EXHIBIT 10.50
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AMENDED AND RESTATED
PARTICIPATION AGREEMENT
among
LIVING CENTERS HOLDING COMPANY,
as Lessee,
FBTC LEASING CORP.,
a New York corporation,
as Lessor,
THE CHASE MANHATTAN BANK,
as Agent for the
Lenders,
THE FUJI BANK, LIMITED (HOUSTON AGENCY),
as Co-Agent
and
THE LENDERS PARTIES HERETO
______________________________
Dated as of November 4, 1997
______________________________
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TABLE OF CONTENTS
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Page
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SECTION 1. THE LOANS......................................................... 2
SECTION 2. LESSOR CONTRIBUTION.............................................. 2
2.1. Lessor Contribution.............................................. 2
2.2. Allocated Lessor Yield........................................... 3
SECTION 3. SUMMARY OF THE TRANSACTIONS...................................... 3
3.1. Operative Agreements............................................. 3
3.2. Property Purchase and Lease...................................... 3
3.3. Construction of Improvements; Lease of Improvements.............. 4
3.4. Aggregate Tranche A Percentage; Tranche A Percentage............. 4
SECTION 4. THE CLOSINGS..................................................... 5
4.1. Initial Closing Date; Reorganization Closing Date................ 5
4.2. Subsequent Funding Dates......................................... 5
SECTION 5. FUNDING OF ADVANCES.............................................. 5
5.1. General.......................................................... 5
5.2. Procedures for Funding........................................... 5
5.3. Substitute Properties............................................ 6
SECTION 6. CONDITIONS OF THE CLOSING........................................ 6
6.1. Conditions to Loans and Lessor Contributions..................... 6
6.2. Conditions to the Lessor's and the Lenders' Obligations to Make
Advances to pay Property Acquisition Costs....................... 10
6.3. Conditions to the Lessor's and the Lenders' Obligations to Make
Advances to pay Project Costs for Construction on any Property... 13
SECTION 7. REPRESENTATIONS AND WARRANTIES................................... 14
7.1. Representations and Warranties of Lessor on the Reorganization
Closing Date..................................................... 14
7.2. Representations and Warranties of the Lessee on the Reorganization
Closing Date..................................................... 16
7.3. Representations and Warranties of the Lessee on Property Closing
Dates............................................................ 20
7.4. Representations and Warranties of the Lessee Upon each Funding
Date............................................................. 23
SECTION 8. PAYMENT OF CERTAIN EXPENSES...................................... 25
8.1. Transaction Expenses............................................. 25
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Page
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8.2. Brokers' Fees and Stamp Taxes..................................... 25
8.3. Certain Fees and Expenses......................................... 26
8.4. Credit Agreement and Related Obligations.......................... 26
8.5. Commitment Fees................................................... 26
SECTION 9. OTHER COVENANTS AND AGREEMENTS.................................... 26
9.1. Covenants of the Lessor........................................... 26
9.2. Repayment of Certain Amounts on Maturity Date..................... 27
9.3. Amendment of Certain Documents.................................... 27
9.4. Proceeds of Casualty or Condemnation.............................. 28
SECTION 10. CREDIT AGREEMENT................................................ 28
10.1. Lessee's Credit Agreement Rights................................. 28
SECTION 11. TRANSFER OF INTEREST............................................. 29
11.1. Restrictions on Transfer......................................... 29
11.2. Effect of Transfer............................................... 30
SECTION 12. INDEMNIFICATION................................................. 30
12.1. General Indemnity................................................ 30
12.2. General Tax Indemnity............................................ 31
SECTION 13. MISCELLANEOUS................................................... 35
13.1. Survival of Agreements........................................... 35
13.2. No Broker, etc................................................... 35
13.3. Notices.......................................................... 36
13.4. Counterparts..................................................... 37
13.5. Amendments and Termination....................................... 37
13.6. Headings, etc.................................................... 38
13.7. Parties in Interest.............................................. 38
13.8. GOVERNING LAW.................................................... 38
13.9. Severability..................................................... 38
13.10. Rights of Lessee................................................ 38
13.11. Rights of Lessor................................................ 38
13.12. Further Assurances.............................................. 38
13.13. Successors and Assigns.......................................... 39
13.14. No Representation or Warranty................................... 39
13.15. Confidentiality................................................. 39
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Exhibits
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Exhibit A-1 Form of Mortgage and Security Agreement
Exhibit A-2 Form of Deed of Trust and Security Agreement
Exhibit B Form of Assignment of Leases
Exhibit C Form of Requisition
Exhibit D-1 Form of Opinion of Local Counsel
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AMENDED AND RESTATED PARTICIPATION AGREEMENT, dated as of November 4,
1997 (this "Agreement"), among LIVING CENTERS HOLDING COMPANY, a Delaware
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corporation (the "Lessee"); FBTC LEASING CORP., a New York corporation (the
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"Lessor"); THE CHASE MANHATTAN BANK, a New York banking corporation, as agent
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(in such capacity, the "Agent") for each of the financial institutions listed on
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the signature pages hereof and for the financial institutions from time to time
parties hereto (each, a "Lender"; collectively, the "Lenders") and THE FUJI
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BANK, LIMITED (HOUSTON AGENCY), as co-agent (in such capacity, the "Co-Agent").
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Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings set forth in Annex A hereto.
Recitals
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Pursuant to that certain Participation Agreement dated as of October
10, 1996 (the "Original Participation Agreement") among the Lessee, the Lessor,
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the Agent and certain banks and financial institutions (the "Prior Lenders"),
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the parties thereto agreed to participate in a transaction in which, among other
things, (i) the Prior Lenders agreed to make certain loans to the Lessor
pursuant to the Credit Agreement; (ii) the Lessor agreed to use the proceeds of
the Loans to acquire and construct the Properties; and (iii) the Lessor agreed
to lease the Properties to Lessee pursuant to the Lease.
The obligations of the Lessor under the Credit Agreement and the other
Operative Agreements are guaranteed by Living Centers of America, Inc. (the
"Original Guarantor") together with certain of its subsidiaries.
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Upon the consummation of the transactions contemplated in the
Recapitalization Agreement, the Original Guarantor will be known as Paragon
Health Network, Inc., a Delaware corporation (the "Guarantor").
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To evidence the foregoing agreements, the Lessee, the Lessor, the
Agent and the Lenders are amending and restating the terms and conditions of the
Original Participation Agreement as of the date hereof upon the terms and
conditions set forth herein.
Preliminary Statement
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In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree that (i) all of the covenants, conditions and
stipulations contained in the Original Participation Agreement are hereby
ratified and confirmed in all respects as of the date hereof and (ii) the terms,
covenants and provisions of the Original Participation Agreement are hereby
modified, amended, reaffirmed and restated in their entirety and the terms,
covenants and conditions set forth herein supersede, amend, modify and restate
all provisions of the Original Participation Agreement in its entirety as
follows:
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SECTION 1. THE LOANS.
The Lenders have agreed to make loans to the Lessor in an aggregate
principal amount of up to $97,000,000 in order for the Lessor to acquire the
Properties, to develop and construct the Improvements (if such Property is not a
Completed Property) in accordance with the Construction Contract and the Agency
Agreement, and to pay other Project Costs, and in consideration of the receipt
of the proceeds of such Loans, the Lessor will issue the Tranche A Notes and the
Tranche B Notes.
The Loans shall be made and the Notes shall be issued pursuant to the
Credit Agreement. Pursuant to this Agreement and the Credit Agreement, the
Loans will be made to the Lessor from time to time at the request of the Lessee
for the purpose of providing funds to the Lessor to acquire one or more parcels
of Land, and, if such Property is not a Completed Property, to construct the
Improvements in accordance with the Plans and Specifications.
The Loans and the obligations of the Lessor under the Credit Agreement
shall be secured by, inter alia, (i) a first priority assignment of the Lease,
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granted pursuant to the Assignment of Leases and consented to by the Lessee
pursuant to the Consent to Assignment (in each case in the respective forms set
forth in Exhibit B hereto), (ii) a first priority assignment of the Agency
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Agreement, granted pursuant to the Contract Assignment and consented to by the
Construction Agent pursuant to the Consent to Contract Assignment; and (iii) a
first priority mortgage lien on each Property pursuant to a Mortgage in the form
set forth on Exhibit A-1 or Exhibit A-2 hereto, as applicable.
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The obligations of the Lessor under the Credit Agreement and the
obligations of the Lessee under each of the Operative Agreements to which it is
a party shall be guaranteed by each of the Guarantors to the extent provided in
the Guarantee.
SECTION 2. LESSOR CONTRIBUTION.
2.1. Lessor Contribution. Subject to the terms and conditions of
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this Agreement, and in reliance on the representations and warranties of each of
the parties hereto contained herein or made pursuant hereto, on each Funding
Date the Lessor shall make an equity contribution (each, a "Lessor
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Contribution") in an amount equal to 3% of the amount of the Advance requested
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by the Construction Agent in the Requisition for such Funding Date. The
aggregate amount of Lessor Contributions made by the Lessor shall not exceed the
Lessor Commitment. The Lessor shall use the Lessor Contributions to pay a
portion of the Project Costs simultaneously and pro rata with the fundings by
the Lenders.
2.2. Allocated Lessor Yield. With respect to each Construction
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Period Property, on each date which is one Business Day prior to any date on
which the Lessor is entitled to a payment on account of the Lessor Yield, the
Construction Agent shall be deemed to have requested that the Lessor make a
Lessor Contribution in an amount equal to the Lessor Yield due and payable on
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such date with respect to the Construction Period Properties solely for the
purpose of paying such Lessor Yield which is then due and payable.
SECTION 3. SUMMARY OF THE TRANSACTIONS.
3.1. Operative Agreements. (a) On the Initial Closing Date, each of
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the respective parties thereto executed and delivered the Lease, the
Construction Contract, the Agency Agreement, the Contract Assignment, the
Consent to Contract Assignment and such other documents, instruments,
certificates and opinions of counsel as agreed to by the parties hereto.
(b) On the Reorganization Closing Date, each of the respective
parties thereto shall execute and deliver this Agreement, the Notes, the
Guarantee, the Credit Agreement, the Completion Guarantee and such other
documents, instruments, certificates and opinions of counsel as agreed to by the
parties hereto.
3.2. Property Purchase and Lease. (a) On each Property Closing
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Date and subject to the terms and conditions of this Agreement and the Credit
Agreement (i) the Lessor will make a Lessor Contribution in accordance with
Section 2 hereof, (ii) the Lenders will make loans in accordance with Section 5
hereof and the terms and provisions of the Credit Agreement, (iii) the Lessor
will purchase all right, title and interest in and to each Property identified
by the Construction Agent pursuant to the Agency Agreement with respect to such
Property Closing Date, and (iv) the Lessor will simultaneously lease (or
sublease, as the case may be) all of its right, title and interest in the
Property to the Lessee by delivering a Lease Supplement pursuant to the Lease.
(b) On each Property Closing Date, the Lessee shall certify to the
Agent on the Property Closing Certificate, delivered pursuant to Section 6.2(a),
the Maximum Residual Guarantee Amount for each Property being acquired on such
Property Closing Date. The Maximum Residual Guarantee Amount so certified shall
be the Maximum Residual Guarantee Amount for such Properties for the duration of
the Term.
(c) No Property Closing Date shall occur after the fifth anniversary
of the Reorganization Closing Date.
3.3. Construction of Improvements; Lease of Improvements. (a) On
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each Property Closing Date (provided such Property is not a Completed Property),
the Lessor and Lessee will execute and deliver an Agency Agreement Supplement,
dated as of such Property Closing Date, pursuant to which Living Centers
Development Company will agree to act as Construction Agent and to perform the
Lessor's obligations under the Construction Contract in connection with the
completion of the construction of the Improvements on such Property.
(b) On each Property Closing Date or the Construction Commencement
Date, if later, provided that the applicable Property Closing Certificate
indicates that the cost of the Land is greater
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than or equal to 25% of the Property Cost for such Property (a "Twenty-Five
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Percent Property"), the Lessor and the Lessee shall execute and deliver an
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additional Lease Supplement pursuant to which the Lessor will lease (or
sublease, as the case may be) all of its right, title and interest in such
Improvements to the Lessee. Notwithstanding that the Improvements on a Twenty-
Five Percent Property (whether existing on the date of acquisition of the Land
or to be constructed pursuant to the Agency Agreement) may be leased by a
separate Lease Supplement, the term "Property" shall include the Land and the
Improvements.
(c) If the Property Closing Certificate indicates that the cost of
the Land is less than 25% of the Property Cost, no additional Lease Supplement
will be required to be delivered and the Land and the Improvements will be
leased on the Property Closing Date under the Lease Supplement delivered
pursuant to Section 6.2(d) and the term "Property" will be deemed to mean Land
and Improvements.
(d) On each Property Closing Date, the Lessor and Lessee will execute
and deliver a Memorandum of Lease which will be recorded in the real estate
records in the county where such Property is located.
3.4. Aggregate Tranche A Percentage; Tranche A Percentage.
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(a) Notwithstanding any other provision of this Agreement or the
other Operative Agreements, the Lessee agrees that in no event shall the Lessee
specify a Property for the Lessor to acquire and lease pursuant to the execution
and delivery of a Lease Supplement if the Aggregate Tranche A Percentage after
giving effect to the acquisition and lease pursuant to the execution and
delivery of a Lease Supplement of such Property would be less than 85%.
(b) Notwithstanding any other provision of this Agreement or the
other Operative Agreements, the Lessee agrees that in no event shall the Lessee
specify a Property for the Lessor to acquire and lease pursuant to the execution
and delivery of a Lease Supplement if the Tranche A Percentage with respect to
such Property would be less than 85% of Budgeted Total Property Costs with
respect to such Property upon the acquisition of such Property.
SECTION 4. THE CLOSINGS.
4.1. Initial Closing Date; Reorganization Closing Date. All
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documents and instruments required to be delivered on either the Initial Closing
Date or the Reorganization Closing Date have been or shall be delivered at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 425 Lexington Avenue, New York, New York,
or at such other location as may be determined by the Agent and the Lessee.
4.2. Subsequent Funding Dates. The Lessee shall deliver to the
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Lessor and the Agent a Requisition appropriately completed, in connection with
each Funding Date.
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SECTION 5. FUNDING OF ADVANCES.
5.1. General. To the extent funds have been made available to the
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Borrower under the Credit Agreement, such funds, along with the Lessor
Contributions, will be applied by the Construction Agent from time to time in
accordance with the terms and conditions of this Agreement and the other
Operative Agreements in order to: (i) allow the Lessor, at the direction of the
Lessee, to acquire the Land in accordance with the terms of this Agreement and
the other Operative Agreements; (ii) allow the Lessor, on behalf of the Lessee,
to pay Transaction Expenses; (iii) permit the Construction Agent to construct
the Improvements (provided that such Property is not a Completed Property) in
accordance with the Plans and Specifications and the terms of the Construction
Contract, the Agency Agreement, the Lease and the other Operative Agreements;
and (iv) pay all other Project Costs.
5.2. Procedures for Funding. (a) Not less than three Business Days
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prior to each proposed Funding Date, the Construction Agent shall deliver to the
Lessor and the Agent, a requisition (a "Requisition"), appropriately completed,
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in the form of Exhibit C hereto.
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(b) Each Requisition shall: (i) be irrevocable; and (ii) request
funds in an amount of at least $500,000 (or such lesser amount as shall be equal
to the total aggregate of the Available Commitments plus the Available Lessor
Commitment at such time) for the payment of Property Acquisition Costs or other
Project Costs which have previously been incurred and were not the subject of
and funded pursuant to a prior Requisition, in each case as specified in the
Requisition.
(c) So long as no Default or Event of Default has occurred and is
continuing and subject to the satisfaction of the conditions set forth in
Sections 6.1, 6.2 and/or 6.3, as applicable, on each Funding Date (i) the
Lenders shall make Loans to the Lessor in an aggregate amount equal to 97% of
the funds specified in any Requisition, up to an aggregate principal amount
equal to the aggregate Available Commitments; (ii) the Lessor shall make a
Lessor Contribution in an amount equal to 3% of the funds specified in any
Requisition, up to an amount equal to the Available Lessor Commitment; and (iii)
the total amount of such Loans and Lessor Contribution made on such date shall
be paid to the Disbursement Account, provided, however, amounts requested to be
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disbursed into the Disbursement Account may be used to pay Project Costs
reasonably anticipated by the Construction Agent to be incurred within 60 days
of the applicable Funding Date. There shall in no event be an amount in excess
of $2,600,000 in the Disbursement Account and the Agent shall at all times
retain the right to demand that funds remaining in the Disbursement Account,
after outstanding checks have cleared, be immediately returned to the Agent for
distribution to the Lenders and the Lessor. So long as no Default or Event of
Default has occurred and is continuing and subject to the satisfaction of the
conditions set forth in Sections 6.1, 6.2 and/or 6.3, as applicable, on each
date on which the Construction Agent is required to pay Project Costs the
Construction Agent shall cause funds to be disbursed from the Disbursement
Account to pay such Project Costs. The Construction Agent may cause funds on
account in the Disbursement Account to be invested in Permitted Investments.
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5.3. Substitute Properties. If, prior to the expiration of the
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Commitment Period, the Lessee purchases one or more Properties (each, a
"Purchased Property") pursuant to the provisions of the Lease and a portion of
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the Loans are prepaid in accordance with Section 2.5 of the Credit Agreement,
the Lessee may cause the Lessor to purchase one or more substitute Properties
(each, a "Substitute Property", collectively, the "Substitute Properties"),
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provided that (a) the aggregate Property Cost of all Substitute Properties may
not exceed $20,000,000, (b) Lessee shall cause the Lessor to purchase the
applicable Substitute Property within one year from the date that the Lessee
purchased the applicable Purchased Property and (c) all of the conditions to the
making of Advances and Lessor Contributions contained in this Agreement, the
Credit Agreement and any other Operative Agreement shall have been satisfied on
or prior to the applicable Funding Date for the purchase of the Substitute
Property.
SECTION 6. CONDITIONS OF THE CLOSINGS AND ADVANCES
6.1. Conditions to Loans and Lessor Contributions. The agreement of
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each Lender to make and continue its Loans and the Lessor to make and continue
its Lessor Contributions, is subject to the satisfaction, immediately prior to
or concurrently with the making and continuation of such Loans and Lessor
Contribution, of the following conditions precedent:
(a) Operative Agreements. Each of the Operative Agreements shall have
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been duly authorized, executed, acknowledged and delivered by the parties
thereto and shall be in full force and effect, and no default shall exist
thereunder (both before and after giving effect to the transactions
contemplated by the Operative Agreements), and the Agent, the Lenders and
the Lessor shall have received a fully executed copy of each of the
Operative Agreements (other than the Notes of which the Agent shall have
received the originals thereof);
(b) Taxes. All taxes, fees and other charges in connection with the
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execution, delivery, and, where applicable, recording, filing and
registration of the Operative Agreements shall have been paid or provisions
for such payment shall have been made to the satisfaction of the Agent and
the Lessor;
(c) Governmental Approvals. All necessary (or, in the reasonable
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opinion of the Agent, the Lessor and their respective counsel, advisable)
Governmental Actions, in each case required by any law or regulation
enacted, imposed or adopted on or after the date hereof or by any change in
fact or circumstances since the date hereof, shall have been obtained or
made and be in full force and effect;
(d) Litigation. No action or proceeding shall have been instituted,
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nor to the knowledge of the Lessee shall any action or proceeding be
threatened before any Governmental Authority, nor shall any order, judgment
or decree have been issued or proposed to be issued by any Governmental
Authority (i) to set aside, restrain, enjoin or prevent the full
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performance of this Agreement, any other Operative Agreement or any of the
transactions contemplated hereby or thereby or (ii) which is reasonably
likely to have a Material Adverse Effect;
(e) Legal Requirements. In the reasonable opinion of the Agent, the
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Lessor and their respective counsel, the transactions contemplated by the
Operative Agreements do not and will not violate in any respect any Legal
Requirements and do not and will not subject the Agent, any Lender or the
Lessor to any adverse regulatory prohibitions or constraints;
(f) Corporate Proceedings of the Lessee, the Construction Agent and
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the Guarantors. On the Reorganization Closing Date, the Agent and the
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Lessor shall have received a copy of the resolutions or minutes, in form
and substance satisfactory to the Agent and the Lessor, of the Board of
Directors of each of the Lessee, the Construction Agent and the Guarantors
authorizing the execution, delivery and performance of this Agreement, the
Guarantee and the other Operative Agreements to which they are parties,
certified by the Secretary or an Assistant Secretary of the Lessee, the
Construction Agent and each Guarantor as of the Reorganization Closing
Date, which certificate shall be in form and substance satisfactory to the
Agent and the Lessor and shall state that the resolutions or minutes
thereby certified have not been amended, modified, revoked or rescinded;
(g) Lessee, Construction Agent and Guarantor Incumbency Certificate.
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On the Reorganization Closing Date, the Agent and the Lessor shall have
received a certificate of the Lessee, the Construction Agent and each
Guarantor, dated the Reorganization Closing Date, as to the incumbency and
signature of the officers of the Lessee, the Construction Agent and such
Guarantor executing any Operative Agreement satisfactory in form and
substance to the Agent and the Lessor, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the Lessee,
the Construction Agent and such Guarantor;
(h) Lessor Incumbency Certificate. On the Reorganization Closing
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Date, the Agent and the Lessee shall have received a certificate of the
Lessor, dated the Initial Closing Date, as to the incumbency and signature
of the officers of the Lessor executing any Operative Agreements
satisfactory in form and substance to the Agent and the Lessee, executed by
a Vice President and the Secretary or an Assistant Secretary of the Lessor;
(i) Corporate Proceedings of the Lessor. On the Reorganization
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Closing Date, the Agent and the Lessee shall have received a copy of the
resolutions, in form and substance satisfactory to the Agent and the
Lessee, of the Board of Directors of the Lessor authorizing the execution,
delivery and performance of the Operative Agreements to which it is a
party, certified by the Secretary or an Assistant Secretary of the Lessor
as of the Reorganization Closing Date, which certificate shall be in form
and substance satisfactory to the Agent and the Lessee and shall state that
the resolutions thereby certified have not been amended, modified, revoked
or rescinded;
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(j) Corporate Documents. On the Reorganization Closing Date the Agent
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and the Lessor shall have received true and complete copies of the articles
of incorporation and by-laws of the Lessee and each Guarantor, certified as
of the Reorganization Closing Date as complete and correct copies thereof
by the Secretary or an Assistant Secretary of the Lessee and such
Guarantor;
(k) Consents, Licenses and Approvals. The Agent and the Lessor shall
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have received a certificate of the Vice President of the Lessee stating
that all consents, authorizations and filings required to consummate the
transaction contemplated by this Agreement have been obtained and are in
full force and effect, and each such consent, authorization and filing
shall be in form and substance reasonably satisfactory to the Agent and the
Lessor;
(l) Fees. The Agent and the Arranger shall have received the fees to
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be paid on the Reorganization Closing Date pursuant to the Fee Letter and
the Lessor shall have received the upfront fees agreed to between the
Lessor and Living Centers to be paid on the Reorganization Closing Date,
which fees shall not be paid using the proceeds of the Loans or Lessor
Contributions;
(m) Legal Opinions. On the Reorganization Closing Date (i) the Agent,
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the Lenders and the Lessor shall have received the executed legal opinion
of Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Lessee and the
Guarantors; and
(ii) the Agent and the Lessee shall have received the executed legal
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Lessor;
(n) Insurance. The Agent and the Lessor shall have received evidence
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in form and substance satisfactory to them that all of the requirements of
Section 14 of the Lease shall have been satisfied;
(o) Representations and Warranties. The representations and
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warranties of the Lessor, the Lessee and each of the Guarantors contained
herein and in each of the other Operative Agreements shall be true and
correct in all material respects on and as of such Funding Date as if made
on and as of such Funding Date;
(p) Performance of Operative Agreements. The parties hereto (other
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than the Lenders) shall have performed their respective agreements
contained herein and in the other Operative Agreements on or prior to each
such Funding Date;
(q) Default. There shall not have occurred and be continuing any
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Default or Event of Default under any of the Operative Agreements and no
Default or Event of Default under any of the Operative Agreements will have
occurred after giving effect to the Advance requested by such Requisition;
and
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(r) Material Adverse Change. As of such Funding Date, there shall not
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have occurred any Material Adverse Change.
6.2. Conditions to the Lessor's and the Lenders' Obligations to Make
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Advances to pay Property Acquisition Costs.
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The obligations of the Lessor to make each Lessor Contribution, and of
the Lenders to make Loans to the Lessor, on a Property Closing Date for the
purpose of providing funds to the Lessor necessary to acquire a Property are
subject to the satisfaction or waiver of the following conditions precedent:
(a) Requisition; Property Closing Certificate. The Agent shall have
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received (i) a fully executed counterpart of the Requisition dated as of
such Property Closing Date (but delivered at least two Business Days prior
to the Property Closing Date), appropriately completed; and (ii) a Property
Closing Certificate dated as of such Property Closing Date, appropriately
completed;
(b) Deed; Ground Lease. There shall have been delivered to the
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Lessor (i) a bargain and sale deed with a covenant against grantor's acts
(or local equivalent) (a "Deed"), in form and substance appropriate for
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recording with the applicable Governmental Authorities, with respect to
each Property (and all Improvements located thereon) being purchased on
such Property Closing Date, conveying fee simple title to such Property to
the Lessor, subject only to the Permitted Exceptions, or (ii) a Ground
Lease with respect to each Property being ground leased on such Property
Closing Date (such Ground Lease, or a Memorandum of Ground Lease, as
appropriate under applicable Legal Requirements, to be in form and
substance appropriate for recording with the applicable Governmental
Authorities), and the Agent and the Lessor shall have received a fully
executed counterpart of such Ground Lease and, if applicable, such
Memorandum of Ground Lease;
(c) Title; Location. Title to all of the Properties shall conform to
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the representations and warranties set forth in Section 7.4(g) and each
Property shall be located in the United States;
(d) Lease Supplement and Memorandum of Lease. The Lessee shall have
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delivered a Lease Supplement and a Memorandum of Lease executed by the
Lessee and the Lessor with respect to each Property being acquired on such
Property Closing Date to the Agent;
(e) Mortgage. The Lessee shall have recorded in the real estate
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records of the county where each Property is located an original of the
Mortgage executed by the Lessor and Lessee with respect to each Property
being acquired on such Property Closing Date;
(f) Assignment of Lease. The Lessee shall have recorded in the real
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estate
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records of the county where each Property is located an original of an
Assignment of Lease executed by the Lessor with respect to each Property
being acquired on such Property Closing Date;
(g) Consent to Assignment of Lease. The Lessee shall have delivered
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to the Agent a consent to the Assignment of Lease executed by the Lessee
with respect to each Property being acquired on such Property Closing Date;
(h) Environmental Audit. (i) The Agent, the Lenders and the Lessor
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shall have received not less than 60 days prior to such Property Closing
Date an Environmental Audit with respect to each Property being acquired on
such Property Closing Date, prepared by an environmental engineer (the
"Environmental Engineer") reasonably satisfactory to the Agent and the
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Lessor and the results of the Environmental Audit shall be in form and
substance reasonably satisfactory to the Agent, the Lenders and the Lessor;
and
(ii) the Agent, the Lenders and the Lessor shall have received
letters from the Environmental Engineer stating, among other things, that
the Agent, the Lenders and the Lessor may rely on the Environmental Audit
with respect to each Property being acquired on such Property Closing Date
which were prepared by such firm as if they were originally addressed to
them in all respects;
(i) Appraisal. The Agent, the Lenders and the Lessor shall have
---------
received an Appraisal of each Property being acquired on such Property
Closing Date and such Appraisal shall indicate a value (assuming Completion
of the Improvements on such Property) of at least six times the amount of
the Tranche B Loans which will be allocable to such Property (based on the
Budgeted Total Property Costs for such Property as of such Property Closing
Date or the Property Cost, as applicable) and otherwise be in form and
substance reasonably acceptable to each Lender and the Lessor;
(j) Survey. The Agent, the Lenders and the Lessor shall have
------
received, and the Title Company shall have received, a survey of each
Property being acquired on such Property Closing Date, certified to the
Agent, the Lenders, the Lessor and the Title Company in a manner
satisfactory to them, dated as of a date within ninety days of the Property
Closing Date, by an independent professionally licensed land surveyor
satisfactory to the Agent and the Lessor, which survey shall be made in
accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there shall be
surveyed and shown on such survey the following: (i) the locations on such
Property of all the buildings, structures and other improvements, if any,
and the established building setback lines; (ii) the lines of streets
abutting such Property; (iii) all access and other easements appurtenant to
such Property; (iv) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting such Property, whether recorded, apparent from a physical
11
inspection of the Property or otherwise known to the surveyor; (v) any
encroachments on any adjoining property by the building, structures and
improvements on such Property; and (vi) if such Property is described as
being on a filed map, a legend relating the survey to said map;
(k) Mortgagee's Title Insurance Policy. With respect to each Property
----------------------------------
being acquired on such Property Closing Date, the Agent shall have received
with respect to the Mortgage a mortgagee's title policy or marked up
unconditional binder for such insurance dated the Property Closing Date;
such policy shall (i) be in an amount equal to the aggregate amount shown
on the Budget for such Property (with a pending disbursements clause, if
applicable) or if such Property is a Completed Property, in the amount of
the Acquisition Cost of such Property; (ii) be issued at ordinary rates;
(iii) insure that the Mortgage insured thereby creates a valid first Lien
on such Property, free and clear of all defects and encumbrances, except
Permitted Exceptions; (iv) name the Agent for the benefit of the Lenders as
the insured thereunder; (v) be in the form of ALTA Loan Policy - 1970
(Amended 10/17/70), if available or another form of lenders' policy
customarily used in commercial transactions in the jurisdiction where such
Property is located; (vi) contain comprehensive, zoning, access,
subdivision, tax lot, revolving credit and such other endorsements and
affirmative coverage as the Agent may reasonably request (if available and
customarily issued in the jurisdiction where the Property is located); and
(vii) be issued by the Title Company; the Agent shall have received
evidence reasonably satisfactory to it that all premiums in respect of such
policy, and all charges for any mortgage recording tax with respect to the
Mortgage have been paid or provision made therefor;
(l) Owner's Title Insurance Policy. The Lessor shall have received an
------------------------------
owner's title policy, or marked up unconditional binder for such insurance,
dated the Property Closing Date for each Property being acquired on such
Property Closing Date; and the Lessor shall have received evidence
reasonably satisfactory to it that all premiums in respect of such policy
have been paid or provision made therefor;
(m) Agency Agreement Supplement. The Lessee shall have delivered an
---------------------------
Agency Agreement Supplement executed by the Lessee and the Lessor with
respect to each Property (other than any Completed Properties) being
acquired on such Property Closing Date to the Agent;
(n) Recorded Documents. The Agent and the Lessor shall have received
------------------
a legible copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy referred to above;
(o) Legal Opinions. With respect to (i) any Property or (ii) any
--------------
group of Properties which are acquired on the same Property Closing Date or
from the same seller and are located in the same state, and which Property
or group of Properties have an estimated aggregate Property Cost in excess
of $5 million, the Agent, the Lenders and the Lessor shall have received an
executed legal opinion of local counsel to the Lessee and the Guarantors
for
12
each state in which such Property or Properties are located,
substantially in the form of Exhibit D-1 hereto; and
-----------
(p) Actions to Perfect Liens. The Agent and the Lessor shall have
------------------------
received evidence in form and substance satisfactory to it that all
filings, recordings, registrations and other actions, including the filing
of duly executed Lender Financing Statements and Lessor Financing
Statements, the Mortgage, and the Memorandum of Lease, necessary or, in the
reasonable opinion of the Agent or the Lessor, desirable to perfect the
Liens created by the Security Documents shall have been completed.
(q) Maximum Property Cost for Construction Period Properties. The
--------------------------------------------------------
aggregate Budgeted Total Property Cost of Construction Period Properties
will not exceed $25,000,000, after giving effect to the Advance being
requested.
6.3. Conditions to the Lessor's and the Lenders' Obligations to Make
---------------------------------------------------------------
Advances to pay Project Costs for Construction on any Property. The obligations
--------------------------------------------------------------
of the Lessor to make each Lessor Contribution, and of the Lenders to make Loans
to the Lessor on a Funding Date for the purpose of providing funds to the Lessor
necessary to pay for the construction of the Improvements or the payment of
Transaction Costs or other Project Costs (other than Property Acquisition Costs)
are subject to the satisfaction or waiver of the following conditions precedent:
(a) Performance of Obligations. The parties hereto shall have
--------------------------
performed their respective agreements contained herein and in the other
Operative Agreements on or prior to such Funding Date;
(b) Requisition. The Agent shall have received a fully executed
-----------
counterpart of the Requisition, appropriately completed;
(c) Title. Title to all of the Properties shall conform to the
-----
representations set forth in Section 7.4(g);
(d) Budget in Balance. Based upon the Construction Budgets, the
-----------------
Available Commitments and the Available Lessor Commitment will be
sufficient to complete the Improvements for which the Requisition relates
on such Properties.
SECTION 7. REPRESENTATIONS AND WARRANTIES
------------------------------
7.1. Representations and Warranties of Lessor on the Reorganization
--------------------------------------------------------------
Closing Date. Lessor represents and warrants to each of the other parties
------------
hereto as of the Reorganization Closing Date as follows:
(a) Due Organization, etc. Lessor is a duly organized and validly
----------------------
existing
13
corporation in good standing under the laws of the State of New York and
has the power and authority to carry on its business as now conducted and
to enter into and perform its obligations under this Agreement, each
Operative Agreement to which it is or will be a party and each other
agreement, instrument and document executed and delivered or to be executed
and delivered by it in connection with or as contemplated by each such
Operative Agreement.
(b) Authorization; No Conflict. The execution, delivery and
--------------------------
performance of each Operative Agreement to which it is or will be a party
has been duly authorized by all necessary action on its part and neither
the execution and delivery thereof by the Lessor, nor the consummation of
the transactions contemplated thereby by the Lessor, nor compliance by it
with any of the terms and provisions thereof (i) requires or will require
any approval of (which approval has not been obtained) any party or
approval or consent of any trustee or holders of any indebtedness or
obligations of the Lessor (ii) contravenes or will contravene any Legal
Requirement applicable to or binding on it as of the date hereof, (iii)
does or will contravene or result in any breach of or constitute any
default under, or result in the creation of any Lessor Lien upon the
Property or any of the Improvements, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it or its properties
may be bound or (iv) does or will require any Governmental Action by any
Governmental Authority.
(c) Enforceability, etc. Each Operative Agreement to which it is or
--------------------
will be a party has been duly executed and delivered by it and constitutes,
or upon execution and delivery will constitute, a legal, valid and binding
obligation enforceable against it in accordance with the terms thereof,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
(d) Litigation. No litigation, investigation or proceeding of or
----------
before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Lessor, threatened by or against the Lessor (a) with
respect to any of the Operative Agreements or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected
to have a material adverse effect on the assets, liabilities, operations,
business or financial condition of the Lessor.
(e) Assignment. Lessor has not assigned or transferred any of its
----------
right, title or interest in or under the Lease, any other Operative
Agreement or any of the Properties, except in accordance with the Operative
Agreements.
(f) No Default. The Lessor is not in default under or with respect to
----------
any of its Contractual Obligations in any respect which could have a
material adverse effect on the assets, liabilities, operations, business or
financial condition of the Lessor. No Default or Event of Default under the
Operative Agreements attributable to it has occurred and is continuing.
14
(g) Use of Proceeds. The proceeds of the Loans and the Lessor
---------------
Contribution shall be applied by the Lessor solely in accordance with the
provisions of the Operative Agreements.
(h) Chief Place of Business. The Lessor's chief place of business,
-----------------------
chief executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each other
Operative Agreement are kept are located at Two World Trade Center, New
York, New York.
(i) Federal Reserve Regulations. The Lessor is not engaged
---------------------------
principally in, and does not have as one of its most important activities,
the business of extending credit for the purpose of purchasing or carrying
any margin stock (within the meaning of Regulation U of the Board), and no
part of the proceeds of the Loans will be used by it to purchase or carry
any margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulations G, T, U or
X of the Board.
(j) Investment Company Act. The Lessor is not an "investment
----------------------
company" or a company controlled by an "investment company" within the
meaning of the Investment Company Act.
(k) Securities Act. Neither the Lessor nor any Person authorized by
--------------
the Lessor to act on its behalf has offered or sold any interest in the
Property or the Notes, or in any similar security or interest relating to
the Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as the
offering of the aforementioned securities to, or solicited any offer to
acquire any of the same from, any Person other than, in the case of the
Notes, the Agent, and neither the Lessor nor any Person authorized by the
Lessor to act on its behalf will take any action which would subject the
issuance or sale of any interest in the Properties or the Notes to the
provisions of Section 5 of the Securities Act or require the qualification
of any Operative Agreement under the Trust Indenture Act of 1939, as
amended.
(l) ERISA. The Lessor is making the Lessor Contribution contemplated
-----
to be made by it hereunder in the ordinary course of its business, and no
part of such amount constitutes the assets of any Employee Benefit Plan.
(m) Lessor Liens. The Property is free and clear of all Lessor Liens.
------------
7.2. Representations and Warranties of the Lessee on the
---------------------------------------------------
Reorganization Closing Date. The Lessee represents and warrants to each of the
---------------------------
other parties hereto as of the Reorganization Closing Date as follows:
15
(a) Corporate Existence; Subsidiaries. The Lessee is a corporation
---------------------------------
duly organized, validly existing, and in good standing under the laws of
Delaware and in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its
business requires such qualification and where a failure to be qualified
would reasonably be expected to cause a Material Adverse Effect. Each
Subsidiary of the Lessee is a corporation duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation
and in good standing and qualified to do business in each jurisdiction
where its ownership or lease of property or conduct of its business
requires such qualification and where a failure to be qualified would
reasonably be expected to cause a Material Adverse Effect.
(b) Corporate Power. The execution, delivery, and performance by the
---------------
Lessee of this Agreement and the other Operative Agreements to which the
Lessee is a party and the consummation of the transactions contemplated
hereby and thereby (a) are within the Lessee's corporate powers, (b) have
been duly authorized by all necessary corporate action, (c) do not
contravene (i) the Lessee's certificate or articles, as the case may be, of
incorporation or by-laws or (ii) any law or any contractual restriction
binding on or affecting the Lessee, the contravention of which would
reasonably be expected to cause a Material Adverse Effect and (d) will not
result in or require the creation or imposition of any Lien prohibited by
this Agreement.
(c) Authorization and Approvals. No authorization or approval or
---------------------------
other action by, and no notice to or filing with, any Governmental
Authority is required for the due execution, delivery and performance by
the Lessee of this Agreement or the other Operative Agreements to which the
Lessee is a party.
(d) Enforceable Obligations. This Agreement and the other Operative
-----------------------
Agreements to which the Lessee is a party have been duly executed and
delivered by the Lessee. Each Operative Agreement to which the Lessee is a
party is the legal, valid, and binding obligation of the Lessee enforceable
against the Lessee in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors' rights
generally and by general principles of equity (whether considered in
proceeding at law or in equity).
(e) Litigation. There is no pending or, to the best knowledge of the
----------
Lessee, threatened action or proceeding affecting the Lessee or any of its
Subsidiaries before any court, Governmental Agency or arbitrator, which
would reasonably be expected to have a Material Adverse Effect or which
purports to affect the legality, validity, binding effect or enforceability
of this Agreement or any other Operative Agreement or the consummation of
any of the transactions contemplated hereby or thereby.
(f) Investment Company Act. Neither the Lessee nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the
16
meaning of the Investment Company Act of 1940, as amended.
(g) Public Utility Holding Company Act. Neither the Lessee nor any of
----------------------------------
its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(h) No Defaults. The Lessee is not in default under or with respect
-----------
to any contract, agreement, lease or other instrument to which the Lessee
is a party and which would reasonably be expected to have a Material
Adverse Effect. To the knowledge of a Responsible Officer of the Lessee,
the Lessee has not received any notice of default under any contract,
agreement, lease or other instrument to which the Lessee is a party which
is continuing and which, if not cured, would reasonably be expected to have
a Material Adverse Effect.
(ii) No Default has occurred and is continuing.
(i) Environmental Condition. (i) The Lessee (A) has obtained all
-----------------------
Environmental Permits necessary for the ownership and operation of its
material properties and the conduct of its business of which the failure to
obtain would reasonably be expected to have a Material Adverse Effect; (B)
has been and is in compliance with all terms and conditions of such
Environmental Permits and with all other material requirements of
applicable Environmental Laws of which the failure to comply would
reasonably be expected to have a Material Adverse Effect; (C) has not
received notice of any violation or alleged violation of any Environmental
Law or Environmental Permit the violation of which would reasonably be
expected to have a Material Adverse Effect; and (D) is not subject to any
actual or contingent Environmental Claim, which Environmental Claim would
reasonably be expected to have a Material Adverse Effect.
(ii) To the knowledge of any Responsible Officer of the Lessee, none
of the present or previously owned or operated property of the Lessee,
wherever located, (A) has been placed on or proposed to be placed on the
National Priorities List, the Comprehensive Environmental Response
Compensation Liability Information System list, or their state or local
analogs, or have been otherwise designated, listed, or identified as a
potential site for removal, remediation, cleanup, closure, restoration,
reclamation, or other response activity under any Environmental Laws; (B)
is subject to a Lien, arising under or in connection with any Environmental
Laws, that attaches to any revenues or to any property owned or operated by
the Lessee, wherever located, which Lien would reasonably be expected to
have a Material Adverse Effect; or (C) has been the site of any Release of
Hazardous Substances or Hazardous Wastes from present or past operations
which has caused at the site or at any third-party site any condition that
has resulted in or would reasonably be expected to result in the need for
Response that would have a Material Adverse Effect.
17
(iii) Without limiting the foregoing, the present and, to the best
knowledge of any Responsible Officer of the Lessee, future liability, if
any, of the Lessee, which would reasonably be expected to arise in
connection with requirements under Environmental Laws will not have a
Material Adverse Effect.
(j) Permits, Licenses, etc. The Lessee possesses all permits,
----------------------
licenses, patents, patent rights or licenses, trademarks, trademark rights,
trade names rights and copyrights which the failure to possess could
reasonably be expected to have a Material Adverse Effect. The Lessee
manages and operates its business in accordance with all applicable Legal
Requirements which the failure to so manage or operate would reasonably be
expected to have a Material Adverse Effect.
(k) Health Care Regulatory Matters. Except as disclosed on Schedule
------------------------------
1 hereto:
(i) Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (A) the Lessee now has
(after giving effect to the Recapitalization), and has no reason to
believe it will not be able to maintain in effect, all Health Care
Permits necessary for the lawful conduct of its business or operations
wherever now conducted and as planned to be conducted (other than
those Health Care Permits the lack of which could not reasonably be
expected to have a Material Adverse Effect), including, without
limitation, the ownership and operation of its Health Care Facilities
pursuant to all Requirements of Law, (B) all such Health Care Permits
are in full force and effect and have not been amended or otherwise
modified, rescinded, revoked or assigned, (C) the Lessee is
substantially complying with the requirements of each such Health Care
Permit, and no event has occurred, and no condition exists, which,
with the giving of notice, the passage of time, or both, would
constitute a violation thereof, (D) the Lessee has not received any
written notice of any violation of any Requirement of Law, (E) to the
knowledge of Lessee, no condition exists or event has occurred which
in itself or with the giving of notice or the lapse of time, or both,
would result in the suspension, revocation, impairment, forfeiture or
non-renewal of any such Health Care Permit, (F) there is no claim
filed with any Governmental Authority of which Lessee has been
notified challenging the validity of any such Health Care Permit and
(G) the continuation, validity and effectiveness of all such Health
Care Permits will not be adversely affected by the Recapitalization or
the execution and performance of any of the Loan Documents or
Operative Agreements.
(ii) All Health Care Facilities owned, leased, managed or
operated by Lessee are entitled to participate in, and receive payment
under, the appropriate Medicare, Medicaid and related reimbursement
programs, and any similar state or local government-sponsored program,
to the extent that Lessee has decided to participate in any such
program, and to receive reimbursement from private and commercial
payers and health maintenance organizations to the extent applicable
thereto. There are no proceedings pending or, to the knowledge of
Lessee, any proceedings threatened or
18
investigations pending or threatened, by any Governmental Authority
with respect to the Lessee's participation in the Medicare, Medicaid
or related reimbursement programs and which could reasonably be
expected to have a Material Adverse Effect.
(l) Lease. Upon the execution and delivery of each Lease Supplement
-----
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement, and will have a valid and
subsisting leasehold interest in the Property and (ii) no offset will exist
with respect to any Rent or other sums payable under the Lease.
7.3. Representations and Warranties of the Lessee on Property
--------------------------------------------------------
Closing Dates. The Lessee hereby represents and warrants as of each Property
-------------
Closing Date as follows:
(a) Representations and Warranties; No Default. The
------------------------------------------
representations and warranties of the Construction Agent, the Lessee and the
Guarantors set forth in the Operative Agreements are true and correct and to the
best of Lessee's knowledge, the representations and warranties of the Lessor are
true and correct on and as of such date as if made on and as of such date. To
the best of Lessee's knowledge, the Lessor is in compliance with its respective
obligations under the Operative Agreements. The Construction Agent, the Lessee
and the Guarantors are in compliance with their respective obligations under the
Operative Agreements and there exists no Default or Event of Default under any
of the Operative Agreements. No Default or Event of Default will occur under any
of the Operative Agreements as a result of, or after giving effect to, the
Advance requested by the Requisition on such Property Closing Date.
(b) Authorization by the Lessee. The execution and delivery of each
---------------------------
Lease Supplement, Memorandum of Lease, Consent to Assignment and other Operative
Agreement delivered by the Lessee on such Property Closing Date and the
performance of the obligations of the Lessee under each such Lease Supplement,
Memorandum of Lease, Consent to Assignment and other Operative Agreements have
been duly authorized by all requisite corporate action of the Lessee.
(c) Execution and Delivery by the Lessee. Each Lease Supplement,
------------------------------------
Memorandum of Lease, Consent to Assignment and other Operative Agreement
delivered on such Property Closing Date by the Lessee have been duly executed
and delivered by the Lessee.
(d) Valid and Binding Obligations. Each Lease Supplement,
-----------------------------
Memorandum of Lease, Consent to Assignment and other Operative Agreement
delivered by the Lessee on such Property Closing Date is a legal, valid and
binding obligation of the Lessee, enforceable against the Lessee in accordance
with its respective terms.
(e) Recording of Documents. Each of the Deed, the Lease Supplement,
----------------------
the Memorandum of Lease, the Assignment of Lease, the Consent to the Assignment
of Lease and the Mortgage delivered on such Property Closing Date will be filed
for recordation with the appropriate Governmental Authorities in the order set
forth in this paragraph, and the UCC Financing Statements with respect to the
Property being acquired will be filed with the appropriate Governmental
19
Authorities.
(f) Priority of Liens. (i) Upon proper recordation, each Mortgage,
-----------------
each Assignment of Lease and each Memorandum of Lease delivered on such Property
Closing Date, will constitute a valid and perfected first lien on each
applicable Property and the Improvements located thereon in an amount not less
than the Property Cost with respect to such Property, subject only to the
Permitted Exceptions, and (ii) upon proper filing, the Lessor Financing
Statements will protect the Lessor's interest under the Lease to the extent the
Lease is a security agreement governed by Article 9 of the Uniform Commercial
Code.
(g) Flood Zone. No portion of any Property being acquired by the
----------
Lessor on such Property Closing Date is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or other
applicable agency, or if any such Property is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or other
applicable agency, then flood insurance has been obtained for such Property in
accordance with Section 14.2(b) of the Lease and in accordance with the National
Flood Insurance Act of 1968, as amended.
(h) Insurance Coverage. The Lessee maintains insurance coverage for
------------------
each Property being acquired by the Lessor on such Property Closing Date which
meets the requirements of Section 14.1 of the Lease and all of such coverage is
in full force and effect.
(i) Legal Requirements. Each Property being acquired by the Lessor
------------------
on such Property Closing Date complies with all Legal Requirements (including
all zoning and land use laws and Environmental Laws) in all material respects.
(j) Consents, etc. All material consents, licenses and building
-------------
permits required by all Legal Requirements for construction, completion,
occupancy and operation, as to be operated by Lessee or Lessee's sublessees, of
each Property being acquired on such Property Closing Date, to the extent such
consents, licenses and building permits are required to have been obtained on or
before such Property Closing Date, have been obtained and are in full force and
effect.
(k) Utilities. All utility services and facilities necessary for the
---------
use of the Improvements existing, or to be constructed, on the Land (including
gas, electrical, water and sewage services and facilities) will be available to
the Property on or prior to the Outside Completion Date.
(l) Environmental Matters. To the best knowledge of the Lessee or
---------------------
Construction Agent:
(i) the Property being acquired on the Property Closing Date
does not contain any Hazardous Substances in amounts or concentrations
which (a) constitute a violation of, or (b) would give rise to liability
under, any Environmental Law.
(ii) the Property and all operations at the Property are in
compliance in all
20
material respects with all applicable Environmental Laws, and there is no
contamination at, on or under the Property or violation of any
Environmental Law with respect to the Property or the business operated by
Lessee or any of its Subsidiaries at the Property (the "Business") that
--------
would constitute a violation of any applicable Environmental Law.
(iii) neither the Lessee nor any of its Subsidiaries has
received any written notice of violation, alleged violation, non-
compliance, liability or potential liability regarding compliance with
Environmental Laws with regard to the Property, nor does the Lessee have
knowledge that any such notice will be received or is being threatened.
(iv) Hazardous Substances have not been transported or disposed
of from the Property in violation of any Environmental Law, nor have any
Hazardous Substances been generated, treated, stored or disposed of at, on
or under the Property in violation of any applicable Environmental Law.
(v) no judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of the Lessee, threatened,
under any Environmental Law to which the Lessee or any Subsidiary is named
as a party with respect to the Property, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Property or the Business.
(vi) there has been no Release of Hazardous Substances at or
from the Property, or arising from or related to the operations of the
Lessee or any Subsidiary in connection with the Property, in violation of
or in amounts or in a manner that could reasonably be expected to give rise
to any material liability under any Environmental Laws.
(m) Title to the Properties. Upon the acquisition of each Property
-----------------------
on such Property Closing Date, the Lessor will have marketable title to the
Property in fee simple, subject only to the Permitted Exceptions. Upon the
acquisition of each Property on such Property Closing Date, the Lessor will have
the right to grant the Mortgage on the Property. The Lessor will at all times
have marketable title to the Building and any other Improvements, subject only
to Permitted Exceptions.
(n) Conditions Precedent in Operative Agreements. All conditions
--------------------------------------------
precedent contained in this Agreement and in the other Operative Agreements to
the acquisition of the Property being acquired on such Property Closing Date by
the Lessor have been satisfied in full.
7.4. Representations and Warranties of the Lessee Upon each
------------------------------------------------------
Funding Date. The Lessee hereby represents and warrants as of each Funding Date
------------
as follows:
(a) Representations and Warranties; No Default. The representations
------------------------------------------
and warranties of the Construction Agent, the Lessee and the Guarantors set
forth in the Operative Agreements are true and correct and to the best of
Lessee's knowledge, the representations and
21
warranties of the Lessor are true and correct, on and as of such date as if made
on and as of such date. To the best of Lessee's knowledge, the Lessor is in
compliance with its respective obligations under the Operative Agreements and
there exists no Default or Event of Default under any of the Operative
Agreements. The Construction Agent, the Lessee and the Guarantors are in
compliance with their respective obligations under the Operative Agreements and
there exists no Default or Event of Default under any of the Operative
Agreements. No Default or Event of Default will occur under any of the Operative
Agreements as a result of, or after giving effect to, the Advance requested by
the Requisition on such date.
(b) Priority of Liens. Each Mortgage, Supplement to the Assignment
-----------------
of Lease and Memorandum of Lease constitutes a valid and perfected first lien on
each applicable Property and the Improvements located thereon in an amount not
less than the Property Cost with respect to such Property, subject only to
Permitted Exceptions.
(c) Execution and Delivery by the Construction Agent. The execution
------------------------------------------------
and delivery of each Operative Agreement delivered by the Construction Agent on
such date and the performance of the Construction Agent's obligations under each
Agency Agreement Supplement and other Operative Agreement have been duly
authorized by all requisite corporate action of the Construction Agent.
(d) Agency Agreement Supplements. Each Operative Agreement delivered
----------------------------
by the Construction Agent on such date has been duly executed and delivered by
the Construction Agent.
(e) Valid and Binding Obligations of the Lessee and the Construction
----------------------------------------------------------------
Agent. Each Operative Agreement delivered by the Lessee and the Construction
-----
Agent on such date is a legal, valid and binding obligation of the Lessee and
the Construction Agent, enforceable against the Lessee and the Construction
Agent in accordance with its terms.
(f) Insurance. The Construction Agent has obtained insurance
---------
coverage covering the Property which meets the requirements of the Agency
Agreement, the Lease and the other Operative Agreements before commencing
construction, repairs or Modifications, as the case may be, and such coverage is
in full force and effect.
(g) Property-Related Matters. The Property, as improved in
------------------------
accordance with the Plans and Specifications, will comply in all material
respects with all Legal Requirements (including all applicable zoning and land
use laws and Environmental Laws) and Insurance Requirements. The Plans and
Specifications have been or will be prepared so as to comply with all applicable
Legal Requirements (including all applicable Environmental Laws and building,
planning, zoning and fire codes) and upon completion of the applicable
Improvements in accordance with the Plans and Specifications, such Improvements
on the Property will not encroach in any manner onto any adjoining land (except
as permitted by express written easements or variance) and such Improvements and
the use thereof by the Lessee and its agents, assignees, employees, invitees,
lessees, licensees and tenants will comply in all material respects with all
applicable Legal Requirements (including all applicable Environmental Laws and
building, planning, zoning and fire codes). There is no action, suit or
22
proceeding (including any proceeding in condemnation or eminent domain or under
any applicable Environmental Law) pending or, to the best knowledge of Lessee
threatened which adversely affects the title to, or materially affects the use,
operation or value of, the Properties. No fire or other casualty with respect
to the Properties has occurred which fire or other casualty has had a material
adverse effect on the Lessee's ability to perform its obligations under the
Agency Agreement and the other Operative Agreements. All utilities serving the
Properties, or proposed to serve the Properties in accordance with the Plans and
Specifications, are located in, and in the future will be located in, and
vehicular access to the Improvements on each of the Properties is provided by,
either public rights-of-way abutting the Property or Appurtenant Rights. All
applicable 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 of dedication, required for (i) the use, treatment, storage,
transport, disposal or disposition of any Hazardous Substance on, at, under or
from the Properties during the construction of the Improvements thereon and the
use and operation of the Improvements following such construction, (ii) the
construction of the Improvements in accordance with the Plans and Specifications
and the Agency Agreement and (iii) the use and operation of the Improvements
following such construction as permitted pursuant to the Lease have been
obtained, to the extent necessary at the time of this representation, from the
appropriate Governmental Authorities having jurisdiction or from private
parties.
(h) Lease Requirements. The Improvements, when completed, will
------------------
comply in all material respects with all requirements and conditions set forth
in the Lease and all other conditions and requirements of the Operative
Documents.
(i) Conditions Precedent contained in the Operative Agreements. All
----------------------------------------------------------
conditions precedent contained in this Agreement and in the other Operative
Agreements relating to the relevant Advance have been satisfied in full.
(j) Projected Completion Value. The Property Cost of each
--------------------------
Improvement as established by the Construction Budget shall not exceed an amount
equal to the Projected Completion Value.
SECTION 8. PAYMENT OF CERTAIN EXPENSES.
Lessee agrees, for the benefit of the Lessor, the Agent, the Co-Agents and
each of the Lenders, to:
8.1. Transaction Expenses. (a) On the Reorganization Closing Date,
--------------------
pay, or cause to be paid, all fees, expenses and disbursements of each of the
Lessor's and the Agent's counsel in connection with the transactions
contemplated by the Operative Agreements and incurred in connection with such
Reorganization Closing Date, including all Transaction Expenses, and all other
23
expenses in connection with such Reorganization Closing Date, including all
expenses relating to all fees, taxes and expenses for the recording,
registration and filing of documents.
(b) On each Property Closing Date, pay, or cause to be paid, all
fees, expenses and disbursements of each of the Lessor's and the Agent's counsel
in connection with the transactions contemplated by the Operative Agreements and
incurred in connection with such Property Closing Date, including all
Transaction Expenses arising from such Property Closing Date, and all other
expenses in connection with such Property Closing Date, including all expenses
relating to each Appraisal, and all fees, taxes and expenses for the recording,
registration and filing of documents.
8.2. Brokers' Fees and Stamp Taxes. Pay or cause to be paid 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 Agreement and the other Operative
Agreements.
8.3. Certain Fees and Expenses. Pay or cause to be paid (i) all
-------------------------
costs and expenses incurred by the Lessee, the Agent or the Lessor in entering
into any future amendments or supplements with respect to any of the Operative
Agreements, whether or not such amendments or supplements are ultimately entered
into, or giving or withholding of waivers of consents hereto or thereto, which
have been requested by the Lessee, and (ii) all costs and expenses incurred by
the Lessor, the Lessee, or the Agent in connection with any purchase of any
Property by the Lessee pursuant to Article XX of the Lease.
8.4. Credit Agreement and Related Obligations. (a) Pay, before the
----------------------------------------
due date thereof, all costs and expenses (other than principal and interest on
the Loans, but including breakage costs and interest on overdue amounts pursuant
to Section 2.8(c) of the Credit Agreement or otherwise) required to be paid by
the Lessor under the Credit Agreement, the Mortgage, the Assignment of Lease and
the Contract Assignment.
(b) Pay the Agent all fees specified in the Fee Letter at the time
and in the manner required by the Fee Letter, which fees may not be paid by
using the proceeds of the Loans or Lessor Contribution.
8.5. Commitment Fees. Pay to the Agent for the account of each
---------------
Lender and the Lessor the Commitment Fee on each Commitment Fee Payment Date.
SECTION 9. OTHER COVENANTS AND AGREEMENTS.
9.1. Covenants of the Lessor. The Lessor hereby agrees that so long
-----------------------
as this Agreement is in effect:
(a) Discharge of Liens. The Lessor will not create or permit to
------------------
exist at any time, and will, at its own cost and expense, promptly take such
action as may be necessary duly to discharge,
24
or to cause to be discharged, all Lessor Liens on the Property attributable to
it; provided, however, that the Lessor shall not be required to so discharge any
-------- -------
such Lessor Lien while the same is being contested in good faith by appropriate
proceedings diligently prosecuted so long as such proceedings shall not involve
any material danger of impairment of the Liens of the Security Documents or of
the sale, forfeiture or loss of, and shall not interfere with the use or
disposition of, any Property or title thereto or any interest therein or the
payment of Rent.
(b) No Voluntary Bankruptcy. The Lessor shall not (i) commence any
-----------------------
case, proceeding or other action under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, arrangement, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial benefit of its creditors; and the Lessor shall not take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in this paragraph.
(c) Change of Chief Place of Business. The Lessor shall give prompt
---------------------------------
notice to the Lessee and the Agent if the Lessor's chief place of business or
chief executive office, or the office where the records concerning the accounts
or contract rights relating to the Property are kept, shall cease to be located
at Two World Trade Center, New York, New York or if it shall change its name.
(d) Loan Documents. Provided that no Event of Default is
--------------
continuing, none of the Lenders, the Lessor, the Lessee nor the Agent shall
consent to or permit any amendment, supplement, waiver or other modification of
the terms and provisions of the Credit Agreement, the Notes or the Security
Documents, in each case without the prior written consent of the Lessee.
(e) Compliance with Operative Agreements. The Lessor shall at all
------------------------------------
times observe and perform all of the covenants, conditions and obligations
required to be performed by it under each Operative Agreement to which it is a
party.
9.2. Repayment of Certain Amounts on Maturity Date. The Lessor and
---------------------------------------------
the Agent hereby agree that if (i) on the Maturity Date (after giving effect to
all payments made by the Lessee under the Lease and the application of all sales
proceeds pursuant to Section 8 of the Credit Agreement) there remains any
outstanding principal or accrued and unpaid principal under the Tranche B Notes
(the aggregate amount of such outstanding principal, the "Tranche B Deficit")
-----------------
and (ii) during the Marketing Period the Lessor has received any Marketing
Period Equity Return, then on the Maturity Date the Lessor shall pay to the
Agent an amount up to the amount of the Tranche B Deficit, but in no event
greater than the Marketing Period Equity Return received by it.
9.3. Amendment of Certain Documents. The Agent, for itself and on
------------------------------
behalf of the Lenders, hereby agrees for the benefit of the Lessor that it will
not amend, alter or otherwise modify, or consent to any amendment, alteration or
modification of, the Lease (including the definitions of any terms used in such
document) without the prior written consent of the Lessor, if such amendment,
alteration or modification would materially and adversely affect the interests
of the Lessor. Provisions
25
requiring consent, include any amendment, alteration or modification that would
release the Lessee from any of its obligations in respect of the payment of
Basic Rent, Supplemental Rent, Termination Value, Maximum Residual Guarantee
Amount or the Purchase Option Price or any other payments in respect of the
Properties as set forth in the Lease, or reduce the amount of, or change the
time or manner of payment of, obligations of the Lessee as set forth in the
Lease, or create or impose any obligation on the part of the Lessor under the
Lease, or extend or shorten the duration of the Term, or modify the provisions
of this Section 9.3.
9.4. Proceeds of Casualty or Condemnation. The Lessor agrees, for
------------------------------------
the benefit of the Agent and the Lenders, that if at any time the Lessor
receives any proceeds as a result, directly or indirectly, of any Casualty or
Condemnation with respect to the Property which the Lessor is entitled to retain
and hold in accordance with the terms of the Lease, the Lessor agrees that it
will promptly deposit such amounts in an account with the Agent. The Lessor
also agrees that it will execute and deliver such documents and instruments as
the Agent may request in order to grant the Agent, for the benefit of the
Lenders, a valid and perfected, first priority security interest in such
proceeds.
SECTION 10. CREDIT AGREEMENT.
10.1. Lessee's Credit Agreement Rights. Notwithstanding anything to
--------------------------------
the contrary contained in the Credit Agreement, the Agent, the Lessee and the
Lessor hereby agree that:
(a) the Lessee shall have the right to give the notice referred to in
Section 2.3 of the Credit Agreement;
(b) the Lessee shall have the right to convert or continue Loans in
accordance with Section 2.6 of the Credit Agreement;
(c) the Lessee shall receive copies of all notices delivered to the
Lessor under the Credit Agreement and the other Operative Agreements and such
notices shall not be effective until received;
(d) the Lessee shall have the right to select Interest Periods in
accordance with the terms of the Credit Agreement;
(e) the Lessee shall have the right to give notice of prepayment of
the Loans in accordance with the Credit Agreement;
(f) the Lessee shall have the right to cure, to the extent
susceptible to a cure, any Default or Event of Default of the Lessor under the
Credit Agreement;
(g) the Lessee shall have the right to approve any successor Agent
pursuant to Section 7.9 of the Credit Agreement;
26
(h) the Lessee shall have the right, on behalf of the Lessor, to
select any person or persons (including the Lessee) to whom funds may be paid at
the discretion of the Lessor in accordance with Sections 8.1 and 8.2 of the
Credit Agreement;
(i) the Lessee shall have the right to consent to any assignment by a
Lender if required pursuant to Section 9.7 of the Credit Agreement; and
(j) the Lessee shall have the right to designate the portion of the
Loans on which interest is due and payable for purposes of the definitions of
"Allocated Interest" and "Allocated Lessor Yield";
(k) the Lessee shall have the right to request that another lending
office be designated pursuant to Section 2.15 of the Credit Agreement;
(l) the Lessee shall have the obligation to notify the Agent of the
amounts or information specified in Section 5.8 of the Credit Agreement; and
(m) without limiting the foregoing clauses (a) through (l), and in
addition thereto, (x) the Lessor shall not exercise any right under the Credit
Agreement without giving the Lessee at least ten (10) Business Days' prior
written notice (or such shorter period as may be required but in no case less
than two (2) Business Days) and, following such notice, the Lessor shall take
such action, or forbear from taking such action, as the Lessee shall direct and
(y) the Lessee shall have the right to exercise any other right of the Lessor
under the Credit Agreement upon not less than two (2) Business Days' prior
written notice from the Lessee to the Lessor.
SECTION 11. TRANSFER OF INTEREST.
11.1. Restrictions on Transfer. (a) The Lessor may not, directly or
------------------------
indirectly, assign, convey or otherwise transfer any of its right, title or
interest in or to any of the Properties without the consent of the Agent, the
Required Lenders and the Lessee, which consent shall not be unreasonably
withheld or delayed. Any transfer by the Lessor as above provided, shall be
effected pursuant to an agreement in form and substance reasonably satisfactory
to the Agent, the Required Lenders, the Lessor, the Lessee and their respective
counsel; provided, however, that no such consent for any such transfer shall be
-------- -------
required if, in the Lessor's sole discretion, the continued ownership of the
Properties, or any part thereof, would violate or conflict with any Requirement
of Law or interpretation thereof, provided, further, however, in such event,
-------- ------- -------
Lessor may only transfer its interest in the Properties upon not less than 30
days prior written notice to the Agent (who will notify the Lenders) and the
Lessee and only to an institutional investor whose net worth is at least
$50,000,000 or whose obligations under the Operative Agreements are guaranteed
by an entity whose net worth is at least $50,000,000.
(b) In the event that the Lessor shall be in breach of any of its
material obligations under the Operative Agreements which breach continues
uncured for a period of 30 days or more after
27
written notice thereof by the Lessee or the Agent, then at the request of the
Lessee, the Lessor shall promptly transfer and assign its interest in the
Properties to a third party, reasonably acceptable to the Agent and the Required
Lenders, designated by the Lessee. If the Agent has obtained knowledge of a
default by the Lessor, it shall notify the Lessee of such default.
11.2. Effect of Transfer. From and after any transfer effected in
------------------
accordance with this Section 11, the transferor shall be released, to the extent
of such transfer, from its liability hereunder and under the other documents to
which it is a party in respect of obligations to be performed on or after the
date of such transfer. Upon any transfer by the Lessor as above provided, any
such transferee shall assume the obligations of the Lessor, and the Lessor, and
shall be deemed the "Lessor" for all purposes of such documents and each
reference herein to the transferor shall thereafter be deemed a reference to
such transferee for all purposes, except as provided in the preceding sentence.
Notwithstanding any transfer of all or a portion of the transferor's interest as
provided in this Section 11, the transferor shall be entitled to all benefits
accrued and all rights vested prior to such transfer including rights to
indemnification under any such document.
28
SECTION 12. INDEMNIFICATION.
12.1. General Indemnity. The Lessee, whether or not any of the
-----------------
transactions contemplated hereby shall be consummated, hereby assumes liability
for and agrees to defend, indemnify and hold harmless each Indemnified Person on
an After Tax Basis from and against any Claims which may be imposed on, incurred
by or asserted against an Indemnified Person in any way relating to or arising
or alleged to arise out of (a) the financing, refinancing, purchase, acceptance,
rejection, ownership, design, construction, delivery, acceptance, nondelivery,
leasing, subleasing, possession, use, operation, repair, modification,
transportation, condition, sale, return, repossession (whether by summary
proceedings or otherwise), or any other disposition of the Property or any part
thereof; (b) any latent or other defects in any property whether or not
discoverable by an Indemnified Person or the Lessee; (c) a violation of
Environmental Laws, Environmental Claims or other loss of or damage relating to
the Properties; (d) the Operative Agreements, or any transaction contemplated
thereby; (e) any breach by the Lessee of any of its representations or
warranties under the Operative Agreements or failure by the Lessee to perform
or observe any covenant or agreement to be performed by it under any of the
Operative Agreements; and (f) personal injury, death or property damage relating
to the Properties, including Claims based on strict liability in tort; but in
any event excluding (x) Claims to the extent such Claims arise solely out of
events occurring after the expiration of the Term and after the Lessee's
discharge of all its obligations under the Lease or (y) Claims to the extent
such Claims arise solely out of the gross negligence or willful misconduct of an
Indemnified Person. The Lessee shall be entitled to control, and shall assume
full responsibility for the defense of any Claim; provided, however, that the
-------- -------
Lessor and the Agent named in such Claim, may each retain separate counsel at
the expense of the Lessee in the event of and to the extent of a conflict or a
potential conflict. The Lessee and each Indemnified Person agree to give each
other prompt written notice of any Claim hereby indemnified against but the
giving of any such notice by an Indemnified Person shall not be a condition to
the Lessee's obligations under this Section 12.1, except to the extent failure
to give such notice materially prejudices Lessee's rights hereunder. After an
Indemnified Person has been fully indemnified for a Claim pursuant to this
Section 12.1, and so long as no Event of Default under the Lease shall have
occurred and be continuing, the Lessee shall be subrogated to any right of such
Indemnified Person with respect to such Claim. None of the Indemnified Persons
shall settle a Claim without the consent of the Lessee, which consent shall not
be unreasonably withheld or delayed.
12.2. General Tax Indemnity. (a) The Lessee shall pay and assume
---------------------
liability for, and does hereby agree to indemnify, protect and defend the
Property and all Tax Indemnitees, and hold them harmless against, all
Impositions on an After Tax Basis. Each Tax Indemnitee further agrees to comply
with recommendations made by the Lessee regarding techniques to minimize Taxes
indemnifiable hereunder, provided that (i) the Lessee agrees to make payments to
(or otherwise indemnify) such Tax Indemnitee against any cost or expense arising
from instituting the Lessee's recommendations and (ii) such Tax Indemnitee
determines in its reasonable discretion that such recommendations will not have
an adverse impact on such Tax Indemnitee.
(b) Provided that no Event of Default has occurred and is
continuing, if any Tax Indemnitee obtains a refund or a reduction in a liability
(but only if such reduction relates to a Tax not
29
otherwise indemnifiable hereunder and has not been taken into account in
determining the amount of a payment on an After Tax Basis) as a result of any
Imposition paid or reimbursed by the Lessee (in whole or in part), such Tax
Indemnitee shall promptly pay to the Lessee the lesser of (x) the amount of such
refund or reduction in liability and (y) the amount previously so paid or
advanced by the Lessee, in each case net of reasonable expenses not already paid
or reimbursed by the Lessee.
(c) (i) Subject to the terms of Section 12.2(g), the Lessee shall
pay or cause to be paid all Impositions directly to the taxing authorities where
feasible and otherwise to the Tax Indemnitee, as appropriate, and the Lessee
shall at its own expense, upon such Tax Indemnitee's reasonable request, furnish
to such Tax Indemnitee copies of official receipts or other satisfactory proof
evidencing such payment.
(ii) In the case of Impositions for which no contest is conducted
pursuant to Section 12.2(g) and which the Lessee pays directly to the taxing
authorities, the Lessee shall pay such Impositions prior to the latest time
permitted by the relevant taxing authority for timely payment. In the case of
Impositions for which the Lessee reimburses a Tax Indemnitee, the Lessee shall
do so within thirty (30) days after receipt by the Lessee of demand by such Tax
Indemnitee describing in reasonable detail the nature of the Imposition and the
basis for the demand (including the computation of the amount payable), but in
no event shall the Lessee be required to pay such reimbursement prior to thirty
(30) days before the latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which a contest is conducted
pursuant to Section 12.2(g), the Lessee shall pay such Impositions or reimburse
such Tax Indemnitee for such Impositions, to the extent not previously paid or
reimbursed pursuant to subsection (a), prior to the latest time permitted by the
relevant taxing authority for timely payment after conclusion of all contests
under Section 12.2(g).
(iii) Impositions imposed for a billing period during which the Lease
expires or terminates with respect to the Property (unless the Lessee has
exercised the Purchase Option with respect to the Properties) shall be adjusted
and prorated by the Agent on a daily basis between the Lessee and the Lessor,
whether or not such Imposition is imposed before or after such expiration or
termination and each party shall pay or reimburse the other for each party's pro
rata share thereof.
(iv) At the Lessee's request, the amount of any indemnification
payment by the Lessee pursuant to subsection (a) shall be verified and certified
by an independent public accounting firm mutually acceptable to the Lessee and
the Tax Indemnitee. The fees and expenses of such independent public accounting
firm shall (i) in the case of the Trust Company or the Lessor, be paid by the
Lessee, and (ii) in the case of all other Tax Indemnitees, be paid by the Lessee
unless such verification shall result in an adjustment in the Lessee's favor of
10% or more of the payment as computed by such Tax Indemnitee, in which case
such fee shall be paid by such Tax Indemnitee.
(d) (i) The Lessee shall be responsible for preparing and filing
any real and personal property or ad valorem tax returns in respect of the
Property. In case any other report or tax return shall be required to be made
with respect to any obligations of the Lessee under or arising out of subsection
(a) and of which the Lessee has knowledge, the Lessee, at its sole cost and
expense, shall
30
notify the relevant Tax Indemnitee of such requirement and (except if such Tax
Indemnitee notifies the Lessee that such Person intends to file such report or
return) (A) to the extent required or permitted by and consistent with Legal
Requirements, make and file in its own name such return, statement or report;
and (B) in the case of any other such return, statement or report required to be
made in the name of such Tax Indemnitee, advise such Tax Indemnitee of such fact
and prepare such return, statement or report for filing by such Tax Indemnitee
or, where such return, statement or report shall be required to reflect items in
addition to any obligations of the Lessee under or arising out of subsection
(a), provide such Tax Indemnitee at the Lessee's expense with information
sufficient to permit such return, statement or report to be properly made with
respect to any obligations of the Lessee under or arising out of subsection (a).
Such Tax Indemnitee shall, upon the Lessee's request and at the Lessee's
expense, provide any data maintained by such Tax Indemnitee (and not otherwise
within the control of the Lessee) with respect to the Property which the Lessee
may reasonably require to prepare any required tax returns or reports;
(e) If directly as a result of the payment or reimbursement by the
Lessee of any expenses of the Lessor, the Lessor or any of its Affiliates, shall
suffer a net increase ( taking into account any available credits or deductions)
in any federal, state or local income tax liability, the Lessee shall indemnify
the Lessor or its respective Affiliates (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis for the amount
of such increase. The calculation of any such net increase shall take into
account any current or future tax savings realized or reasonably expected to be
realized by the Lessor or such Affiliate, in respect thereof, as well as any
interest, penalties and additions to tax payable by the Lessor or such
Affiliate, in respect thereof;
(f) As between the Lessee and the Lessor, the Lessee shall be
responsible for, and the Lessee shall indemnify and hold harmless the Lessor
(without duplication of any indemnification required by subsection (a)) on an
After Tax Basis against, any obligation for United States withholding taxes
imposed in respect of the interest payable on the Notes to the extent, but only
to the extent, Lessor has actually paid funds to a taxing authority with respect
to such withholding taxes (and, if the Lessor receives a demand for such payment
from any taxing authority, the Lessee shall discharge such demand on behalf of
the Lessor). Notwithstanding the foregoing, the Lessee shall not be responsible
for any obligation for United States withholding taxes imposed in respect of the
interest payable on the Notes or in respect of the Lessor Yield to the extent
the Lessor is not a United States person for purposes of the Code;
(g) (i) If a written claim is made against any Impositions Indemnitee
or if any proceeding shall be commenced against such Impositions Indemnitee
(including a written notice of such proceeding), for any Impositions, such
Impositions Indemnitee shall promptly notify Lessee in writing and shall not
take action with respect to such claim or proceeding without the consent of
Lessee for thirty (30) days after the receipt of such notice by Lessee;
provided, that, in the case of any such claim or proceeding, if action shall be
--------
required by law regulation to be taken prior to the end of such 30-day period,
such Impositions Indemnitee shall, in such notice to Lessee, inform Lessee, and
no action shall be taken with respect to such claim or proceeding without the
consent of Lessee before the end of such shorter period; provided, further, that
-------- -------
the failure of such Impositions Indemnitee to give
the notices referred to this sentence shall not diminish Lessee's obligation
hereunder except to the extent such failure adversely affects the ability of the
Lessee to contest all or part of such claim.
(ii) If, within thirty (30) days of receipt of such notice from the
Impositions Indemnitee (or such shorter period as the Impositions Indemnitee has
noticed Lessee is required by law or regulation for the Impositions Indemnitee
to commence such contest), Lessee shall request in writing that such Impositions
Indemnitee contest such Imposition, the Impositions Indemnitee shall, at the
expense of Lessee, in good faith conduct and control such contest (including by
pursuit of appeals) relating to the validity, applicability or amount of such
impositions (provided, however, that (A) if such contest can be pursued
independently from any other proceeding involving a tax liability of such
Impositions Indemnitee, the Impositions Indemnitee, at Lessee's request, shall
allow Lessee to conduct and control such contest and (B) in the case of any
contest that Lessee is not entitled to control, the Impositions Indemnitee may
request Lessee to conduct and control such contest if possible or permissible
under applicable law or regulation) by, in the sole discretion of the Person
conducting and controlling such contest, (1) resisting payment thereof, (2) not
paying the same except under protest, if protest is necessary and proper, (3) if
the payment be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4) taking such other
action as is reasonably requested by Lessee from time to time.
(iii) The party controlling any contest shall consult in good faith
with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of such contest; provided that all
--------
decisions ultimately shall be made in the sole discretion of the controlling
party. The parties agree that an Impositions Indemnitee may at any time decline
to take further action with respect to the contest of any Imposition and may
settle such contest if such Impositions Indemnitee shall waive its rights to any
indemnity from Lessee that otherwise would be payable in respect of such claim
(and any future claim by any taxing authority with respect to other taxable
periods that are based, in whole or in part, upon the resolution of such claim)
and shall pay to Lessee any amount previously paid or advanced by Lessee
pursuant to this Section 12.2 by way of indemnification or advance for the
payment of an Imposition, and no other then future liability of the Lessee is
likely with respect to such Imposition.
(iv) Notwithstanding the foregoing provisions of this Section 12.2,
an Impositions Indemnitee shall not be required to take any action and Lessee
shall not be permitted to contest any Impositions in its own name or that of the
Impositions Indemnitee unless (A) Lessee shall pay to such Impositions
Indemnitee on demand and on an After Tax Basis all reasonable costs,
losses and expenses that such Impositions Indemnitee actually incurs in
connection with contesting such Impositions, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements, (B) in
the case of a claim that must be pursued in the name of an Impositions
Indemnitee (or an Affiliate thereof), the amount of the potential indemnity
(taking into account all similar or logically related claims that have been or
could be raised in any audit involving such Impositions Indemnitee for which
Lessee may be liable to pay an indemnity under this Section 12.2) is less than
$1,000,000, unless the pursuit of such contest is in a manner mutually
satisfactory to the Imposition Indemnitee and the Lessee, but in no event shall
such right prevent the Lessee from prosecuting or continuing such contest,
32
(C) the Impositions Indemnitee shall have reasonably determined that the action
to be taken will not result in any material danger of sale, forfeiture or loss
of any Property, or any part thereof or interest therein, will not interfere
with the payment of Rent, and will not result in risk of criminal liability, (D)
if such contest shall involve the payment of the Imposition prior to the
contest, Lessee shall provide to the Impositions Indemnitee an interest-free
advance in an amount equal to the Imposition that the Impositions Indemnitee is
required to pay (with no additional net after-tax cost to such Impositions
Indemnitee), (E) in the case of a claim that must be pursued in the name of an
Impositions Indemnitee (or an Affiliate thereof), Lessee shall have provided to
such Impositions Indemnitee an opinion of independent tax counsel selected by
the Lessee and reasonably satisfactory to such Imposition Indemnitee stating
that a reasonable basis exists to contest such claim (or, in the case of an
appeal of an adverse determination, an opinion of such counsel to the effect
that there is substantial authority for the position asserted in such appeal)
and (F) no Event of Default shall have occurred and be continuing.
SECTION 13. MISCELLANEOUS.
13.1. Survival of Agreements. The representations, warranties,
----------------------
covenants, indemnities and agreements of the parties provided for in the
Operative Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, the transfer of the
Property to the Lessor, the construction of any Improvements, any disposition of
any interest of the Lessor in the Property or the Improvements, the payment of
the Notes and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions or conditions of
any of the Operative Agreements. Except as otherwise expressly set forth herein
or in other Operative Agreements, the indemnities of the parties provided for in
the Operative Agreements shall survive the expiration or termination of any
thereof.
13.2. No Broker, etc. Each of the parties hereto represents to the
---------------
others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Agreement, nor has it
authorized any broker, finder or financial adviser retained or employed by any
other Person so to act, except for the Arranger, the fees of which shall be paid
by the Lessee. Any party who is in breach of this representation shall indemnify
and hold the other parties harmless from and against any liability arising out
of such breach of this representation.
13.3. 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 nationally recognized courier service and
any such notice shall become effective five Business Days after being deposited
in the mails, certified or registered with appropriate postage prepaid or one
Business Day after delivery to a nationally recognized courier service
specifying overnight delivery and shall be directed to the address of such
Person as indicated:
33
If to the Lessee, to it at:
Living Centers Holding Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Lessor, to it at:
FBTC Leasing Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent, to it at:
The Chase Manhattan Bank
Agent Lender Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
34
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇▇▇ ▇▇▇▇, Jr., Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
13.4. Counterparts. This Agreement may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
13.5. Amendments and Termination. Neither this Agreement nor any of
--------------------------
the terms hereof may be terminated, amended, supplemented, waived or modified
except by an instrument in writing signed by the party against which the
enforcement of the termination, amendment, supplement, waiver or modification
shall be sought. This Agreement may be terminated by an agreement signed in
writing by the Lessor, the Lessee, the Agent and the Lenders.
13.6. Headings, etc.. The Table of Contents and headings of the
--------------
various Sections and Subsections of this Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
13.7. Parties in Interest. Except as expressly provided herein, none
-------------------
of the provisions of this Agreement are intended for the benefit of any Person
except the parties hereto.
13.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13.9. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10. Rights of Lessee. Notwithstanding any provision of the
----------------
Operative Agreements but subject in all respects to the terms of the Collateral
Agent Agreement, if at any time all obligations (i) of the Lessor under the
Credit Agreement and the Security Documents and (ii) of the Lessee under the
Operative Agreements have in each case been satisfied or discharged in full,
then the Lessee shall be
35
entitled to (a) terminate the Lease (to the extent not previously terminated)
and (b) receive all amounts then held under the Operative Agreements and all
proceeds with respect to the Property. Upon the fulfillment of the obligations
contained in clauses (i) and (ii) above, the Lessor shall transfer to the Lessee
all of its right, title and interest in and to the Property (to the extent not
previously transferred to the Lessee in accordance with the Lease) and any
amounts or proceeds referred to in the foregoing clause (b) shall be paid over
to the Lessee.
13.11. Rights of Lessor. Notwithstanding any provision of the
----------------
Operative Agreements but subject in all respects to the terms of the Collateral
Agent Agreement, if a Lease Event of Default continues for a period exceeding 90
days, the Lessor shall be permitted to send notice to Lessee of such default.
13.12. Further Assurances. The parties hereto shall promptly cause
------------------
to be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
effectuate the intent and purposes of this Agreement, the other Operative
Agreements and the transactions contemplated hereby and thereby (including,
without limitation, the preparation, execution and filing of any and all Uniform
Commercial Code financing statements and other filings or registrations which
the parties hereto may from time to time request to be filed or effected). The
Lessee, at its own expense, shall take such action as may be reasonably
requested in order to maintain and protect all security interests provided for
hereunder or under any other Operative Agreement.
13.13. Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and assigns.
13.14. No Representation or Warranty. Nothing contained herein, in
-----------------------------
any other Operative Agreement or in any other materials delivered to the Lessee
in connection with the transactions contemplated hereby or thereby shall be
deemed a representation or warranty by the Agent or the Arranger or any of their
Affiliates as to the proper accounting treatment or tax treatment that should be
afforded to the Lease and the Lessor's ownership of the Properties and the Agent
expressly disclaims any representation or warranty with respect to such matters.
13.15. Confidentiality. Each of the Agent, the Lessor and each
---------------
Lender agrees that it will use its best efforts not to disclose without the
prior consent of Living Centers (other than to its subsidiaries and affiliates
conducting business related to the making and syndication of loans and its and
such subsidiaries and affiliates' employees, auditors or counsel or to another
Lender if the disclosing Lender or the disclosing Lender's holding or parent
company in its sole discretion determines that any such party should have access
to such information) any information with respect to any Guarantor which is
furnished pursuant to this Agreement or any other Operative Agreement and which
is designated by such party furnishing such information to the Lenders in
writing as confidential, provided that the Agent, the Lessor or any Lender may
--------
disclose any such information (a) as has become generally available to the
public, (b) as may be required or appropriate in any report, statement, or
36
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the FDIC or similar organizations (whether in the United States or
elsewhere), (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (d) in order to comply with any
law, order, regulation or ruling applicable to such Lender, and (e) to the
prospective transferee or participant in connection with any contemplated
transfer of any of the Notes or any interest therein by the Person disclosing
such information, provided that such prospective transferee or participant
--------
executes an agreement with such Guarantor containing provisions substantially
identical to those contained in this Section.
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
LIVING CENTERS HOLDING COMPANY, as Lessee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FBTC LEASING CORP., as Lessor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Treasurer
THE CHASE MANHATTAN BANK, as Agent and a
Lender
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇
Title: Vice President
THE FUJI BANK, LIMITED, as Co-Agent and a
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: Vice President & Manager
Citibank, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney in Fact
NATIONSBANK, N.A., as a Lender
38
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Corporate Banking Officer
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ ▇. ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President
BANQUE PARIBAS, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH, as a Lender
By: /s/ Farboud Tavangar
-----------------------------------
Name: Farboud Tavangar
Title: First Vice President
DRESDNER BANK AG, New York and Grand
Cayman Branches, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
39
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. Dohertry
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Dohertry
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
TORONTO DOMINION BANK (Texas), Inc., as a
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE UNION BANK OF CALIFORNIA, N.A., as a
Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
MARINE MIDLAND BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
Exhibit A-1
-----------
================================================================================
FORM OF
MORTGAGE AND SECURITY AGREEMENT
from
FBTC LEASING CORP.
to
THE CHASE MANHATTAN BANK, as Agent
Dated as of ______________ ___, _____
When recorded return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
================================================================================
MORTGAGE AND SECURITY AGREEMENT
MORTGAGE AND SECURITY AGREEMENT, dated as of ______________ ___, ____
(this "Mortgage"), made by FBTC LEASING CORP., a New York corporation (the
--------
"Mortgagor"), in favor of THE CHASE MANHATTAN BANK, a New York banking
---------
corporation, as collateral agent (in such capacity, the "Mortgagee" or the
---------
"Agent") under the Collateral Agent Agreement, dated as of November 4, 1997 (the
-----
"Collateral Agent Agreement"), among the Mortgagor, the Mortgagee and the
--------------------------
financial institutions from time to time parties thereto (the "Lenders").
-------
Preliminary Statement
---------------------
A. Mortgagor has entered into that certain Amended and Restated
Credit Agreement dated as of November 4, 1997 (as the same may be further
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement") with the several lenders from time to time parties thereto (the
---------
"Lenders") and Mortgagee.
-------
B. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Real
------------ ----
Estate").
------
C. Pursuant to the terms and conditions of the Credit Agreement, the
Mortgagee has agreed to make loans to the Mortgagor, in an aggregate principal
amount not to exceed $97,000,000 (the "Loans"). Pursuant to the terms and
-----
conditions of that certain Amended and Restated Guarantee dated as of the date
hereof, Paragon Health Network, Inc. ("Paragon"), as the successor-in-interest
-------
to Living Centers of America, Inc. and certain of Paragon's subsidiaries, have
agreed to amend and restate its obligations under that certain Guarantee dated
as of October 10, 1996 and guarantee the obligations of Mortgagor under the
Credit Agreement.
D. Paragon has entered into that certain Credit Agreement dated as
of November 4, 1997 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Corporate Credit Agreement") with the several
--------------------------
lenders from time to time parties thereto (the "Corporate Lenders") and The
-----------------
Chase Manhattan Bank, as Administrative Agent (in such capacity, "Administrative
--------------
Agent").
-----
E. Pursuant to the terms and conditions of the Corporate Credit
Agreement, the Corporate Lenders have agreed to make loans to Paragon in an
aggregate principal amount not to exceed $890,000,000 (the "Corporate Loans").
---------------
F. The obligations of (i) the Lenders to make the Loans are
conditioned upon, among other things, that the obligations of Mortgagor under
the Credit Agreement be secured by a mortgage lien upon the Mortgaged Property
and (ii) the Corporate Lenders to make the
2
Corporate Loans are conditioned upon, among other things, that the
obligations of Paragon under the Corporate Credit Agreement be secured by a
mortgage lien upon the Mortgaged Property.
G. In order to induce (i) the Lenders to make the Loans and (ii) the
Corporate Lenders to make the Corporate Loans, Mortgagor desires to grant
Mortgagee a lien upon the Mortgaged Property upon the terms and conditions
hereinafter set forth.
H. Capitalized terms used but not otherwise defined in this Mortgage
shall have the meanings assigned to them in Annex A attached to the Amended and
Restated Participation Agreement dated as of November 4, 1997 among Living
Centers Holding Company, Mortgagor, Agent, certain co-agents and the Lenders.
The rules of usage and documentary conventions set forth in such Annex are also
applicable hereto.
Granting Clauses
----------------
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment by Mortgagor of all obligations, liabilities
and indebtedness of Mortgagor, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
under, arising out of or in connection with the Credit Agreement, the Notes
or the other Operative Agreements, together with all interest and fees
payable thereon (collectively, the "Mortgagor Indebtedness") and (ii) the
----------------------
payment of all obligations, liabilities and indebtedness of Paragon,
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, under, arising out of or in
connection with the Corporate Credit Agreement and the other Loan
Documents, together with all interest and fees payable thereon
(collectively, the "Paragon Indebtedness"; together with the Mortgagor
--------------------
Indebtedness, the "Indebtedness"); and
------------
(b) (i) the performance and observance of all covenants, agreements,
obligations and liabilities of Mortgagor (the "Mortgagor Obligations")
---------------------
under or pursuant to the provisions of the Operative Agreements and any
amendments, supplements, extensions, renewals, restatements, replacements
or modifications of any of the foregoing and (ii) the performance and
observance of all covenants, agreements, obligations and liabilities of
Paragon under the Loan Documents and any amendments, supplements,
extensions, renewals, restatements, replacements or modifications of any of
the foregoing (the "Paragon Obligations"; together with the Mortgagor
-------------------
Obligations, the "Obligations") (the Operative Agreements and the Loan
-----------
Documents and all other documents and instruments from time to time
evidencing, securing or guaranteeing the payment of the Indebtedness or the
performance of the Obligations, as any of the same may be amended,
supplemented, extended, renewed, restated, replaced or modified from time
to time, are collectively referred to as the "Credit Documents");
----------------
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST
IN, AND HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO
MORTGAGEE:
(A) all right, title and interest of Mortgagor whether now owned or
hereafter
3
acquired, in and to the parcels of real property described on Schedule A
(together with the Land, the Improvements, the Appurtenant Rights and the
Fixtures relating thereto being collectively referred to as the
"Property");
--------
(B) all the estate, right, title, claim or demand whatsoever of the
Mortgagor, in possession or expectancy, in and to the Property or any part
thereof;
(C) all right, title and interest of Mortgagor whether now owned or
hereafter acquired, in and to the Equipment;
(D) all right, title and interest of Mortgagor, whether now owned or
hereafter acquired, in and to all substitutes and replacements of, and all
additions and improvements to, the Property and the Equipment, subsequently
acquired by or released to Mortgagor or constructed, assembled or placed by
Mortgagor on the Property, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation, any
and all building materials whether stored at the Property or offsite, and,
in each such case, without any further mortgage, conveyance, assignment or
other act by Mortgagor;
(E) all right, title and interest of Mortgagor, whether now owned or
hereafter acquired, in, to and under all leases, subleases, underlettings,
concession agreements, management agreements, licenses and other agreements
relating to the use or occupancy of the Property or the Equipment or any
part thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated, extended,
renewed or modified from time to time, the "Leases"), and all rights of
------
Mortgagor in respect of cash and securities deposited thereunder and the
right to receive and collect the revenues, income, rents, issues and
profits thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment of
the Mortgaged Property (as defined below) (collectively, the "Rents");
-----
(F) all right, title and interest of Mortgagor in and to all unearned
premiums under insurance policies now or subsequently obtained by Mortgagor
relating to the Property or Equipment and Mortgagor's interest in and to
all proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds; and all
awards and other compensation, including the interest payable thereon and
the right to collect and receive the same, made to the present or any
subsequent owner of the Property or Equipment for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Property or
any easement or other right therein;
(G) all right, title and interest of Mortgagor in and to (i) all
contracts from time to time executed by Mortgagor or any manager or agent
on its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Property or Equipment or any
part thereof and all agreements relating to the purchase or lease of any
portion of the Property or any property which is adjacent or peripheral to
the Property, together with the right to exercise such options and all
leases of Equipment, (ii) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Property or
any part thereof and (iii) all drawings, plans, specifications and similar
4
or related items relating to the Property;
(H) all right, title and interest of Mortgagor in and to any and all
monies now or subsequently on deposit for the payment of real estate taxes
or special assessments against the Property or for the payment of premiums
on insurance policies covering the foregoing property or otherwise on
deposit with or held by Mortgagee as provided in this Mortgage; all
capital, operating, reserve or similar accounts held by or on behalf of
Mortgagor and related to the operation of the Mortgaged Property, whether
now existing or hereafter arising and all monies held in any of the
foregoing accounts and any certificates or instruments related to or
evidencing such accounts; and
(I) all amendments, modifications, substitutions, replacements and
additions of any of the foregoing, and all proceeds, both cash and noncash,
of any of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by the Mortgagor and described in the foregoing
clauses (A) through (I) are collectively referred to as the "Mortgaged
---------
Property"); provided that excluded from the Mortgaged Property at all times and
-------- -------- ---- --------
in all respects shall be all Excepted Rights and the Mortgaged Property shall be
subject at all times and in all respects to all Shared Rights.
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto the Mortgagee, its successors and assigns for
the uses and purposes set forth, until all of the Indebtedness is paid and the
Obligations are performed, subject however to the matters listed on Schedule B
hereto (the "Permitted Encumbrances and Liens").
[PROVIDED, HOWEVER, that this Mortgage secures a principal amount of
the Obligations not to exceed $______________ (the "Maximum Secured Amount");
----------------------
and
PROVIDED FURTHER, that payments made on account of the Indebtedness or
any portion thereof, whether in due course, as prepayments or otherwise, shall
not reduce the Maximum Secured Amount, unless the aggregate principal amount of
the Indebtedness is less than the Maximum Secured Amount.]/1/
-
Terms and Conditions
--------------------
Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. Payment of Indebtedness. The Mortgagor shall pay the Mortgagor
-----------------------
Indebtedness at the times and places and in the manner specified in the Notes
and the Credit Agreement and shall perform all the Mortgagor Obligations.
2. Other Covenants. At any time and from time to time, upon the
---------------
written request of the Mortgagee, and at the sole expense of the Mortgagor, the
Mortgagor will promptly and
__________________________
/1/ This provision should be added in appropriate jurisdictions.
-
5
duly execute and deliver such further instruments and documents and take such
further actions as the Mortgagee reasonably may request for the purposes of
obtaining or preserving the full benefits of this Mortgage and of the rights and
powers granted by this Mortgage.
3. Further Assurances. To further assure Mortgagee's rights under
------------------
this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property) as may be reasonably required by Mortgagee to confirm the rights or
benefits conferred on Mortgagee by this Mortgage.
4. Mortgagee's Right to Perform. If the Mortgagor fails to perform
----------------------------
or comply with any of its agreements contained in this Mortgage, the Mortgagee,
at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement. The expenses of
the Mortgagee incurred in connection with actions undertaken as provided in this
Section, together with interest thereon at a rate per annum equal to the Overdue
Rate, from the date of payment by the Mortgagee to the date reimbursed by the
Mortgagor, shall be payable by the Mortgagor to the Mortgagee on demand;
provided, however, that the Mortgagor shall not be liable for payment of any
-------- -------
amount under this Section to the extent the Lessee is responsible for payment of
such amount under the Lease, the Participation Agreement or any other Operative
Agreement.
5. Mortgagor's Existence, etc. Mortgagor shall do all things
---------------------------
necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state of [ ]
and its right to own property and transact business in the state of [ ].
This Mortgage constitutes the legal, valid and binding obligation of Mortgagor,
enforceable against Mortgagor in accordance with its terms, except as
enforceability may be limited by principles of equity and applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally.
6. Events of Default. It shall be an event of default under this
-----------------
Mortgage (an "Event of Default") if an Event of Default shall occur under any of
----------------
the Credit Documents.
6
7. Remedies.
--------
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Credit Documents,
or as provided by law, and without limitation, (a) if such event triggers an
Acceleration under Section 6.1(h) or 6.1(i) of the Credit Agreement,
automatically the Indebtedness and all other amounts owing under the Notes, this
Mortgage and the other Security Documents immediately shall become due and
payable, and (b) if such event is any other Event of Default, by notice to
Mortgagor, Mortgagee may declare the Indebtedness (together with accrued
interest thereon) and all other amounts payable under the Note, this Mortgage
and the other Security Documents to be immediately due and payable. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Mortgagee may immediately take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or any
part of the Mortgaged Property, (B) institute and maintain an action on the
Notes, (C) sell all or part of the Mortgaged Property (Mortgagor expressly
granting to Mortgagee the power of sale), or (D) take such other action at
law or in equity for the enforcement of this Mortgage or any of the Credit
Documents as the law may allow. Mortgagee may proceed in any such action
to final judgment and execution thereon for all sums due hereunder,
together with interest thereon at the rate specified in Section 2.8(c) of
the Credit Agreement and all costs of suit, including, without limitation,
reasonable attorneys' fees and disbursements. Interest at the rate
specified in Section 2.8(c) of the Credit Agreement shall be due on any
judgment obtained by Mortgagee from the date of judgment until actual
payment is made of the full amount of the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the Mortgaged
Property or any other collateral as security for the Indebtedness and
Obligations enter into and upon the Mortgaged Property and each and every
part thereof and exclude Mortgagor and its agents and employees therefrom
without liability for trespass, damage or otherwise (Mortgagor hereby
agreeing to surrender possession of the Mortgaged Property to Mortgagee
upon demand at any such time) and use, operate, manage, maintain and
control the Mortgaged Property and every part thereof. Following such entry
and taking of possession, Mortgagee shall be entitled, without limitation,
(x) to lease all or any part or parts of the Mortgaged Property for such
periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and (z)
generally to execute, do and perform any other act, deed, matter or thing
concerning the Mortgaged Property as Mortgagee shall deem appropriate as
fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose it, shall
be entitled to the appointment of a receiver. In case of a foreclosure sale,
the Mortgaged Property may be sold,
7
at Mortgagee's election, in one parcel or in more than one parcel and Mortgagee
is specifically empowered, (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Mortgaged
Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.
(d) The Mortgagor hereby waives the benefit of all appraisement,
valuation, stay, extension and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale of the Mortgaged Property or any
interest therein.
7A. Application of Proceeds. The proceeds available from the
-----------------------
sale of the Mortgaged Property or any part thereof shall be applied as follows:
(_)(a) first, to the payment of the costs and expenses of such sale,
including attorneys' fees, and to the payment of any protective advances
made by the Mortgagee, together with any interest due thereon, in all cases
including all amounts to be paid pursuant to clause First of Section 3.4 of
the Collateral Agent Agreement;
(b) second, an amount up to the amount which, after payments due
under clause (a) above, does not exceed the aggregate outstanding principal
of and accrued interest on the Tranche B Loans shall be paid to the
Collateral Agent to be applied in accordance with the Collateral Agent
Agreement;
(c) third, an amount equal to the proceeds of the sale available
after the payments due pursuant to the clauses (a) and (b) above, reduced
by an amount equal to the aggregate unpaid Lessor Contribution and accrued
Lessor Yield (which amount shall be retained by Mortgagor), shall be paid
to the Collateral Agent to be applied in accordance with the Collateral
Agent Agreement; and
(d) fourth, the balance, if any, shall be paid to whomever shall be
entitled thereto.
8. Successor Mortgagor. In the event ownership of the Mortgaged
-------------------
Property or any portion thereof becomes vested in a person other than the
Mortgagor herein named, Mortgagee may, without notice to the Mortgagor herein
named, whether or not Mortgagee has given written consent to such change in
ownership, deal with such successor or successors in interest with reference to
this Mortgage and the Indebtedness and the Obligations, and in the same manner
as with the Mortgagor herein named, without in any way vitiating or discharging
Mortgagor's liability hereunder or under the Indebtedness and the Obligations.
9. Right of Mortgagee to Credit Sale. Upon the occurrence of any
---------------------------------
sale made under this Mortgage, whether made under the power of sale or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof.
In lieu of paying cash therefor, Mortgagee may make
8
settlement for the purchase price by crediting upon the Indebtedness or other
sums secured by this Mortgage the net sales price after deducting therefrom the
expenses of sale and the cost of the action and any other sums which Mortgagee
is authorized to deduct under this Mortgage. In such event, this Mortgage, the
Note and documents evidencing expenditures secured hereby may be presented to
the person or persons conducting the sale in order that the amount so used or
applied may be credited upon the Indebtedness as having been paid.
10. Remedies Not Exclusive. The Mortgagee shall be entitled to
----------------------
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Credit Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Obligations may now or hereafter be otherwise
secured, whether by mortgage, security agreement, pledge, lien, assignment or
otherwise. Neither the acceptance of this Mortgage nor its enforcement, shall
prejudice or in any manner affect the Mortgagee's right to realize upon or
enforce any other security now or hereafter held by the Mortgagee, it being
agreed that the Mortgagee shall be entitled to enforce this Mortgage and any
other security now or hereafter held by the Mortgagee in such order and manner
as the Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to the Mortgagee is intended to be exclusive of any
other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every power or remedy
given by any of the Credit Documents to the Mortgagee or to which it may
otherwise be entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by the Mortgagee. In no
event shall the Mortgagee, in the exercise of the remedies provided in this
Mortgage (including in connection with the Assignment of Leases, or the
appointment of a receiver and the entry of such receiver on to all or any part
of the Mortgaged Property), be deemed a "mortgagee in possession," and the
Mortgagee shall not in any way be made liable for any act, either of commission
or omission, in connection with the exercise of such remedies, except for its
gross negligence or willful misconduct.
11. Duty of the Mortgagee. The Mortgagee's sole duty with respect to
---------------------
the custody, safekeeping and physical preservation of any Mortgaged Property in
its possession, under Section 9-207 of the Uniform Commercial Code or otherwise,
shall be to deal with it in the same manner as the Mortgagee deals with similar
property for its own account. Neither the Mortgagee, any Lender nor any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Mortgaged Property or for
any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Mortgaged Property upon the request of the Mortgagor or any other
Person or to take any other action whatsoever with regard to the Mortgaged
Property or any part thereof.
12. Powers Coupled with an Interest. All powers, authorizations and
-------------------------------
agencies contained in this Mortgage are coupled with an interest and are
irrevocable until this Mortgage is terminated and the lien created hereby is
released.
13. Execution of Financing Statements. To the extent permitted by
---------------------------------
applicable law, pursuant to Section 9-402 of the Uniform Commercial Code, the
Mortgagor authorizes the Mortgagee to file financing statements with respect to
the Mortgaged Property without the signature of the Mortgagor in such form and
in such filing offices as the Mortgagee reasonably determines appropriate to
perfect the security interests of the Mortgagee under this Mortgage.
9
To the extent permitted by applicable law, a carbon, photographic or other
reproduction of this Mortgage shall be sufficient as a financing statement for
filing in any jurisdiction.
14. Appointment of Receiver. If an Event of Default shall have
-----------------------
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property,
without requiring the posting of a surety bond and without reference to the
adequacy or inadequacy of the value of the Mortgaged Property or the solvency or
insolvency of Mortgagor or any other party obligated for payment of all or any
part of the Indebtedness, and whether or not waste has occurred with respect to
the Mortgaged Property. Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual
powers and duties of receivers in like or similar cases and all the powers and
duties of Mortgagee in case of entry as provided in this Mortgage, including and
to the extent permitted by law, the right to enter into leases of all or any
part of the Mortgaged Property, and shall continue as such and exercise all such
powers until the date of confirmation of sale of the Mortgaged Property unless
such receivership is sooner terminated.
15. Extension, Release, etc. (a) Without affecting the encumbrance
------------------------
or charge of this Mortgage upon any portion of the Mortgaged Property not then
or theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall not
reduce the amount of the encumbrance of this Mortgage until the encumbrance
amount shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the encumbrance of this Mortgage or any
liens, rights, powers or remedies of Mortgagee hereunder, and such liens,
rights, powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights, or to provide notice to such tenants
as required in any statutory procedure governing a sale of the Mortgaged
Property by Mortgagee, or to terminate such tenant's rights in such sale, will
not be asserted by Mortgagor as a defense to any proceeding instituted by
Mortgagee to collect the Indebtedness or to foreclose this Mortgage.
(d) Unless expressly provided otherwise, in the event that
Mortgagee's interest in this Mortgage and title to the Mortgaged Property or any
estate therein shall become vested in the
10
same person or entity, this Mortgage shall not merge in such title but shall
continue as a valid charge on the Mortgaged Property for the amount secured
hereby.
16. Security Agreement under Uniform Commercial Code. (a) It is the
------------------------------------------------
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "UCC") of the
---
State in which the Mortgaged Property is located. If an Event of Default shall
occur, then in addition to having any other right or remedy available at law or
in equity, the Mortgagee shall have the option of either (i) proceeding under
the UCC and exercising such rights and remedies as may be provided to a secured
party by the Code with respect to all or any portion of the Mortgaged Property
which is personal property (including taking possession of and selling such
property) or (ii) treating such property as real property and proceeding with
respect to both the real and personal property constituting the Mortgaged
Property in accordance with the Mortgagee's rights, powers and remedies with
respect to the real property (in which event the default provisions of the UCC
shall not apply). If the Mortgagee shall elect to proceed under the UCC, then
ten days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by the Mortgagee shall include, but not be limited
to, attorneys' fees and legal expenses. At the Mortgagee's request, the
Mortgagor shall assemble the personal property and make it available to the
Mortgagee at a place designated by the Mortgagee which is reasonably convenient
to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Property; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the UCC; (iii) Mortgagor is the record
owner of the Property; and (iv) the addresses of Mortgagor and Mortgagee are as
set forth in Section 19 of this Mortgage.
(c) The Mortgagor, upon request by the Mortgagee from time to time,
shall execute, acknowledge and deliver to the Mortgagee one or more separate
security agreements, in form reasonably satisfactory to the Mortgagee and
consistent with the Credit Documents, covering all or any part of the Mortgaged
Property and will further execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as the Mortgagee may
request in order to perfect, preserve, maintain, continue or extend the security
interest under and the priority of this Mortgage and such security instrument.
The Mortgagor further agrees to pay to the Mortgagee on demand all reasonable
costs and expenses incurred by the Mortgagee in connection with the preparation,
execution, recording, filing and re-filing of any such document and all
reasonable costs and expenses of any record searches for financing statements
the Mortgagee shall reasonably require; provided, however, that the Mortgagor
-------- -------
shall not be liable for payment of any amount under this Section to the extent
that (i) the Lessee is responsible for payment of such amount under the Lease,
the Participation Agreement or any other Credit Document or (ii) the Lessee has
not paid such amount to the Lessor. If the Mortgagor shall fail to furnish any
financing or continuation statement within ten days after request by the
Mortgagee, then pursuant to the provisions of the UCC, the Mortgagor hereby
authorizes the Mortgagee, without the signature of the Mortgagor, to execute and
file any such financing and continuation statements. The filing of any
financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
the Mortgagee to proceed
11
against any personal property encumbered by this Mortgage as real property, as
set forth above.
17. Additional Rights. The holder of any subordinate lien or
-----------------
subordinate mortgage on the Mortgaged Property shall have no right to terminate
any lease affecting the Property whether or not such lease is subordinate to
this Mortgage nor shall any holder of any subordinate lien or subordinate deed
of trust join any tenant under any lease in any action to foreclose the lien or
modify, interfere with, disturb or terminate the rights of any tenant under any
lease. By recordation of this Mortgage all subordinate lienholders and the
mortgagees under subordinate mortgages are subject to and notified of this
provision, and any action taken by any such lienholder contrary to this
provision shall be null and void. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Indebtedness.
Any such application shall not be construed to cure or waive any Default or
Event of Default or invalidate any act taken by Mortgagee on account of such
Default or Event of Default.
18. Authority of Mortgagee. The Mortgagor acknowledges that the
----------------------
rights and responsibilities of the Mortgagee under this Mortgage with respect to
any action taken by the Mortgagee or the exercise or non-exercise by the
Mortgagee of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Mortgage shall,
as between the Mortgagee and the Lenders, be governed by the Credit Agreement
and the Collateral Agent Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the Mortgagee
and the Mortgagor, the Mortgagee shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and the Mortgagor shall be under no obligation, or entitlement, to make
any inquiry respecting such authority.
19. 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 or by hand and any such notice shall become effective five
Business Days after being deposited in the mails, certified or registered with
appropriate postage prepaid or one Business Day after delivery to a nationally
recognized courier service specifying overnight delivery or, if delivered by
hand, when received, and shall be directed to the address of such Person as
indicated:
12
If to the Mortgagor, to it at:
FBTC Leasing Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
If to the Mortgagee, to it at:
The Chase Manhattan Bank
Agent Lender Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
20. Partial Invalidity. In the event any one or more of the
------------------
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
21. No Waiver; Cumulative Remedies. (a) No failure to exercise, nor
------------------------------
any delay in exercising, on the part of the Mortgagee or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Mortgagee of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Mortgagee would otherwise have on any future occasion. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the mortgagee of any subordinate mortgage or the holder of any
subordinate lien on the Mortgaged Property, any part of the security held for
the obligations secured by this Mortgage without, as to the remainder of the
security, in anyway impairing or affecting this Mortgage or the priority of this
Mortgage over any subordinate lien or deed of trust.
(b) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
22. No Oral Modification. This Mortgage may not be changed or
--------------------
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage
13
relating to this Mortgage shall be superior to the rights of the holder of any
intervening or subordinate lien, deed of trust or encumbrance.
23. Section Headings. The section headings used in this Mortgage are
----------------
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
24. Successors and Assigns. All covenants of Mortgagor contained in
----------------------
this Mortgage are imposed solely and exclusively for the benefit of Mortgagee,
the Lenders and their respective permitted successors and assigns, and no other
person or entity shall have standing to require compliance with such covenants
or be deemed, under any circumstances, to be a beneficiary of such covenants,
any or all of which may be freely waived in whole or in part by Mortgagee at any
time if in the sole discretion of the Mortgagee such waiver is deemed advisable.
All such covenants of Mortgagor shall run with the land and bind Mortgagor, the
permitted successors and assigns of Mortgagor (and each of them) and all
subsequent owners, encumbrances and tenants of the Mortgaged Property, and shall
inure to the benefit of Mortgagee, the Lenders and their respective permitted
successors and assigns. The word "Mortgagor" shall be construed as if it read
"Mortgagors" whenever the sense of this Mortgage so requires and if there shall
be more than one Mortgagor, the obligations of the Mortgagors shall be joint and
several.
25. Mortgagor's Waiver of Rights. Except as otherwise set forth
----------------------------
herein, to the fullest extent permitted by law, the Mortgagor waives the benefit
of all laws now existing or that may subsequently be enacted providing for (i)
any appraisement before sale of any portion of the Mortgaged Property, (ii) any
extension of the time for the enforcement of the collection of the indebtedness
or the creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Mortgaged Property from
attachment, levy or sale under execution or exemption from civil process. Except
as otherwise set forth herein, to the full extent the Mortgagor may do so, the
Mortgagor agrees that the Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and the Mortgagor, for the Mortgagor and its
successors and assigns, and for any and all Persons ever claiming any interest
in the Mortgaged Property, to the extent permitted by law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of execution,
notice of election to mature or declare due the whole of the secured
indebtedness and marshalling in the event of foreclosure of the liens hereby
created.
26. Multiple Security. If (a) the Mortgaged Property shall consist
-----------------
of one or more parcels, whether or not contiguous and whether or not located in
the same county, or (b) in addition to this Mortgage, the Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or other
security (directly or indirectly) for the Indebtedness upon other property in
the State in which the Mortgaged Property is located (whether or not such
property is owned by the Mortgagor or by others) or (c) both the circumstances
described in clauses (a) and (b) shall be true, then to the fullest extent
permitted by law, the Mortgagee may, at its election, commence or consolidate in
a single foreclosure action all foreclosure proceedings against all such
collateral securing the Indebtedness (including the Mortgaged Property), which
action may be brought or consolidated in the courts of any county in which any
of such collateral
14
is located. The Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to the Mortgagee to extend the
Indebtedness and the Mortgagor expressly and irrevocably waives any objections
to the commencement or consolidation of the foreclosure proceedings in a single
action and any objections to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have. The Mortgagor further
----- --- ----------
agrees that if the Mortgagee shall be prosecuting one or more foreclosure or
other proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if the Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Mortgaged Property is located, the
Mortgagee may commence or continue foreclosure proceedings and exercise its
other remedies granted in this Mortgage against all or any part of the Mortgaged
Property and the Mortgagor waives any objections to the commencement or
continuation of a foreclosure of this Mortgage or exercise of any other remedies
hereunder based on such other proceedings or judgments, and waives any right to
seek to dismiss, stay, remove, transfer or consolidate either any action under
this Mortgage or such other proceedings on such basis. Neither the commencement
nor continuation of proceedings to foreclose this Mortgage nor the exercise of
any other rights hereunder nor the recovery of any judgment by the Mortgagee in
any such proceedings shall prejudice, limit or preclude the Mortgagee's right to
commence or continue one or more foreclosure or other proceedings or obtain a
judgment against any other collateral (either in or outside the State in which
the Mortgaged Property is located) which directly or indirectly secures the
Indebtedness, and the Mortgagor expressly waives any objections to the
commencement of, continuation of, or entry of a judgment in such other
proceedings or exercise of any remedies in such proceedings based upon any
action or judgment connected to this Mortgage, and the Mortgagor also waives any
right to seek to dismiss, stay, remove, transfer or consolidate either such
other proceedings or any action under this Mortgage on such basis. It is
expressly understood and agreed that to the fullest extent permitted by law, the
Mortgagee may, at its election, cause the sale of all collateral which is the
subject of a single foreclosure action at either a single sale or at multiple
sales conducted simultaneously and take such other measures as are appropriate
in order to effect the agreement of the parties to dispose of and administer all
collateral securing the Indebtedness (directly or indirectly) in the most
economical and least time-consuming manner.
27. Governing Law, etc. This Mortgage shall be governed by and
------------------
construed in accordance with the laws of the State of where the Mortgaged
Property is located, except that Mortgagor expressly acknowledges that by its
terms the Notes, the Credit Agreement and the Participation Agreement shall be
governed and construed in accordance with the laws of the State of New York,
without regard to principles of conflict of law, and for purposes of
consistency, Mortgagor agrees that in any in personam proceeding related to this
-- --------
Mortgage the rights of the parties to this Mortgage shall also be governed by
and construed in accordance with the laws of the State of New York governing
contracts made and to be performed in that State, without regard to principles
of conflict of law.
28. Obligations Are Without Recourse. Except as otherwise expressly
--------------------------------
provided in any Credit Document or the Participation Agreement, neither the
Mortgagor nor any of the Mortgagor's successors or assigns (all such Persons
being hereinafter referred to collectively as the "Exculpated Persons"), shall
------------------
be personally liable in any respect for any liability or obligation hereunder or
under any other Credit Document including the payment of the principal of, or
15
interest on, the Notes, or for monetary damages for the breach of performance of
any of the covenants contained in the Credit Agreement, the Notes, this Mortgage
or any of the other Credit Documents. The Lenders and the Mortgagee agree that,
in the event any of them pursues any remedies available to them under the Credit
Agreement, the Notes, this Mortgage or under any other Credit Document, neither
the Lenders nor the Mortgagee shall have any recourse against the Mortgagor, nor
any other Exculpated Person, for any deficiency, loss or claim for monetary
damages or otherwise resulting therefrom and recourse shall be had solely and
exclusively only against the Mortgaged Property; but nothing contained herein
shall be taken to prevent recourse against or the enforcement of remedies
against the Mortgaged Property or the Guarantee in respect of any and all
liabilities, obligations and undertakings contained in the Credit Agreement, the
Notes or any other Credit Document. The Lenders and the Mortgagee further agree
that the Mortgagor shall not be responsible for the payment of any amounts owing
hereunder (excluding principal and interest (other than Overdue Interest) in
respect of the Loans) (such non-excluded amounts, "Supplemental Amounts") except
--------------------
to the extent that payments of Supplemental Rent applicable to such Supplemental
Amounts have been made by the Lessee for application to such Supplemental
Amounts (it being understood that the failure by the Lessee for any reason to
pay any Supplemental Rent in respect of such Supplemental Amounts shall
nevertheless be deemed to constitute a default by the Mortgagor for the purposes
of Section 6(a)(ii) of the Credit Agreement). Notwithstanding the foregoing
provisions of this Section, nothing in this Mortgage or any other Credit
Document shall (a) constitute a waiver, release or discharge of any obligation
evidenced or secured by this Mortgage or any other Credit Document, (b) limit
the right of any Lenders or the Mortgagee to name the Mortgagor as a party
defendant in any action or suit for judicial foreclosure and sale under any
Security Document, or (c) affect in any way the validity or enforceability of
the Guarantee or any other guaranty (whether of payment and/or performance)
given to the Lenders or the Mortgagee, or of any indemnity agreement given by
the Mortgagor, in connection with the Loans made under the Credit Agreement.
29. WAIVER OF TRIAL BY JURY. MORTGAGOR AND MORTGAGEE EACH HEREBY
-----------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT
OR PROCEEDING RELATING TO THIS MORTGAGE AND FOR ANY COUNTERCLAIM BROUGHT
THEREIN. MORTGAGOR HEREBY WAIVES ALL RIGHTS TO INTERPOSE ANY COUNTERCLAIM IN
ANY SUIT BROUGHT BY MORTGAGEE HEREUNDER AND ALL RIGHTS TO HAVE ANY SUCH SUIT
CONSOLIDATED WITH ANY SEPARATE SUIT, ACTION OR PROCEEDING.
30. Partial Release; Full Release. The Mortgagee may release, for
-----------------------------
such consideration or none, as it may require, any portion of the Mortgaged
Property without, as to the remainder of the Mortgaged Property, in any way
impairing or affecting the lien, security interest and priority herein provided
for the Mortgagee compared to any other lien holder or secured party. Further,
upon receipt of the Purchase Option Price or the Termination Value and all other
amounts which are due under the Credit Documents with respect to the Property
and payment of all other amounts due on the Notes with respect to the Property
encumbered by this Mortgage, the Mortgagee shall execute and deliver to the
Mortgagor such documents and instruments as may be required to release the lien
and security interest created by this Mortgage.
31. Priority. This Mortgage shall be subject and subordinate to the
--------
Lease and to all presently existing or future Lease Supplements which affect the
Property.
16
32. Miscellaneous. (a) This Mortgage is one of several mortgages
-------------
and other documents that create liens and security interests that secure payment
and performance of the Indebtedness. The Mortgagee, at its election, may
commence or consolidate in a single action all proceedings to realize upon all
such liens and security interests. The Mortgagor hereby waives (i) any
objections to the commencement or continuation of an action to foreclose this
Mortgage or exercise of any other remedies hereunder based on any action being
prosecuted or any judgment entered with respect to the Indebtedness or any liens
or security interests that secure payment and performance of the Obligations and
(ii) any objections to the commencement of, continuation of, or entry of a
judgment in any such other action based on any action or judgment connected to
this Mortgage. In case of a foreclosure sale, the Mortgaged Property may be
sold, at Mortgagee's election, in one parcel or in more than one parcel, and the
Mortgagee is specifically empowered (without being required to do so, and in its
sole and absolute discretion) to cause successive sales of portions of the
Mortgaged Property to be held.
(b) Except as provided in the Operative Agreements, the Mortgagee,
with the express written consent of the Mortgagor, may at any time or from time
to time renew or extend this Mortgage, or alter or modify the same in any way,
or the Mortgagee may waive any of the terms, covenants or conditions hereof in
whole or in part and may release any portion of the Mortgaged Property or any
other security, and grant such extensions and indulgences in relation to the
Obligations secured hereby as the Mortgagee may determine without the consent of
any other person and without any obligation to give notice of any kind thereto
and without in any manner affecting the priority of the lien hereof on any part
of the Mortgaged Property.
33. Amendments, etc. with respect to the Guaranteed Obligations;
------------------------------------------------------------
Waiver of Rights. This Mortgage shall remain valid and effective and Mortgagor
----------------
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against Mortgagor and without notice to or further assent by such
Mortgagor, any demand for payment of any of the Paragon Indebtedness or the
Paragon Obligations made by Mortgagee or Administrative Agent or any Corporate
Lender may be rescinded by such party and any of the Paragon Indebtedness or the
Paragon Obligations continued, and the Paragon Indebtedness or the Paragon
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
Mortgagee, the Administrative Agent or any Corporate Lender, and the Corporate
Loan Documents may be amended, modified, supplemented or terminated, in whole or
in part, as the Administrative Agent (or the Required Corporate Lenders, as the
case may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by Mortgagee, Administrative Agent
or any Corporate Lender for the payment of the Paragon Indebtedness or the
Paragon Obligations may be sold, exchanged, waived, surrendered or released.
Neither Mortgagee, Administrative Agent nor any Corporate Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Paragon Indebtedness or the Paragon Obligations. Any
release of Paragon by Mortgagee, Administrative Agent or any Corporate Lender
shall not relieve Mortgagor, and shall not impair or affect this Mortgage or the
rights and remedies, express or implied, or as a matter of law, of Mortgagee,
Administrative Agent or any Corporate Lender against Mortgagor under this
Mortgage.
34. Mortgage Absolute and Unconditional. Mortgagor waives any and
-----------------------------------
all notice
17
of the creation, renewal, extension or accrual of any of the Paragon
Indebtedness or the Paragon Obligations and notice of or proof of reliance by
Mortgagee or any Corporate Lender upon this Mortgage or acceptance of this
Mortgage; the Paragon Indebtedness and the Paragon Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Mortgage. Mortgagor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon Paragon with respect to the Paragon Indebtedness and
the Paragon Obligations in order for Mortgagee to exercise its rights under this
Mortgage. Mortgagor understands and agrees that this Mortgage shall be construed
as a continuing, absolute and unconditional mortgage without regard to (a) the
validity, regularity or enforceability of the Corporate Loan Documents, any of
the Paragon Indebtedness or the Paragon Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Mortgagee or any Corporate Lender, (b) any
defense, set-off or counterclaim which may at any time be available to or be
asserted by the Paragon against Mortgagee or any Corporate Lender, or (c) any
other circumstance whatsoever which constitutes, or might be construed to
constitute, an equitable or legal discharge of Paragon for the Paragon
Indebtedness or the Paragon Obligations, in bankruptcy or in any other instance.
When pursuing its rights and remedies hereunder against Mortgagor, Mortgagee and
any Corporate Lender may, but shall be under no obligation to, pursue such
rights and remedies as it may have against Paragon or any other Person or
against any collateral security or guarantee for the Paragon Indebtedness or the
Paragon Obligations or any right of offset with respect thereto, and any failure
by Mortgagee or any Corporate Lender to pursue such other rights or remedies or
to collect any payments from Paragon or any such other Person or to realize upon
any such collateral security or guarantee or to exercise any such right of
offset, or any release of Paragon or any such other Person or any such
collateral security, guarantee or right of offset, shall not relieve Mortgagor
of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of Mortgagee
under this Mortgage. This Mortgage shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon Mortgagor and the
successors and assigns thereof, and shall inure to the benefit of Mortgagee and
the Corporate Lenders, and their respective successors, indorsees, transferees
and assigns, until all the Obligations shall have been satisfied by payment in
full and the commitments of the Lenders and the Corporate Lenders shall be
terminated, notwithstanding that from time to time during the term of the
Corporate Loan Documents Paragon may be free from any Paragon Indebtedness or
the Paragon Obligations.
35. Reinstatement. This Mortgage shall continue to be effective, or
-------------
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Paragon Indebtedness or the Paragon Obligations is rescinded or
must otherwise be restored or returned by the Mortgagee or any Corporate Lender
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Paragon, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
Paragon or any substantial part of its property, or otherwise, all as though
such payments had not been made.
36. Receipt of Copy. Mortgagor acknowledges that it has received a
---------------
true copy of this Mortgage.
IN WITNESS WHEREOF, the undersigned has caused this Mortgage to be
duly executed and delivered as of the date first above written.
FBTC LEASING CORP.
By:____________________________
Name:
Title:
STATE OF ________ )
) ss.:
COUNTY OF ________ )
On the ___ day of,___________, ___, before me personally came
____________________ to me known, who, being by me duly
sworn, did depose and say that he/she resides at------------------------------;
that he/she is the ___________________________of FBTC LEASING CORP., the
corporation described in and which executed the above instrument; and that
he/she signed his/her name thereto by order of the board of directors of said
corporation.
_______________________________
Notary Public
Exhibit A
---------
Legal Description of the Property
---------------------------------
JOINDER OF LESSEE
-----------------
LIVING CENTERS HOLDING COMPANY, a Delaware corporation having its
principal office at ______________________________ hereby joins in this Mortgage
in order to, and HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST
IN, AND HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE;
on behalf of the Lenders, all of its right, title and interest in and to the
Property and the other Mortgaged Property (the "Lessee Collateral") for the
-----------------
purpose of securing the Indebtedness. Lessee acknowledges and agrees that, upon
the occurrence of a Credit Agreement Event of Default, the Lenders shall have
the right to exercise any and all of its remedies hereunder as against the
Lessee Collateral.
Lessee agrees that if Lessee has any right, title, estate or interest
in the Lessee Collateral, the Lessee is to that extent a guarantor or surety for
the benefit of the Agent and the Lenders. In such event, Lessee expressly
agrees that the rights of the Agent and the Lenders shall in no way be affected
or impaired by reason of the occurrence of any of the following events: (i) the
waiver by the Agent or the Lenders of the performance or observance by the
Mortgagor, Lessee or any other party of any terms of the Operative Agreements;
(ii) the extension, in whole or in part, of the time for payment by Mortgagor of
any sums owing or payable under the Operative Agreements; (iii) any failure,
delay or inability of the Agent or the Lenders in enforcing any remedies or any
other provisions under the Operative Agreements; (iv) the occurrence of any
event described in Section 6.1(i) of the Credit Agreement; or (v) the inability
of Mortgagor to perform (or the release of Mortgagor's performance) under the
Operative Agreements due to any Legal Requirement.
This Joinder shall be considered part of the Mortgage to which it is
attached, and all references in the Operative Agreements to the Mortgage shall
mean the Mortgage together with this Joinder.
All capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed to such terms in the Mortgage.
This Joinder has been duly executed by Lessee on the date first above
written.
LIVING CENTERS HOLDING COMPANY
By: _______________________
Name:
Title:
EXHIBIT A-2 TO THE
PARTICIPATION AGREEMENT
-----------------------
================================================================================
FORM OF
DEED OF TRUST AND SECURITY AGREEMENT/1/
-
from
FBTC LEASING CORP., Grantor
to
________________________, Trustee
for the use and benefit of
THE CHASE MANHATTAN BANK, as Agent
Dated as of _______ __, ____
When recorded return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
_______________________
/1/ The form of Deed of Trust in each jurisdiction shall be modified to conform
-
to documentary conventions and recording statutes and customs of the particular
jurisdiction.
1
DEED OF TRUST AND SECURITY AGREEMENT
------------------------------------
DEED OF TRUST AND SECURITY AGREEMENT, dated as of _______ __, ____
(this "Deed of Trust"), made by FBTC LEASING CORP., a New York corporation (the
-------------
"Grantor"), to ___________________ (the "Trustee"), for the use and benefit of
------- -------
THE CHASE MANHATTAN BANK, a New York banking corporation, as collateral agent
(in such capacity, the "Beneficiary" or the "Agent") under the Collateral Agent
----------- -----
Agreement, dated as of November 4, 1997 (as amended, supplemented, or otherwise
modified from time to time, the "Collateral Agent Agreement"), among the
--------------------------
Grantor, the Beneficiary and the financial institutions from time to time
parties thereto.
Preliminary Statement
---------------------
A. Grantor has entered into that certain Amended and Restated Credit
Agreement dated as of November 4, 1997 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
----------------
with the several lenders from time to time parties thereto (the "Lenders") and
-------
Beneficiary.
B. Grantor is the owner of the parcel(s) of real property described
on Schedule A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"Improvements"), being collectively referred to as the "Real Estate").
------------ -----------
C. Pursuant to the terms and conditions of the Credit Agreement, the
Beneficiary has agreed to make loans to the Grantor, in an aggregate principal
amount not to exceed $97,000,000 (the "Loans"). Pursuant to the terms and
-----
conditions of that certain Amended and Restated Guarantee dated as of the date
hereof, Paragon Health Network, Inc. ("Paragon"), as the successor-in-interest
-------
to Living Centers of America, Inc. and certain of Paragon's subsidiaries, have
agreed to amend and restate its obligations under that certain Guarantee dated
as of October 10, 1996 and guarantee the obligations of Grantor under the Credit
Agreement.
D. Paragon has entered into that certain Credit Agreement dated as of
November 4, 1997 (as the same may be amended, supplemented or otherwise modified
from time to time, the "Corporate Credit Agreement") with the several lenders
--------------------------
from time to time parties thereto (the "Corporate Lenders") and The Chase
-----------------
Manhattan Bank, as Administrative Agent (in such capacity, "Administrative
--------------
Agent").
-----
E. Pursuant to the terms and conditions of the Corporate Credit
Agreement, the Corporate Lenders have agreed to make loans to Paragon in an
aggregate principal amount not to exceed $890,000,000 (the "Corporate Loans").
---------------
F. The obligations of (i) the Lenders to make the Loans are
conditioned upon, among other things, that the obligations of Grantor under the
Credit Agreement be secured by a mortgage lien upon the Trust Property and (ii)
the Corporate Lenders to make the Corporate Loans are conditioned upon, among
other things, that the obligations of Paragon under the
2
Corporate Credit Agreement be secured by a mortgage lien upon the Trust
Property.
G. In order to induce (i) the Lenders to make the Loans and (ii) the
Corporate Lenders to make the Corporate Loans, Grantor desires to grant
Beneficiary a lien upon the Trust Property upon the terms and conditions
hereinafter set forth.
H. Capitalized terms used but not otherwise defined in this Mortgage
shall have the meanings assigned to them in Annex A attached to the Amended and
Restated Participation Agreement dated as of November 4, 1997 among Living
Centers Holding Company, Grantor, Agent, certain co-agents and the Lenders. The
rules of usage and documentary conventions set forth in such Annex are also
applicable hereto.
Granting Clauses
----------------
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor agrees that to secure:
(a) (i) the repayment by Grantor of all obligations, liabilities and
indebtedness of Grantor, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
under, arising out of or in connection with the Credit Agreement, the Notes
or the other Operative Agreements, together with all interest and fees
payable thereon (collectively, the "Grantor Indebtedness") and (ii) the
--------------------
payment of all obligations, liabilities and indebtedness of Paragon,
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, under, arising out of or in
connection with the Corporate Credit Agreement and the other Loan
Documents, together with all interest and fees payable thereon
(collectively, the "Paragon Indebtedness"; together with the Grantor
--------------------
Indebtedness, the "Indebtedness"); and
------------
(b) (i) the performance and observance of all covenants, agreements,
obligations and liabilities of Grantor (the "Grantor Obligations") under or
-------------------
pursuant to the provisions of the Operative Agreements and any amendments,
supplements, extensions, renewals, restatements, replacements or
modifications of any of the foregoing and (ii) the performance and
observance of all covenants, agreements, obligations and liabilities of
Paragon under the Loan Documents and any amendments, supplements,
extensions, renewals, restatements, replacements or modifications of any of
the foregoing (the "Paragon Obligations"; together with the Grantor
-------------------
Obligations, the "Obligations") (the Operative Agreements and the Loan
-----------
Documents and all other documents and instruments from time to time
evidencing, securing or guaranteeing the payment of the Indebtedness or the
performance of the Obligations, as any of the same may be amended,
supplemented, extended, renewed, restated, replaced or modified from time
to time, are collectively referred to as the "Credit Documents");
----------------
GRANTOR HEREBY IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE, IN TRUST,
WITH POWER OF SALE, AND RIGHT OF ENTRY AND INSPECTION, THE FOLLOWING:
(A) all right, title and interest of Grantor, whether now owned or
hereafter
3
acquired, in and to the parcels of real property described on Schedule A
(together with the Land, the Improvements, the Appurtenant Rights and the
Fixtures relating thereto being collectively referred to herein as the
"Property")
--------
(B) all the estate, right, title, claim or demand whatsoever of the
Grantor, in possession or expectancy, in and to the Property or any part
thereof;
(C) all right, title and interest of Grantor, whether now owned or
hereafter acquired, in and to the Equipment;
(D) all right, title and interest of Grantor, whether now owned or
hereafter acquired, in and to all substitutes and replacements of, and all
additions and improvements to, the Property and the Equipment, subsequently
acquired by or released to Grantor or constructed, assembled or placed by
Grantor on the Property, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation, any
and all building materials whether stored at the Property or offsite, and,
in each such case, without any further mortgage, conveyance, assignment or
other act by Grantor;
(E) all right, title and interest of Grantor, whether now owned or
hereafter acquired, in, to and under all leases, subleases, underlettings,
concession agreements, management agreements, licenses and other agreements
relating to the use or occupancy of the Property or the Equipment or any
part thereof, now existing or subsequently entered into by Grantor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated, extended,
renewed or modified from time to time, the "Leases"), and all rights of
------
Grantor in respect of cash and securities deposited thereunder and the
right to receive and collect the revenues, income, rents, issues and
profits thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment of
the Trust Property (as defined below) (collectively, the "Rents");
-----
(F) all right, title and interest of Grantor in and to all unearned
premiums under insurance policies now or subsequently obtained by Grantor
relating to the Property or Equipment and Grantor's interest in and to all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds; and all
awards and other compensation, including the interest payable thereon and
the right to collect and receive the same, made to the present or any
subsequent owner of the Property or Equipment for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Property or
any easement or other right therein;
(G) all right, title and interest of Grantor in and to (i) all
contracts from time to time executed by Grantor or any manager or agent on
its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Property or Equipment or any
part thereof and all agreements relating to the purchase or lease of any
portion of the Property or any property which is adjacent or peripheral to
the Property, together with the right to exercise such options and all
leases of Equipment, (ii) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Property or
any part thereof and (iii) all drawings, plans, specifications and similar
or
4
related items relating to the Property;
(H) all right, title and interest of Grantor in and to any and all
monies now or subsequently on deposit for the payment of real estate taxes
or special assessments against the Property or for the payment of premiums
on insurance policies covering the foregoing property or otherwise on
deposit with or held by Beneficiary as provided in this Deed of Trust; all
capital, operating, reserve or similar accounts held by or on behalf of
Grantor and related to the operation of the Trust Property, whether now
existing or hereafter arising and all monies held in any of the foregoing
accounts and any certificates or instruments related to or evidencing such
accounts; and
(I) all amendments, modifications, substitutions, replacements and
additions of any of the foregoing, and all proceeds, both cash and noncash,
of any of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Grantor and described in the foregoing clauses
(A) through (I) are collectively referred to as the "Trust Property"); PROVIDED
--------------
THAT EXCLUDED from the Trust Property at all times and in all respects shall be
all Excepted Rights and the Trust Property shall be subject at all times and in
all respects to all Shared Rights.
TO HAVE AND TO HOLD the Trust Property and the rights and privileges
hereby granted unto Trustee, its successors and assigns for the uses and
purposes set forth, until the Indebtedness is fully paid and the Obligations
fully performed, subject however to the matters listed on Schedule B hereto (the
"Permitted Encumbrances and Liens").
[PROVIDED, HOWEVER, that this Deed of Trust secures a principal amount
of the Obligations not to exceed $______________ (the "Maximum Secured Amount");
----------------------
and
PROVIDED FURTHER, that payments made on account of the Indebtedness or
any portion thereof, whether in due course, as prepayments or otherwise, shall
not reduce the Maximum Secured Amount, unless the aggregate principal amount of
the Indebtedness is less than the Maximum Secured Amount.]/2/
-
Terms and Conditions
--------------------
Grantor further represents, warrants, covenants and agrees with
Trustee and Beneficiary as follows:
1. Payment of Indebtedness. Grantor shall pay the Indebtedness at
-----------------------
the times and places and in the manner specified in the Notes and the Credit
Agreement and shall perform all the Obligations.
2. Other Covenants. At any time and from time to time, upon the
---------------
written request of the Beneficiary, and at the sole expense of the Grantor, the
Grantor will promptly and duly
___________________
/2/ This provision should be added in appropriate jurisdictions.
-
5
execute and deliver such further instruments and documents and take such further
actions as the Beneficiary reasonably may request for the purposes of obtaining
or preserving the full benefits of this Deed of Trust and of the rights and
powers granted by this Deed of Trust.
3. Further Assurances. To further assure Beneficiary's and Trustee's
------------------
rights under this Deed of Trust, Grantor agrees upon demand of Beneficiary or
Trustee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Trust Property) as may be reasonably required by Beneficiary or Trustee to
confirm the rights or benefits conferred on Beneficiary or Trustee by this Deed
of Trust.
4. Beneficiary's Right to Perform. If the Grantor fails to perform
------------------------------
or comply with any of its agreements contained in this Deed of Trust, the
Beneficiary, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement. The
expenses of the Beneficiary incurred in connection with actions undertaken as
provided in this Section, together with interest thereon at a rate per annum
equal to the Overdue Rate, from the date of payment by the Beneficiary to the
date reimbursed by the Grantor, shall be payable by the Grantor to the
Beneficiary on demand; provided, however, that the Grantor shall not be liable
-------- -------
for payment of any amount under this Section to the extent the Lessee is
responsible for payment of such amount under the Lease, the Participation
Agreement or any other Operative Agreement.
5. Grantor's Existence, etc. Grantor shall do all things necessary
-------------------------
to preserve and keep in full force and effect its existence, franchises, rights
and privileges under the laws of the state of [ ] and its right to own
property and transact business in the state of [ ]. This Deed of
Trust constitutes the legal, valid and binding obligation of Grantor,
enforceable against Grantor in accordance with its terms, except as
enforceability may be limited by principles of equity and applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally.
6. Events of Default. It shall be an event of default under this
-----------------
Deed of Trust (an "Event of Default") if an Event of Default shall occur under
----------------
any of the Credit Documents.
7. Remedies./3/ Upon the occurrence of any Event of Default, in
-------- -
addition to any other rights and remedies Beneficiary may have pursuant to the
Credit Documents, or as provided by law, and without limitation, (a) if such
event triggers an Acceleration under Section 6.1(h) or 6.1(i) of the Credit
Agreement, automatically the Indebtedness and all other amounts owing under the
Notes, this Deed of Trust and the other Security Documents immediately shall
become due and payable, and (b) if such event is any other Event of Default, by
notice to Grantor, Beneficiary may declare the Indebtedness (together with
accrued interest thereon) and all other amounts payable under the Note, this
Deed of Trust and the other Security Documents to be immediately due and
payable. Except as expressly provided in the Credit Documents presentment,
demand,
_____________________
/3/ Deed of Trust remedies are a matter of state law and vary from jurisdiction
-
to jurisdiction. Local counsel will be consulted to be sure that the Deed
of Trust covers all remedies available under local law, and that any
waivers or other provisions required by state statutes to ensure
enforceability of particular remedies are included in the Deed of Trust.
6
protest and all other notices of any kind are hereby expressly waived. In
addition, upon the occurrence of any Event of Default, Beneficiary may
immediately take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Grantor and in and to the Trust Property,
including the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such manner as Beneficiary may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Beneficiary:
(a) Either in person or by agent, with or without bringing any
action or proceeding, or by a receiver appointed by a court and without regard
to the adequacy of its security, enter upon and take possession of the Trust
Property or any part thereof, with or without legal action, and do any acts
which it deems necessary or desirable to preserve the value, marketability or
rentability of the Trust Property, or any part thereof or the value of this Deed
of Trust (including entering into new leases of all or any part of the Trust
Property) and, with or without taking possession of the Trust Property, ▇▇▇ for
or otherwise collect the rents, issues and profits thereof, including those past
due and unpaid, and apply the same, less costs and expenses of operation and
collection including reasonable attorneys' fees, upon the Indebtedness, all in
such order as Beneficiary may determine. The entering upon and taking
possession of the Trust Property, the collection of such rents, issues and
profits and the application thereof as aforesaid, shall not cure or waive any
default or notice of default hereunder or invalidate any act done in response to
such default or pursuant to such notice of default and, notwithstanding the
continuance in possession of the Trust Property or the collection, receipt and
application of rents, issues or profits, Beneficiary shall be entitled to
exercise every right provided for in any of the Credit Documents or by law.
(b) Bring an action in any court of competent jurisdiction to
foreclose this Deed of Trust, to appoint a receiver or to enforce any of the
covenants, terms or conditions hereof and Beneficiary shall have the right to
specific performance, injunction and any other equitable right or remedy as
though other remedies were not provided in this Deed of Trust.
(c) Elect to cause the Trust Property or any part thereof to be sold
as follows, Grantor hereby expressly waiving any right which it may have to
direct the order in which any of the Trust Property may be sold:
(i) Beneficiary may proceed as if all of the Trust Property were real
property, in accordance with subparagraph (c) below, or Beneficiary may
elect to treat any of the Trust Property which consists of personal
property, in accordance with the Section of this Deed of Trust entitled
"Security Agreement under Uniform Commercial Code", separate and apart from
the sale of real property, the remainder of the Trust Property being
treated as real property;
(ii) Beneficiary may cause any such sale or other disposition to be
conducted immediately following the expiration of any grace period, if any,
herein provided or Beneficiary may delay any such sale or other disposition
for such period of time as Beneficiary deems to be in its best interest.
Should Beneficiary desire that more than one such sale or other disposition
be conducted, Beneficiary may, at its option, cause the same to be
conducted simultaneously, or successively on the same day, or at such
different days or times and in such order as Beneficiary may deem to be in
its best interest;
7
(iii) Should Beneficiary elect to sell the Trust Property and
Beneficiary elects to proceed under the laws governing foreclosure of or
sales pursuant to deeds of trust, Beneficiary or Trustee shall give such
notice of default and election to sell as may then be required by law.
Thereafter, upon the expiration of such time and the giving of such notice
of sale as may then be required by law, Trustee, at the time and place
specified by the notice of sale, shall sell such Trust Property, or any
portion thereof specified by Beneficiary, at public auction to the highest
bidder for cash in lawful money of the United States, subject, however, to
the provisions of the Section of this Deed of Trust entitled "Right of
Beneficiary to Credit Sale". Trustee may, and upon request of Beneficiary
shall, from time to time, postpone the sale by public announcement thereof
at the time and place noticed therefor. If the Trust Property consists of
several lots or parcels, Beneficiary may elect to sell the Trust Property
either as a whole or in separate lots or parcels. If Beneficiary elects to
sell in separate lots or parcels, Beneficiary may designate the order in
which such lots or parcels shall be offered for sale or sold. Any person,
including Grantor, Trustee or Beneficiary, may purchase at the sale. Upon
any sale, Trustee shall execute and deliver to the purchaser or purchasers
a deed or deeds conveying the property so sold, but without any covenant or
warranty whatsoever, express or implied, whereupon such purchaser or
purchasers shall be let into immediate possession;
(iv) In the event of a sale or other disposition of any such
property, or any part thereof, and the execution of a deed or other
conveyance pursuant thereto, the recitals therein of facts, such as an
Event of Default, the giving of notice of default and notice of sale,
demand that such sale should be made, postponement of sale, terms of sale,
sale, purchase, payments of purchase money, and any other fact affecting
the regularity or validity of such sale or disposition shall be conclusive
proof of the truth of such facts; and any such deed or conveyance shall be
conclusive against all persons as to such facts recited therein;
(v) Beneficiary and/or Trustee shall apply the proceeds of any sale
or disposition hereunder in the order as provided in the Section of this
Deed of Trust entitled "Sale of the Properties; Application of Proceeds";
and
(d) Exercise all other rights and remedies provided herein, in
the other Credit Documents or otherwise available at law of equity.
7A. Application of Proceeds. The proceeds available from the
-----------------------
sale of the Trust Property or any part thereof shall be applied as follows:
(_)(a) first, to the payment of the costs and expenses of such sale,
including attorneys' fees, and to the payment of any protective advances
made by the Beneficiary, together with any interest due thereon, in all
cases including all amounts to be paid pursuant to clause First of Section
3.4 of the Collateral Agent Agreement;
(b) second, an amount up to the amount which, after payments due
under clause (a) above, does not exceed the aggregate outstanding principal
of and accrued interest on the Tranche B Loans shall be paid to the
Collateral Agent to be applied in accordance with the Collateral Agent
Agreement;
8
(c) third, an amount equal to the proceeds of the sale available
after the payments due pursuant to the clauses (a) and (b) above, reduced
by an amount equal to the aggregate unpaid Lessor Contribution and accrued
Lessor Yield (which amount shall be retained by Grantor), shall be paid to
the Collateral Agent to be applied in accordance with the Collateral Agent
Agreement; and
(d) fourth, the balance, if any, shall be paid to whomever shall be
entitled thereto.
8. Sale of the Properties; Application of Proceeds. Subject to the
-----------------------------------------------
requirements of applicable law, the proceeds or avails of any foreclosure sale
and all moneys received by Beneficiary pursuant to any right given or action
taken under the provisions of this Deed of Trust shall be applied in accordance
with Section 8.2 of the Credit Agreement.
9. Successor Grantor. In the event ownership of the Trust Property
-----------------
or any portion thereof becomes vested in a person other than the Grantor herein
named, Beneficiary may, without notice to the Grantor herein named, whether or
not Beneficiary has given written consent to such change in ownership, deal with
such successor or successors in interest with reference to this Deed of Trust
and the Indebtedness and the Obligations, and in the same manner as with the
Grantor herein named, without in any way vitiating or discharging Grantor's
liability hereunder or under the Indebtedness and the Obligations.
10. Right of Beneficiary to Credit Sale. Upon the occurrence of any
-----------------------------------
sale made under this Deed of Trust, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Beneficiary may bid for and acquire the Trust Property or any part
thereof. In lieu of paying cash therefor, Beneficiary may make settlement for
the purchase price by crediting upon the Indebtedness or other sums secured by
this Deed of Trust the net sales price after deducting therefrom the expenses of
sale and the cost of the action and any other sums which Beneficiary is
authorized to deduct under this Deed of Trust. In such event, this Deed of
Trust, the Notes and documents evidencing expenditures secured hereby may be
presented to the person or persons conducting the sale in order that the amount
so used or applied may be credited upon the Indebtedness as having been paid.
11. Remedies Not Exclusive. Beneficiary and Trustee shall be
----------------------
entitled to enforce payment of the Indebtedness and performance of the
Obligations and to exercise all rights and powers under this Deed of Trust or
under any of the other Credit Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the Indebtedness and
Obligations may now or hereafter be otherwise secured, whether by deed of trust,
mortgage, security agreement, pledge, lien, assignment or otherwise. Neither
the acceptance of this Deed of Trust nor its enforcement, shall prejudice or in
any manner affect Beneficiary's or Trustee's right to realize upon or enforce
any other security now or hereafter held by Beneficiary or Trustee, it being
agreed that Beneficiary and Trustee shall be entitled to enforce this Deed of
Trust and any other security now or hereafter held by Beneficiary or Trustee in
such order and manner as Beneficiary may determine in its absolute discretion.
No remedy herein conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by any of the Credit Documents to
Beneficiary or Trustee or to which either may otherwise be entitled, may be
exercised, concurrently or independently, from time to
9
time and as often as may be deemed expedient by Beneficiary or Trustee, as the
case may be. In no event shall Beneficiary or Trustee, in the exercise of the
remedies provided in this Deed of Trust (including in connection with the
Assignment of Leases, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Trust Property), be deemed a "mortgagee in
possession," and neither Beneficiary nor Trustee shall in any way be made liable
for any act, either of commission or omission, in connection with the exercise
of such remedies except for its gross negligence or willful misconduct.
12. Duty of the Beneficiary. The Beneficiary's sole duty with
-----------------------
respect to the custody, safekeeping and physical preservation of any Trust
Property in its possession, under Section 9-207 of the Uniform Commercial Code
or otherwise, shall be to deal with it in the same manner as the Beneficiary
deals with similar property for its own account. Neither the Beneficiary, any
Lender nor any of their respective directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon any of the Trust
Property or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Trust Property upon the request of the Grantor or
any other Person or to take any other action whatsoever with regard to the Trust
Property or any part thereof.
13. Powers Coupled with an Interest. All powers, authorizations and
-------------------------------
agencies contained in this Deed of Trust are coupled with an interest and are
irrevocable until this Deed of Trust is terminated and the lien created hereby
is released.
14. Execution of Financing Statements. To the extent permitted by
---------------------------------
applicable law, pursuant to Section 9-402 of the Uniform Commercial Code, the
Grantor authorizes the Beneficiary to file financing statements with respect to
the Trust Property without the signature of the Grantor in such form and in such
filing offices as the Beneficiary reasonably determines appropriate to perfect
the security interests of the Beneficiary under this Deed of Trust. To the
extent permitted by applicable law, a carbon, photographic or other reproduction
of this Deed of Trust shall be sufficient as a financing statement for filing in
any jurisdiction.
15. Trustee's Powers and Liabilities.
--------------------------------
(a) Powers of Trustee. At any time or from time to time, without
-----------------
liability therefor and without notice, upon the written request of Beneficiary
and presentation of the Notes and this Deed of Trust for endorsement, without
affecting the personal liability of any person for the payment of the
indebtedness secured hereby, and without affecting the lien of this Deed of
Trust upon the Trust Property for the full amount of all amounts secured hereby,
Trustee may (i) reconvey all or any part of the Trust Property, (ii) consent to
the making of any map or plat thereof, (iii) join in granting any easement
thereon or in creating any covenants or conditions restricting use or occupancy
thereof, or (iv) join in any extension agreement or in any agreement
subordinating the lien or charge hereof.
(b) Reconveyance. Upon written request of Beneficiary stating that
------------
all sums secured hereby have been paid, and upon surrender of this Deed of Trust
and the Notes to Trustee for cancellation and retention, and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in any such reconveyance of any matters or facts shall
be conclusive proof of the truth thereof. The grantee in such reconveyance may
be described as "the person or persons legally entitled thereto."
10
(c) Trustee Notice. Trustee is not obligated to notify any party
--------------
hereto of any pending sale under any other deed of trust or of any action or
proceeding in which Grantor, Beneficiary or Trustee shall be a party, unless
brought by Trustee.
(d) Compensation and Indemnification of Trustee. Trustee shall be
-------------------------------------------
entitled to reasonable compensation for all services rendered or expenses
incurred in the administration or execution of the trusts hereby created and
Grantor hereby agrees to pay the same. Except to the extent caused by Trustee's
gross negligence or willful misconduct, Trustee shall be indemnified, held
harmless and reimbursed by Grantor for any liability, damage or expense,
including reasonable attorneys' fees and amounts paid in settlement, which
Trustee may incur or sustain in connection with this Deed of Trust or in the
doing of any act which Trustee is required or permitted to do by the terms
hereof or by law.
(e) Substitute Trustees. Beneficiary may from time to time
-------------------
substitute the Trustee hereunder in any manner now or hereafter provided by law,
or in lieu thereof, Beneficiary may from time to time, by an instrument in
writing, substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed and acknowledged by Beneficiary and
recorded in the office of the recorder of the county or counties where the Trust
Property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall thereupon, and without conveyance from
the predecessor Trustee, succeed to all its title, estate, rights, powers and
duties.
(f) Acceptance by Trustee. The acceptance by Trustee of this trust
---------------------
shall be evidenced when this Deed of Trust, duly executed and acknowledged, is
made a public record as provided by law.
(g) Trust Irrevocable; No Offset. The trust created hereby is
----------------------------
irrevocable by Grantor. No offset or claim that Grantor now or may in the
future have against Beneficiary shall relieve Grantor from paying the
Indebtedness or performing the Obligations.
(h) Corrections. Grantor will, upon request of Beneficiary or
-----------
Trustee, promptly correct any defect, error or omission which may be discovered
in the contents of this Deed of Trust or in the execution or acknowledgement
hereof, and will execute, acknowledge and deliver such further instruments and
do such further acts as may be necessary or as may be reasonably requested by
Beneficiary or Trustee to carry out more effectively the purposes of this Deed
of Trust, to subject to the lien and security interests hereby created any of
Grantor's properties, rights or interest covered or intended to be covered
hereby, and to perfect and maintain such lien and security interest.
16. Appointment of Receiver. If an Event of Default shall have
-----------------------
occurred and be continuing, Beneficiary as a matter of right and without notice
to Grantor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Trust Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Grantor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Trust Property, without
requiring the posting of a surety bond and without reference to the adequacy or
inadequacy of the value of the Trust Property or the solvency or insolvency of
Grantor or any other party obligated for payment of all or any part
11
of the Indebtedness, and whether or not waste has occurred with respect to the
Trust Property. Grantor hereby irrevocably consents to such appointment and
waives notice of any application therefor (except as may be required by law).
Any such receiver or receivers shall have all the usual powers and duties of
receivers in like or similar cases and all the powers and duties of Beneficiary
in case of entry as provided in this Deed of Trust, including, without
limitation and to the extent permitted by law, the right to enter into leases of
all or any part of the Trust Property, and shall continue as such and exercise
all such powers until the date of confirmation of sale of the Trust Property
unless such receivership is sooner terminated.
17. Extension, Release, etc. (a) Without affecting the encumbrance
------------------------
or charge of this Deed of Trust upon any portion of the Trust Property not then
or theretofore released as security for the full amount of the Indebtedness,
Beneficiary may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Beneficiary's option any parcel, portion or all of the Trust
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Deed of Trust shall
secure less than all of the principal amount of the Indebtedness, it is
expressly agreed that any repayments of the principal amount of the Indebtedness
shall not reduce the amount of the encumbrance of this Deed of Trust until the
encumbrance amount shall equal the principal amount of the Indebtedness
outstanding.
(b) No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Trust Property or upon any other property
of Grantor shall affect the encumbrance of this Deed of Trust or any liens,
rights, powers or remedies of Beneficiary or Trustee hereunder, and such liens,
rights, powers and remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose this Deed of
Trust or to direct the Trustee to exercise its power of sale, Grantor authorizes
Beneficiary at its option to foreclose the lien of this Deed of Trust (or direct
the Trustee to sell the Trust Property, as the case may be) subject to the
rights of any tenants of the Trust Property. The failure to make any such
tenants parties defendant to any such foreclosure proceeding and to foreclose
their rights, or to provide notice to such tenants as required in any statutory
procedure governing a sale of the Trust Property by Trustee, or to terminate
such tenant's rights in such sale, will not be asserted by Grantor as a defense
to any proceeding instituted by Beneficiary to collect the Indebtedness or to
foreclose this Deed of Trust.
(d) Unless expressly provided otherwise, in the event that
Beneficiary's interest in this Deed of Trust and title to the Trust Property or
any estate therein shall become vested in the same person or entity, this Deed
of Trust shall not merge in such title but shall continue as a valid charge on
the Trust Property for the amount secured hereby.
18. Security Agreement under Uniform Commercial Code. (a) It is the
------------------------------------------------
intention of the parties hereto that this Deed of Trust shall constitute a
Security A greement within the meaning of the Uniform Commercial Code (the
"UCC") of the State in which the Trust Property is located. If an Event of
Default shall occur under this Deed of Trust, then in addition to having any
other right or remedy available at law or in equity, Beneficiary shall have the
option of either (i) proceeding under the UCC and exercising such rights and
remedies as may be provided to a
12
secured party by the UCC with respect to all or any portion of the Trust
Property which is personal property (including, without limitation, taking
possession of and selling such property) or (ii) treating such property as real
property and proceeding with respect to both the real and personal property
constituting the Trust Property in accordance with Beneficiary's rights, powers
and remedies with respect to the real property (in which event the default
provisions of the UCC shall not apply). If Beneficiary shall elect to proceed
under the UCC, then ten Business Days' notice of sale of the personal property
shall be deemed reasonable notice and the reasonable expenses of retaking,
holding, preparing for sale, selling and the like incurred by Beneficiary shall
include, but not be limited to, attorneys' fees and legal expenses. At
Beneficiary's request, Grantor shall assemble the personal property and make it
available to Beneficiary at a place designated by Beneficiary which is
reasonably convenient to both parties.
(b) Grantor and Beneficiary agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Property; (ii) this Deed of
Trust upon recording or registration in the real estate records of the proper
office shall constitute a financing statement filed as a "fixture filing" within
the meaning of Sections 9-313 and 9-402 of the UCC; (iii) Grantor is the record
owner of the Property; and (iv) the addresses of Grantor and Beneficiary are as
set forth in Section 17 of this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to time, shall
execute, acknowledge and deliver to Beneficiary one or more separate security
agreements, in form reasonably satisfactory to Beneficiary and consistent with
the Credit Documents, covering all or any part of the Trust Property and will
further execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, any financing statement, affidavit, continuation statement or
certificate or other document as Beneficiary may reasonably request in order to
perfect, preserve, maintain, continue or extend the security interest under and
the priority of this Deed of Trust and such security instrument. Grantor
further agrees to pay to Beneficiary on demand all reasonable costs and expenses
incurred by Beneficiary in connection with the preparation, execution,
recording, filing and re-filing of any such document and all reasonable costs
and expenses of any record searches for financing statements Beneficiary shall
reasonably require; provided, however, that the Grantor shall not be liable for
-------- -------
payment of any amount under this Section to the extent that (i) the Lessee is
responsible for payment of such amount under the Lease, the Participation
Agreement or any other Credit Document or (ii) the Lessee has not paid such
amount to Lessor. If Grantor shall fail to furnish any financing or
continuation statement within ten days after request by Beneficiary, then
pursuant to the provisions of the UCC, Grantor hereby authorizes Beneficiary,
without the signature of Grantor, to execute and file any such financing and
continuation statements. The filing of any financing or continuation statements
in the records relating to personal property or chattels shall not be construed
as in any way impairing the right of Beneficiary to proceed against any personal
property encumbered by this Deed of Trust as real property, as set forth above.
19. Additional Rights. The holder of any subordinate lien or
-----------------
subordinate deed of trust on the Trust Property shall have no right to terminate
any lease affecting the Property whether or not such lease is subordinate to
this Deed of Trust nor shall any holder of any subordinate lien or subordinate
deed of trust join any tenant under any lease in any trustee's sale or action to
foreclose the lien or modify, interfere with, disturb or terminate the rights of
any tenant under any lease. By recordation of this Deed of Trust all subordinate
lienholders and the trustees and beneficiaries under subordinate deeds of trust
are subject to and notified of this
13
provision, and any action taken by any such lienholder or trustee or beneficiary
contrary to this provision shall be null and void. Upon the occurrence of any
Event of Default, Beneficiary may, in its sole discretion and without regard to
the adequacy of its security under this Deed of Trust, apply all or any part of
any amounts on deposit with Beneficiary under this Deed of Trust against all or
any part of the Indebtedness. Any such application shall not be construed to
cure or waive any Default or Event of Default or invalidate any act taken by
Beneficiary on account of such Default or Event of Default.
20. Authority of Beneficiary. The Grantor acknowledges that the
------------------------
rights and responsibilities of the Beneficiary under this Deed of Trust with
respect to any action taken by the Beneficiary or the exercise or non-exercise
by the Beneficiary of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Deed of Trust
shall, as between the Beneficiary and the Lenders, be governed by the Credit
Agreement and the Collateral Agent Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Beneficiary and the Grantor, the Beneficiary shall be conclusively presumed to
be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and the Grantor shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
21. 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 or by hand and any such notice shall become effective five
Business Days after being deposited in the mails, certified or registered with
appropriate postage prepaid or one Business Day after delivery to a nationally
recognized courier service specifying overnight delivery or, if delivered by
hand, when received, and shall be directed to the address of such Person as
indicated:
14
If to the Grantor, to it at:
FBTC Leasing Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
If to the Beneficiary, to it at:
The Chase Manhattan Bank
Agent Lender Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇
If to the Trustee, to it at:
[ ]
_________________________
_________________________
Attn: ________________
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
22. Partial Invalidity. In the event any one or more of the
------------------
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
23. No Waiver; Cumulative Remedies. (a) No failure to exercise, nor
------------------------------
any delay in exercising, on the part of the Beneficiary or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Beneficiary of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Beneficiary would otherwise have on any future occasion.
Beneficiary may release, regardless of consideration and without the necessity
for any notice to or consent by
the beneficiary of any subordinate deed of trust or the holder of any
subordinate lien on the Trust Property, any part of the security held for the
obligations secured by this Deed of Trust without, as to the remainder of the
security, in
15
anyway impairing or affecting this Deed of Trust or the priority of this Deed of
Trust over any subordinate lien or deed of trust.
(b) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
24. No Oral Modification. This Deed of Trust may not be changed or
--------------------
terminated orally. Any agreement made by Grantor and Beneficiary after the date
of this Deed of Trust relating to this Deed of Trust shall be superior to the
rights of the holder of any intervening or subordinate deed of trust, lien or
encumbrance. Trustee's execution of any written agreement between Grantor and
Beneficiary shall not be required for the effectiveness thereof as between
Grantor and Beneficiary.
25. Section Headings. The section headings used in this Deed of
----------------
Trust are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
26. Successors and Assigns. All covenants of Grantor contained in
----------------------
this Deed of Trust are imposed solely and exclusively for the benefit of
Beneficiary, the Lenders and Trustee and their respective permitted successors
and assigns, and no other person or entity shall have standing to require
compliance with such covenants or be deemed, under any circumstances, to be a
beneficiary of such covenants, any or all of which may be freely waived in whole
or in part by Beneficiary or Trustee at any time if in the sole discretion of
either of them such waiver is deemed advisable. All such covenants of Grantor
shall run with the land and bind Grantor, the permitted successors and assigns
of Grantor (and each of them) and all subsequent owners, encumbrances and
tenants of the Trust Property, and shall inure to the benefit of Beneficiary,
Trustee and their respective permitted successors and assigns. Without limiting
the generality of the foregoing, any successor to Trustee appointed by
Beneficiary shall succeed to all rights of Trustee as if such successor had been
originally named as Trustee hereunder. The word "Grantor" shall be construed as
if it read "Grantors" whenever the sense of this Deed of Trust so requires and
if there shall be more than one Grantor, the obligations of the Grantors shall
be joint and several.
27. Grantor's Waiver of Rights. Except as otherwise set forth
--------------------------
herein, to the fullest extent permitted by law, Grantor waives the benefit of
all laws now existing or that may subsequently be enacted providing for (i) any
appraisement before sale of any portion of the Trust Property, (ii) any
extension of the time for the enforcement of the collection of the indebtedness
or the creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Trust Property from attachment,
levy or sale under execution or exemption from civil process. Except as
otherwise set forth herein, to the full extent Grantor may do so, Grantor agrees
that Grantor will not at any time insist upon, plead, claim or take the benefit
or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Deed of Trust before exercising any other remedy granted
hereunder and Grantor, for Grantor and its successors and assigns, and for any
and all Persons ever claiming any interest in the Trust Property, to the extent
permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of exercise by Trustee or Beneficiary of the power of sale or other rights
hereby created.
16
28. Multiple Security. If (a) the Land shall consist of one or more
-----------------
parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Deed of Trust, Beneficiary shall now or
hereafter hold or be the beneficiary of one or more additional deeds of trust,
mortgages, liens or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Land is located (whether or not
such property is owned by Grantor or by others) or (c) both the circumstances
described in clauses (a) and (b) shall be true, then to the fullest extent
permitted by law, Beneficiary may, at its election, commence or consolidate in a
single trustee's sale or foreclosure action all trustee's sale or foreclosure
proceedings against all such collateral securing the Indebtedness (including the
Trust Property), which action may be brought or consolidated in the courts of,
or sale conducted in, any county in which any of such collateral is located.
Grantor acknowledges that the right to maintain a consolidated trustee's sale or
foreclosure action is a specific inducement to Beneficiary to extend the
Indebtedness, and Grantor expressly and irrevocably waives any objections to the
commencement or consolidation of the foreclosure proceedings in a single action
and any objections to the laying of venue or based on the grounds of forum non
----- ---
conveniens which it may now or hereafter have. Grantor further agrees that if
----------
Trustee or Beneficiary shall be prosecuting one or more foreclosure or other
proceedings against a portion of the Trust Property or against any collateral
other than the Trust Property, which collateral directly or indirectly secures
the Indebtedness, or if Beneficiary shall have obtained a judgment of
foreclosure and sale or similar judgment against such collateral (or, in the
case of a trustee's sale, shall have met the statutory requirements therefor
with respect to such collateral), then, whether or not such proceedings are
being maintained or judgments were obtained in or outside the State in which the
Land is located, Beneficiary may commence or continue any trustee's sale or
foreclosure proceedings and exercise its other remedies granted in this Deed of
Trust against all or any part of the Trust Property and Grantor waives any
objections to the commencement or continuation of a foreclosure of this Deed of
Trust or exercise of any other remedies hereunder based on such other
proceedings or judgments, and waives any right to seek to dismiss, stay, remove,
transfer or consolidate either any action under this Deed of Trust or such other
proceedings on such basis. The commencement or continuation of proceedings to
sell the Trust Property in a trustee's sale, to foreclose this Deed of Trust or
the exercise of any other rights hereunder or the recovery of any judgment by
Beneficiary or the occurrence of any sale by the Trustee in any such proceedings
shall not prejudice, limit or preclude Beneficiary's right to commence or
continue one or more trustee's sales, foreclosure or other proceedings or obtain
a judgment against (or, in the case of a trustee's sale, to meet the statutory
requirements for, any such sale of) any other collateral (either in or outside
the State in which the Land is located) which directly or indirectly secures the
Indebtedness, and Grantor expressly waives any objections to the commencement
of, continuation of, or entry of a judgment in such other sales or proceedings
or exercise of any remedies in such sales or proceedings based upon any action
or judgment connected to this Deed of Trust, and Grantor also waives any right
to seek to dismiss, stay, remove, transfer or consolidate either such other
sales or proceedings or any sale or action under this Deed of Trust on such
basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Beneficiary may, at its election, cause the sale of all
collateral which is the subject of a single trustee's sale or foreclosure action
at either a single sale or at multiple sales conducted simultaneously and take
such other measures as are appropriate in order to effect the agreement of the
parties to dispose of and administer all collateral securing the Indebtedness
(directly or indirectly) in the most economical and least time-consuming manner.
17
29. Governing Law, etc. This Deed of Trust shall be governed
------------------
by and construed in accordance with the laws of the State where the Trust
Property is located, except that Grantor expressly acknowledges that by its
terms the Notes, the Credit Agreement and the Participation Agreement shall be
governed and construed in accordance with the laws of the State of New York,
without regard to principles of conflict of law, and for purposes of
consistency, Grantor agrees that in any in personam proceeding related to this
-- --------
Deed of Trust the rights of the parties to this Deed of Trust shall also be
governed by and construed in accordance with the laws of the State of New York
governing contracts made and to be performed in that State, without regard to
principles of conflict of law.
30. Obligations Are Without Recourse. Except as otherwise expressly
--------------------------------
provided in any Credit Document or the Participation Agreement, neither the
Grantor nor any of the Grantor's successors or assigns (all such Persons being
hereinafter referred to collectively as the "Exculpated Persons"), shall be
------------------
personally liable in any respect for any liability or obligation hereunder or
under any other Credit Document including the payment of the principal of, or
interest on, the Notes, or for monetary damages for the breach of performance of
any of the covenants contained in the Credit Agreement, the Notes, this Deed of
Trust or any of the other Credit Documents. The Lenders, the Trustee and the
Beneficiary agree that, in the event any of them pursues any remedies available
to them under the Credit Agreement, the Notes, this Deed of Trust or under any
other Credit Document, neither the Lenders, the Trustee nor the Beneficiary
shall have any recourse against the Grantor, nor any other Exculpated Person,
for any deficiency, loss or claim for monetary damages or otherwise resulting
therefrom and recourse shall be had solely and exclusively only against the
Trust Property; but nothing contained herein shall be taken to prevent recourse
against or the enforcement of remedies against the Trust Property or the
Guarantee in respect of any and all liabilities, obligations and undertakings
contained in the Credit Agreement, the Notes or any other Credit Document. The
Lenders, the Trustee and the Beneficiary further agree that the Grantor shall
not be responsible for the payment of any amounts owing hereunder (excluding
principal and interest (other than Overdue Interest) in respect of the Loans)
(such non-excluded amounts, "Supplemental Amounts") except to the extent that
--------------------
payments of Supplemental Rent applicable to such Supplemental Amounts have been
made by the Lessee for application to such Supplemental Amounts (it being
understood that the failure by the Lessee for any reason to pay any Supplemental
Rent in respect of such Supplemental Amounts shall nevertheless be deemed to
constitute a default by the Grantor for the purposes of Section 6(a)(ii) of the
Credit Agreement). Notwithstanding the foregoing provisions of this Section,
nothing in this Deed of Trust or any other Credit Document shall (a) constitute
a waiver, release or discharge of any obligation evidenced or secured by this
Deed of Trust or any other Credit Document, (b) limit the right of any Lenders,
the Trustee or the Beneficiary to name the Grantor as a party defendant in any
action or suit for judicial foreclosure and sale under any Security Document, or
(c) affect in any way the validity or enforceability of the Guarantee or any
other guaranty (whether of payment and/or performance) given to the Lenders, the
Trustee or the Beneficiary, or of any indemnity agreement given by the Grantor,
in connection with the Loans made under the Credit Agreement.
31. WAIVER OF TRIAL BY JURY. GRANTOR, TRUSTEE AND BENEFICIARY EACH
-----------------------
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY ACTION, CLAIM,
SUIT OR PROCEEDING RELATING TO THIS DEED OF TRUST AND FOR ANY COUNTERCLAIM
BROUGHT THEREIN.
18
GRANTOR HEREBY WAIVES ALL RIGHTS TO INTERPOSE ANY COUNTERCLAIM IN ANY SUIT
BROUGHT BY BENEFICIARY OR TRUSTEE HEREUNDER AND ALL RIGHTS TO HAVE ANY SUCH SUIT
CONSOLIDATED WITH ANY SEPARATE SUIT, ACTION OR PROCEEDING.
32. Partial Release; Full Release. The Beneficiary may release, for
-----------------------------
such consideration or none, as it may require, any portion of the Trust Property
without, as to the remainder of the Trust Property, in any way impairing or
affecting the lien, security interest and priority herein provided for the
Beneficiary compared to any other lien holder or secured party. Further, upon
receipt of the Purchase Option Price or the Termination Value and all other
amounts which are due under the Credit Documents with respect to the Property
and payment of all other amounts due on the Notes with respect to the Property
encumbered by this Deed of Trust, the Beneficiary shall execute and deliver to
the Grantor such documents and instruments as may be required to release the
lien and security interest created by this Deed of Trust.
33. Priority. This Deed of Trust shall be subject and subordinate to
--------
the Lease and to all presently existing or future Lease Supplements which affect
the Property.
34. Miscellaneous. (a) This Deed of Trust is one of several deeds
-------------
of trust and other documents that create liens and security interests that
secure payment and performance of the Indebtedness. The Beneficiary, at its
election, may commence or consolidate in a single action all proceedings to
realize upon all such liens and security interests. The Grantor hereby waives
(i) any objections to the commencement or continuation of an action to foreclose
this Deed of Trust or exercise of any other remedies hereunder based on any
action being prosecuted or any judgment entered with respect to the Indebtedness
or any liens or security interests that secure payment and performance of the
Obligations and (ii) any objections to the commencement of, continuation of, or
entry of a judgment in any such other action based on any action or judgment
connected to this Deed of Trust. In case of a foreclosure sale, the Trust
Property may be sold, at Beneficiary's election, in one parcel or in more than
one parcel, and the Beneficiary is specifically empowered (without being
required to do so, and in its sole and absolute discretion) to cause successive
sales of portions of the Trust Property to be held.
(b) Except as provided in the Credit Documents, the Beneficiary, with
the express written consent of the Grantor, may at any time or from time to time
renew or extend this Deed of Trust, or alter or modify the same in any way, or
the Beneficiary may waive any of the terms, covenants or conditions hereof in
whole or in part and may release any portion of the Trust Property or any other
security, and grant such extensions and indulgences in relation to the
Obligations secured hereby as the Beneficiary may determine without the consent
of any other person and without any obligation to give notice of any kind
thereto and without in any manner affecting the priority of the lien hereof on
any part of the Trust Property.
35. Amendments, etc. with respect to the Guaranteed Obligations;
------------------------------------------------------------
Waiver of Rights. This Deed of Trust shall remain valid and effective and
----------------
Grantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against Grantor and without notice to or further assent by
such Grantor, any demand for payment of any of the Paragon Indebtedness or the
Paragon Obligations made by Beneficiary or Administrative Agent or any Corporate
Lender may be rescinded by such party and any of the Paragon Indebtedness or the
Paragon Obligations continued, and the Paragon Indebtedness or the Paragon
Obligations, or the
19
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by Beneficiary, the
Administrative Agent or any Corporate Lender, and the Corporate Loan Documents
may be amended, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent (or the Required Corporate Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by Beneficiary, Administrative Agent or any
Corporate Lender for the payment of the Paragon Indebtedness or the Paragon
Obligations may be sold, exchanged, waived, surrendered or released. Neither
Beneficiary, Administrative Agent nor any Corporate Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Paragon Indebtedness or the Paragon Obligations. Any release
of Paragon by Beneficiary, Administrative Agent or any Corporate Lender shall
not relieve Grantor, and shall not impair or affect this Deed of Trust or the
rights and remedies, express or implied, or as a matter of law, of Beneficiary,
Administrative Agent or any Corporate Lender against Grantor under this Deed of
Trust.
36. Deed of Trust Absolute and Unconditional. Grantor waives any and
----------------------------------------
all notice of the creation, renewal, extension or accrual of any of the Paragon
Indebtedness or the Paragon Obligations and notice of or proof of reliance by
Beneficiary or any Corporate Lender upon this Deed of Trust or acceptance of
this Deed of Trust; the Paragon Indebtedness and the Paragon Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this Deed of
Trust. Grantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon Paragon with respect to the Paragon
Indebtedness and the Paragon Obligations in order for Beneficiary to exercise
its rights under this Deed of Trust. Grantor understands and agrees that this
Deed of Trust shall be construed as a continuing, absolute and unconditional
mortgage without regard to (a) the validity, regularity or enforceability of the
Corporate Loan Documents, any of the Paragon Indebtedness or the Paragon
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Beneficiary or any Corporate Lender, (b) any defense, set-off or counterclaim
which may at any time be available to or be asserted by the Paragon against
Beneficiary or any Corporate Lender, or (c) any other circumstance whatsoever
which constitutes, or might be construed to constitute, an equitable or legal
discharge of Paragon for the Paragon Indebtedness or the Paragon Obligations, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against Grantor, Beneficiary and any Corporate Lender may, but shall
be under no obligation to, pursue such rights and remedies as it may have
against Paragon or any other Person or against any collateral security or
guarantee for the Paragon Indebtedness or the Paragon Obligations or any right
of offset with respect thereto, and any failure by Beneficiary or any Corporate
Lender to pursue such other rights or remedies or to collect any payments from
Paragon or any such other Person or to realize upon any such collateral security
or guarantee or to exercise any such right of offset, or any release of Paragon
or any such other Person or any such collateral security, guarantee or right of
offset, shall not relieve Grantor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of Beneficiary under this Deed of Trust. This Deed of Trust
shall remain in full force and effect and be binding in accordance with and to
the extent of its terms upon Grantor and the successors and assigns thereof, and
shall inure to the benefit of Beneficiary and the Corporate Lenders, and their
respective successors, indorsees, transferees and assigns,
20
until all the Obligations shall have been satisfied by payment in full and the
commitments of the Lenders and the Corporate Lenders shall be terminated,
notwithstanding that from time to time during the term of the Corporate Loan
Documents Paragon may be free from any Paragon Indebtedness or the Paragon
Obligations.
37. Reinstatement. This Deed of Trust shall continue to be
-------------
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Paragon Indebtedness or the Paragon Obligations is
rescinded or must otherwise be restored or returned by the Beneficiary or any
Corporate Lender or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Paragon, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, Paragon or any substantial part of its property, or otherwise, all
as though such payments had not been made.
38. Receipt of Copy. Grantor acknowledges that it has received a
---------------
true copy of this Deed of Trust.
21
This Deed of Trust has been duly executed by Grantor on the date first
above written.
FBTC LEASING CORP., a New York corporation
By: _____________________________
Name:
Title:
STATE OF ________)
) ss.:
COUNTY OF ________ )
On the ____ day of ____________, 199__, before me personally came
____________________________________________ to me known, who, being by me duly
sworn, did depose and say that he/she resides at______________________________;
that he/she is the ___________________________of FBTC LEASING CORP., the
corporation described in and which executed the above instrument; and that
he/she signed his/her name thereto by order of the board of directors of said
corporation.
_______________________________
Notary Public
Schedule A
----------
Description of the Land
JOINDER OF LESSEE
-----------------
LIVING CENTERS HOLDING COMPANY, a Delaware corporation having its
principal office at ________________________ hereby joins in this Deed of Trust
in order to, and hereby irrevocably, GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE,
IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY AND INSPECTION, all of its
right, title and interest in and to the Property and the other Trust Property
(the "Lessee Collateral") for the purpose of securing the Obligations. Lessee
-----------------
acknowledges and agrees that, upon the occurrence of a Credit Agreement Event of
Default, the Trustee and the Beneficiary shall have the right to exercise any
and all of their remedies hereunder as against the Lessee Collateral.
Lessee agrees that if Lessee has any right, title, estate or interest
in the Lessee Collateral, the Lessee is to that extent a guarantor or surety for
the benefit of the Agent and the Lenders. In such event, Lessee expressly
agrees that the rights of the Agent and the Lenders shall in no way be affected
or impaired by reason of the occurrence of any of the following events: (i) the
waiver by the Agent or the Lenders of the performance or observance by the
Grantor, Lessee or any other party of any terms of the Operative Agreements;
(ii) the extension, in whole or in part, of the time for payment by Grantor of
any sums owing or payable under the Operative Agreements; (iii) any failure,
delay or inability of the Trustee, the Agent or the Lenders in enforcing any
remedies or any other provisions under the Operative Agreements; (iv) the
occurrence of any event described in Section 6.1(i) of the Credit Agreement; or
(v) the inability of Grantor to perform (or the release of Grantor's
performance) under the Operative Agreements due to any Legal Requirement.
This Joinder shall be considered part of the Deed of Trust to which it
is attached, and all references in the Operative Agreements to the Deed of Trust
shall mean the Deed of Trust together with this Joinder.
All capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed to such terms in the Deed of Trust.
2
This Joinder has been duly executed by Lessee on the date first above
written.
LIVING CENTERS HOLDING COMPANY
By: ________________________________
Name:
Title:
3
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