the following: (1) any Claim
to the extent resulting from the willful misconduct or gross negligence of such
Indemnitee (it being understood that the Representative shall be required to
indemnify an Indemnitee even if the ordinary (but not gross) negligence of such
Indemnitee caused or contributed to such Claim) or the breach of any
representation, warranty or covenant of such Indemnitee set forth in any
Operative Document, (2) any Claim resulting from Lessor Liens which
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the Agent Lessor, the Administrative Agent or any of the Lessors or Lenders is
responsible for discharging under the Operative Documents, (3) any Claim
arising from a breach or alleged breach by the Lenders or the Lessors of any
agreement entered into in connection with the assignment or participation of
any Loan or Lessor Amount and (4) any Claim arising in respect to any Property
in the period after the respective Lessee ceases to lease such Property from
the Lessors under the related Lease, provided that the facts supporting such
Claim occur after such period. It is expressly understood and agreed that the
indemnity provided for herein shall survive the expiration or termination of
and shall be separate and independent from any remedy under the Lease or any
other Operative Document. Without limiting the express rights of any
Indemnitee under this Section 13.1, this Section 13.1 shall be construed as an
indemnity only and not a guaranty of residual value of the Properties or as a
guaranty of the Notes.
Section 13.2 End of Term Indemnity.
(a) If the Representative elects the Remarketing Option
and there would, after giving effect to the proposed remarketing transactions,
be a Shortfall Amount, then prior to the Expiration Date and as a condition to
the Representative's right to complete the remarketing of the Properties
pursuant to Article XX of the Master Lease, the Representative shall cause to
be delivered to the Agent Lessor at least one hundred twenty (120) days prior
to the Expiration Date, at the Representative's sole cost and expense, a report
from the Appraiser in form and substance satisfactory to the Agent Lessor, the
Administrative Agent and the Participants (the "End of the Term Report") which
shall state the appraiser's conclusions as to the reason for any decline in the
Fair Market Sales Value of any of the Property from that anticipated for such
date in the As-Built Appraisal delivered with respect to such Property.
(b) On or prior to the Expiration Date the Representative
shall pay to the Agent Lessor for the account of each of the Lessors an amount
(not to exceed the Shortfall Amount) equal to the portion of the Shortfall
Amount that the End of the Term Report demonstrates was the result of a decline
in the Fair Market Sales Value of the applicable Property due to
(i) extraordinary use; failure to maintain,
repair, restore, rebuild or replace; failure to comply with all
applicable laws; failure to use; workmanship; method of installation or
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removal or maintenance, repair, rebuilding or replacement, (excepting in
each case ordinary wear and tear), or
(ii) any change to the Plans and Specifications,
or any Modification made to, or any rebuilding of, the applicable
Properties or any part thereof by the applicable Lessee or the
Construction Agent, or
(iii) the existence of any Hazardous Activity,
Hazardous Materials or Environmental Violations, the indemnity for which
shall not exceed the cost of the remediation thereof, or
(iv) any restoration or rebuilding carried out by
the applicable Lessee or the Construction Agent, or
(v) any condemnation of any portion of any of the
applicable Properties pursuant to Article XIV of the Master Lease, or
(vi) any use of any of the applicable Properties
or any part thereof by the Lessee or any sublessee other than an
assisted living facility or nursing facility as contemplated by the
applicable As-Built Appraisal, or
(vii) any grant, release, dedication, transfer,
annexation or amendment made pursuant to Section 11.2 of the Master
Lease, or
(viii) the failure of the Lessors to have good and
marketable title to any of the applicable Properties free and clear of
all Liens (excluding Permitted Property Liens), or
(ix) the existence of any sublease relating to any
of the applicable Properties that shall survive the Expiration Date.
Section 13.3 Environmental Indemnity. Without limitation of the
other provisions of this Article XIII, the Representative hereby agrees to
indemnify, hold harmless and defend each Indemnitee from and against any and
all claims (including, without limitation, third party claims for personal
injury or real or personal property damage), losses (including but not limited
to, to the extent the Lease Balance has not been fully paid, any loss of value
of the Property related thereto), damages, liabilities, fines, penalties,
charges,
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administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, requirements, enforcement actions of any
kind, and all reasonable and documented costs and expenses incurred in
connection therewith (including but not limited to reasonable and documented
attorneys' and/or paralegals' fees and expenses), including, but not limited
to, all costs incurred in connection with any investigation or monitoring of
site conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local Governmental Authority, arising in whole or in part,
out of:
(a) the presence on or under any of the Properties of any
Hazardous Materials, or any Releases of any Hazardous Materials on, under, from
or onto any of the Properties,
(b) any activity, including, without limitation,
construction, carried on or undertaken on or off any of the Properties, and
whether by any Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of any Lessee or any predecessor in title, or any
other Persons (including such Indemnitee), or in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or disposal
of any Hazardous Materials that at any time are located or present on or under
or that at any time migrate, flow, percolate, diffuse or in any way move onto
or under any of the Properties,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs, remediation and
removal costs, costs of corrective action, costs of financial assurance, fines
and penalties and natural resource damages), or death or injury to any Person,
and all expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or under
Hazardous Materials Laws,
(d) any claim concerning lack of compliance with
Hazardous Materials Laws, or any act or omission causing an environmental
condition that requires remediation or would allow any Governmental Authority
to record a Lien on the land records, or
(e) any residual contamination on or under any of the
Land, or affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the generation, use,
handling, storage, transport or disposal
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of any such Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances;
provided, however, that the Representative shall not be required to indemnify
any Indemnitee under this Section 13.3 for any Claim to the extent resulting
from the willful misconduct or gross negligence of such Indemnitee. It is
expressly understood and agreed that the indemnity provided for herein shall
survive the expiration or termination of the Lease Term with respect to any
Claim based on facts or circumstances arising prior to or during the Lease
Term, and shall be separate and independent from any remedy under the Lease or
any other Operative Document.
Section 13.4 Proceedings in Respect of Claims.
In case any action, suit or proceeding shall be brought against
any Indemnitee, such Indemnitee shall notify the Representative of the
commencement thereof, and the Representative shall be entitled, at the
Representative's expense, to participate in, and, to the extent that the
Representative desires to, assume and control the defense thereof; provided,
however, that the Representative shall have acknowledged in writing its
obligation to fully indemnify such Indemnitee in respect of such action, suit or
proceeding, and the Representative shall keep such Indemnitee fully apprised of
the status of such action, suit or proceeding and shall provide such Indemnitee
with all information with respect to such action, suit or proceeding as such
Indemnitee shall reasonably request, and provided, further, that the
Representative shall not be entitled to assume and control the defense of any
such action, suit or proceeding if and to the extent that, (A) in the reasonable
opinion of such Indemnitee, (x) such action, suit or proceeding involves any
risk of imposition of criminal liability or will involve a risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Property Lien) on any Property or any part thereof unless, in the case of civil
liability, the Representative shall have posted a bond or other security
satisfactory to take relevant Indemnitees in respect to such risk or (y) the
control of such action, suit or proceeding would involve an actual or potential
conflict of interest, (B) such proceeding involves Claims not fully indemnified
by the Representative which the Representative and the Indemnitee have been
unable to sever from the indemnified claim(s), or (C) an Event of Default under
the Lease has occurred and is continuing.
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The Indemnitee will join in the Representative's efforts to sever such action.
The Indemnitee may participate at its own expense and with its own counsel in
any proceeding conducted by the Representative in accordance with the
foregoing. The Representative shall not enter into any settlement or other
compromise with respect to any Claim which is entitled to be indemnified under
Section 13.1 or 13.3 without the prior written consent of the Indemnitee, which
consent shall not be unreasonably withheld in the case of a money settlement
not involving an admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Representative supply
the Representative with such information and documents reasonably requested by
the Representative as are necessary or advisable for the Representative to
participate in any action, suit or proceeding to the extent permitted by
Section 13.1 or 13.3.
Upon payment in full of any Claim by the Representative pursuant
to Section 13.1 or 13.3 to or on behalf of an Indemnitee, the Representative,
without any further action, shall be subrogated to any and all claims that such
Indemnitee may have relating thereto (other than claims in respect of insurance
policies maintained by such Indemnitee at its own expense), and such Indemnitee
shall execute such instruments of assignment and conveyance, evidence of claims
and payment and such other documents, instruments and agreements as may be
necessary to preserve any such claims and otherwise cooperate with the
Representative and give such further assurances as are necessary or advisable
to enable the Representative vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 13.1 or
13.3 shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the
amount so payable.
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Section 13.5 General Tax Indemnity.
(a) Indemnification. The Representative shall pay and
assume liability for, and does hereby agree to indemnify, protect and defend
the applicable Property and all Tax Indemnitees, and hold them harmless
against, all Impositions on an After Tax Basis.
(b) Contests. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee
(including a written notice of such proceeding) for any Imposition as to which
the Representative may have an indemnity obligation pursuant to this Section
13.5, or if any Tax Indemnitee shall determine that any Imposition to which the
Representative may have an indemnity obligation pursuant to this Section 13.5
may be payable, such Tax Indemnitee shall promptly (and in any event, within 30
days) notify the Representative in writing (provided that failure to so notify
the Representative within 30 days shall not alter such Tax Indemnitee's rights
under this Section 13.5 except to the extent such failure precludes or
materially adversely affects the ability to conduct a contest of any
Impositions) and shall not take any action with respect to such claim,
proceeding or Imposition without the written consent of the Representative
(such consent not to be unreasonably withheld or unreasonably delayed) for 30
days after the receipt of such notice by the Representative; provided, however,
that in the case of any such claim or proceeding, if such Tax Indemnitee shall
be required by law or regulation to take action prior to the end of such 30-day
period, such Tax Indemnitee shall in such notice to the Representative, so
inform the Representative and such Tax Indemnitee shall not take any action
with respect to such claim, proceeding or Imposition without the consent of the
Representative (such consent not to be unreasonably withheld or unreasonably
delayed) for 10 days after the receipt of such notice by the Representative
unless such Tax Indemnitee shall be required by law or regulation to take
action prior to the end of such 10-day period.
The Representative shall be entitled for a period of 30 days from
receipt of such notice from such Tax Indemnitee (or such shorter period as such
Tax Indemnitee has notified the Lessee is required by law or regulation for
such Tax Indemnitee to commence such contest), to request in writing that such
Tax Indemnitee contest the imposition of such Tax, at the Representative's
expense. If (x) such contest can be pursued in the name of the Representative
and independently from any other proceeding involving a Tax
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liability of such Tax Indemnitee for which the Representative has not agreed to
indemnify such Tax Indemnitee, (y) such contest must be pursued in the name of
such Tax Indemnitee, but can be pursued independently from any other proceeding
involving a Tax liability of such Tax Indemnitee for which the Representative
has not agreed to indemnify such Tax Indemnitee or (z) such Tax Indemnitee so
requests, then the Representative shall be permitted to control the contest of
such claim, provided that in the case of a contest described in clause (y), if
such Tax Indemnitee determines reasonably and in good faith that such contest
by the Representative could have a material adverse impact on the business or
operations of such Tax Indemnitee and provides a written explanation to the
Representative of such determination, such Tax Indemnitee may elect to control
or reassert control of the contest, and provided that by taking control of the
contest, the Representative acknowledges that it is responsible for the
Imposition ultimately determined to be due by reason of such claim, and
provided, further, that in determining the application of clauses (x) and (y)
above, each Tax Indemnitee shall take any and all reasonable steps to segregate
claims for any Taxes for which the Representative indemnifies hereunder from
Taxes for which the Representative is not obligated to indemnify hereunder, so
that the Representative can control the contest of the former. In all other
claims requested to be contested by the Representative, such Tax Indemnitee
shall control the contest of such claim, acting through counsel reasonably
acceptable to the Representative. In no event shall the Representative be
permitted to contest (or such Tax Indemnitee required to contest) any claim,
(A) if such Tax Indemnitee provides the Representative with a legal opinion of
counsel reasonably acceptable to the Representative that such action, suit or
proceeding involves a risk of imposition of criminal liability or will involve
a material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on any Property or any part thereof unless the
Representative shall have posted and maintained a bond or other security
satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an
Event of Default has occurred and is continuing, (C) unless the Representative
shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all
reasonable out-of-pocket costs, losses and expenses that such Tax Indemnitee
may incur in connection with contesting such Imposition including all
reasonable legal, accounting and investigatory fees and disbursements, or (D)
if such contest shall involve the payment of the Tax prior to the contest,
unless the Representative shall provide to such Tax Indemnitee an
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interest-free advance in an amount equal to the Imposition that the Indemnitee
is required to pay (with no additional net after-tax costs to such Tax
Indemnitee). In addition for Tax Indemnitee controlled contests and claims
contested in the name of such Tax Indemnitee in a public forum, no contest
shall be required: (A) unless the amount of the potential indemnity (taking
into account all similar or logically related claims that have been or could be
raised in any audit involving any or all such Tax Indemnitees with respect to
any period for which the Representative may be liable to pay an indemnity under
this Sec 13.5(b)) exceeds $75,000 and (B) unless, if requested by such Tax
Indemnitee, the Representative shall have provided to such Tax Indemnitee an
opinion of counsel selected by the Representative (which may be in-house
counsel) (except, in the case of income taxes indemnified hereunder, in which
case such opinion shall be an opinion of independent tax counsel selected by
such Tax Indemnitee and reasonably acceptable to the Representative) that a
reasonable basis exists to contest such claim. In no event shall a Tax
Indemnitee be required to appeal an adverse judicial determination to the
United States Supreme Court.
The party conducting the contest shall consult in good faith with
the other party and its counsel with respect to the contest of such claim for
Taxes (or claim for refund) but the decisions regarding what actions to be
taken shall be made by the controlling party in its sole judgment, provided,
however, that if such Tax Indemnitee is the controlling party and the
Representative recommends the acceptance of a settlement offer made by the
relevant Governmental Authority and such Tax Indemnitee rejects such settlement
offer then the amount for which the Representative required to indemnify such
Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed
the amount which it would have owed if such settlement offer had been accepted.
In addition, the controlling party shall keep the non-controlling party
reasonably informed as to the progress of the contest, and shall provide the
noncontrolling party with a copy of (or appropriate excerpts from) and reports
or claims issued by the relevant auditing agents or taxing authority to the
controlling party thereof, in connection with such claim or the contest
thereof.
Each Tax Indemnitee shall, at the Representative's expense,
supply the Representative with such information and documents reasonably
requested by the Representative as are necessary or advisable for the
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Representative to participate in any action, suit or proceeding to the extent
permitted by this Section 13.5(b). Notwithstanding anything in this Section
13.5(b) to the contrary, no Tax Indemnitee shall enter into any settlement or
other compromise or fail to appeal an adverse ruling with respect to any claim
which is entitled to be indemnified under this Section 13.5 (and with respect
to which contest is required under this Section 13.5(b)) without the prior
written consent of the Representative, unless such Tax Indemnitee waives its
right to be indemnified under this Section 13.5 with respect to such claim.
Notwithstanding anything contained herein to the contrary, a Tax
Indemnitee will not be required to contest (and the Representative shall not be
permitted to contest) a claim with respect to the imposition of any Tax if such
Tax Indemnitee shall waive its right to indemnification under this Section 13.5
with respect to such claim (and any claim with respect to such year or any
other taxable year the contest of which is materially adversely affected as a
result of such waiver).
(c) [Intentionally left blank]
(d) Payments. Any Imposition indemnifiable under this
Section 13.5 shall be paid directly when due to the applicable taxing authority
if direct payment is practicable and permitted. If direct payment to the
applicable taxing authority is not permitted or is otherwise not made, any
amount payable to a Tax Indemnitee pursuant to Section 13.5 shall be paid
within thirty (30) days after receipt of a written demand therefor from such
Tax Indemnitee accompanied by a written statement describing in reasonable
detail the amount so payable, but not before two Business Days prior to the
date that the relevant Taxes are due. Any payments made pursuant to this
Section 13.5 shall be made directly to such Tax Indemnitee entitled thereto or
the Representative, as the case may be, in immediately available funds at such
bank or to such account as specified by the payee in written directions to the
payor, or, if no such direction shall have been given, by check of the payor
payable to the order of the payee by certified mail, postage prepaid at its
address as set forth in Schedule II hereto. Upon the request of any Tax
Indemnitee with respect to a Tax that the Representative is required to pay,
the Representative shall furnish to such Tax Indemnitee the original or a
certified copy of a receipt for the Representative's payment of such Tax or
such other evidence of payment as is reasonably acceptable to such Tax
Indemnitee.
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(e) Reports. In the case of any report, return or
statement required to be filed with respect to any Taxes that are subject to
indemnification under this Section 13.5 and of which the Representative or any
Lessee has knowledge, the Representative shall promptly notify such Tax
Indemnitee of such requirement and, at the Representative's expense (i) if the
Representative is permitted (unless otherwise requested by such Tax Indemnitee)
by Applicable Law, timely file such report, return or statement in its own name
or (ii) if such report, return or statement is required to be in the name of or
filed by such Tax Indemnitee or such Tax Indemnitee otherwise requests that
such report, return or statement be filed in its name, prepare and finish such
statement for filing by such Tax Indemnitee in such manner as shall be
satisfactory to such Tax Indemnitee and send the same to such Tax Indemnitee
for filing no later than 15 days prior to the due date therefor. In any case
in which such Tax Indemnitee will file any such report, return or statement,
the Representative shall, upon written request of such Tax Indemnitee, provide
such Tax Indemnitee with such information as is reasonably necessary to allow
such Tax Indemnitee to file such report, return or statement.
(f) [Intentionally left blank]
(g) Tax Ownership. Each Tax Indemnitee represents and
warrants that it will not, prior to the termination of the Master Lease, claim
ownership of (or any tax benefits, including depreciation, with respect to) any
Property for any income tax purposes (unless required to do so by a
Governmental Authority), it being understood that the Lessees are and will
remain the owners of the Properties for such income tax purposes until the
termination of the Master Lease.
Section 13.6 Indemnity Payments in Addition to Lease
Obligations. The Representative acknowledges and agrees that the
Representative's obligations to make indemnity payments under this Article XIII
are separate from, in addition to, and do not reduce, any ▇▇▇▇▇▇▇ Entity's
obligation to pay any amounts owing from time to time under the Lease.
Section 13.7 Eurodollar Rate Lending Unlawful. Notwithstanding
any other provision herein, if the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof occurring after the
Documentation Date shall make it unlawful for any Participant to make, continue
or maintain Eurodollar Loans/Lessor Amounts as contemplated by the Operative
Documents, (i) such Participant shall promptly give
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written notice of such circumstances to the Representative, the Lessor Agent
and the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (ii) the commitment of such Lender or Lessor,
as the case may be, hereunder to make, continue or maintain Eurodollar
Loans/Lessor Amounts shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Participant to make, continue or maintain
Eurodollar Loans/Lessor Amounts, such Participant shall then have a commitment
only to make or maintain Base Rate Loans/Lessor Amounts when a Eurodollar
Loans/Lessor Amounts is requested and (c) such Participant's Loans and Lessor
Amounts then outstanding as Eurodollar Loans/Lessor Amounts, if any, shall be
converted automatically to Base Rate Loans/Lessor Amounts on the respective
last days of the then current Interest Periods with respect to such Loans and
Lessor Amounts or within such earlier period as required by law. If any such
conversion of Eurodollar Loans/Lessor Amounts occurs on a day which is not the
last day of the then current Interest Period with respect thereto, the
Representative shall pay to such Participant such amounts, if any, as may be
required pursuant to Section 13.10. In any such case, interest and principal
(if any) shall be payable contemporaneously with the related Eurodollar
Loans/Lessor Amounts of the other Participants.
Section 13.8 Deposits Unavailable. If any of the Participants
shall have determined that:
(i) Dollar deposits in the relevant amount and for
the relevant Interest Period are not available to the Participant in its
relevant market; or
(ii) by reason of circumstances affecting the
Participant's relevant market, adequate means do not exist for
ascertaining the interest rate or Yield, as the case may be, applicable
to such Participant's Eurodollar Loans/Lessor Amounts;
then, upon notice from such Participant to the Representative, the Lessor
Agent, the Administrative Agent and the other Participants, (x) the obligations
of the Participants to make or continue any Loans or Lessor Amounts as, or to
convert any Loans or Lessor Amounts into Eurodollar Loans/Lessor Amounts shall
be suspended, and (y) each outstanding Eurodollar Loan/Lessor Amount shall
automatically convert into a Base Rate Loan/Lessor
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Amount on the last day of the then current Interest Period applicable thereto.
Section 13.9 Increased Costs, etc.
(a) If the adoption of or any change in a Requirement of
Law or in the interpretation or application thereof applicable to any
Participant, or compliance by any Participant with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority, in each case made subsequent to the Documentation Date
(or, if later, the date on which such Participant becomes a Participant):
(i) shall subject such Participant to any tax of
any kind whatsoever with respect to any Eurodollar Loans/Lessor Amounts
made, continued or maintained by it or its obligation to make, continue
or maintain Eurodollar Loans/Lessor Amounts, or change the basis of
taxation of payments to such Participant in respect thereof (except for
excluded Impositions, any changes in taxes measured by or imposed upon
the overall gross or net income, franchise or other taxes (imposed in
lieu of such net income tax), of such Participant or its applicable
lending office, branch, or any affiliate thereof); or
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account of,
Loans and Lessor Amounts, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Participant which is
not otherwise included in the determination of the Adjusted Eurodollar
Rate hereunder; or
(iii) shall impose on such Participant any other
condition (excluding any Tax of any kind) whatsoever in connection with
the Operative Documents;
and the result of any of the foregoing is to increase the cost to such
Participant, by an amount which such Participant deems to be material, of
making, continuing or maintaining Eurodollar Loans/Lessor Amounts or to reduce
any amount receivable hereunder in respect thereof, then, in any such case,
upon notice to the Representative from such Participant, through the
Administrative Agent and/or the Agent Lessor, in
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accordance herewith, the Representative shall pay such Participant any
additional amounts necessary to compensate such Participant for such increased
cost or reduced amount receivable; provided that, in any such case, the
Representative may elect to convert the Eurodollar Loans/Lessor Amounts made by
such Participant hereunder to Base Rate Loans/Lessor Amounts by giving the
Administrative Agent at least one Business Day's notice of such election, in
which case the Representative shall promptly pay to such Participant, upon
demand, without duplication, such amounts, if any, as may be required pursuant
to Section 13.10. All payments required by this Section 13.9(a) shall be made
by the Representative within 10 Business Days after demand by the affected
Participant. The Representative shall not be obligated to reimburse any
Participant for any increased cost or reduced return incurred more than 120
days after the date that such Participant receives actual notice of such
increased cost or reduced return unless such Participant gives notice thereof
to the Representative in accordance with this Section 13.9 during such 120 day
period. If any Participant becomes entitled to claim any additional amounts
pursuant to this subsection, it shall provide prompt notice thereof to the
Representative, through the Administrative Agent and/or the Agent Lessor,
certifying (x) that one of the events described in this clause (a) has occurred
and describing in reasonable detail the nature of such event, (y) as to the
increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Participant and a reasonably detailed
explanation of the calculation thereof (including the method by which such
Participant allocated such amounts to the applicable Lessee or Lessees). Such
a certificate as to any additional amounts payable pursuant to this clause
submitted by such Participant, through the Administrative Agent and/or the
Agent Lessor, to the Representative shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and Lessor Amounts and all other amounts payable
hereunder.
(b) Each Participant shall use its reasonable efforts to
reduce or eliminate any claim for compensation pursuant to this Section 13.9,
including, without limitation, a change in the office of such Participant at
which its obligations related to this Participation Agreement are maintained if
such change will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Participant, be otherwise
disadvantageous to it. If any such claim for compensation shall not be
eliminated
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or waived, the Representative shall have the right to replace the affected
Participant with a new financial institution that shall succeed to the rights
of such Participant under this Participation Agreement; provided, however, that
such Participant shall not be replaced hereunder until it has been paid in full
such claim and all other amounts owed to it hereunder.
Section 13.10 Funding Losses. The Representative agrees to
indemnify each Indemnitee and to hold each Indemnitee harmless from any loss or
expense which such Indemnitee may sustain or incur (other than through such
Person's own gross negligence or willful misconduct) as a consequence of (a)
default by any Lessee in making a borrowing of, conversion into or continuation
of Loans or Lessor Amounts which are Eurodollar Loans/Lessor Amounts after such
Lessee has given a notice requesting the same in accordance with the provisions
of this Participation Agreement, (b) default by such Lessee in making any
prepayment of a Loan or Lessor Amounts which is a Eurodollar Loan/Lessor Amount
after the Lessee has given a notice thereof in accordance with the provisions
of this Participation Agreement, or (c) the making of a prepayment of Loans or
Lessor Amounts which are Eurodollar Loans/Lessor Amounts on a day which is not
the last day of an Interest Period with respect thereto. This covenant shall
survive the termination of this Participation Agreement or any other Operative
Document and the payment of the Loans, Lessor Amounts and all other amounts
payable under the Operative Documents.
Section 13.11 Capital Adequacy.
(a) If the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Participant with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, in each case made
subsequent to the Documentation Date has or will have the effect of reducing
the rate of return on any Participant's or its parent company's capital by an
amount such Participant deems to be material, as a consequence of its
commitments or obligations hereunder to a level below that which such
Participant or its parent company could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such
Participant's or its parent company's policies with respect to capital
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adequacy), then, upon notice from such Participant, the Representative shall
pay to such Participant such additional amount or amounts as will compensate
such Participant and its parent company for such reduction (it being understood
that such parent company shall not be reimbursed to the extent its subsidiary
Participant is reimbursed by the Representative in connection with the same or
a similar law, rule, regulation, change, request or directive applicable to
such Participant). All payments required by this Section 13.11 shall be made
by the Representative within 10 Business Days after demand by the affected
Participant. The Representative shall not be obligated to reimburse any
Participant for any reduced return incurred more than 120 days after the date
that such Participant receives actual notice of such reduced return unless such
Participant gives notice thereof to the Representative in accordance with this
Section 13.11 during such 120 day period. If any Participant becomes entitled
to claim any additional amounts pursuant to this clause, it shall provide
prompt notice thereof to the Representative, through the Administrative Agent
and/or the Agent Lessor, certifying (x) that one of the events described in
this clause (a) has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Participant and a
reasonably detailed explanation of the calculation thereof (including the
method by which such Participant allocated such amounts to the applicable
Lessee or Lessees). Such a certificate as to any additional amounts payable
pursuant to this clause submitted by such Participant, through the
Administrative Agent and/or the Agent Lessor, to the Representative shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Participation Agreement and the other Operative Documents
and the payment of the Loans, Lessor Amounts and all other amounts payable
hereunder and thereunder.
(b) Each Participant shall use its commercially
reasonable efforts to reduce or eliminate any claim for compensation pursuant
to this Section 13.11, including, without limitation, a change in the office of
such Participant at which its obligations related to the Operative Documents
are maintained if such change will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such Participant,
be otherwise disadvantageous to it. If any such claim for compensation shall
not be eliminated or waived, the Representative shall have the right to replace
the
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affected Participant with a new financial institution that shall succeed to the
rights of such Participant under the Operative Documents; provided, however,
that such Participant shall not be replaced hereunder until it has been paid in
full such claim and all other amounts owed to it hereunder.
ARTICLE XIV
THE AGENT LESSOR
Section 14.1 Appointment and Authorization. Each Lessor
irrevocably appoints and authorizes BMO Leasing (U.S.), Inc. as Agent Lessor
(in such capacity as Agent Lessor hereunder and under the other Operative
Documents, the "Agent Lessor") of such Lessor to enter into the Operative
Documents (including, without limitation, the Master Lease and each Lease
Supplement) on behalf of such Lessor and to act as specified herein and in the
other Operative Documents, and each such Lessor hereby authorizes the Agent
Lessor as agent for such Lessor, to take such action on its behalf under the
provisions of this Participation Agreement and the other Operative Documents
and to exercise such powers and perform such duties as are expressly delegated
by the terms hereof and thereof, together with such other powers as are
reasonably incidental thereto (including, without limitation, the execution and
delivery from time to time with the Lenders' unanimous consent of Lease
Supplements, Construction Agency Agreement Supplements, Assignment of Lease and
Rent Supplements and the various other documents, conveyances, terminations,
assignments and instruments contemplated herein to be delivered by the Agent
Lessor on behalf of the Lessors). Each action taken by the Agent Lessor under
any Operative Document shall be deemed to be on behalf of each the Lessors,
unless otherwise indicated. Notwithstanding any provision to the contrary
elsewhere herein or in the other Operative Documents, the Agent Lessor shall
not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lessor, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Participation Agreement or any of the other
Operative Documents, or shall otherwise exist against the Agent Lessor.
Section 14.2 Delegation of Duties. The Agent Lessor may execute
any of its duties hereunder or under the other Operative Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of
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counsel concerning all matters pertaining to such duties. The Agent Lessor
shall not be responsible for the negligence or misconduct of any agents or
attorneys in fact selected by it with reasonable care.
Section 14.3 Agent Lessor and Affiliates. The Agent Lessor
shall have the same rights and powers under this Participation Agreement and
under the other Operative Documents as any other Lessor, and may exercise or
refrain from exercising the same as though it were not the Agent Lessor.
Section 14.4 Action by Agent Lessor. The obligations of the
Agent Lessor hereunder and under the other Operative Documents are only those
expressly set forth herein and therein. Without limiting the generality of the
foregoing, the Agent Lessor shall not be required to take any action with
respect to any Default or Event of Default, except as expressly provided herein
and in the other Operative Documents.
Section 14.5 Consultation with Experts. The Agent Lessor may
consult with legal counsel (who may be counsel for a ▇▇▇▇▇▇▇ Entity, a
Participant, the Administrative Agent, the Arranger or any Affiliate of any of
them), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
Section 14.6 Exculpatory Provisions. Neither the Agent Lessor
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be responsible for or have any duty to ascertain, inquire into
or verify (a) any statement, warranty or representation made in connection with
the Operative Documents; (b) the performance or observance of any of the
covenants or agreements of any ▇▇▇▇▇▇▇ Entity; (c) the satisfaction of any
condition precedent specified herein or in any other Operative Document; (d)
the validity, effectiveness or genuineness of any of the Operative Documents or
any other instrument or writing furnished in connection herewith or therewith;
(e) the use of the proceeds of the Advances; (f) the existence of any Default
or Event of Default; or (g) the properties, books or records of any ▇▇▇▇▇▇▇
Entity.
Section 14.7 Reliance on Communications. The Agent Lessor shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit,
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letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to any ▇▇▇▇▇▇▇ Entity, independent accountants and other experts
selected by the Agent Lessor with reasonable care). The Agent Lessor may deem
and treat the Participants as the owner of their respective interests hereunder
and under the other Operative Documents for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Agent Lessor in accordance with Section 12.1 of the Participation
Agreement. The Agent Lessor, acting in its capacity as Agent Lessor, shall be
fully justified in failing or refusing to take any action under this
Participation Agreement or under any of the other Operative Documents unless it
shall first receive such advice or concurrence of the Lessors as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Participants against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent Lessor
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Operative Documents in accordance with a
request of the Lessors and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Participants (including their
successors and assigns).
Section 14.8 Notice of Default. The Agent Lessor shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent Lessor has received notice from a
Participant or a ▇▇▇▇▇▇▇ Entity referring to the Operative Document, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Agent Lessor receives such a notice, the Agent
Lessor shall give prompt notice thereof to the Participants. The Agent Lessor
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Lessors.
Section 14.9 Non-Reliance on Agent Lessor and Other
Participants. Each Participant expressly acknowledges that neither the Agent
Lessor (other than in its role as Participant) nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent Lessor or any
affiliate thereof hereafter taken, including any review of the
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affairs of any ▇▇▇▇▇▇▇ Entity, shall be deemed to constitute any representation
or warranty by the Agent Lessor to any Participant. Each Participant
represents to the Agent Lessor that it has, independently and without reliance
upon the Agent Lessor or any other Participant, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of each ▇▇▇▇▇▇▇ Entity and
made its own decision to make its proportionate share of all Advances hereunder
and under the other Operative Documents and enter into this Participation
Agreement and the other Operative Documents. Each Participant also represents
that it will, independently and without reliance upon the Agent Lessor or any
other Participant, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Participation
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of each ▇▇▇▇▇▇▇ Entity. Except for
notices, reports and other documents expressly required to be furnished to the
Participants by the Agent Lessor hereunder, the Agent Lessor shall not have any
duty or responsibility to provide any Participant with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of any ▇▇▇▇▇▇▇ Entity which may
come into the possession of the Agent Lessor or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 14.10 Indemnification. The Lessors agree to indemnify
the Agent Lessor in its capacity as such (to the extent not reimbursed by the
▇▇▇▇▇▇▇ Entities and without limiting the obligation of the ▇▇▇▇▇▇▇ Entities to
do so), ratably according to their respective Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including without limitation at any time following the payment
of the Obligations) be imposed on, incurred by or asserted against the Agent
Lessor in its capacity as such in any way relating to or arising out of this
Participation Agreement or the other Operative Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent
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Lessor under or in connection with any of the foregoing; provided that no
Lessor shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent Lessor. If any indemnity furnished to the Agent Lessor
for any purpose shall, in the opinion of the Agent Lessor, be insufficient or
become impaired, the Agent Lessor may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
payment in full of the Obligations and all other amounts payable hereunder and
under the other Operative Documents.
Section 14.11 Failure to Act. Except for action expressly
required of the Agent Lessor hereunder, the Agent Lessor shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall be
indemnified to its satisfaction by the Lessors against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 14.12 Resignation and Removal. The Agent Lessor may
resign at any time upon at least 30 days' prior notice to the Representative
and the Participants, and may be removed as such at any time by vote of the
Required Lessors and notice to the retiring Agent Lessor, the Administrative
Agent and the Representative. In the Event of any such resignation or removal,
the Required Lessors shall as promptly as practicable (but with five Business
Days' prior written notice being given to the Representative) appoint a
successor Agent Lessor, provided that such successor Agent Lessor shall be
approved by the Administrative Agent, and, unless an Event of Default is
continuing, be approved by the Representative (which approval shall not be
unreasonably withheld or delayed) and, if the Representative has not responded
within such five Business Day period, the Representative shall be deemed to
have approved such new Agent Lessor. If no successor Agent Lessor shall have
been so appointed and shall have accepted such appointment within 30 days after
either the retiring Agent Lessor's giving of notice of resignation or the
Required Lessors' vote to remove the retiring Agent Lessor, then the retiring
Agent Lessor may, on behalf of the Lessors, appoint a successor Agent Lessor,
which shall be a commercial bank organized under the laws of the United States
of America or of any State thereof or under the laws of another country that is
doing
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business in the United States and having a combined capital, surplus and
undivided profits of at least $100,000,000, or a wholly owned subsidiary of
such bank. Upon its acceptance of its appointment, such successor Agent Lessor
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent Lessor, and the retiring Agent
Lessor shall be discharged from all further duties and obligations as Agent
Lessor under this Participation Agreement and under the other Operative
Documents. After any retiring Agent Lessor's resignation or removal hereunder
as Agent Lessor, the provisions of this Participation Agreement and of the
other Operative Documents shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent Lessor under this
Participation Agreement. No resignation or renewal of the Agent Lessor may
become effective until a successor Agent Lessor has been appointed as provided
above.
Section 14.13 Distributions. The Agent Lessor shall, as
promptly as practicable, distribute to each Participant its appropriate
portion, if any, of payments received (in good, collected funds) by the Agent
Lessor from the ▇▇▇▇▇▇▇ Entities for the account of the Participants or of any
such payments so received for the account of such Participant.
Section 14.14 Rights of Each ▇▇▇▇▇▇▇ Entity. Except where a
▇▇▇▇▇▇▇ Entity is expressly referenced in this Article XIV, (w) the Agent
Lessor shall act solely as agent of the Lessors and does not assume and shall
not be deemed to have assumed any obligation or relationship of agency or trust
with or for any ▇▇▇▇▇▇▇ Entity, (x) this Article XIV is for the benefit of the
Agent Lessor and the Participants only, (y) each ▇▇▇▇▇▇▇ Entity shall have no
right to enforce any part of this Article XIV and shall have no rights as third
party beneficiary or otherwise therein, and (z) this Article XIV may be amended
by the approval of Agent Lessor and the Required Participants, without any need
to obtain the approval of any ▇▇▇▇▇▇▇ Entity, provided no such amendment shall
be permitted without the consent of the Representative, which consent shall not
be unreasonably withheld. The Agent Lessor shall send the Representative a
copy of any such amendments.
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ARTICLE XV
MISCELLANEOUS
Section 15.1 Survival of Agreements. The representations,
warranties, covenants, indemnities and agreements of the parties provided for
in the Operative Documents, and the parties' obligations under any and all
thereof, shall survive the execution and delivery of this Participation
Agreement, the transfer of any and all Property to the Agent Lessor, the
construction of any Improvements, any disposition of any interest of the Agent
Lessor or any Participant in any Property or any Improvements and the payment
of the Notes and any disposition thereof, and shall be and continue in effect
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions or conditions of
any of the Operative Documents. Except as otherwise expressly set forth herein
or in the other Operative Documents, the indemnities of the parties provided
for in the Operative Documents shall survive the expiration or termination of
any thereof.
Section 15.2 No Broker, etc. Each of the parties hereto
represents to the others that it has not retained or employed any broker,
finder or financial adviser (other than Capstar Partners, Inc.) to act on its
behalf in connection with this Participation Agreement or the transactions
contemplated herein or in the other Operative Documents nor has it authorized
any broker, finder or financial adviser (other than Capstar Partners, Inc.)
retained or employed by any other Person so to act. Any party which is in
breach of this representation shall indemnify and hold the other parties
harmless from and against any liability arising out of such breach of this
representation.
Section 15.3 Notices. Unless otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions, requests
and other communications required or permitted by the terms hereof to be given
to any Person shall be given in writing by United States mail, by nationally
recognized courier service, by hand or by facsimile, and any such notice shall
become effective (i) if delivered by United States mail, five (5) Business days
after being deposited in the mail, certified or registered with appropriate
postage prepaid, (ii) if delivered by a nationally recognized courier service,
two (2) Business Days after delivery to a nationally recognized courier service
specifying overnight delivery, (iii) if delivered by hand, when
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received or (iv) if delivered by facsimile, when transmitted (upon electronic
confirmation thereof), and shall be directed to the address or facsimile number
of such Person as indicated on Schedule II. From time to time any party may
designate a new address or facsimile number for purposes of notice hereunder by
written notice to each of the other parties hereto in accordance with this
Section.
Section 15.4 Counterparts. This Participation Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 15.5 Amendments, etc. Neither any Operative Document
nor any of the terms thereof may be terminated (except upon payment in full of
the Lease Balance or effective exercise and consummation of the Remarketing
Option in accordance with Article XX of the Master Lease and payment in full of
all amounts due in accordance therewith), amended, supplemented, waived or
modified without the written agreement or consent of each party thereto and,
regardless of whether the Lenders and the Lessors are parties thereto, the
Required Participants; provided, however, that:
(a) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each Participant:
(i) modify any of the provisions of this Section
15.5, change the definition of "Required Participants" or modify or
waive any provision of any Operative Document requiring action by the
foregoing;
(ii) amend, modify, waive or supplement any of the
provisions of Section 2.5, 2.6 or 2.7 of the Loan Agreement;
(iii) reduce, modify, amend or waive any fees or
indemnities in favor of any Participant, including without limitation
amounts payable pursuant to Article XIII (except that any Person may
consent to any reduction, modification, amendment or waiver of any
indemnity payable to it);
(iv) modify, postpone, reduce or forgive, in whole
or in part, any payment of Rent (other than pursuant to the terms of any
Operative
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Document), any Loan or Lessor Amount, the Lease Balance, the Loan
Balance, Commitment Fees, amounts due pursuant to Section 20.2 of the
Master Lease, interest or Yield (except that any Person may consent to
any modification, postponement, reduction or forgiveness of any payment
of any Commitment Fee payable to it) or, subject to subclause (iii)
above, any other amount payable under the Lease or this Participation
Agreement, or modify the definition or method of calculation of Rent
(other than pursuant to the terms of any Operative Document), Loans or
Lessor Amounts, Lease Balance, Loan Balance, Commitment Fees, Commitment
Fee Shortfall Amounts, Shortfall Amount, Property Improvement Costs,
Estimated Improvement Costs, Participant Balance, or any other
definition which would affect the amounts to be advance or which are
payable under the Operative Documents;
(v) consent to any assignment of the Master Lease
or any Lease Supplement by any Lessee, releasing such Lessee from its
obligations in respect of the payments of Rent, Loan Balance or Lease
Balance or changing the absolute and unconditional character of such
obligations; or
(vi) consent to any change in clause (i) of the
definition of Unavailable Commitment Termination Date from August 1,
1997; and
(b) no such termination, amendment, supplement, waiver or
modification that would increase the obligations of any ▇▇▇▇▇▇▇ Party
thereunder or deprive any ▇▇▇▇▇▇▇ Party of any of its rights thereunder shall
be effective against such ▇▇▇▇▇▇▇ Party without its written agreement or
consent.
Section 15.6 Headings, etc. The Table of Contents and headings
of the various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
Section 15.7 Parties in Interest. Except as expressly provided
herein, none of the provisions of this Participation Agreement is intended for
the benefit of any Person except the parties hereto. No ▇▇▇▇▇▇▇ Entity shall
assign or transfer any of its rights or obligations under the Operative
Documents except in accordance with the terms and conditions thereof.
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Section 15.8 GOVERNING LAW. THIS AGREEMENT AND THE OTHER
OPERATIVE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
Section 15.9 Severability. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15.10 Liability Limited.
(a) The parties hereto agree that except as specifically
set forth herein or in any other Operative Document, no Lessor shall have any
personal liability whatsoever to any Participant or their respective successors
and assigns for any claim based on or in respect hereof or any of the other
Operative Documents or arising in any way from the transactions contemplated
hereby or thereby and recourse, if any, shall be solely had against such
Lessor's interest in the Property; provided, however, that each Lessor shall be
liable in its individual capacity (a) for its own willful misconduct or gross
negligence, (b) breach of any of its representations, warranties or covenants
under the Operative Documents, or (c) for any Tax based on or measured by any
fees, commission or compensation received by it for acting as a Lessor as
contemplated by the Operative Documents. It is understood and agreed that,
except as provided in the preceding sentence: (i) no Lessor shall have any
personal liability under any of the Operative Documents as a result of acting
pursuant to and consistent with any of the Operative Documents; (ii) all
obligations of each Lessor to any Lender are solely nonrecourse obligations
except to the extent that such Lessor has received payment from others
(including, without limitation, obligations with respect to the Loans); and
(iii) all such personal liability of any Lessor is expressly waived and
released as a condition of, and as consideration for, the execution and
delivery of the Operative Documents by such Lessor.
(b) No Participant shall have any obligation to any other
Participant or to any ▇▇▇▇▇▇▇ Entity, the Lessors or the Lenders with respect
to transactions contemplated by the Operative Documents,
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except those obligations of such Participant expressly set forth in the
Operative Documents or except as set forth in the instruments delivered in
connection therewith, and no Participant shall be liable for performance by any
other party hereto of such other party's obligations under the Operative
Documents except as otherwise so set forth.
Section 15.11 Further Assurances. The parties hereto shall
promptly cause to be taken, executed, acknowledged or delivered, at the sole
expense of the Representative, all such further acts, conveyances, documents
and assurances as the other parties may from time to time reasonably request in
order to carry out and preserve the security interests and liens (and the
priority thereof) intended to be created pursuant to this Participation
Agreement, the other Operative Documents, and the transactions thereunder
(including, without limitation, the preparation, execution and filing of any
and all Uniform Commercial Code financing statements and other filings or
registrations which the parties hereto may from time to time request to be
filed or effected). The Representative, at its own expense and without need of
any prior request from any other party, shall take such action as may be
necessary (including any action specified in the preceding sentence), or as so
requested, in order to maintain and protect all security interests provided for
hereunder or under any other Operative Document.
Section 15.12 SUBMISSION TO JURISDICTION. EACH PARTY HERETO
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY
OF THE OTHER OPERATIVE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 15.13 Setoff. The Lenders and the Lessors shall, upon
the occurrence of any Lease Event of Default or Construction Agency Event of
Default, have the right to appropriate and, subject to Section 4.7, apply to
the payment of any ▇▇▇▇▇▇▇ Entity's obligations under the Lease, the
Construction Agency Agreement and the other Operative Documents as security for
the payment of such obligations, any and all balances, credits,
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98
deposits, accounts or moneys of such ▇▇▇▇▇▇▇ Entity then or thereafter
maintained with any Lender or any Lessor. The rights of the Lenders and the
Lessors under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which such
Person may have.
Section 15.14 WAIVER OF JURY TRIAL. THE PARTIES HERETO
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY OF THE PARTIES HERETO. THE PARTIES HERETO HEREBY
AGREE THAT THEY WILL NOT SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER
LITIGATION IN WHICH A JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF
THIS SECTION 15.14 HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE
SUBJECT TO NO EXCEPTIONS. EACH ▇▇▇▇▇▇▇ ENTITY PARTY HERETO ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE AGENT LESSOR,
THE ADMINISTRATIVE AGENT, THE ARRANGER AND EACH OF THE PARTICIPANTS ENTERING
INTO THIS PARTICIPATION AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
Section 15.15 No Participant Responsible for Other Participants.
The obligations of each Participant under this Participation Agreement and the
other Operative Documents are several and not joint; and, in the event of a
failure by a Participant to perform any of its obligations hereunder or under
any other Operative Document, neither the Agent Lessor nor the Administrative
Agent nor any other Participant (other than the defaulting Participant) shall
have any liability as a consequence thereof.
Section 15.16 Each Lessor to Have an Undivided Interest. The
Agent Lessor hereby confirms that it is holding each Property on behalf of the
Lessors, each of which shall hold an undivided interest in the Property (and
all proceeds thereof), in each case such interest to be equal to the Commitment
of such Lessor relative to the aggregate amount of the Lessor Commitment of all
Lessors.
Section 15.17 Authority of Representative. Each of the Lessees
hereby appoints and designates (which appointment and designation is
irrevocable and coupled with an interest) ▇▇▇▇▇▇▇ Enterprises, Inc., as its
attorney in fact and legal representative (the
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99
"Representative") for the purposes of the Operative Documents and all
transactions contemplated thereby, and hereby authorizes each Participant to
conclusively rely on such designation. Each Lessee hereby confirms that the
Representative, acting alone, has sufficient power and authority to bind such
Lessee in respect of all matters contemplated by the Operative Documents, and
hereby agrees to indemnify and hold each Participant harmless from and against
any Claims it may suffer in relying on the Representative as above indicated.
Section 15.18 Assignment by ▇▇▇▇▇▇▇ Enterprises, Inc. (a)
Subject to the conditions under clause (b), notwithstanding any provision
herein each party hereto agrees that ▇▇▇▇▇▇▇ Enterprises, Inc. may transfer all
of its assets (other than the stock of Pharmacy and the Subsidiaries of
Pharmacy) to a Wholly-Owned Subsidiary which is not a Subsidiary on the date
hereof (the "New ▇▇▇▇▇▇▇ Holding Company"), and ▇▇▇▇▇▇▇ Enterprises, Inc. shall
cause the New ▇▇▇▇▇▇▇ Holding Company to assume all of the obligations of
▇▇▇▇▇▇▇ Enterprises, Inc. at the time of such transfer, including the
obligations of ▇▇▇▇▇▇▇ Enterprises, Inc. as Representative, Construction Agent
and Parent Guarantor under the Operative Documents. Upon such transfer and
assumption the terms "Company", "Representative", "Construction Agent" and
"Parent Guarantor" shall mean the New ▇▇▇▇▇▇▇ Holding Company and shall cease
to mean ▇▇▇▇▇▇▇ Enterprises, Inc. and thereupon ▇▇▇▇▇▇▇ Enterprises, Inc. and
Pharmacy and its Subsidiaries, without further action on behalf of any party
hereto, shall be released from all covenants, liabilities and obligations under
the Operative Documents. Any transfer of assets by ▇▇▇▇▇▇▇ Enterprises, Inc.
as aforesaid to New ▇▇▇▇▇▇▇ Holding Company and any distribution of the stock
of New ▇▇▇▇▇▇▇ Holding Company to shareholders of ▇▇▇▇▇▇▇ Enterprises, Inc.
shall not constitute a Change of Control.
(b) Conditions Precedent. The transfer and assignment
contemplated under clause (a) shall not occur, and the Operative Documents
shall remain in full force and effect, unmodified by such transfer and
assignment unless and until all of the following conditions precedent (the
"Conditions Precedent") have been satisfied, to the satisfaction of the Agent
Lessor, the Administrative Agent and each Participant, on or before the date of
such transfer and assignment (the Conditions Precedent are for the benefit of
the Agent Lessor, the Administrative Agent and each Participant only):
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(i) Payment of Transaction Expenses. ▇▇▇▇▇▇▇
Enterprises, Inc. shall pay the Transaction Expenses incurred in connection
with the transactions contemplated under clause (a), and any other costs and
fees incurred by the Administrative Agent, the Agent Lessor and each
Participant in accordance with the terms of the Operative Documents.
(ii) Confirmation of Covenants and Representations and
Warranties. All of the ▇▇▇▇▇▇▇ Entities' covenants, representations, and
warranties contained in the Operative Documents (except as expressly modified
by clause (a)) shall remain true and correct and enforceable in all respects
before and after giving effect to the transactions contemplated under clause
(a).
(iii) No Default. No Default, Event of Default, breach or
failure of condition exists, or would exist with notice or lapse of time or
both, under any of the Operative Documents before or after giving effect to the
transactions contemplated under clause (a).
(iv) Reperfection. Each of the Participants shall have
received evidence reasonably satisfactory to it that each Lien under the
Operative Documents with respect to the Representative has been, or will be,
amended in a manner sufficient to properly perfect each of their interests
therein.
Section 15.19 Recourse during Construction. Notwithstanding any
provision herein to the contrary prior to the Completion Date for any Property
if no Construction Agency Agreement Event of Default described in clauses (a)
or (b) of Section 5.1 of the Construction Agency Agreement has occurred and is
continuing with respect to such Property and no Construction Agency Agreement
Event of Default described in clause (c) of Section 5.1 of the Construction
Agency Agreement has occurred and is continuing, so long as the Lessee for such
Property relinquishes its interests therein and conveys possession of such
Property to the Agent Lessor as contemplated by Section 20.3(b)(ii) of the
Master Lease with the affidavit and certificate contemplated by Section
20.3(b)(i) of the Master Lease, the maximum recovery on a recourse basis from
such Lessee for such Property (and any guarantor of such Lessee, including the
Guarantors) shall be limited to 89.99% of the Property Cost with respect to
such Property; provided that the Lessees and the Representative (on behalf of
itself and each other ▇▇▇▇▇▇▇ Entity) acknowledge and agree that Lessors shall
be entitled to recover 100% of such Lease Balance from its interest as owner or
mortgagee, as the
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case may be, in such Property and provided further that nothing contained in
this Section 15.19 limits the obligation of the Representative with respect to
indemnification under Article XIII.
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102
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
▇▇▇▇▇▇▇ ENTERPRISES, INC., as
Representative, Construction Agent and
Parent Guarantor
By
---------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY, as Arranger,
Administrative Agent
and as a Lender
By
---------------------------------------
Name:
Title:
BMO LEASING (U.S.),
INC., as Agent Lessor and as a Lessor
By
---------------------------------------
Name:
Title:
BANK OF MONTREAL, as Co-Arranger and as a
Lender
By
---------------------------------------
Name:
Title:
S-1
103
VANTAGE HEALTHCARE CORPORATION, as Lessee
and Structural Guarantor
By
---------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ HEALTH CARE, INC., as Lessee and
Structural Guarantor
By
---------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ SAVANA CAY MANOR, INC., as Lessee
and Structural Guarantor
By
---------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ENTERPRISES - GEORGIA, INC., as
Lessee and Structural Guarantor
By
---------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ENTERPRISES - CALIFORNIA, INC.,
as Lessee and Structural Guarantor
By
---------------------------------------
Name:
Title:
S-2
104
SCHEDULE I
TO PARTICIPATION AGREEMENT
COMMITMENTS
=============================================================================
COMMITMENT
PARTICIPANT COMMITMENT PERCENTAGE
-----------------------------------------------------------------------------
LENDERS
-------
-----------------------------------------------------------------------------
LTCB $25,000,000 50%
-----------------------------------------------------------------------------
Bank of Montreal $17,000,000 34%
-----------------------------------------------------------------------------
LESSORS
-------
-----------------------------------------------------------------------------
BMO Leasing
(U.S.), Inc. $ 8,000,000 16%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
TOTAL $50,000,000 100%
-----------------------------------------------------------------------------
=============================================================================
I-1
105
SCHEDULE II
TO PARTICIPATION AGREEMENT
Notice Information, Wire Instructions and Funding Offices
Representative, Construction Agent and Parent Guarantor
▇▇▇▇▇▇▇ ENTERPRISES, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇-▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Chase Manhattan Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: ▇▇▇▇▇▇▇ Enterprises, Inc.
Account Number: 323-213448
Ref: Synthetic Lease Draws
Agent Lessor:
BMO LEASING (U.S.), INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Citibank N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: BMO Leasing
Account Number: 3602-3029
Ref: ▇▇▇▇▇▇▇ Enterprises
Administrative Agent:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Wing-▇▇▇ ▇▇▇▇
▇▇-1
106
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions for the Account:
Bank: Bankers Trust New York
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Name: Long-Term Credit Bank of Japan, Ltd.,
Los Angeles Agency
Account Number: ▇▇▇▇▇▇▇▇
Ref: ▇▇▇▇▇▇▇ Enterprises, Inc.
Lessors:
BMO LEASING (U.S.), INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Citibank N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: BMO Leasing
Account Number: 3602-3029
Ref: ▇▇▇▇▇▇▇ Enterprises
Lenders:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Wing-▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Bankers Trust New York
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Name: Long-Term Credit Bank of Japan, Ltd.,
Los Angeles Agency
Account Number: ▇▇▇▇▇▇▇▇
Ref: ▇▇▇▇▇▇▇ Enterprises, Inc.
II-2
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: Bank of Montreal
Account Number: 124-8566
Ref: ▇▇▇▇▇▇▇ Enterprises
Lessees and
Structural Guarantors:
c/o ▇▇▇▇▇▇▇ Enterprises, Inc.
II-3
108
SCHEDULE III
TO PARTICIPATION AGREEMENT
Item 8.2(h) - Subsidiaries
Item 10.2(i) - Indebtedness
III
109
SCHEDULE IV
TO PARTICIPATION AGREEMENT
PRICING CATEGORY
For purposes of the Pricing Categories used in the definitions of "Loan Margin"
and "Lessor Margin", the following terms have the following meanings:
"Pricing Ratio" means the ratio of Consolidated EBITDAR to the sum of
Consolidated Interest Charges and Consolidated Rental Expense.
"Category I Pricing" applies on any day after March 31, 1997 if, as of the last
day of the fiscal quarter of the Representative most recently ended on or prior
to such day and as to which the Representative shall have delivered, or been
required to deliver, on or prior to such day a certificate pursuant to Section
10.1(d)(iii), the Pricing Ratio is greater than 2.50 to 1.0.
"Category II Pricing" applies on any day after March 31, 1997 if, as of the
last day of the fiscal quarter of the Representative most recently ended on or
prior to such day and as to which the Representative shall have delivered, or
been required to deliver, on or prior to such day a certificate pursuant to
Section 10.1(d)(iii), (i) the Pricing Ratio is greater than 2.25 to 1.0 and
(ii) Category I Pricing does not apply.
"Category III Pricing" applies on any day (a) from and including the
Documentation Date to and including March 31, 1997 and (b) if, as of the last
day of the fiscal quarter of the Representative most recently ended on or prior
to such day and as to which the Representative shall have delivered, or been
required to deliver, on or prior to such day a certificate pursuant to Section
10.1(d)(iii), (i) the Pricing Ratio is greater than 2.00 to 1.0 and (ii)
neither Category I Pricing nor Category II Pricing applies.
"Category IV Pricing" applies on any day if, as of the last day of the fiscal
quarter of the Representative most recently ended on or prior to such day and
as to which the Representative shall have delivered, or been required to
deliver, on or prior to such day a certificate pursuant to Section
10.1(d)(iii), (i) Pricing Ratio is greater than 1.75 to 1.0 and (ii) none of
Category I Pricing, Category II Pricing or Category III Pricing applies.
IV-I
110
"Category V Pricing" applies on any day if, on such day, no other Pricing
Category applies.
"Pricing Category" means any one of the five pricing categories
denominated Category I Pricing, Category II Pricing, Category III Pricing,
Category IV Pricing or Category V Pricing.
IV-II
111
EXHIBIT A
TO PARTICIPATION AGREEMENT
FORM OF LEGAL OPINION OF REPRESENTATIVE,
LESSEES AND GUARANTORS(1/)
March __, 1997
To the Parties
Listed on Schedule A hereto
Re: ▇▇▇▇▇▇▇ Enterprises, Inc.
Ladies and Gentlemen:
We have acted as counsel to ▇▇▇▇▇▇▇ Enterprises, Inc., a Delaware
corporation (the "Representative"), each of the Lessees as identified on the
signature pages to the Participation Agreement (as defined below) (each a
Lessee and collectively the "Lessees") and each of the Guarantors as identified
on the signature pages to the Participation Agreement (as defined below) (each
a Guarantor and collectively, the "Guarantors") (the Representative, each
Lessee and each Guarantor collectively, the "▇▇▇▇▇▇▇ Entities") in connection
with the negotiation, execution and delivery of (i) the Participation
Agreement, dated as of March 21, 1997 (the "Participation Agreement"), among
the Lessees, Representative, Construction Agent, Parent Guarantor, the
Structural Guarantors, the Agent Lessor, the Lessors, the Lenders, the
Administrative Agent, the Arranger and the Co-Arranger and (ii) each of the
other Operative Documents. Terms not defined herein have the meanings assigned
to those terms in Appendix A to the Participation Agreement. References herein
to the "UCC" shall mean the Uniform Commercial Code as in effect in the
applicable State on the date hereof. This letter is furnished to you pursuant
to Section 2.1(j)(v) of the Participation Agreement.
We have examined the originals, or certified, conformed or
reproduction copies, of the Participation
--------------------
(1/)These opinions may be divided between Lessee's New York counsel with
respect to opinions 3, 9 and 10 and Lessee's general counsel with respect to
all other opinions.
A-I
112
Agreement, the other Operative Documents and all records, other agreements,
instruments and documents and have made such other investigations as we have
deemed relevant or necessary as the basis for the opinions hereinafter
expressed. In our examination, we have assumed with your approval the
genuineness of all signatures; the authenticity of documents submitted to me as
originals; and the conformity with authentic original documents of all
documents submitted to me as copies.
As to matters of fact bearing upon the opinions set forth below,
we have relied, without independent verification, upon the accuracy and
genuineness of the representations and warranties made in the Operative
Documents by the various parties to the Operative Documents (other than the
▇▇▇▇▇▇▇ Entities). In rendering such opinions, we have further relied on the
following assumptions, the accuracy of which we have not independently
verified:
Each of the parties to the Operative Documents (other than
the ▇▇▇▇▇▇▇ Entities) has the right, power and authority to execute,
deliver and perform its obligations under the Operative Documents to
which it is a party, and has duly authorized the execution and delivery
of the Operative Documents to which it is a party and the performance of
its obligations thereunder.
Each of the parties to the Operative Documents (other than
the ▇▇▇▇▇▇▇ Entities) has duly executed and delivered the Operative
Documents to which it is a party.
Each of the Operative Documents constitutes the legal,
valid and binding obligation of each party thereto (other than the
▇▇▇▇▇▇▇ Entities) and creates the rights and interests which it purports
to create therein.
Based upon the foregoing examinations and assumptions, and
subject to the exclusions and qualifications stated below, and having regard
for the legal considerations that we deem relevant, we are of the opinion that:
1. Each of the ▇▇▇▇▇▇▇ Entities is a corporation duly organized,
validly existing and in good standing under the laws of the State of its
incorporation and has full corporate power and authority to conduct its
business as presently conducted and to
A-II
113
enter into and perform its obligations under the Operative Documents to which
it is or will be a party. Each of the ▇▇▇▇▇▇▇ Entities is qualified to do
business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Effect.
2. The execution, delivery and performance by each of the
▇▇▇▇▇▇▇ Entities of each Operative Document to which it is a party have been
duly authorized by all necessary corporate action on its part and each such
Operative Document has been duly executed and delivered by Lessee and such
Guarantor.
3. Each Operative Document to which any ▇▇▇▇▇▇▇ Party is a
party constitutes its legal, valid and binding obligation, enforceable against
such ▇▇▇▇▇▇▇ Entity in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable principles.
4. Neither the execution, delivery or performance by any
▇▇▇▇▇▇▇ Entity of any Operative Document to which it is a party (i) requires
any approval of the stockholders of any ▇▇▇▇▇▇▇ Entity, or approval or consent
of any trustee or holder of any of such ▇▇▇▇▇▇▇ Entity's indebtedness or
obligations; (ii) contravenes or will contravene any Requirement of Law
currently in effect applicable to or binding upon any ▇▇▇▇▇▇▇ Entity; (iii)
conflicts with, results in any breach of or constitutes any default under, or
results in the creation of any Lien (other than the respective rights and
interest of the Participants as provided in the Operative Documents) upon any
▇▇▇▇▇▇▇ Entity's property under, (A) any indenture, mortgage, chattel mortgage,
deed of trust, lease, conditional sales contract, loan or credit arrangement or
other material agreement or instrument by which such ▇▇▇▇▇▇▇ Entity or any of
its properties may be bound, (B) such ▇▇▇▇▇▇▇ Entity's corporate charter or (C)
such ▇▇▇▇▇▇▇ Entity's by-laws.
5. There is no action, proceeding or investigation pending
or, to the best of our knowledge, threatened which is reasonably likely to
result, either in any case or in the aggregate, in a Material Adverse Effect
with respect to any ▇▇▇▇▇▇▇ Entity.
6. No authorization, consent, approval, license or formal
exemption from, nor any filing, declaration or registration with, any
Governmental
A-III
114
Authority is or will be required in connection with the execution and delivery
by any ▇▇▇▇▇▇▇ Entity of the Operative Documents to which it is a party, or the
performance by any ▇▇▇▇▇▇▇ Entity of its obligations under such Operative
Documents.
7. Neither the Notes nor the interests of the Participants
under the Operative Documents are required to be registered under the
Securities Act of 1933, as amended.
8. No ▇▇▇▇▇▇▇ Entity is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. No ▇▇▇▇▇▇▇ Entity is subject to regulation as
a "holding company," an "affiliate" of a "holding company," or a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended. The proceeds of any Advance, if used
in accordance with the terms of the Operative Documents, will not result in a
violation of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
9. No Participant is required under the laws of New York to
qualify as a foreign corporation, foreign trust company or otherwise in New
York solely as a result of its execution, delivery and performance of the
Operative Documents to which it is a party.
10. The express choice of law of the State of New York to
govern the Operative Documents is enforceable and will be recognized by New
York courts.
11. The UCC Financing Statements which are to be recorded or
filed within the State, the forms of which are attached as Schedule I hereto,
are in form sufficient under the laws of the State for filing or recording, and
when recorded with the Recording Office and the Arkansas Secretary of State
will have been filed or recorded in all public offices in the State in which
such filing or recording is necessary to perfect the interest of the Agent
Lessor in the collateral described therein to the extent the same can be
perfected by filing or recording in the State.
We are licensed to practice law in the State of [Arkansas][New York]. This
opinion is solely for your benefit and for the benefit of subsequent assignees
of any Participant's interests in the Operative Documents. No other person or
entity shall be entitled to rely on matters set forth herein without the
express written
A-IV
115
consent of the undersigned. This opinion is limited to the matters set forth
herein; no opinion may be inferred or implied beyond the matters expressly
stated in this letter.
Very truly yours,
A-V
116
SCHEDULE A
BMO Leasing (U.S.) Inc.
The Long-Term Credit Bank of Japan, Ltd.,
Los Angeles Agency
Bank of Montreal
A-VI
117
EXHIBIT B
TO PARTICIPATION AGREEMENT
FORM OF FUNDING REQUEST
(Date)
TO: Agent Lessor and the Administrative Agent, pursuant to the Participation
Agreement (the "Participation Agreement") dated as of March 21, 1997
among the Lessees, Representative, Construction Agent, Parent Guarantor,
the Structural Guarantors, the Agent Lessor, the Lessors, the Lenders,
the Administrative Agent, the Arranger and the Co-Arranger as the same
may be amended, supplemented, amended and restated or otherwise modified
from time to time (capitalized terms used herein shall have the
meanings ascribed thereto in the Participation Agreement).
FROM: ▇▇▇▇▇▇▇ Enterprises, Inc., as Construction Agent
RE: [Funding Date][Acquisition Date] Closing
1. This irrevocable Funding Request is hereby delivered by Lessee pursuant
to Section 3.4(a) of the Participation Agreement.
2. The [Funding Date][Acquisition Date] is scheduled for _______________,
199_ [, and such date will also be an Acquisition Date].
3. The amount of the Advance is $__________________.
4. The Loans and Lessor Amounts comprising such Advance will be [Base Rate
Loans/Lessor Amounts][Eurodollar Loans/Lessor Amounts]. The initial
Interest Period for such Eurodollar Loans/Lessor Amounts will extend
from the [Funding Date] [Acquisition Date] to the next Scheduled Payment
Date.
5. The Advance will be allocated among each of the Properties listed in
Schedule I attached hereto. With respect to each acquisition of
Property, Schedule II specifies (i) a description of the Property, (ii)
the seller or lessor of the Property, (iii) the related Land Acquisition
Cost and (iv) the Estimated Improvement Costs.
B-I
118
6. After giving effect to the Advance requested hereby, the Property Cost
for each Property in respect of which the Advance is being drawn is set
forth on Schedule A hereto and such amount does not exceed the Fair
Market Sales Value for such Property as set forth in the As-Built
Appraisal therefor as delivered pursuant to clause (i) or (ii) of
Section 6.2(b) of the Participation Agreement.
7. Funds shall be sent by wire transfer as follows:
a. Each Lessor and Lender shall transfer its Commitment Percentage
of $______________ to the following account of Agent Lessor:
Bank:
ABA Number:
Account Name:
Account Number:
Ref:
Further Credit to:
[amount to be provided by Lessee]
b. Construction Agent hereby instructs Agent Lessor to distribute
the funds as follows:
[information to be provided by Construction Agent]
8. All of the costs being funded pursuant to this Funding Request relate to
the acquisition of Land and all Improvements thereon and to the
construction of such other Improvements subject to the Master Lease and
all moneys advanced to Construction Agent pursuant to this Funding
Request will be applied by Lessee solely to the payment (or
reimbursement) of such costs.
In connection with such requested Advance, the Construction Agent hereby
represents and warrants to you as follows:
a. On the proposed Funding Date or Acquisition Date, both
immediately before and after giving effect to the making of the
requested Advance and the application of the proceeds thereof,
the statements made by each ▇▇▇▇▇▇▇ Entity in Section 8 of the
Participation Agreement are true and correct in all material
respects.
B-II
119
b. After giving effect to the Advance requested hereby (i) the
aggregate outstanding amounts of each of the Loans and the Lessor
Amounts to all Lessees does not exceed the Commitments of the
Lenders and the Lessors, respectively and (ii) in the case of an
acquisition of a fee simple interest or leasehold interest in the
applicable Land, the Land Acquisition Cost for such Property does
not exceed the Fair Market Sales Value of such Property as set
forth in the Appraisal of such Property delivered pursuant to
Section 6.1(d) of the Participation Agreement.
c. All of the conditions precedent set forth in Article VI of the
Participation Agreement applicable to the Advance requested
hereby have been satisfied or waived.
IN WITNESS WHEREOF, I have signed my name this ______ day of
_______, 199_.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Construction Agent
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
B-III
120
SCHEDULE A TO FUNDING REQUEST
ALLOCATION OF ADVANCES
===================================================================================================================
Aggregate Property
Cost (all Advances to
Property Description Lease Land Acquisition Costs Improvement Costs date, including Current
(City, State) Supp. No. (Current Advance Only) (Current Advance Only) Advance
-------------------------------------------------------------------------------------------------------------------
1._______ No. __ $________ $________ $________
-------------------------------------------------------------------------------------------------------------------
2._______ No. __ $________ $________ $________
-------------------------------------------------------------------------------------------------------------------
3._______ No. __ $________ $________ $________
-------------------------------------------------------------------------------------------------------------------
4._______ No. __ $________ $________ $________
-------------------------------------------------------------------------------------------------------------------
5._______ No. __ $________ $________ $________
===================================================================================================================
================================================================================
As-Built Appraisal for Land Acquisition
Property Description Property as of Costs and Estimated
(City, State) Completion Date Improvement Costs
--------------------------------------------------------------------------------
1._______ $________ $________
--------------------------------------------------------------------------------
2._______ $________ $________
--------------------------------------------------------------------------------
3._______ $________ $________
--------------------------------------------------------------------------------
4._______ $________ $________
--------------------------------------------------------------------------------
5._______ $________ $________
================================================================================
B-IV
121
SCHEDULE B TO FUNDING REQUEST
INFORMATION REQUIRED
FOR FUNDING ACQUISITION OF LAND
1. Description of the subject Property:__________.
2. The subject Property consists of [Land only] [Land and
Improvements].
3. The Land comprising part of the subject Property is to be [ground
leased by the Lessors] [acquired by the Lessors in fee simple].
4. [name of Seller/Ground lessor] is the [Seller] [Ground lessor] of
the Land comprising part of the subject Property.
5. (*/)Land Acquisition Cost for the subject Property: Indicated on
Schedule A.
6. Estimated Improvement Costs for the subject Property in the
aggregate are $_____________.
-------------------------
(*/) Insert in the case of an acquisition of a fee simple interest in the
applicable Land.
B-V
122
EXHIBIT C
TO PARTICIPATION AGREEMENT
FORM OF INTEREST PERIOD SELECTION/CONTINUATION/CONVERSION
NOTICE(*/)
Re:(▇▇▇▇▇▇▇ Enterprises, Inc.)
TO: Agent Lessor and Administrative Agent
This Interest Period Selection/Continuation/Conversion Notice is delivered to
you pursuant to Section 3.6 of the Participation Agreement dated as of March
21, 1997 (the "Participation Agreement"), among the Lessees, Representative,
Construction Agent, Parent Guarantor, the Structural Guarantors, the Agent
Lessor, the Lessors, the Lenders, the Administrative Agent, the Arranger and
the Co-Arranger as the same may be amended, supplemented, amended and restated
or otherwise modified from time to time.
▇▇▇▇▇▇▇ Enterprises, Inc. (the "Representative") hereby requests that on
_____ __, 19__, all or any portion of the presently outstanding principal
amount of the Loans and Lessor Amounts:
(1) which are presently [Base Rate Loans/Lessor Amounts] [Eurodollar
Loans/Lessor Amounts with an Interest Period ending on ______ __, 19__],
(2) be [continued as] [converted into],
(3) [Eurodollar Loans/Lessor Amounts having an Interest Period of _____
months].
Any and all capitalized terms used in this Notice for
Selection/Continuation/Conversion shall have the meaning ascribed thereto in
the Participation Agreement, unless specifically defined herein.
The Representative hereby certifies, represents and warrants that no
Default or Event of Default exists or will (after giving effect to the
selection, continuation or conversion requested hereby) exist.
-------------------------
(*/)Subject to Section 3.6(b) of the Participation Agreement, this notice is
only applicable with respect to Loan and Lessor Amounts outstanding during the
Basic Lease Term.
C-I
123
The Representative has caused this notice to be executed and delivered
by its Responsible Officer this _____ day of ______ __, 19__.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
------------------------
Name:
----------------------
Title:
---------------------
C-II
124
EXHIBIT D-1
TO PARTICIPATION AGREEMENT
FORM OF OFFICER'S CERTIFICATE
Pursuant to the Participation Agreement dated as of March 21, 1997 (the
"Participation Agreement") among the Lessees, Representative, Construction
Agent, Parent Guarantor, the Structural Guarantors, the Agent Lessor, the
Lessors, the Lenders, the Administrative Agent, the Arranger and the Co-
Arranger as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time. I, _______________, _______________ of
[Representative/Lessee], do hereby certify as follows (capitalized terms used
herein shall have the meanings ascribed thereto in the Participation
Agreement):
1. The representations and warranties of [Representative/Lessee] contained in
the Participation Agreement and other Operative Documents to which it is a
party are true, correct and complete on and as of the date hereof with the same
effect as if such representations and warranties had been made on and as of the
date hereof.
2. [Representative/Lessee] has performed all agreements on its part required
to be performed under the Participation Agreement and the other Operative
Documents to which it is a party on or prior to the date hereof.
3. There exists on the date hereof no Default or Event of Default.
IN WITNESS WHEREOF, I have signed my name this _____ day of _____________,
199__.
[REPRESENTATIVE/LESSEE]
By:
------------------------
Name:
----------------------
Title:
---------------------
▇-▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
TO PARTICIPATION AGREEMENT
FORM OF SECRETARY'S CERTIFICATE
The undersigned, _________________, [Assistant] Secretary of
[Representative/Lessee], a ______ corporation [("Representative/Lessee"],
pursuant to the Participation Agreement dated as of March 21, 1997 (the
"Participation Agreement") among the Representative, Construction Agent,
Parent Guarantor, the Structural Guarantors, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent, the Arranger and the Co-Arranger as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time, does hereby certify as follows (capitalized terms used herein
shall have the meanings ascribed thereto in the Participation Agreement):
1. Attached hereto as Exhibit A is a true, correct and complete copy
of [Representative's/Lessee's] Certificate of Incorporation, as amended, and in
effect on the date hereof, certified by the Secretary of State of the State of
[its incorporation].
2. Attached hereto as Exhibit B is a true, correct and complete copy
of [Representative's/Lessee's] Articles and By-Laws, as amended, and in effect
on the date hereof, and such by-laws have been in full force and effect since
_________________, 19____ without modification or amendment.
3. Attached hereto as Exhibit C are true, correct and complete
copies of all resolutions adopted by the [Board of Directors] (and
shareholders) of [Representative/Lessee] relating to the [Participation
Agreement/Master Lease] and the other Operative Documents to which
[Representative/Lessee] is a party, which resolutions have not been amended or
rescinded and are in full force and effect on the date hereof.
4. No proceeding for merger, consolidation, liquidation,
reorganization or dissolution of [Representative/Lessee] or the sale of all or
substantially all of its assets is pending or contemplated.
5. The following persons are on the date hereof duly qualified and
acting officers of [Representative/ Lessee], duly elected or appointed to the
offices set forth beside their respective names and signatures, and each such
person who, as an officer of
D-2-I
126
[Representative/Lessee], signed the [Participation Agreement/Master Lease], any
of the other Operative Documents or any other document delivered before or on
the date hereof in connection with such agreements and documents and the
transactions contemplated therein was, at the respective times of such signing
and delivery, and is now duly elected or appointed, qualified and acting as
such officer, and the signatures of such persons appearing on such documents
are their genuine signatures:
NAME OFFICE SIGNATURE
---- ------ ---------
------------- -------------- ------------------
------------- -------------- ------------------
------------- -------------- ------------------
IN WITNESS WHEREOF, I have signed my name this _____ day of
_____________, 199__.
[REPRESENTATIVE/LESSEE]
By:
---------------------------
Name:
-------------------------
Title: [Assistant] Secretary
I, ___________________, [Vice] President of [Representative/Lessee],
hereby certify that ______________________ is on the date hereof the duly
elected, qualified and acting [Assistant] Secretary of [Representative/Lessee],
and that the signature set forth above is such person's true and correct
signature.
Dated: _________________, 199__
[REPRESENTATIVE/LESSEE]
By:
---------------------------
Name:
-------------------------
Title: [Vice] President
D-2-II
127
EXHIBIT D-3
TO PARTICIPATION AGREEMENT
FORM OF RESPONSIBLE OFFICER'S CERTIFICATE
Pursuant to the Participation Agreement dated as of March 21, 1997,
among the Lessees, Representative, Construction Agent, Parent Guarantor, the
Structural Guarantors, the Agent Lessor, the Lessors, the Lenders, the
Administrative Agent, the Arranger and the Co-Arranger as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time, I, [name of Responsible Officer], [position of Responsible Officer] of
▇▇▇▇▇▇▇ Enterprises, Inc. (the "Representative"), do hereby certify as follows
(capitalized terms used herein shall have the meanings ascribed thereto in the
Participation Agreement):
1. The representations and warranties of each ▇▇▇▇▇▇▇ Entity
contained in the Participation Agreement and other Operative Documents to which
it is a party are true, correct and complete on and as of the date hereof with
the same effect as if such representations and warranties had been made on and
as of the date hereof.
2. Each ▇▇▇▇▇▇▇ Entity has performed all agreements on its part
required to be performed under the Participation Agreement and the other
Operative Documents to which it is a party on or prior to the date hereof
3. Each Operative Document to which any ▇▇▇▇▇▇▇ Entity is a party is
in full force and effect with respect to it.
4. There exists on the date hereof no Default or Event of Default.
D-3-I
128
IN WITNESS WHEREOF, I have signed my name this _____ day of
_______________ 199_ and certify that I am the [position of Responsible
Officer] of the Representative.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
---------------------------
Name:
-------------------------
Title:
------------------------
D-3-II
129
EXHIBIT E
TO PARTICIPATION AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
TO: Agent Lessor, Administrative Agent, Lessors and Lenders
1. This Compliance Certificate is hereby delivered by the Representative
pursuant to Section 10.1(d)(3)(B) of the Participation Agreement dated
as of March 21, 1997, among the Lessees, Representative, Construction
Agent, Parent Guarantor, the Structural Guarantors, the Agent Lessor,
the Lessors, the Lenders, the Administrative Agent, the Arranger and the
Co-Arranger as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time (the "Participation
Agreement").
2. As described below, the Representative and each Lessee has been in
compliance during and at the end of such accounting periods covered by
the financial statements delivered pursuant to Sections 10.1(d)(i) and
10.1(d)(ii) of the Participation Agreement with the restrictions
contained in Section 10.2(a), Section 10.2(b), Section 10.2(c), clause v
of Section 10.2(e), Section 10.2(f), Section 10.2(g), Section 10.2(i)
and Section 10.2(1) of the Participation Agreement.
[Representative to provide reasonable detail evidencing compliance with
aforementioned section references]
Any and all capitalized terms used in this Compliance Certificate shall
have the meaning ascribed thereto in the Participation Agreement, unless
specifically defined herein.
E-I
130
IN WITNESS WHEREOF, I have signed my name this _____ day of
_______________ 199_.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
---------------------------
Name:
-------------------------
Title:
------------------------
E-II
131
EXHIBIT F
TO PARTICIPATION AGREEMENT
FORM OF ASSIGNMENT AGREEMENT
To: ▇▇▇▇▇▇▇ Enterprises, Inc. as the Lessee
BMO Leasing (U.S.), Inc., as Agent Lessor
Reference is made to Section 12.1 of the Participation Agreement dated
as of March 21, 1997, among the Lessees, Representative, Construction Agent,
Parent Guarantor, the Structural Guarantors, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent, the Arranger and the Co-Arranger as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time (the "Participation Agreement"). Unless otherwise defined herein,
capitalized terms used herein shall have the meanings given thereto in the
Participation Agreement.
[Name of assigning Participant] (the "Assignor") and [Name of Eligible
Lender Assignee/Eligible Lessor Assignee] hereby agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, a
[__]% interest in and to all the Assignor's rights and obligations under the
Operative Documents as of the Effective Date (as defined below) (including,
without limitation, such percentage interest in the [Lender][Lessor] Commitment
of the Assignor on the Effective Date and such percentage interest in each
[Loan][Lessor Amounts] owing to the Assignor outstanding on the Effective Date
together with such percentage interest in all unpaid [interest][Yield] and fees
(including those fees under Section 4.4 of the Participation Agreement) accrued
to the Effective Date).
2. The Assignor (a) represents and warrants that as of the date
hereof its [Lender][Lessor] Commitment (without giving effect to assignments
thereof which have not yet become effective) is $[_______], and the outstanding
aggregate principal balance of its [Loans][Lessor Amounts] (without giving
effect to assignments thereof which have not yet become effective) is
$[_______] and (b) makes no representation or warranty and assumes no
responsibility (i) with respect to any statements, warranties or
representations made in or in connection with any Operative Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Operative Document or any
F-I
132
other instrument or document furnished thereunder or pursuant thereto, except
that it represents and warrants that it is the legal and beneficial owner of
the interests being assigned by it hereunder and that such interests are free
and clear of adverse claims, and (ii) with respect to the financial position of
the Representative, Lessee or any Guarantor or the performance or observance by
the Representative, any Lessee or any Guarantor of any of their respective
obligations under any Operative Document or any other instrument or document
furnished thereunder or pursuant thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment Agreement; (b) confirms that it has
received a copy of each of the Participation Agreement, Lease, Construction
Agency Agreement and Loan Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 10.1(d) of the Participation
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment
Agreement; (c) agrees that it will, independently and without reliance upon the
Administrative Agent, the Agent Lessor, the Assignor or any other Participant
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under any Operative Document; (d) appoints and authorizes the Administrative
Agent and the Agent Lessor, as applicable, to take such action on its behalf
and to exercise such powers under the Operative Documents as are delegated to
the Administrative Agent and the Agent Lessor, as applicable, by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(e) agrees that it will perform in accordance with its terms all the
obligations which by the terms of the Operative Documents are required to be
performed by it as a Participant.
4. From and after the Effective Date (a) the Assignee shall be party
to and be bound by the provisions of the Operative Documents as a
[Lender][Lessor] and, to the extent of its interests assigned by this
Assignment Agreement, have the rights and obligations of a ["Lender"]
["Lessor"] and as a "Participant" thereunder and (b) the Assignor shall, to the
extent of its interests assigned by this Assignment Agreement, relinquish its
rights and be released from its obligations under the Operative Documents.
F-II
133
5. This Assignment Agreement will be delivered to each of the
Administrative Agent and the Agent Lessor together with a transfer fee of
$2,500 payable by the Assignor or the Assignee to the Administrative Agent for
its own account.
[6. The Assignor shall surrender to the Administrative Agent its Note
or Notes representing the Assignor's interest in and to all the Assignor's
rights and obligations under the Operative Documents, and the Administrative
Agent will (upon execution and delivery thereof by the Representative) promptly
provide to the Assignor and the Assignee separate promissory notes in the
amount of their respective interests substantially in the form of the original
Note (each such note with a notation thereon that it is given in substitution
for and replacement of the original Note or any replacement notes
thereof).](**/)
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8. The effective date of this Assignment Agreement shall be ______
__, 19__ (the "Effective Date").
[THIS SPACE INTENTIONALLY LEFT BLANK]
-------------------------
(**/)This Section to apply only if the Assignor is a Lender.
F-III
134
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed and delivered by their respective duly authorized
officers as of the date first written above.
Adjusted Commitment [__________________],
as Assignor
Commitment to make Loans:
$_________
Commitment Percentage: ___% By:
--------------------------
Commitment to advance Name:
Lessor Amounts: ---------------------
$_________ Title:
Commitment Percentage: ___%
Commitment
Commitment to make Loans: [__________________],
$_________ as Assignee
Commitment Percentage: ___%
Commitment to advance By:
Lessor Amounts: --------------------------
$_____ Name:
Commitment Percentage: ___% ---------------------
Title:
--------------------
F-IV
135
Agreed to and Accepted:
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
-------------------------
Name:
-----------------------
Title:
----------------------
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY,
as Administrative Agent
By:
-------------------------
Name:
-----------------------
Title:
----------------------
BMO LEASING (U.S.), INC.,
as Agent Lessor
By:
-------------------------
Name:
-----------------------
Title:
----------------------
F-V
136
EXHIBIT G
TO PARTICIPATION AGREEMENT
FORM OF LEGAL OPINION OF LOCAL COUNSEL TO LESSEE
[Letterhead of Local Counsel]
___________________, 19___
TO: BMO Leasing (U.S.), Inc.
Bank of Montreal
The Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency
Re: ▇▇▇▇▇▇▇ Enterprises, Inc.
Ladies and Gentlemen:
We have acted as special ___________________ counsel to _______________,
a ____________ corporation (together with its permitted successors and assigns,
the "Company") in connection with the transactions contemplated by the
Participation Agreement dated as of March 21, 1997 (the "Participation
Agreement"), entered into by and among the Lessees, Representative,
Construction Agent, Parent Guarantor, the Structural Guarantors, the Agent
Lessor, the Lessors, the Lenders, the Administrative Agent, the Arranger and
the Co-Arranger.
Capitalized terms used but not otherwise defined herein have the
respective meanings specified in Appendix A to the Participation Agreement.
This opinion is being furnished to you at the request of [Lessee] (the
"Lessee") pursuant to Section 6.1(s) of the Participation Agreement.
In connection with the opinions contained herein, we have examined and
are familiar with originals of or copies identified to our satisfaction of the
documents listed on Schedule I attached hereto (the "Subject Documents"). In
addition, we have examined and are
G-I
137
familiar with such legal matters as we have deemed necessary for the purpose of
rendering this opinion.
In rendering this opinion we have assumed: (a) the genuineness of the
signatures on all documents and instruments and the authenticity of all
documents submitted as originals, and the conformity to originals of all
documents submitted as photostatic or certified copies; (b) that each of the
parties to the Subject Documents has all the legal capacity, power and
authority required for it to enter into the Subject Documents to which it is a
party, and to perform its respective obligations thereunder; (c) that all such
matters have received any corporate or other authorization required by any
applicable charter, by-law, law or regulation; (d) the due execution and
delivery of the Subject Documents by each of the parties thereto; and (e) that
there are no agreements between any parties which would alter the agreements
set forth in the Subject Documents. To the extent that the assumptions in
clauses (b) and (c) relate to any laws or regulations, such assumptions relate
only to those laws and regulations as to which we are not opining herein.
Based upon the foregoing, we are of the opinion that:
1. Neither BMO Leasing (U.S.), Inc. nor any Participant is required
under the laws of the State of ____________ (the "State") to qualify as a
foreign corporation or otherwise in the State solely as a result of its
execution, delivery and performance of the Subject Documents to which it is a
party.
2. Title to the Property situated in the State may be held in the
name of the Agent Lessor as follows: BMO Leasing (U.S.), Inc., as Agent Lessor
under the Master Lease and Open End Mortgage dated as of March 21, 1997, among
BMO Leasing (U.S.), Inc., as Agent ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Enterprises, Inc., as
Representative and the various Lessees identified therein.
3. To the extent local law is applicable to the Subject Documents,
each of the Subject Documents delivered on the Acquisition Date for the related
Property situated in the State or previously delivered constitutes the legal,
valid and binding obligation of the parties thereto enforceable against each
such party in accordance with the terms thereof, except as such enforceability
may be limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable principles.
G-II
138
[4. The [Deed] [Ground Lease] delivered on the Acquisition Date for
the related Property situated in the State is in form sufficient under the laws
of the State to convey all interests in the property described therein intended
to be conveyed thereby, and such instrument, when filed or recorded with
_______________________ (the "Recording Office") will have been filed or
recorded in the appropriate public offices in the State in which such filing or
recording is necessary to convey valid title to the property described therein
to the Agent Lessor.
5. The Subject Documents create rights in the Agent Lessor for the
ratable benefit of all Participants, and the Agent Lessor has the power to
exercise remedies granted to it by the Subject Documents without naming the
other Participants.
6. No registration, filing or qualification is required to permit
the Agent Lessor to exercise remedies in the State under the Lease, and the
validity and enforceability of the Lease will not be affected by any failure of
the Agent Lessor to qualify.
7. If the transactions contemplated by the Master Lease and Lease
Supplement No. __ (the "Subject Lease Supplement") delivered on the Acquisition
Date for the related Property situated in the State are characterized as a
lease transaction, the Master Lease and the Subject Lease Supplement are in
form sufficient under the laws of the State to demise to the Lessee a valid
leasehold interest in such Property. The Subject Lease Supplement, when
recorded with the Recording Office, will have been filed or recorded in all
public offices in the State in which such filing or recording is necessary to
provide constructive notice of the Subject Lease Supplement to third Persons
and to establish of record the interest of the Agent Lessor thereunder.
8. If the transactions as provided for in the Master Lease and the
Subject Lease Supplement are characterized as a loan transaction:
a. Section 6 of the Subject Lease Supplement is effective to
create a power of sale in favor of the Lessee.
b. The Master Lease and the Subject Lease Supplement are in
form sufficient under the laws of the State to create a valid lien or
security interest, in favor of the Agent Lessor and to secure all the
obligations of the Lessee under the Operative Documents, including
future
G-III
139
Advances, in the Property situated in the State described therein. The
Subject Lease Supplement, when recorded with the Recording Office, will
have been filed or recorded in all public offices in the State in which
such filing or recording is necessary to perfect the lien of the Agent
Lessor thereunder to the extent that such Property situated in the State
constitutes real estate. The Master Lease and the Subject Lease
Supplement each provide the Agent Lessor with all remedies customarily
obtained by lenders in the State in connection with the type of loan and
security provided thereby. [There is no "one form of action" or similar
rule limiting the remedies available for the enforcement of the Lease.
There is no limitation on remedies resulting from the exercise of
remedies against any leased property located outside the State.](**/)
9. The Assignment of Lease and Rent and the Supplement to the
Assignment of Lease and Rent delivered on the Acquisition Date for the related
Property situated in the State are in form sufficient under the laws of the
State to create valid liens or security interests in favor of the Lenders in
the collateral described therein, and when recorded with the Recording Office,
will have been filed or recorded in all public offices in the State in which
such filing or recording is necessary to perfect the lien of the Lenders
thereunder to the extent that such collateral constitutes real estate. The
Assignment of Lease and Rent and the Supplement to the Assignment of Lease and
Rent delivered on the Acquisition Date for the related Property situated in the
State provide the Lenders with all remedies customarily obtained by lenders in
the State in connection with the type of loan and security provided for by the
Loan Agreement.
10. The law (statutory or otherwise) of the State does not require a
lienholder to make an election of remedies where such lienholder holds security
interests and liens on both the real and the personal property of a debtor or
to take recourse first or solely against or otherwise exhaust its remedies
against its collateral before otherwise proceeding to enforce against such
debtor the obligations of such debtor.
11. The UCC Financing Statements which are to be recorded or filed
within the State, the forms of which are attached as Schedule II hereto, are in
form sufficient under the laws of the State for filing or recording, and when
recorded with
-------------------------
(**/) Bracketed language to be replaced in opinions from California.
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the Recording Office and the ____________ Secretary of State will have been
filed or recorded in all public offices in the State in which such filing or
recording is necessary to perfect the interest of the Agent Lessor in the
collateral described therein to the extent the same can be perfected by filing
or recording in the State.
12. Neither the execution and delivery of the Subject Documents, nor
the fulfillment of or the compliance with the provisions thereof by the Agent
Lessor results in a violation of, or contravenes any State statute, law, rule,
code, ordinance or regulation to which the Agent Lessor is subject.
13. Except for the filings and recordings described above, no
approval, consent, or withholding of objection on the part of, or filing or
registration with, any governmental authority or regulatory body in the State
is required to be made or taken in the State to establish, protect and preserve
title to, interests in, liens on and security interests in the Property as
contemplated by the Subject Documents, except for UCC continuation statements.
14. Subject to the following sentence and except for federal, state
and local franchise, withholding and income taxes, no taxes, fees or other
charges imposed by the State, ___________ County or any other local
governmental entity are payable by the Agent Lessor or the Lenders solely as a
result of the execution, delivery, recordation or filing (where applicable) of
the Subject Documents and all other instruments delivered in connection with
the transactions contemplated thereby (except for nominal filing or recording
fees payable at the time of filing or recording).
15. Under the laws of the State and local jurisdictions therein,
there are no statutory or regulatory requirements relating to the transfer of
ownership or operation, sale or foreclosure of the Property situated in the
State which require notification of the State or the local jurisdiction of such
transfer, sale or foreclosure, certification that there has been no discharge
of Hazardous Materials or other substances.
16. The courts of the State would recognize the choice of New York
law as to all matters of construction, validity and performance of the
Operative Documents (excluding the lease documents which are governed by the
internal laws of any other jurisdiction). The lease documents that are
governed by the laws of the State are enforceable under the laws of the State.
We are members of the Bar of the State. The opinions expressed herein
are limited exclusively to the laws of the State and the rules and regulations,
if any, under each of said laws. Certain of the Subject Documents purport to
be governed by laws of states other than the State. With your permission, we
have
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141
assumed for the purposes of this opinion (contrary to the express provisions
thereof) that such agreements would be governed by and construed and
interpreted in accordance with the laws of the State.
Very truly yours,
-----------------------------------
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SCHEDULE I
List of Subject Documents
1. Master Lease
2. Lease Supplement No. __
3. [Deed] [Ground Lease] dated as of _______ __, 19___, from ____________,
as [grantor] [landlord], to BMO Leasing (U.S.) Inc., as Lessor Agent
4. Construction Agency Agreement
5. Supplement No. __ to Construction Agency Agreement
6. Assignment of Lease and Rent
7. Construction Agency Agreement Assignment
8. Supplement No. __ to Assignment of Lease and Rent
9. UCC financing statements described on Schedule II hereto
10. Construction Documents Assignment
11. Participation Agreement
12. Loan Agreement
13. Structural Guaranty
14. Guaranty
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SCHEDULE II
UCC Financing Statements
[Attach Forms of UCC Financing Statements]
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EXHIBIT H
TO PARTICIPATION AGREEMENT
FORM OF COMPLETION CERTIFICATE
TO: Agent Lessor, Administrative Agent, Lessors and Lenders pursuant to the
Participation Agreement (the "Participation Agreement") dated as of
March 21, 1997 among the Lessees, Representative, Construction Agent,
Parent Guarantor, the Structural Guarantors, the Agent Lessor, the
Lessors, the Lenders, the Administrative Agent, the Arranger and the Co-
Arranger as the same may be amended, supplemented, amended and restated
or otherwise modified from time to time (capitalized terms used herein
shall have the meanings ascribed thereto in the Participation
Agreement).
With respect to the Property that is subject to Lease Supplement No. ___, the
Construction Agent certifies to each of you, as of _____, 19__, as follows:
1. The construction of Improvements, the identification of and assistance
with the acquisition of Land, and the construction of Improvements on
such Land have been completed in all material respects in accordance
with the applicable Plans and Specifications, the Construction Agency
Agreement and the other Operative Documents, and in compliance in all
material respects with all Requirements of Law and Insurance
Requirements and in all material respects with all information,
requirements and assumptions used in delivering the As-Built Appraisal
with respect to such Property.
2. The Property is ready for occupancy and operation in accordance with the
Plans and Specifications therefor, as evidenced by the issuance by the
appropriate Governmental Authority of a permanent certificate of
occupancy for all of the Improvements contemplated by the Plans and
Specifications for such Property and all applicable Governmental Action
has been taken;
3. The Property is subject to and governed by all of the provisions of the
Master Lease and the other Operative Documents.
4. The representations and warranties set forth in Section 8.2 and 8.3 of
the Participation Agreement (other than any representations and
warranties made only as of a specific date, each of which was true and
correct as of the date when made) are true and correct as of the date
hereof as if such representations and warranties were set forth herein
in full.
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5. The aggregate Property Cost for the Property is $______. $______ of the
Property Cost is allocable to Improvement Costs.
6. All amounts owing to third parties for the Construction of the
Improvements on the Property have been paid in full.
7. No changes or modifications were made to the Plans and Specifications
relating to the Property after the related Acquisition Date that have
had a Material Adverse Effect on the value, use or useful life of the
Property.
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IN WITNESS WHEREOF, I have signed my name this _____ day of
_______________ 199_.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Construction Agent
By:
-------------------------
Name:
-----------------------
Title:
----------------------
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147
APPENDIX A
to
Participation Agreement
A. Interpretation. In each Operative Document, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted
by the Operative Documents, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument (including any
Operative Document) means such agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of the other Operative Documents, and reference
to any promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(v) reference to any Requirement of Law means such Requirement of Law
as amended, modified, codified, replaced or reenacted, in whole or in part, and
in effect from time to time, including rules and regulations promulgated
thereunder, and reference to any section or other provision of any Requirement
of Law means that provision of such Requirement of Law from time to time in
effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision;
(vi) reference in any Operative Document to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section thereof or
Appendix, Schedule or Exhibit thereto;
(vii) "hereunder", "hereof, "hereto" and words of similar import shall
be deemed references to an Operative Document as a whole and not to any
particular Article, Section or other provision thereof;
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(viii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term; and
(ix) with respect to any rights and obligations of the parties under
the Operative Documents, all such rights and obligations shall be construed to
the extent permitted by Applicable Law.
B. Computation of Time Periods. Unless otherwise specified in any
Operative Document, for purposes of computation of periods of time under the
Operative Documents, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
C. Accounting Terms and Determinations. Unless otherwise specified
in any Operative Document, all terms of an accounting character used therein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Representative's independent public accountants or
otherwise required by a change in GAAP) with the most recent audited
consolidated financial statements of the Representative and its Consolidated
Subsidiaries delivered to the Administrative Agent, the Agent Lessor and the
Participants, unless with respect to any such change concurred in by the
Representative's independent public accountants or required by GAAP, in
determining compliance with any of the provisions of any Operative Document:
(i) the Representative shall have objected to determining such compliance on
such basis at the time of delivery of such financial statements, or (ii) the
Required Participants shall so object in writing (delivered to the
Representative) within 30 days after the delivery of such financial statements,
in either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which no such objection shall have been made.
D. Conflict in Operative Documents. If there is any conflict
between any Operative Documents, such Operative Documents shall be interpreted
and construed, if possible, so as to avoid or minimize such conflict but, to
the extent (and only to the extent) of such conflict, the Participation
Agreement shall prevail and control.
E. Legal Representation of the Parties. The Operative Documents
were negotiated by the parties with the benefit of legal representation and any
rule of construction or interpretation otherwise requiring the
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Operative Documents to be construed or interpreted against any party shall not
apply to any construction or interpretation hereof or thereof.
F. Defined Terms. Unless a clear contrary intention appears, terms
defined herein have the respective indicated meanings when used in each
Operative Document.
"Account" means the account identified by the Administrative Agent into
which all payments by the ▇▇▇▇▇▇▇ Entities under the Operative Documents shall
be made. The Account shall be specified on Schedule II to the Participation
Agreement, as such Schedule may from time to time be amended, supplemented,
amended and restated or otherwise modified.
"Acquisition Date" is defined in Section 6.1 of the Participation
Agreement.
"Adjusted Consolidated Debt" means at any date the sum, without
duplication, of (i) all liabilities of the Representative and its Subsidiaries
at such date of the types classified as "current liabilities: short-term
borrowings", "current liabilities: current portion of long-term obligations"
and "long-term obligations" on the consolidated balance sheet included in the
Base Financials (including any Subordinated Notes), (ii) all guarantees at such
date of obligations of other issuers (other than guarantees outstanding on the
date hereof of obligations outstanding on the date hereof, in amounts not in
excess of $110,901,000 and reported in the Base Financials) and (iii) an amount
equal to the product of eight multiplied by the Consolidated Rental Expense for
the four fiscal quarters of the Representative most recently completed on or
prior to such date.
"Adjusted Consolidated Debt Ratio" means the ratio of Adjusted
Consolidated Debt to Consolidated Net Worth.
"Adjusted Eurodollar Rate" means, as applicable to any Interest Period,
a rate per annum equal to the quotient obtained (rounded upwards, if necessary,
to the next higher 1/100th of it) by dividing (i) the applicable London
Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Eurodollar Reserve Percentage.
"Administrative Agent" means LTCB in its capacity as Administrative
Agent, and any successors or assigns thereto in such capacity.
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"Advance" means an advance of funds to the Construction Agent pursuant
to Article III of the Participation Agreement.
"Affiliate" means any Person (other than any ▇▇▇▇▇▇▇ Entity or any
Participant) (a) which directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
the Representative or (b) which is the beneficial owner of 10% or more of any
class of the Voting Stock of the Representative.
"After Tax Basis" means, with respect to any payment to be received, the
amount of such payment increased so that, after deduction of the amount of all
taxes required to be paid by the recipient (less any tax savings realized and
the present value of any tax savings projected to be realized by the recipient
as a result of the payment of the indemnified amount) with respect to the
receipt by the recipient of such amounts, such increased payment (as so
reduced) is equal to the payment otherwise required to be made.
"Agent Lessor" means BMO Leasing (U.S.), Inc., a Delaware corporation,
together with its successors permitted pursuant to Section 14.12 of the
Participation Agreement.
"Aggregate Commitment Amount" means, on any date, $50,000,000 as such
amount may be reduced from time to time pursuant to Section 4.3(a) of the
Participation Agreement.
"Appraisal" means, with respect to any Property, an appraisal of the
Fair Market Sales Value of such Property, which Appraisal complies in all
material respects with all of the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, the rules and
regulations adopted pursuant thereto, and all other applicable Requirements of
Law, and is addressed to the Administrative Agent, the Agent Lessor and the
Representative. Each Appraisal shall be prepared by an MAI appraiser selected
by the Administrative Agent and the Agent Lessor, and such appraiser shall be
reasonably acceptable to the Representative.
"Appraised Value" means, with respect to any asset subjected to or
released from any Lien, the value of such asset as determined by an independent
appraisal performed within 90 days of, and as of a date not less than 90 days
prior to, the date upon which such asset is subjected to or released from such
Lien.
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"Appraiser" means, with respect to any Property, the appraiser which
prepared an Appraisal of such Property or such other Person selected by the
Administrative Agent and the Agent Lessor.
"Appurtenant Rights" means, with respect to any Land, (i) all
agreements, easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, and other rights and benefits at any time
belonging or pertaining to such Land or the Improvements thereon, including,
without limitation, the use of any streets, ways, alleys, vaults or strips of
land adjoining, abutting, adjacent or contiguous to such Land and (ii) all
permits, licenses and rights, whether or not of record, appurtenant to such
Land.
"Arranger" means LTCB, in its capacity as arranger.
"Arranger's Fee Letter" means that certain fee letter dated as of March
21, 1997, among the Representative, Arranger and the Co-Arranger.
"As-Built Appraisal", means, with respect to any Property, an Appraisal
of such Property appraising the Fair Market Value of such Property as built in
accordance with the Plans and Specifications therefor.
"Assignment of Lease and Rent" means the Assignment of Lease and Rent
dated as of March 21, 1997, from the Agent Lessor, as assignor, to the
Administrative Agent for the benefit of the Lenders, as assignee, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Assignment of Lease and Rent Supplement" means each supplement to the
Assignment of Lease and Rent executed by the Agent Lessor in favor of the
Administrative Agent, substantially in the form of Exhibit A thereto.
"Authorized Financial Officer" of any Person means the Chief Financial
Officer, Treasurer or Controller of such Person.
"Available Commitments" means the sum of the Available Loan Commitments
and the Available Lessor Commitments.
"Available Lessor Commitment" means at any time, an amount equal to the
excess, if any, of (x) the aggregate amount of the Lessor Commitments, minus
(y) the aggregate Lessor Amounts outstanding.
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"Available Loan Commitment" means at any time, an amount equal to the
excess, if any, of (x) the aggregate amount of the Loan Commitments, minus (y)
the aggregate principal amount of all Loans outstanding.
"Bankruptcy Code" is defined in Section 5.1(e) of the Loan Agreement.
"Base Financials" means the consolidated balance sheet of the
Representative and its Consolidated Subsidiaries as of December 31, 1995 and
the related consolidated statements of operations, stockholders' equity and
cash flows for the year then ended, together with the notes thereto, included
in the Representative's 1995 Form 10-K and reported on without qualification by
Ernst & Young LLP.
"Base Rate" means, for any day, the rate per annum equal to the higher
as of each such day of (i) the Prime Rate, and (ii) one-half of one percent
(0.50%) above the Federal Funds Rate. For purposes of determining the Base
Rate for any day, changes in the Prime Rate shall be effective on the date of
each such change.
"Base Rate Loan/Lessor Amount" means a Loan or Lessor Amount, as the
case may be, bearing interest at the Base Rate.
"Basic Lease Term" is defined in Section 2.3 of the Master Lease.
"Basic Rent" means, for each Property, the sum of (i) the Lender Basic
Rent and (ii) the Lessor Basic Rent, calculated as of the applicable date on
which Basic Rent is due.
"▇▇▇▇▇▇▇ Entity" shall mean any Structural Guarantor, the Parent
Guarantor, any other Guarantor, the Representative, the Construction Agent, and
any Lessee.
"▇▇▇▇ of Sale" is defined in Section 6.1(j) of the Participation
Agreement.
"BMO" means Bank of Montreal.
"Break Costs" means an amount equal to the amount, if any, required to
compensate any Participant for any additional losses (including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by such Participant to fund its
obligations under the Operative Documents) it may incur as a result of (w) any
Lessee's payment of Rent other than on a Scheduled Payment Date, (x)
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any Advance not being made on the date specified therefor in the applicable
Funding Request (other than as a result of a breach by such Participant of its
obligation under Section 3.1, 3.2 or 3.3, as the case may be, of the
Participation Agreement to make Advances to the Construction Agent or make
Lessor Amounts or Loans available to the Agent Lessor), (y) any ▇▇▇▇▇▇▇
Entity's payment of the Lease Balance on any date other than a Basic Rent
Payment Date, or (z) as a result of any conversion of the London Interbank
Offered Rate in accordance with Section 13.7 or 13.8 of the Participation
Agreement. A statement as to the amount of such loss, cost or expense,
prepared in good faith and in reasonable detail and submitted by such
Participant, as the case may be, to the Representative, shall be correct and
binding on the Representative absent manifest error.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close, except that, when used in connection with a Eurodollar Loan or
Eurodollar Lessor Amount, such day shall also be a day on which dealings
between banks are carried on in U.S. dollar deposits in London, England and New
York, New York.
"Casualty" means any damage or destruction of all or any portion of a
Property as a result of a fire, flood, earthquake or other casualty.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. Sections 9601 et. seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986.
"Certifying Party" is defined in Section 22.1 of the Master Lease.
"Change of Control" is defined in Section 16.1(n) of the Master Lease.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including, without limitation, reasonable legal fees and expenses) of
any nature whatsoever.
"Co-Arranger" means BMO, in its capacity as co-arranger.
"Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
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"Commitment" means (i) as to any Lender, its Loan Commitment, and (ii)
as to any Lessor, its Lessor Commitment.
"Commitment Fees" is defined in Section 4.4(a) of the Participation
Agreement.
"Commitment Percentage" means, with respect to any Participant, the
percentage set forth opposite such Participant's name under the heading
"Commitment Percentage" on Schedule I to the Participation Agreement, as such
Schedule may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Commitment Period" means, with respect to each Property, the period
from and including the Acquisition Date to but not including the date occurring
on the earlier of (i) the Commitment Termination Date, (ii) the date on which
the sum of the Loan Balance and the Lessor Balance equals the Aggregate
Commitment Amount, (iii) the date of Completion of the applicable Construction,
(iv) the Outside Completion Date for such Property and (v) the date on which
the Commitments shall terminate as provided in the Operative Documents;
provided, however, that in the event that any Commitment Period would end after
the Commitment Termination Date, such Commitment Period shall end on such
Commitment Termination Date.
"Commitment Termination Date" means the Interim Termination Date.
"Company" means ▇▇▇▇▇▇▇ Enterprises, Inc., a Delaware corporation.
"Completed Property" means as of any date, any Property with respect to
which the Completion Date shall have occurred.
"Completion" means, with respect to any Property, such time as the
conditions set forth in Section 6.3 of the Participation Agreement are
satisfied with respect thereto.
"Completion Certificate" is defined in 6.3(d) of the Participation
Agreement.
"Completion Date" means, with respect to any Property, the date on which
Completion for such Property has occurred, as certified in the Completion
Certificate.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit E to the Participation Agreement.
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"Condemnation" means, with respect to any Property, any condemnation,
requisition, confiscation, seizure or other taking or sale of the use, access,
occupancy, easement rights or title to such Property or any part thereof,
wholly or partially (temporarily or permanently), by or on account of any
actual or threatened eminent domain proceeding or other taking of action by any
Person having the power of eminent domain, including an action by a
Governmental Authority to change the grade of, or widen the streets adjacent
to, such Property or alter the pedestrian or vehicular traffic flow to such
Property so as to result in change in access to such Property, or by or on
account of an eviction by paramount title or any transfer made in lieu of any
such proceeding or action. A "Condemnation, shall be deemed to have occurred
on the earliest of the dates that use, occupancy or title vests in the
condemning authority.
"Consolidated EBITDA" means, for any period, Consolidated Net Income of
the Representative and its Consolidated Subsidiaries for such period plus,
without duplication, any amounts deducted in determining such Consolidated Net
Income in respect of (a) Consolidated Interest Charges for such period, (b)
Consolidated Tax Charges for such period and (c) expenses for such period of
the types classified as "depreciation and amortization" on the consolidated
statement of operations included in the Base Financials.
"Consolidated EBITDAR" means, for any period, the sum of Consolidated
EBITDA and Consolidated Rental Expense for such period.
"Consolidated Gross Capital Expenditures" means, for any period, the
total amount of additions to property and equipment, other than software
development costs, of the Representative and its Consolidated Subsidiaries
during such period of the types classified as "Capital expenditures" on the
consolidated statement of cash flows included in the Base Financials.
"Consolidated Interest Charges" means, for any period, all items for
such period of the types classified as "interest" on the consolidated statement
of operations included in the Base Financials.
"Consolidated Net Income" means, for any period, the net income (loss)
(calculated (a) before preferred and common stock dividends and (b) exclusive
of the effect of any extraordinary or other material non-recurring gain or loss
outside the ordinary course of business) of the
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Representative and its Consolidated Subsidiaries, determined on a consolidated
basis for such period.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Representative and its Consolidated Subsidiaries at
such date.
"Consolidated Rental Expense" means, for any period, the rental expense
(net of sublease income) of the Representative and its Consolidated
Subsidiaries for such period.
"Consolidated Subsidiary" means, with respect to any Person and at any
date, any of its Subsidiaries or any other entity the accounts of which would
be consolidated with those of such Person in its consolidated financial
statements if such statements were prepared as of such date.
"Consolidated Tax Charges" means, for any period, all items for such
period of the types classified as "provision for income taxes" on the
consolidated statement of operations included in the Base Financials.
"Construction" means, with respect to any Property, the construction and
installation of all Improvements thereon contemplated by the Plans and
Specifications applicable to such Property.
"Construction Agency Agreement" means the Construction Agency Agreement,
dated as of March 21, 1997, between the Agent Lessor and the Construction
Agent, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Construction Agency Agreement Assignment" means the Construction Agency
Agreement Assignment, dated as of March 21, 1997, made by the Agent Lessor, as
assignor, in favor of the Administrative Agent on behalf of the Lenders, as
assignee, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Construction Agency Agreement Default" means any event or condition
which, with the lapse of time or the giving of notice, or both, would
constitute a Construction Agency Agreement Event of Default.
"Construction Agency Agreement Event of Default" is defined in Section
5.1 of the Construction Agency Agreement.
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"Construction Agency Agreement Supplement" means any duly executed and
delivered Supplement to the Construction Agency Agreement substantially in the
form attached to the Construction Agency Agreement as Exhibit A thereto.
"Construction Agent" means the Representative, as construction agent
under the Construction Agency Agreement.
"Construction Agent Fee" means, with respect to any of the Properties,
the fee payable to the Construction Agent in connection with its obligations
under the Construction Agency Agreement of a nature ordinarily and reasonably
incurred in connection with the Construction but not in excess of 5% of the
Estimated Improvement Costs for such Properties.
"Construction Costs" means the fees, expenses, costs and other items
related to the development and construction of the Properties and specified
below:
(a) the costs of development, architectural and engineering services
related to the Properties, including the costs of preparation of studies,
surveys, reports, tests, plans and specifications;
(b) the costs of legal, accounting and other services related to the
Properties;
(c) the fees and charges incurred in connection with securing all
Governmental Actions required to be taken, given or obtained in connection with
the development, construction, ownership, financing, maintenance or operation
of the Properties;
(d) any title fees, premiums and escrow costs and other expenses
relating to title insurance and title closings contemplated by the Operative
Documents;
(e) all expenses relating to all Environmental Audits;
(f) fees and other expenses relating to Appraisals;
(g) the costs incurred in connection with the acquisition,
construction, improvement, rehabilitation or extension of the Improvements
comprising a part of the Properties and the provision of the necessary services
and utilities thereto, including the cost of unmovable Equipment and excluding
the cost of movable Equipment;
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(h) interest on the Loans and Yield on the Lessor Amounts during the
Construction Period in respect of each Property;
(i) any sales, use, property, real or personal, tangible or
intangible taxes incurred in connection with the Properties;
(j) any other items included in the construction budget, including,
to the extent included in the As-Built Appraisal, pre-opening or start-up costs
prior to resident admissions for such items as labor, utilities and advertising
or promotion;
(k) any other costs and expenses incurred in connection with the
acquisition, construction, development and equipping of the Properties;
(l) the Construction Agent Fee; and
(m) such other items as the Participants may approve in writing;
provided, however, that the aggregate amount of all such Construction Costs
except for item (g) shall not exceed 15% of the Estimated Improvement Costs for
such Properties.
"Construction Documents" is defined in Section 2.5 of the Construction
Agency Agreement.
"Construction Documents Assignment" means the Construction Documents
Assignment, dated as of March 21, 1997, made by the Construction Agent in favor
of the Agent Lessor and delivered pursuant to the Parent Guaranty, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Construction Period" means, with respect to any Property, the period
commencing on the commencement of construction on such Property and ending on
the earlier of (i) the Completion Date and (ii)the Outside Completion Date for
such Property.
"Construction Period Property" means, at any date of determination, any
Property as to which the Construction Period has commenced but not ended on or
prior to such date.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking
to which such Person is a party or by which it or any of its property is bound.
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"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling and "Controlled" shall have meanings correlative thereto.
"Deed" means a special warranty deed with respect to the real property
comprising the applicable Property, in conformity with Applicable Law and
appropriate for recording with the applicable Governmental Authorities,
conveying fee simple title to such real property to the Agent Lessor, subject
only to Permitted Property Liens.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"Defaulting Participant" means, at any time, any Participant that, at
such time (a) has failed to make an Advance of a Loan or Lessor Amount, as the
case may be, required pursuant to the terms of the Participation Agreement, (b)
has failed to pay to the Administrative Agent, the Agent Lessor, any Lender, or
any Lessor an amount owed by such Participant pursuant to the terms of the
Operative Documents, or (c) has been declared insolvent or has become subject
to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Documentation Date" is defined in Section 2.1 of the Participation
Agreement.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"Eligible Assignee" means an Eligible Lessor Assignee or an Eligible
Lender Assignee, as the case may be.
"Eligible Lender Assignee" means any Lender or any Affiliate or
Subsidiary of a Lender; and any other
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commercial bank, financial institution or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) with combined capital
and surplus in excess of $50,000,000.
"Eligible Lessor Assignee" means any Lessor or any Affiliate or
Subsidiary of a Lessor; and any other commercial bank, financial institution or
"accredited investor" (as defined in Regulation D of the Securities and
Exchange Commission) with combined capital and surplus in excess of
$50,000,000.
"End of the Term Report" is defined in Section 13.2(a) of the
Participation Agreement.
"Environmental Audit" means, with respect to each Property, a Phase One
environmental site assessment (the scope and performance of which meets or
exceeds the then most current ASTM Standard Practice E1527 for Environmental
Site Assessments: Phase One Environmental Site Assessment Process) of such
Property.
"Environmental Laws" means any and all applicable foreign, federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes or decrees or any Governmental Authority or other Requirement
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment
or the use, storage, handling, disposal, transport, treatment or generation of
Hazardous Materials, as now or may at any time be in effect during the Lease
Term, including CERCLA, RCRA, the Clean Air Act, 42 USC Section 7401 et seq.,
the Toxic Substances Control Act 15 USC Section 2601 et seq. and any rules and
regulations promulgated thereunder.
"Environmental Violation" means, with respect to any Property, any
activity, occurrence or condition that violates or results in non-compliance
with any Hazardous Materials Law.
"Equipment" means equipment, apparatus, fittings and personal property
of every kind and nature whatsoever purchased, leased or otherwise acquired by
the Agent Lessor using the proceeds of the Loans and/or the Lessor Amounts and
now or subsequently attached to, contained in or used or usable in any way in
connection with any operation or letting of a Property, including but without
limiting the generality of the foregoing, all screens, awnings, shades, blinds,
curtains, draperies, artwork, carpets, rugs, storm doors and windows, shelving,
display cases, counters, furniture and furnishings, heating, electrical, switch
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gear, uninterrupted power supply, and mechanical equipment, lighting,
switchboards, plumbing, ventilation, air conditioning and air-cooling
apparatus, refrigerating and incinerating equipment, escalators, generators,
elevators, loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
communications systems (including satellite dishes and antennae), sprinkler
systems and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
fittings and fixtures of every kind and description; provided that such
Equipment shall be unmovable and with an average useful life of at least 6-2/3
years.
"Equity Amount" shall have the meaning provided in Section 7.4 of the
Participation Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" means each person (as defined in section 3(9) of
ERISA) which together with the Representative or a Subsidiary of the
Representative would be deemed to be a "single employer" (i) within the meaning
of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the
Representative or a Subsidiary of the Representative being or having been a
general partner of such person.
"ERISA Group" means the Representative and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Representative, are
treated as a single employer under Section 414(b) or 414(c) of the Code.
"Estimated Improvement Costs" means, with respect to any Property as of
the related Acquisition Date, an amount equal to the aggregate amount which the
Construction Agent in good faith expects to be expended in order to achieve
Completion with respect to Improvements for such Property, including
Construction Costs allocated with respect to such Property prior to or during
its Construction Period.
"Eurodollar Loan/Lessor Amount" means a Loan or Lessor Amount as the
case may be, bearing interest at the Adjusted Eurodollar Rate.
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the
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Federal Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in respect of
"Eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any bank to United States
residents). The London Interbank Offered Rate shall be adjusted automatically
on and as of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" means a Lease Event of Default, a Construction Agency
Agreement Event of Default or a Loan Agreement Event of Default.
"Excepted Payments" means:
(a) all indemnity payments (including indemnity payments made
pursuant to Article XIII of the Participation Agreement) to which the
Administrative Agent, the Arranger, the Agent Lessor, any Lender, any Lessor or
any of their respective Affiliates, agents, officers, directors or employees is
entitled;
(b) any amounts (other than Basic Rent or amounts payable by a
▇▇▇▇▇▇▇ Entity pursuant to Section 15.2 of the Master Lease or Articles XVI,
XVIII or XX of the Master Lease) payable under any Operative Document to
reimburse the Administrative Agent, the Arranger, the Agent Lessor, any Lender,
any Lessor or any of their respective Affiliates (including the reasonable
expenses of the Administrative Agent, the Arranger, the Agent Lessor, any
Lender, any Lessor or such Affiliates incurred in connection with any such
payment) for performing or complying with any of the obligations of a ▇▇▇▇▇▇▇
Entity under and as permitted by any Operative Document;
(c) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies, other than such
proceeds or payments payable to a Lessee or to the Administrative Agent;
(d) any insurance proceeds under policies maintained by any
Participant;
(e) Transaction Expenses or other amounts or expenses paid or payable
to or for the benefit of the Administrative Agent, the Arranger, the Agent
Lessor, any Lender or any Lessor; and
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(f) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (e) above.
"Excess Casualty/Condemnation Proceeds" means the excess, if any, of (x)
the aggregate of all awards, compensation or insurance proceeds payable in
connection with a Casualty or Condemnation, minus (y) the Property Balance paid
by the applicable Lessee pursuant to Article XV of the Master Lease with
respect to such Casualty or Condemnation.
"Excess Sales Proceeds" means the excess, if any, of (x) the aggregate
of all proceeds received by the Agent Lessor in connection with any sale of the
Properties pursuant to the Agent Lessor's exercise of remedies under Section
16.2 of the Master Lease or the Representative's exercise of the Remarketing
Option under Article XX of the Master Lease (in either case, less all fees,
costs and expenses of the Agent Lessor in connection with the exercise of its
rights and remedies thereunder), minus (y) the Lease Balance.
"Expiration Date" means, with respect to the Master Lease, the earlier
of the date the Master Lease shall have been terminated in accordance with the
provisions of the Master Lease or any of the other Operative Documents and the
Maturity Date; provided, however, with respect to Article XX of the Master
Lease, the Expiration Date shall be the later of (i) the Maturity Date and (ii)
the Extended Expiration Date.
"Expiration Date Purchase Obligation" means the Representative's
obligation, pursuant to Section 18.2 of the Master Lease, to purchase or cause
one or more Lessees to purchase all (but not less than all) of the Properties
on the Expiration Date.
"Extended Expiration Date" is defined in Section 20.3(a) of the Master
Lease.
"Fair Market Sales Value" means, with respect to any Property, the
amount, which in any event shall not be less than zero, that would be paid in
cash in an arm's-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, for the ownership of such Property. The Fair
Market Sales Value of any Property shall be determined based on the assumption
that, except for purposes of Article XVI of the Master Lease and Section 13.2
of the Participation Agreement, such Property is in the condition and state of
repair required
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under Section 9.1 of the Master Lease and the applicable Lessee is in
compliance with the other requirements of the Operative Documents relating to
the condition of the Property.
"Federal Funds Rate" means, for any day or period, as applicable, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of it) at
which Federal funds in the amount equal to the principal amount of the related
Loans or Lessor Amounts are offered in the interbank market to LTCB as of 11:00
A.M., New York time, on such day for such day or for such period, as
applicable.
"Financial Officer" of any corporation means the chief financial
officer, principal accounting officer, treasurer or controller of such
corporation.
"Fixed Charge Coverage Ratio" means, on any date, the ratio of (i)
Consolidated EBITDAR minus Consolidated Gross Capital Expenditures for the four
consecutive fiscal quarters most recently ended on or prior to such date to
(ii) the sum of Consolidated Interest Charges and Consolidated Rental Expense
for such four fiscal quarters.
"Force Majeure Event" means, with respect to the Construction of any
Property, any event (the existence of which was not known and could not have
been discovered through the exercise of due diligence by the applicable Lessee
or the Construction Agent prior to the Acquisition Date with respect to such
Property) beyond the control of the applicable Lessee and the Construction
Agent, including, but not limited to, strikes, lockouts, adverse soil
conditions, acts of God, adverse weather conditions, inability to obtain labor
or materials, government activities, civil commotion and enemy action; but
excluding any event, cause or condition that results from the applicable
Lessee's or the Construction Agent's financial condition or failure to pay or
any event, cause or condition which could have been avoided or which could be
remedied through the exercise of commercially reasonable efforts or the
expenditure of funds.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Funding Date" means any Business Day on which Advances are made under
the Participation Agreement pursuant to Section 3.4 thereof.
"Funding Office" means the office of each Participant identified on
Schedule II to the Participation Agreement as its Funding Office.
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"Funding Request" is defined in Section 3.4(a) of the Participation
Agreement.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the full
use, occupancy, zoning and operation of any Property.
"Governmental Authority" means any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Gross Remarketing Proceeds" is defined in Section 20.2(h) of the Master
Lease.
"Guarantor" is defined as each Structural Guarantor, each other Wholly-
Owned Subsidiary of the Representative and the Parent Guarantor, unless
otherwise indicated.
"Guaranty" means the Guaranty dated as of March 21, 1997, made by each
of the Guarantors (other than the Parent Guarantor and the Structural
Guarantors) in favor of each of the Agent Lessor, the Lessors, the
Administrative Agent and each of the Lenders, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"Hazardous Activity" means any activity, process, procedure or
undertaking that directly or indirectly (i) produces, generates or creates any
Hazardous Material; (ii) causes or results in (or threatens to cause or result
in) the Release of any Hazardous Material into the environment (including air,
water vapor, surface water, groundwater, drinking water, land (including
surface or subsurface), plant, aquatic and animal life); (iii) involves the
containment or storage of any Hazardous Material; or (iv) would be regulated as
hazardous waste treatment, storage or disposal within the meaning of any
Hazardous Materials Law.
"Hazardous Materials" means any hazardous, toxic or dangerous materials,
substances, chemicals, wastes or pollutants that from time to time are defined
by or pursuant to or are regulated under any Hazardous Materials
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Laws, including asbestos, polychlorinated biphenyls, petroleum, petroleum
derivatives or by-products, other hydrocarbons, urea formaldehyde and any
material, substance, pollutant or waste that is defined as a hazardous waste
under RCRA or defined as a hazardous substance under CERCLA.
"Hazardous Materials Laws" means all federal, state, regional, county or
local laws, statutes, rules, regulations or ordinances, now or hereafter in
effect, relating to the generation, recycling, use, reuse, sale, storage,
handling, transport, treatment or disposal of Hazardous Materials, including
CERCLA, RCRA, the Clean Air Act, 42 U.S.C. Section 7401, et sea. ("CAA"), the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et sea. ("TSCA") and any
rules, regulations and guidance documents promulgated or published thereunder,
and any state, regional, county or local statute, law, rule, regulation or
ordinance now or hereafter in effect that relates to the discharge, emission or
disposal of Hazardous Materials in or to air, water, land or groundwater, to
the withdrawal or use of groundwater, to the use, handling or disposal of
asbestos, polychlorinated biphenyls, petroleum, petroleum derivatives or
by-products, other hydrocarbons or urea formaldehyde, to the treatment,
storage, disposal or management of Hazardous Materials, to exposure to
Hazardous Materials or to the transportation, storage, disposal, management or
release of gaseous or liquid substances, and any regulation, order, injunction,
judgment, declaration, notice or demand issued thereunder.
"Impositions" means any and all liabilities, losses, expenses and costs
of any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever ("Taxes") (including,
without limitation, (i) real and personal property taxes, including personal
property taxes on any property covered by any Lease that is classified by
Governmental Authorities as personal property, and real estate or ad valorem
taxes in the nature of property taxes; (ii) sales taxes, use taxes and other
similar taxes (including rent taxes and intangibles taxes); (iii) any excise
taxes; (iv) real estate transfer taxes, conveyance taxes, mortgage taxes,
intangible taxes, stamp taxes and documentary recording taxes and fees; (v)
taxes that are or are in the nature of franchise, income, value added, gross
receipts, privilege and doing business taxes, license and registration fees;
and (vi) assessments on any Property, including all assessments for public
improvements or benefits, (whether or not such improvements are commenced or
completed within the Lease Term)), and in each case all interest additions to
tax and penalties thereon, which at any time may be
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levied, assessed or imposed by any Federal, state or local authority upon or
with respect to (a) any Tax Indemnitee, any Property or any part thereof or
interest therein, or any Lessee or any sublessee or user of any Property; (b)
the financing, refinancing, demolition, construction, substitution, subleasing,
assignment, control, condition, occupancy, servicing, maintenance, repair,
ownership, possession, purchase, rental, lease, activity conducted on,
delivery, insuring, use, operation, improvement, transfer, return or other
disposition of such Property or any part thereof or interest therein; (c) the
Notes or other Indebtedness with respect to any Property or any part thereof or
interest therein or transfer thereof; (d) the rentals, receipts or earnings
arising from any Property or any part thereof or interest therein; (e) the
Operative Documents or any payment made or accrued pursuant thereto; (f) the
income or other proceeds received with respect to any Property or any part
thereof or interest therein upon the sale or disposition thereof; (g) any
contract (including the Construction Agency Agreement) relating to the
construction, acquisition or delivery of the Improvements or any part thereof
or interest therein; (h) the issuance of the Notes; or (i) otherwise in
connection with the transactions contemplated by the Operative Documents.
Notwithstanding anything in the first paragraph of this definition
(except as provided in the final paragraph of this definition) the term
"Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or are in the
nature of, sales, use, rental, transfer or property taxes) that are imposed by
any Governmental Authority and that are based upon or measured by or with
respect to the net income (including, without limitation, any minimum taxes,
income or capital gains taxes, withholding taxes, items of tax preference or
franchise taxes) and any interest, additions to tax, penalties or other charges
in respect thereof; provided that this clause (i) shall not be interpreted to
prevent a payment from being made on an After Tax Basis if such payment is
otherwise required to be so made; provided, further, that this clause (i) shall
not apply to any Taxes imposed on the Agent Lessor as a result of its
compliance with the terms of Section 10.3 of the Participation Agreement
following the occurrence and during the continuance of an Event of Default;
(ii) any Tax or imposition for so long as, but only for so long as, it
is being contested in accordance with the provisions of Section 13.5(b) of the
Participation
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Agreement, provided that the foregoing shall not limit any ▇▇▇▇▇▇▇ Entity's
obligation under Section 13.5(b) of the Participation Agreement to advance to
such Tax Indemnitee amounts with respect to Taxes that are being contested in
accordance with Section 13.5(b) of the Participation Agreement or any expenses
incurred by such Tax Indemnitee in connection with such contest;
(iii) Taxes imposed on or with respect to or payable by a Tax
Indemnitee resulting from, or that would not have been imposed but for the
existence of, any Lessor Lien created by or through such Tax Indemnitee or an
affiliate thereof and not caused by acts or omissions of any ▇▇▇▇▇▇▇ Entity;
(iv) any tax imposed by its express terms in lieu of or in
substitution for a Tax not subject to indemnity pursuant to the provisions of
Section 13.5 of the Participation Agreement.
Notwithstanding the foregoing, no exclusion from the definition of Impositions
set forth above shall apply to any Taxes or any increase in Taxes imposed on a
Tax Indemnitee net of any decrease in taxes realized by such Tax Indemnitee, to
the extent that such tax increase or decrease would not have occurred if on
each Funding Date the Agent Lessor had advanced funds to the Construction Agent
in the form of a loan secured by the applicable Property in an amount equal to
the applicable Property Improvement Cost funded on such Funding Date, with debt
service for such loan equal to the Basic Rent payable on each Rent Payment Date
and a principal balance at the maturity of such loan in an amount equal to the
then outstanding amount of the Advances at the end of the term of the Master
Lease, as determined by such Tax Indemnitee, which determination shall be
binding absent manifest error.
"Improvements" means all buildings, structures, fixtures, Equipment and
other improvements of every kind existing at any time and from time to time
(including those constructed pursuant to the Construction Agency Agreement and
those purchased with amounts advanced by the Participants pursuant to the
Participation Agreement) on or under any Land or any parcel of Land to be
acquired pursuant to the terms of the Operative Documents, together with any
and all appurtenances to such buildings, structures or improvements, including
sidewalks, utility pipes, conduits and lines, parking areas and roadways, and
including all Modifications and other additions to or changes in the
Improvements at any time.
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"Indebtedness" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all obligations of such Person with respect to letters of credit and similar
instruments, including, without limitation, obligations under reimbursement
agreements, (vi) all mandatorily redeemable preferred stock of such Person,
(vii) all Indebtedness of others secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person, and (viii) all
Indebtedness of others guaranteed by such Person.
"Indemnitee" means each Lender, each Lessor, the Administrative Agent
and the Agent Lessor.
"Initial Acquisition Date" means the first Acquisition Date occurring
under Section 6.1 of the Participation Agreement.
"Initial Construction Date" means, with respect to any Property, the
date of the first Advance made under the Operative Documents with respect to
Construction Costs for such Property.
"Initial Interest Period" is defined in Section 3.4 of the Participation
Agreement.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Insurance Requirements" means all terms and conditions of any insurance
policy either required by the Master Lease to be maintained by the applicable
Lessee or required by the Construction Agency Agreement to be maintained by the
Construction Agent, and all requirements of the issuer of any such policy.
"Interest Period" means:
(a) during the Interim Lease Term, with respect to each outstanding
Advance (i) the Initial Interest Period
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and (ii) immediately succeeding the Initial Interest Period, the period
beginning on and including each Scheduled Payment Date and ending on but
excluding the next succeeding Scheduled Payment Date, and
(b) during the Basic Lease Term, with respect to each Eurodollar
Loan/Lessor Amount, the period commencing on (and including) the date such
Eurodollar Loan/Lessor Amount is continued as, or converted into, a LIBO Rate
Amount pursuant to Section 3.4 or 3.6 of the Participation Agreement, and
ending on but excluding the numerically corresponding day one, two, three or
six months thereafter, as selected (or deemed selected) by the Representative
from time to time pursuant to an Interest Period
Selection/Continuation/Conversion Notice;
provided, however, that the foregoing provisions in clauses (a) and (b)
relating to Interest Periods are subject to the following:
(i) Interest Periods commencing on the same date for Eurodollar
Loans/Lessor Amounts comprising part of the same Advance shall be of the same
duration;
(ii) if any Interest Period would otherwise end (or if payments are
otherwise due with respect to Eurodollar Loans/Lessor Amounts) on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
(iii) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; and
(iv) if any Interest Period begins on a day for which there is no
numerically corresponding day in a calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month.
"Interest Period Selection/Continuation/Conversion Notice" means a
notice duly executed by a Responsible Officer of the Representative
substantially in the form of Exhibit C to the Participation Agreement.
"Interest Rate" is defined in Section 2.4(a) of the Loan Agreement.
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"Interim Lease Term" is defined in Section 2.3 of the Master Lease.
"Interim Termination Date" means the second anniversary of the
Documentation Date.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"Land" means each fee interest or leasehold interest, as the case may
be, in real property described on Schedule I to any Lease Supplement, and
includes all Appurtenant Rights attached thereto.
"Land Acquisition Cost" means, with respect to any Property, the amount
of the Advance made available to the Construction Agent for the purpose of
acquiring the portion of such Property constituting Land, as such amount is set
forth in the Funding Request relating to the acquisition of such Property.
"Lease" means, collectively, the Master Lease and each Lease Supplement.
"Lease Balance" means, as of any date of determination, an amount equal
to the sum of the Loan Balance and the Lessor Balance and all other amounts
owing by any ▇▇▇▇▇▇▇ Entity under the Operative Documents (including without
limitation, accrued and unpaid Rent and Supplemental Rent, if any).
"Lease Cancellation Payment" means any payment made to cancel or
terminate a lease of a facility and related property prior to the end of its
term.
"Lease Conversion" means any acquisition by the Representative or any of
its Subsidiaries of a facility and related property that had theretofore been
leased by the Representative or any such Subsidiary and that the Representative
or any of its Subsidiaries continues to operate.
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" is defined in Section 16.1 of the Master Lease.
"Lease Supplement" means each Lease Supplement substantially in the form
of Exhibit A to the Master Lease,
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executed by a Lessee and the Agent Lessor, dated as of an Acquisition Date and
covering the Property located on the Land identified on Schedule I thereto, as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Lease Term" means, with respect to each Property, the period commencing
on (and including) the Acquisition Date for such Property and ending on (but
excluding) the Expiration Date.
"Lender Basic Rent" means, as determined as of any Basic Rent Payment
Date, the interest due on the Loans, determined in accordance with Section 2.4
of the Loan Agreement and excluding any interest at the applicable Overdue Rate
on any installment of Basic Rent not paid when due and any fine, penalty,
interest or cost assessed or added under any agreement with a third party for
nonpayment or late payment of Basic Rent.
"Lenders" means, collectively, the various financial institutions that
are or may from time to time become parties to the Loan Agreement as Lenders.
"Lessee" means each institution that is or may from time to time become
a party to the Lease and the other Operative Documents as a lessee.
"Lessor Amount" is defined in Section 3.2 of the Participation
Agreement.
"Lessor Balance" means, as of any date of determination, an amount equal
to the sum of the outstanding Lessor Amounts together with all accrued and
unpaid Yield thereon.
"Lessor Basic Rent" means the amount of accrued Yield due on the Lessor
Amounts, determined in accordance with Section 4.1 of the Participation
Agreement as of any Scheduled Payment Date and excluding (i) any interest at
the applicable Overdue Rate on any installment of Lessor Basic Rent not paid
when due and (ii) any fine, penalty, interest or cost assessed or added under
any agreement with a third party for nonpayment or late payment of Lessor Basic
Rent.
"Lessor Commitment" means the Commitment of each Lessor in the amount
set forth on Schedule I of the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated, reduced or otherwise modified from
time to time less the product of (i) such
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Lessor's Commitment Percentage and (ii) the Unavailable Commitment, if any.
"Lessor Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Agent Lessor's and the Lenders' interest under the
Master Lease and the Lease Supplements to the extent the Master Lease and Lease
Supplements are security agreements.
"Lessor Letter Agreement" means the letter agreement dated as of March
21, 1997, among the Agent Lessor and the Representative.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against any Participant not
resulting from the transactions contemplated by the Operative Documents, (b)
any act or omission of any Participant which is not required or permitted by
the Operative Documents or is in violation of any of the terms of the Operative
Documents, (c) any claim against any Participant, with respect to Taxes or
Transaction Expenses against which a ▇▇▇▇▇▇▇ Entity is not required to
indemnify any Participant, in its individual capacity, pursuant to Article IX
of the Participation Agreement, or (d) any claim against the Agent Lessor
arising out of any transfer by the Agent Lessor of all or any portion of the
interest of the Agent Lessor in the Properties or the Operative Documents other
than the transfer of title to or possession of the Properties by the Agent
Lessor pursuant to and in accordance with the Master Lease, the Loan Agreement
or the Participation Agreement or pursuant to the exercise of the remedies set
forth in Section 16.2 of the Master Lease.
"Lessor Margin" means, with respect to the Lessor Amounts on any day,
the percentage set forth below opposite the Pricing Category in effect for such
date for the applicable type of Lessor Amount:
Pricing Category LIBO Margin Base Rate Margin
---------------- ----------- ----------------
I 1.125% 0.50%
II 1.375% 0.50%
III 1.50% 0.625%
IV 1.75% 1.125%
V 2.125% 1.625%
"Lessor Mortgage" means, with respect to any Property, the Lease
Supplement for such Property and any and all other security instruments in
appropriate recordable form
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in each relevant jurisdiction sufficient to grant to the Lessor a first
priority Lien on such Property.
"Lessors" means, collectively, each of the Persons that are or may from
time to time become identified as a "Lessor" party to the Participation
Agreement.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Representative or any of its Subsidiaries shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan Agreement" means the Loan Agreement, dated as of March 21, 1997,
among the Agent Lessor, as borrower thereunder, the Lenders, and the
Administrative Agent, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Loan Agreement Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute a Loan Agreement Event of
Default.
"Loan Agreement Event of Default" is defined in Section 5.1 of the Loan
Agreement.
"Loan Balance" means, as of any date of determination, an amount equal
to the sum of the outstanding Loans together with all accrued and unpaid
interest thereon pursuant to the Loan Agreement.
"Loan Commitment" means the Commitment of each Lender in the amount set
forth on Schedule I to the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated or otherwise modified from time to
time less the product of (i) such Lender's Commitment Percentage and (ii) the
Unavailable Commitment, if any.
"Loan Documents" means the Loan Agreement and the Notes.
"Loan Margin" means, with respect to the Loans on any day, the
percentage set forth below opposite the Pricing Category in effect for such day
for the applicable type of Loan:
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Pricing Category LIBO Margin Base Rate Margin
---------------- ----------- ----------------
I 0.625% 0.0%
II 0.875% 0.0%
III 1.0% 0.125%
IV 1.25% 0.625%
V 1.625% 1.125%
"Loans" is defined in Section 2.1 of the Loan Agreement.
"London Interbank Offered Rate" means, as applicable to any Eurodollar
Loan, for the Interest Period of such Eurodollar Loan, the rate per annum
determined by the Administrative Agent on the basis of the offered rate for
deposits in Dollars of amounts equal or comparable to the principal amount of
such Eurodollar Loan offered for a term comparable to such Interest Period,
which rates appear on the Reuters Screen LIBO Page as of 11:00 A.M., London
time, two (2) Business Days prior to the first day of such Interest Period,
provided that (i) if more than one such offered rate appears on the Reuters
Screen LIBO Page, the "London Interbank Offered Rate" will be the arithmetic
average (rounded upwards, if necessary, to the next higher 1/100th of it) of
such offered rates; and (ii) if no such offered rates appear on such page, the
"London Interbank Offered Rate" for such Interest Period will be the rate per
annum quoted by the Administrative Agent's London Branch, two (2) Business Days
prior to the first day of such Interest Period, for deposits in Dollars offered
to leading banks for a period comparable to such Interest Period in an amount
comparable to the principal amount of such Eurodollar Loan.
"LTCB" means The Long-Term Credit Bank of Japan, Ltd., Los Angeles
Agency.
"Margin Stock" has the meaning given such term under Regulation U of the
F.R.S. Board.
"Marketing Period" means the period commencing on the date 360 days
prior to the Expiration Date and ending on the Expiration Date.
"Master Lease" means the Master Lease and Open End Mortgage, dated as of
March 21, 1997, among the Agent Lessor, the Lessees and the Representative as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Material" and "Materially" mean material to (i) the ability of any
▇▇▇▇▇▇▇ Entity to perform its obligations
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under the Operative Documents to which it is a party, or (ii) the value or
condition of any Property.
"Material Adverse Effect" means (a) a materially adverse effect on the
business, assets, operations or condition, financial or otherwise, of the
Representative and its Subsidiaries taken as a whole, (b) material impairment
of the ability of any ▇▇▇▇▇▇▇ Entity to perform any of its obligations under
any Operative Document to which it is or will be a party or (c) material
impairment of the rights of or benefits available to the Lenders, the Lessors,
the Administrative Agent and the Agent Lessor under any Operative Document.
"Material Commitment" means an outstanding commitment by a financial
institution or a syndicate of financial institutions to provide financial
accommodations to the Representative and/or one or more of its Subsidiaries,
arising in one or more related transactions, in an amount equal to or exceeding
in the aggregate $50,000,000.
"Material Financial Obligations" means a principal or face amount of
Indebtedness and/or (in the case of Section 16.1(k)(i) of the Master Lease)
payment obligations in respect of, or (in the case of Section 16.1(k)(i) or
Section 16.1(k)(ii) of the Master Lease) market-to-market value of, Derivative
Obligations of the Representative and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, exceeding in the
aggregate $20,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.
"Maturity Date" means with respect to the Loans and the Lessor Amounts,
the fifth anniversary of the Documentation Date, unless such Maturity Date is
extended pursuant to Section 2.7 of the Loan Agreement and Section 11.1 of the
Participation Agreement.
"Modifications" is defined in Section 10.1 of the Master Lease.
"▇▇▇▇▇▇ Credit Agreement" means the $375,000,000 Amended and Restated
Credit Agreement, dated as of December 20, 1996, among ▇▇▇▇▇▇▇ Enterprises,
Inc., the banks listed therein and ▇▇▇▇▇▇ Guaranty Trust Company of New York,
as issuing bank and as agent, as at any time amended or refinanced in whole or
in part, including amendments and refinancings that increase the amount of
credit or loans that may be advanced thereunder.
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"Mortgage Assets" is defined in Section 10.2(g)(i)(13) of the
Participation Agreement
"MultiEmployer Plan" means any multiple employer plan, as defined in
Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Net Proceeds" means all amounts received by the Lessor in connection
with any Casualty or Condemnation or any sale of the Property pursuant to the
Agent Lessor's exercise of remedies under Section 16.2 of the Master Lease or
the Representative's exercise of the Remarketing Option under Article XX of the
Master Lease and all interest earned thereon, less the expense of claiming and
collecting such amounts, including all costs and expenses in connection
therewith for which the Agent Lessor or any Participant is entitled to be
reimbursed pursuant to the Lease.
"Non-Consenting Participant" is defined in Section 11.1(b) of the
Participation Agreement.
"Notes" is defined in Section 2.2 of the Loan Agreement.
"Obligations" means all obligations (monetary or otherwise) of any
▇▇▇▇▇▇▇ Entity arising under or in connection with any of the Operative
Documents.
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Master Lease;
(c) each Lease Supplement;
(d) the Loan Agreement;
(e) each Note;
(f) the Assignment of Lease and Rent;
(g) each Deed and ground lease;
(h) the Lessor Mortgages;
(i) the Lessor Financing Statements;
(j) the Construction Agency Agreement;
(k) the Construction Agency Agreement Assignment;
(l) the Construction Documents Assignment;
(m) each Construction Agency Agreement Supplement;
(n) each Assignment of Lease and Rent Supplement;
(o) the Arranger's Fee Letter;
(p) the Guaranty;
(q) the Structural Guaranties; and
(r) the Parent Guaranty.
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"Other Plan" means an employee pension benefit plan (other than a Plan
or a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code.
"Outside Completion Date" means, with respect to any Property, the date
occurring on the earlier of (a) fifteen (15) months after the date the initial
Advance is made in respect of such Property and (b) the Interim Termination
Date.
"Overdue Rate" means, with respect to any Loan or Lessor Amount, the
Base Rate or the Adjusted Eurodollar Rate then in effect for such Loan or
Lessor Amount, as the case may be, plus two percent (2%).
"Parent Guarantor" means the Company in its capacity as Parent Guarantor
under the Parent Guaranty.
"Parent Guaranty" means the guaranty dated as of March 21, 1997, made by
the Parent Guarantor in favor of each of the Agent Lessor, the Lessors, the
Administrative Agent and each of the Lenders, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"Partial Termination Date" is defined in Section 15.2 of the Master
Lease.
"Partial Termination Notice" is defined in Section 15.1 of the Master
Lease.
"Participant Balance" means, with respect to any Participant as of any
date of determination: (i) with respect to any Lender, an amount equal to the
aggregate outstanding Loans of such Lender, together with all accrued and
unpaid interest thereon or (ii) with respect to any Lessor, an amount equal to
the aggregate outstanding Lessor Amounts of such Lessor, together with all
amounts of accrued and unpaid Yield thereon.
"Participants" means, collectively, each Lender and each Lessor, and
their successors and assigns.
"Participation Agreement" means the Participation Agreement dated as of
March 21, 1997, among the Lessees, the Representative, Construction Agent,
Structural Guarantors, the Parent Guarantor, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent, the Arranger, the Documentation Agent, the
Co-Arranger and Syndication Agent as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
▇▇
▇▇▇
"▇▇▇▇" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Preferred Stock" means preferred stock of the Representative
that has no mandatory redemption or redemption at the option of the holder
thereof prior to the first anniversary of the Termination Date and no required
increase in the rate of dividends payable thereon prior to such first
anniversary other than increases arising from the resetting of the rate of
dividends on the basis of a reasonable market or other similar index or a
market interest rate.
"Permitted Property Liens" means, with respect to any Property, any of
the following:
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents;
(ii) the rights of any sublessee under a sublease permitted by the
terms of the Master Lease;
(iii) Liens for Taxes that either are not yet subject to interest or
penalties or are being contested in accordance with the provisions of Section
12.1 of the Master Lease;
(iv) Liens arising by operation of law, materialmen's, mechanics',
workers', repairmen's, employees', carriers', warehousemen's and other like
Liens relating to the construction of the Improvements or in connection with
any Modifications or arising in the ordinary course of business for amounts
that either are not more than 60 day past due or are being diligently contested
in good faith by appropriate proceedings, so long as such proceedings satisfy
the conditions for the continuation of proceedings to contest Taxes set forth
in Section 12.1 of the Master Lease;
(v) Liens of any of the types referred to in clause (iv) above that
have been bonded for not less than the full amount in dispute (or as to which
other security arrangements satisfactory to the Agent Lessor have been made),
which bonding (or arrangements) shall comply with applicable Requirements of
Law, and has effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to which
appeals or other proceedings for review are being prosecuted in good faith and
for the payment of which adequate reserves have been provided as required by
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GAAP or other appropriate provisions have been made, so long as such
proceedings have the effect of staying the execution of such judgments or
awards and satisfy the conditions for the continuation of proceedings to
contest Taxes set forth in Section 12.1 of the Master Lease;
(vii) easements, rights of way and other encumbrances on title to real
property pursuant to Section 11.2 of the Master Lease;
(viii) Lessor Liens;
(ix) Liens created by any ▇▇▇▇▇▇▇ Entity with the consent of the
Required Participants; and
(x) Liens described on the title insurance policy delivered with
respect to such Property pursuant to Section 6.1(q) of the Participation
Agreement, other than Liens described in clause (iv) or (vi) above that are not
removed within forty (40) days of their discovery by a ▇▇▇▇▇▇▇ Entity.
"Permitted Receivables Financing Securities" means debt securities or
preferred stock issued by a Special Purpose Receivables Financing Subsidiary
pursuant to a Receivables Financing Program and borrowings by a Special Purpose
Receivables Financing Subsidiary under a related Receivables Financing Backstop
Facility.
"Person" means any natural person, corporation, trust, joint venture,
association, company, partnership or government, or any agency or political
subdivision thereof.
"Pharmacy" means Pharmacy Corporation of America, a California
corporation, and its successors.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is maintained, or
contributed to, by any member of the ERISA Group for employees of any member of
the ERISA Group.
"Plans and Specifications" means, with respect to each Property, the
plans and specifications for the Construction thereof, as more particularly
described in Schedule 2 to the Construction Agency Agreement Supplement
applicable to such Property.
"Pledge Agreement" means the Amended and Restated Pledge and Security
Agreement dated as of December 20, 1996 among the Representative, Pharmacy and
▇▇▇▇▇▇ Guaranty
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Trust Company of New York, as the same may be amended from time to time.
"Pledged Stock" has the meaning set forth in the Pledge Agreement
"Pricing Category" shall be defined, and the applicable category thereof
for any date shall be determined, in accordance with Schedule IV to the
Participation Agreement.
"Pricing Ratio" is defined in Schedule IV to the Participation
Agreement.
"Prime Rate" refers to that interest rate so denominated and set by the
Administrative Agent from time to time as an interest rate basis for
borrowings. The Prime Rate is but one of several interest rate bases used by
the Administrative Agent. The Administrative Agent lends at interest rates
above and below the Prime Rate.
"Property" means (i) the Agent Lessor's interest in any Land, as lessee
or as owner in fee simple thereof and (ii) all of the Improvements at any time
located on or under such Land.
"Property Balance" means, with respect to any Property, an amount equal
to the outstanding principal amount of the Loans and Lessor Amounts relating to
such Property, and all accrued and unpaid interest and Yield thereon, and any
Supplemental Rent related thereto.
"Property Cost" means, with respect to any Property, the sum of the Land
Acquisition Cost and the Property Improvement Costs for such Property.
"Property Improvement Costs" means, with respect to any Property, the
aggregate amount of Advances made to or at the direction of the Construction
Agent for the purpose of paying Construction Costs and the Transaction Expenses
relating to such funding and construction, as such amount is set forth in the
Funding Request relating thereto.
"Purchase Notice" means an irrevocable written notice by the
Representative delivered to the Agent Lessor pursuant to Section 18.1 of the
Master Lease, notifying the Agent Lessor of the Representative's intention to
exercise its option pursuant to such Section, and identifying the proposed
purchase date therefor.
"Purchase Option" means the Representative's option to purchase all (but
not less than all) of the Properties in
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accordance with the provisions of Section 18.1 of the Master Lease.
"Purchase Option Price" is defined in Section 18.1 of the Master Lease.
"Qualified Land" means each parcel of Land which has a Land Acquisition
Cost that equals or exceeds 25% of the sum of (x) such Land Acquisition Cost
plus (y) the Estimated Improvement Costs of the Property consisting of such
Land and the Improvements thereon.
"Quarterly Payment Date" means the last day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. Section
6901 et seq.
"Receivables Financing Backstop Facility" means a credit facility
entered into by a Special Purpose Receivables Financing Subsidiary for the
purposes of providing liquidity with respect to securities issued by such
Special Purpose Receivables Financing Subsidiary and of financing transactions
of the type intended to be financed with the proceeds of such securities.
"Receivables Financing Program" means a program pursuant to which a
Special Purpose Receivables Financing Subsidiary issues debt securities or
preferred stock secured by (i) Medicaid, Medicare or other patient accounts
receivable or Permitted Receivables Financing Securities purchased from the
Company and its Subsidiaries or (ii) security interests in Medicaid, Medicare
or other patient accounts receivable or Permitted Receivables Financing
Securities granted by the Company and its Subsidiaries.
"Refinancing Debt" is defined in Section 10.2(i)(i)(5) of the
Participation Agreement.
"Refinanced Debt" is defined in Section 10.2(i)(i)(5) of the
Participation Agreement.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous material.
"Remarketing Option" is defined in Section 20.1 of the Master Lease.
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"Renewal Term" is defined in clause (a) of Section 11.1 of the
Participation Agreement.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent, in
each case payable under the Master Lease.
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term
as used in Section 4241 of ERISA.
"Replacement Participant" is defined in Section 11.1(b) of the
Participation Agreement.
"Reportable Event" means an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under subsection .13,
.14, .16, .18, .19 or .20 of PBGC Regulation Section 2615.
"Representative" means the Company.
"Requesting Party" is defined in Section 22.1 of the Master Lease.
"Required Lenders" means, at any time, Lenders having Commitments
representing at least 66 2/3% of the aggregate Loan Commitments or, for
purposes of acceleration pursuant to Section 5.2(a)(ii)(y) of the Loan
Agreement or in the event that the Loan Commitments have been terminated,
Lenders representing at least 66 2/3% of the aggregate principal amount of
Loans outstanding; provided, however, that if any Lender shall be a Defaulting
Participant at such time, then there shall be excluded from the determination
of "Required Lenders" such Defaulting Participant's Commitments, or after
termination of the Commitments, the principal balance of the Loans owing to
such Defaulting Participant.
"Required Modification" is defined in Section 10.1 of the Master Lease.
"Required Participants" means at any time Participants representing 66
2/3% of the aggregate Commitments of the Lenders and Lessors, or if such
Commitments shall have been terminated, Participants representing at least 66
2/3% of the aggregate of Loans and Lessor Amounts outstanding; provided,
however, that these shall be excluded therefrom any Defaulting Participant's
Commitments, Loans or Lessor Amounts, as the case may be.
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"Requirement of Law" means, as to any Person, (a) the partnership
agreement, certificate of incorporation, bylaws or other organizational or
governing documents of such Person, and (b) all Federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting any Property, the
Improvements or the demolition, Construction, use or alteration thereof,
whether now or hereafter enacted and in force, including any that require
repairs, modifications or alterations in or to any Property or in any way limit
the use and enjoyment thereof (including all building, zoning and fire codes
and the Americans with Disabilities Act of 1990, 42 U.S.C. S 1201 et. seq. and
any other similar federal, state or local laws or ordinances and the
regulations promulgated thereunder) and any that may relate to environmental
requirements (including all Hazardous Materials Laws), and all permits,
certificates of occupancy, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments which are either of record or known to any ▇▇▇▇▇▇▇ Entity
affecting any Property, the Appurtenant Rights and any easements, licenses or
other agreements entered into pursuant to Section 11.2 of the Master Lease.
"Responsible Officer" means as to any ▇▇▇▇▇▇▇ Entity, the President,
Chief Executive Officer, Executive Vice President, the Treasurer or any
Assistant Treasurer, Secretary or any Assistant Secretary of such Person.
"Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer in substantially the form of Exhibit D-3 to the
Participation Agreement, which certificate shall certify as true and correct
the subject matter being certified to in such certificate.
"Scheduled Payment Date" means:
(a) during the Interim Lease Term, (i) the date occurring one (1)
month after the initial Acquisition Date pursuant to Section 3.4 of the
Participation Agreement and, (ii) thereafter, the earlier of (A) each date
occurring one (1) month after each preceding Scheduled Payment Date and (B) the
Interim Termination Date; and
(b) during the Basic Lease Term,
(i) as to any Eurodollar Loan/Lessor Amount, the last day of
each applicable Interest Period (and, if any such Interest Period shall
exceed three (3) months, on each date occurring every three
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(3) months after the first day of such Interest Period) and the Maturity
Date; and
(ii) as to any Base Rate Loan/Lessor Amount, each Quarterly
Payment Date and the Maturity Date; provided, however, that if any such
day is not a Business Day, then the "Scheduled Payment Date" shall be
the immediately succeeding Business Day (except as otherwise required by
clause (ii) of the proviso in the definition of "Interest Period" with
respect to Eurodollar Loans/Lessor Amounts).
"Shortfall Amount" means, as of the Expiration Date, an amount equal to
(i) the Lease Balance, minus (ii) the Loan Balance received by the
Administrative Agent from the Representative pursuant to Section 20.2(f) of the
Master Lease, minus (iii) the aggregate amount of the highest, binding,
written, unconditional, irrevocable offer to purchase each Property obtained by
the Representative pursuant to Section 20.2(a) of the Master Lease; provided,
however, that if the sale of the Properties to the Person submitting such offer
is not consummated on or prior to the Expiration Date, then the term "Shortfall
Amount" shall mean an amount equal to (i) the Lease Balance, minus (ii) the
Loan Balance received by the Administrative Agent pursuant to Section 20.2(f)
of the Master Lease.
"Significant Casualty" means a Casualty that in the reasonable, good
faith judgment of the Administrative Agent and the Agent Lessor (a) renders the
related Property unsuitable for continued use as property of the type of such
Property immediately prior to such Casualty, or (b) is so substantial in nature
that restoration of the related property to substantially its condition as it
existed immediately prior to such Casualty would be impracticable or
impossible.
"Significant Condemnation" means (a) a Condemnation that involves a
taking of the Agent Lessor's entire title to the related Land, or (b) a
Condemnation that in the reasonable, good faith judgment of the Administrative
Agent and the Agent Lessor (i) renders the related Property unsuitable for
continued use as property of the type of such Property immediately prior to
such Condemnation, or (b) is so substantial in nature that restoration of the
related property to substantially its condition as it existed immediately prior
to such Condemnation would be impracticable or impossible.
"Single Employer Plan" means any Plan which is not a Multiemployer Plan.
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"Solvent" means with respect to any Person on a particular date, that on
such date (i) the fair value of the property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability taking into account any
subrogation and contribution rights.
"Special Purpose Receivables Financing Subsidiary" means a Wholly-Owned
Subsidiary of the Representative the sole purpose of which is to issue debt
securities and/or preferred stock and to purchase Medicare, Medicaid or other
patient accounts receivable of the Representative and its Subsidiaries and/or
Permitted Receivables Financing Securities and make advances to the
Representative and its Subsidiaries secured by security interests in such
Medicare, Medicaid or other patient accounts receivable and/or Permitted
Receivables Financing Securities, which accounts receivable, Permitted
Receivables Financing Securities and/or security interests therein may be
pledged to secure such debt securities and/or preferred stock and/or borrowings
by such Special Purpose Receivables Financing Subsidiary under a Receivables
Financing Backstop Facility.
"Structural Guarantor" means each Lessee.
"Structural Guaranty" means each Structural Guaranty dated as of March
21, 1997, made by each Structural Guarantor in favor of each of the
Administrative Agent and the Lenders, as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
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"Submitted Financial Statements" means the financial statements of the
Representative for the fiscal year ended December 31, 1995, which were audited
by Ernst & Young LLP, copies of which have been delivered to the Administrative
Agent, the Agent Lessor and each Participant.
"Subordinated Notes" means the Representative's 5-1/2% Convertible
Subordinated Debentures issued from time to time in exchange for the
Representative's $2.75 Cumulative Convertible Exchangeable Preferred Stock.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
provided that, with respect to the Representative, Subsidiary shall not (except
for financial reporting purposes and determination of compliance with financial
covenants) include any corporations or other entities (i) which are inactive,
(ii) each of which has neither assets nor liabilities, calculated on a
consolidated basis for each such corporation or other entity, of $1,600,000 or
more and (iii) which taken together have neither aggregate assets nor aggregate
liabilities, calculated on a consolidated basis, of $3,000,000 or more.
"Supplemental Rent" means all amounts, liabilities and obligations
(other than Basic Rent) which each Lessee or the Representative, as applicable,
assumes or agrees to pay to the Administrative Agent, any Participant or any
other Person under the Master Lease, or under any of the other Operative
Documents, including, without limitation, Commitment Fees, Break Costs, the
Lessor Balance, the Loan Balance, the Shortfall Amount, amounts due pursuant to
Section 13.2 of the Participation Agreement and payments pursuant to Sections
15.2 of the Master Lease and Articles XVIII and XX of the Master Lease.
"Tax Indemnitee" means each Lender, each Lessor, the Administrative
Agent and the Agent Lessor.
"Taxes" is defined in the definition of Impositions.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
with maturities of not more than 180 days rated at least P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. or A-1 by Standard & Poor's Ratings group, (iii)
deposit accounts in, and certificates of
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deposit, repurchase agreements and bankers' acceptances of, United States
branches of commercial banks whose unsecured senior long-term debt is rated A
or better by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Ratings
Group, in each case maturing within one year from the date of acquisition
thereof or (iv) in addition to the accounts and instruments referred to in
clause (iii), deposit accounts and certificates of deposit in United States
branches of banks insured by the Federal Deposit Insurance Corporation which do
not aggregate more than $100,000 in any one bank.
"Transaction Expenses" means all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Documents and the transactions contemplated by the Operative Documents
including without limitation:
(a) subject to the fee letters of counsel, if applicable, the fees,
out-of-pocket expenses and disbursements of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, special counsel for the Administrative Agent, Arranger and
Documentation Agent, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, special counsel for the Agent Lessor
and Lessor, and such other fees, expenses and disbursements of counsel for the
▇▇▇▇▇▇▇ Entities, in negotiating the terms of the Operative Documents and the
other transaction documents, preparing for the closing under, and rendering
opinions in connection with, such transactions and in rendering other services
customary for counsel representing parties to transactions of the types
involved in the transactions contemplated by the Operative Documents;
(b) the fees, out-of-pocket expenses and disbursements of special
counsel for the Administrative Agent, Arranger and Documentation Agent, and for
the Agent Lessor and Lessor in connection with (1) subject to the fee letters
of counsel, if applicable, the transactions contemplated to occur on each
Funding Date and each Acquisition Date, (2) any amendment, supplement, waiver
or consent with respect to any Operative Documents requested or approved by any
▇▇▇▇▇▇▇ Entity, and (3) any enforcement of any rights or remedies against any
▇▇▇▇▇▇▇ Entity in respect of the Operative Documents that arise after an Event
of Default;
(c) any and all Taxes and fees incurred in recording, registering or
filing any Operative Document or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement with
any public office, registry or governmental agency in connection with the
transactions contemplated by the Operative Documents.
▇▇
▇▇▇
(▇) all reasonable out-of-pocket expenses, disbursements and costs of
the Administrative Agent, the Co-Arranger, Capstar Partners, Inc. and the Agent
Lessor paid or incurred in connection with the transactions contemplated by the
Operative Documents (including without limitation the transactions contemplated
to occur on each Funding Date and Acquisition Date);
(e) all title fees, premiums and escrow costs and other expenses
relating to title insurance and the closings contemplated by the Operative
Documents;
(f) all expenses relating to property surveys and Environmental
Audits; and
(g) all fees and other expenses relating to Appraisals.
"Transactions" shall mean the transactions contemplated under the
Participation Agreement and each of the other Operative Documents.
"Unavailable Commitments" shall mean, as of any date occurring on or
after the Documentation Date but prior to the Unavailable Commitment
Termination Date, the amount equal to $35,000,000.
"Unavailable Commitment Termination Date" shall mean the earlier of (i)
August 1, 1997, and (ii) the date upon which the Participants give unanimous
consent to a prior written notice from the Representative requesting that the
Unavailable Commitments become available for any proposed Loan or Lessor
Amount.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement
of Financial Accounting Standards No. 87, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code as
in effect in any applicable jurisdiction.
"Up-Front Fee" means the fee payable to the Arranger pursuant to the
Arranger's Fee Letter.
"Voting Stock" means capital stock of any class or classes (however
designated) having ordinary voting power
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for the election of directors of the Representative, other than stock having
such power only by reason of the happening of a contingency.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the shares of Voting Stock or other ownership
interests of which (except directors' qualifying shares) are at the time
directly or indirectly owned by such Person.
"Workout Transaction" means any adjustment, renegotiation, exchange,
subordination, amendment, sale or other disposition of any note receivable,
Investment or other similar asset of the Representative or any of its
Subsidiaries, any release, subordination, renegotiation or other adjustment or
any Lien securing any Indebtedness or other obligation of any Person held by or
owed to the Representative or any of its Subsidiaries, any acquisition of any
asset by the Representative or any of its Subsidiaries or the making of any
Investment by the Representative or any of its Subsidiaries, in each case in
connection with (i) the foreclosure, enforcement or realization by the
Representative or any such Subsidiary on any Lien securing any Indebtedness or
other obligation of any Person held by or owed to the Representative or any
such Subsidiary or (ii) any renegotiation, composition, adjustment, amendment
or restructuring of, or any other similar arrangement with respect to, any such
Indebtedness or obligation in each case in connection with the bankruptcy,
insolvency, financial distress or other similar condition of such Person;
provided that any such adjustment, renegotiation, exchange, subordination,
amendment, sale, disposition, release or acquisition or the making of any such
Investment (A) will, in the reasonable opinion of an Authorized Financial
Officer of the Representative, in light of the circumstances affecting the
relevant obligor, be likely to maximize the amount to be realized by the
Representative and its Subsidiaries with respect to such Indebtedness or other
obligation or (B) is imposed on the Representative or any of its Subsidiaries
pursuant to voting arrangements mandated by any law or contract arrangements
binding upon the Representative or such Subsidiary.
"Yield" is defined in Section 4.1(a) of the Participation Agreement.
"Yield Rate" means the sum of the Base Rate or the Adjusted Eurodollar
Rate, as applicable, plus the Lessor Margin.
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