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EXHIBIT 10.37
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AMENDED AND RESTATED
PARTICIPATION AGREEMENT
dated as of August 28, 1998
amending and restating the Participation
Agreement dated as of March 21, 1997
among
VANTAGE HEALTHCARE CORPORATION, ▇▇▇▇▇▇▇▇ HEALTH CARE, INC., ▇▇▇▇▇▇▇ SAVANA
CAY MANOR, INC.,
▇▇▇▇▇▇▇ ENTERPRISES-GEORGIA, INC.,
▇▇▇▇▇▇▇ ENTERPRISES-CALIFORNIA, INC.,
▇▇▇▇▇▇▇ HEALTH AND REHABILITATION SERVICES, INC.,
▇▇▇▇▇▇▇ ENTERPRISES - ARKANSAS, INC.,
▇▇▇▇▇▇▇ ENTERPRISES - FLORIDA, INC. and
▇▇▇▇▇▇▇ ENTERPRISES - WASHINGTON, INC.
as Lessees and Structural Guarantors
▇▇▇▇▇▇▇ ENTERPRISES, INC.
as Representative, Construction Agent
and Parent Guarantor,
BANK OF MONTREAL GLOBAL CAPITAL SOLUTIONS, INC.,
as Agent Lessor and Lessor,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
and
BANK OF MONTREAL,
as Lenders,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
as Arranger
and
BANK OF MONTREAL,
as Co-Arranger, Syndication Agent and Administrative Agent
for the Lenders
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Lease Financing of New Headquarters for ▇▇▇▇▇▇▇ Enterprises, Inc. and
Assisted Living and Nursing
Facilities
for
▇▇▇▇▇▇▇ Enterprises, Inc.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS; INTERPRETATION
ARTICLE II
DOCUMENTATION DATE
Section 2.1 Documentation Date...............................................................3
ARTICLE III
FUNDING OF ADVANCES
Section 3.1 Advances.........................................................................5
Section 3.2 Lessors' Commitments.............................................................6
Section 3.3 Lenders' Commitments.............................................................6
Section 3.4 Procedures for Advances..........................................................7
Section 3.5 Interest Rate; Yield Rate........................................................7
Section 3.6 Interest Period Selection/ Continuation/Conversion Elections.....................8
ARTICLE IV
YIELD; INTEREST; FEES
Section 4.1 Yield............................................................................9
Section 4.2 Interest on Loans...............................................................10
Section 4.3 Reductions in Commitments and Prepayments.......................................10
Section 4.4 Fees............................................................................11
Section 4.5 Place and Manner of Payments....................................................12
Section 4.6 Pro Rata Treatment..............................................................13
Section 4.7 Sharing of Payments.............................................................13
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ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
Section 5.1 Nature of Transaction...........................................................14
Section 5.2 Amounts Due Under the Lease.....................................................15
ARTICLE VI
CONDITIONS PRECEDENT: ACQUISITION DATES; FUNDING DATES
Section 6.1 Acquisition Dates...............................................................15
Section 6.2 Funding Dates...................................................................20
Section 6.3 Conditions to Completion Date...................................................23
ARTICLE VII
DISTRIBUTIONS
Section 7.1 Basic Rent.....................................................................23
Section 7.2 Purchase Payments by the Representative and the Lessees........................23
Section 7.3 Payment of Loan Balance........................................................24
Section 7.4 Sales Proceeds of Remarketing of Properties....................................24
Section 7.5 Supplemental Rent..............................................................25
Section 7.6 Distribution of Payments after Lease Event of Default..........................25
Section 7.7 Other Payments.................................................................28
Section 7.8 Casualty and Condemnation Amounts..............................................28
Section 7.9 Order of Application...........................................................29
Section 7.10 Payments to Account............................................................29
ARTICLE VIII
REPRESENTATIONS
Section 8.1 Representations of the Participants.............................................29
Section 8.2 Representations of the ▇▇▇▇▇▇▇ Entities.........................................29
Section 8.3 Representations with Respect to each Funding Date and Acquisition Date..........37
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
Section 9.1 Transaction Expenses............................................................38
Section 9.2 Brokers' Fees and Stamp Taxes...................................................38
Section 9.3 Loan Agreement and Related Obligations..........................................39
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ARTICLE X
OTHER COVENANTS AND AGREEMENTS
Section 10.1 Affirmative Covenants of the Representative....................................39
Section 10.2 Negative Covenants of the Representative.......................................44
Section 10.3 Affirmative Covenant of the Agent Lessor.......................................55
ARTICLE XI
RENEWALS
Section 11.1 Extensions of Maturity Date and Expiration Date;
Replacement of Participants..............................................55
Section 11.2 Replacement of Defaulting Participant..........................................56
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
Section 12.1 Assignments....................................................................57
Section 12.2 Participations.................................................................57
Section 12.3 Withholding Taxes; Disclosure of Information; Pledge Under Regulation A........58
ARTICLE XIII
INDEMNIFICATION
Section 13.1 General Indemnification.......................................................59
Section 13.2 End of Term Indemnity.........................................................62
Section 13.3 Environmental Indemnity.......................................................63
Section 13.4 Proceedings in Respect of Claims..............................................64
Section 13.5 General Tax Indemnity.........................................................66
Section 13.6 Indemnity Payments in Addition to Lease Obligations...........................70
Section 13.7 Eurodollar Rate Lending Unlawful..............................................70
Section 13.8 Deposits Unavailable..........................................................70
Section 13.9 Increased Costs, etc..........................................................71
Section 13.10 Funding Losses................................................................72
Section 13.11 Capital Adequacy..............................................................73
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ARTICLE XIV
THE AGENT LESSOR
Section 14.1 Appointment and Authorization.................................................74
Section 14.2 Delegation of Duties..........................................................75
Section 14.3 Agent Lessor and Affiliates...................................................75
Section 14.4 Action by Agent Lessor........................................................75
Section 14.5 Consultation with Experts.....................................................75
Section 14.6 Exculpatory Provisions........................................................75
Section 14.7 Reliance on Communications....................................................76
Section 14.8 Notice of Default.............................................................76
Section 14.9 Non-Reliance on Agent Lessor and Other Participants...........................76
Section 14.10 Indemnification...............................................................77
Section 14.11 Failure to Act................................................................77
Section 14.12 Resignation and Removal.......................................................78
Section 14.13 Distributions.................................................................78
Section 14.14 Rights of Each ▇▇▇▇▇▇▇ Entity.................................................78
ARTICLE XV
MISCELLANEOUS
Section 15.1 Survival of Agreements........................................................79
Section 15.2 No Broker, etc................................................................79
Section 15.3 Notices.......................................................................79
Section 15.4 Counterparts..................................................................80
Section 15.5 Amendments, etc...............................................................80
Section 15.6 Headings, etc.................................................................81
Section 15.7 Parties in Interest...........................................................81
Section 15.8 Governing Law.................................................................81
Section 15.9 Severability..................................................................82
Section 15.10 Liability Limited.............................................................82
Section 15.11 Further Assurances............................................................82
Section 15.12 Submission To Jurisdiction....................................................83
Section 15.13 Setoff........................................................................83
Section 15.14 Waiver of Jury Trial..........................................................83
Section 15.15 No Participant Responsible for Other Participants.............................84
Section 15.16 Each Lessor to Have an Undivided Interest.....................................84
Section 15.17 Authority of Representative...................................................84
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EXHIBIT A - FORM OF LEGAL OPINION OF LESSEE AND GUARANTORS
EXHIBIT B - FORM OF FUNDING REQUEST
EXHIBIT C - FORM OF INTEREST PERIOD
SELECTION/CONTINUATION/CONVERSION NOTICE
EXHIBIT D-1 - FORM OF OFFICER'S CERTIFICATE
EXHIBIT D-2 - FORM OF SECRETARY'S CERTIFICATE
EXHIBIT D-3 - FORM OF RESPONSIBLE OFFICER'S CERTIFICATE
EXHIBIT E - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT G - FORM OF LEGAL OPINION OF LOCAL COUNSEL TO
LESSEE
EXHIBIT H - FORM OF COMPLETION CERTIFICATE
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PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT (this "Participation
Agreement"), dated as of August 28, 1998, is entered into by and among ▇▇▇▇▇▇▇
ENTERPRISES, INC., a Delaware corporation, as the Representative, Construction
Agent and Parent Guarantor (in its capacity as Representative, the
"Representative"; in its capacity as Construction Agent, the "Construction
Agent"; and, in its capacity as Parent Guarantor, the "Parent Guarantor") and
together with the Guarantors listed on the signature page to the Guaranty (each
a "Guarantor") and the Structural Guarantors, the "Guarantors"); BANK OF
MONTREAL GLOBAL CAPITAL SOLUTIONS, INC. (formerly known as BMO Leasing (U.S.)
Inc.) , a Delaware corporation, as a Lessor (together with any permitted
successors and assigns thereto, each a "Lessor" and collectively the "Lessors");
BANK OF MONTREAL GLOBAL CAPITAL SOLUTIONS, INC. (formerly known as BMO Leasing
(U.S.) Inc.), as Agent Lessor for the Lessors (in such capacity, the "Agent
Lessor"); THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS ANGELES AGENCY ("LTCB"),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, BANK OF MONTREAL, a
Canadian banking organization ("BMO"), and the other various financial
institutions as are or may from time to time become lenders (the "Lenders")
under the Loan Agreement; LTCB as Arranger (in such capacity, the "Arranger");
and BMO, as Co- Arranger, Syndication Agent and Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent"), amending and restating
the Participation Agreement, dated as of March 21, 1997, among the
aforementioned parties (the "Existing Participation Agreement").
W I T N E S S E T H:
WHEREAS, on each Acquisition Date, the Agent Lessor will either (a)
purchase from one or more third parties designated by the Construction Agent, or
(b) with respect to Property that is not Improved Property lease pursuant to a
ground lease, parcels of Land, together with any Improvements thereon;
WHEREAS, the Representative, as Construction Agent, has constructed and
will construct, at Lessor's expense, additional Improvements on each Property
that is not Improved Property which as constructed will be the property of the
Agent Lessor and will become part of each Property that is not Improved
Property;
WHEREAS, the Agent Lessor desire to lease to the respective Lessees,
and the respective Lessees desire to lease from the Agent Lessor, such Property;
and
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WHEREAS, the Lessors are willing to provide the funding of the costs of
the acquisition of Land, all Improvements thereon and the construction of such
other Improvements;
WHEREAS, the Lenders are willing to provide financing to the Lessor for
a portion of the costs of acquisition of Land, all Improvements thereon and the
construction of such other Improvements and;
WHEREAS, to secure such financing (a) the Lessors will have the benefit
of (i) the Parent Guaranty from the Parent Guarantor and the Guaranty from the
other Guarantors (other than the Structural Guarantors) and (ii) a first
priority Lien on the Properties and (b) the Lenders will have the benefit of (i)
the Structural Guaranties from the Structural Guarantors, the Parent Guaranty
from the Parent Guarantor and the Guaranty from the other Guarantors, (ii) a
Lien on the Agent Lessor's right, title and interest in the Properties, and
(iii) an assignment of certain of the Agent Lessor's rights against the Lessees
under the Lease and against the Construction Agent under the Construction Agency
Agreement;
WHEREAS, the parties hereto wish to amend and restate the terms of the
Existing Participation Agreement and to increase the commitments of the Lessors
and Lenders to provide financing for the acquisition of additional Land and
construction of additional Improvements;
WHEREAS, the parties hereto acknowledge that all advances made prior to
the date hereof are subject to the benefit of the security arrangements
contemplated by the Existing Participation Agreement without interruption;
WHEREAS, contemporaneous with the execution and delivery of this
Participation Agreement BMO and LTCB have assigned to BoA shares of the
outstanding Loan Balance such that after such assignment the outstanding Loan
Balance of each Lender is proportional to its respective Commitment Percentage;
NOW THEREFORE, in consideration of the mutual agreements contained in
this Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix A hereto
for all
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purposes hereof (as such Appendix A may be amended, supplemented, amended and
restated or otherwise modified from time to time, "Appendix A to this
Participation Agreement"); and the rules of interpretation set forth in Appendix
A to this Participation Agreement shall apply to this Participation Agreement.
ARTICLE II
DOCUMENTATION DATE
Section 2.1 Documentation Date. The Documentation Date for the
transaction contemplated by the Participation Agreement occurred on March 21,
1997.
Section 2.2 Effectiveness of this Agreement. This Amended and Restated
Participation Agreement shall be in effect upon satisfaction or waiver of each
of the following conditions precedent; the date of such effectiveness being
hereinafter referred to as the "Effective Date".
(a) Participation Agreement. This Participation Agreement
shall have been duly authorized, executed and delivered by the parties
hereto.
(b) Master Lease. The Master Lease shall have been duly
authorized, executed and delivered by the parties thereto.
(c) Construction Agency Agreement. The Construction Agency
Agreement shall have been duly authorized, executed and delivered by
the parties thereto.
(d) Construction Agency Agreement Assignment; Construction
Documents Assignment. The Construction Agency Agreement Assignment and
the Construction Documents Assignment shall have been duly authorized,
executed and delivered by the Agent Lessor and consented to and
acknowledged by the Construction Agent.
(e) Loan Agreement and Notes. The Loan Agreement and each
Lender's Note shall have been duly authorized, executed and delivered
by the parties thereto.
(f) Assignment of Lease and Rent. The Assignment of Lease and
Rent shall have been duly authorized, executed and delivered by the
Agent Lessor, as assignor, to the Administrative Agent, as assignee,
and the
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Assignment of Lease and Rent shall have been consented to and
acknowledged by the Lessees.
(g) Guaranties. The Structural Guaranties shall have been duly
authorized, executed and delivered by each Structural Guarantor, the
Parent Guaranty shall have been duly authorized, executed and delivered
by the Parent Guarantor and the Guaranty shall have been duly
authorized, executed and delivered by each of the other Guarantors.
(h) Fees. The Administrative Agent and each Participant, as
applicable, shall have received all fees then due and payable pursuant
to Section 4.4.
(i) Certain Transaction Expenses. ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
("MBP"), as special counsel for the Agent Lessor, shall have received,
to the extent then invoiced, payment in full in cash of all Transaction
Expenses payable to such counsel pursuant to Section 9.1.
(j) Corporate Documents; Certificates; Acceptance Letter. Each
of the Lessees and the Representative shall have delivered, or shall
have caused to be delivered, to the Administrative Agent, the Agent
Lessor, each Lender and each Lessor the following:
(i) Good Standing. To the extent the following has
not previously been delivered with respect to any Lessee,
copies of certificates of good standing, existence or its
equivalent, certified as of a recent date by the appropriate
governmental authorities of the state of its incorporation
and, for each Lessee, of the state where the Property leased
to it is located.
(ii) Opinions of Counsel. An opinion of (i) Weil,
Gotshal & ▇▇▇▇▇▇ LLP, New York counsel, (ii) the vice
president and deputy general counsel for the ▇▇▇▇▇▇▇ Entities,
and (iii) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Agent Lessor,
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., internal counsel for the Agent
Lessor, each dated the Effective Date and, with respect to (i)
and (ii), addressed to the Administrative Agent, the Agent
Lessor, each of the Lenders and each of the Lessors, covering
the matters set forth in Exhibit A.
(k) No Default. No Default or Event of Default shall have
occurred and be continuing on the Effective Date unless such Default or
Event of Default shall have been waived in accordance with the
Operative Documents.
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(l) Governmental Approvals. All Governmental Actions required
by any Requirement of Law for the purpose of authorizing each ▇▇▇▇▇▇▇
Entity, the Agent Lessor, the Administrative Agent and each Participant
to enter into the amended and restated Operative Documents shall have
been obtained or made and be in full force and effect.
All documents and instruments required to be delivered pursuant to this Section
2.1 shall be delivered at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other location as may be determined by the
Agent Lessor, the Administrative Agent and the Representative, and in such
numbers as shall be reasonably requested by the Administrative Agent.
ARTICLE III
FUNDING OF ADVANCES
Section 3.1 Advances. Subject to the conditions and terms hereof, the
Agent Lessor shall take the following actions at the written request of the
Representative from time to time during the Commitment Period with respect to
each Property:
(a) the Agent Lessor shall make Advances (out of funds
provided by the Lessors and the Lenders) to the Construction Agent, for
the purpose of financing the acquisition of Land, with respect to
Property that is not Improved Property, or leasehold interests therein
(and Improvements existing thereon, if any) and the Construction of
Improvements thereon, and the proceeds of such Advances shall be made
directly to the Construction Agent or to such parties designated in
writing by the Construction Agent to the Agent Lessor;
(b) the Agent Lessor shall acquire the Land, with respect to
Property that is not Improved Property, or leasehold interests therein,
and Improvements, if any (using funds provided by the Lessors and the
Lenders); and
(c) the Agent Lessor shall lease (or in the case of
leaseholds, sublease) the Land and Improvements to the relevant Lessee
under the Master Lease and the respective Lease Supplement.
Notwithstanding any other provision hereof, the Agent Lessor shall not be
obligated to make any Advance with respect to any Property if, after giving
effect thereto, (i) the aggregate outstanding amounts of the Loans and the
Lessor Amounts would exceed the Aggregate Commitment Amount, or (ii) the
Property Balance for such Property would exceed the lesser of (x) 110% of the
Estimated Improvements Costs
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plus Land Acquisition Cost, as set forth in the Funding Request relating to the
Acquisition Date for such Property, and (y) the Fair Market Sales Value of such
Property as set forth in (A) the As-Built Appraisal thereof delivered pursuant
to clause (i) or (ii) of Section 6.2(b) , or (iii) with respect to the New
▇▇▇▇▇▇▇ Headquarters, the aggregate Property Cost thereof would exceed
$40,000,000. Notwithstanding the foregoing, but subject to the rights and
remedies of the Agent Lessor under the Construction Agency Agreement and to
Article VI hereof, the Construction Agent is entitled to obtain Advance for the
purpose of reimbursing it for Project Costs expended by it in connection with
the construction of Improvements on a Property. Furthermore, until the
Unavailable Commitment Termination Date, no Lessor or Lender shall be obligated
to make available any Lessor Amount or Loan if, after giving effect to the
proposed Lessor Amount or Loan, the outstanding aggregate amount of the Lessor
Amounts and Loans would exceed (I) with respect to any Improved Property, the
Fair Market Sales Value of such Property as set forth in the Improved Property
Appraisal thereof delivered pursuant to clause (i) of Section 6.1(d) and (II)
with respect to any Property that is not Improved Property, the difference
between (x) the Aggregate Commitment Amount and (y) the Unavailable Commitment.
There shall not be a Funding Date with respect to any Improved Property after
the Acquisition Date of such Property.
Section 3.2 Lessors' Commitments. Subject to the conditions and terms
hereof, each of the Lessors shall make available to the Agent Lessor at the
request of the Construction Agent from time to time during the Commitment Period
on any Funding Date or Acquisition Date, as appropriate, an amount (relative to
such Lessor, a "Lessor Amount") in immediately available funds equal to such
Lessor's Commitment Percentage of the amount of the Advance being funded on such
Funding Date or Acquisition Date. Notwithstanding any other provision hereof, no
Lessor shall be obligated to make available any Lessor Amount if, after giving
effect to the proposed Lessor Amount, the outstanding aggregate amount of the
Lessor Amounts of such Lessor would exceed such Lessor's Commitment.
Section 3.3 Lenders' Commitments. Subject to the conditions and terms
hereof, each of the Lenders shall make Loans to the Agent Lessor at the request
of the Construction Agent from time to time during the Commitment Period on any
Funding Date or Acquisition Date, as appropriate, an amount (relative to such
Lender, a "Loan") in immediately available funds equal to such Lender's
Commitment Percentage of the amount of the Advance being funded on such Funding
Date or Acquisition Date. Notwithstanding any other provision hereof, no Lender
shall be obligated to make any Loan if, after giving effect to the proposed
Loan, the outstanding aggregate amount of such Lender's Loans would exceed such
Lender's Commitment.
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Section 3.4 Procedures for Advances.
(a) With respect to each Advance, the Construction Agent shall give the
Agent Lessor and the Administrative Agent prior written notice pursuant to a
Funding Request substantially in the form of Exhibit B (a "Funding Request"),
which Funding Request shall be delivered not later than 10:00 a.m. (New York
City time), three (3) Business Days prior to the proposed Acquisition Date or
the proposed Funding Date, specifying: (i) the proposed Acquisition Date or
Funding Date, (ii) the amount of Advance requested, (iii) whether such proposed
Funding Date will also be an Acquisition Date, and (iv) the Properties to which
such Advance is being allocated and the amount allocated to each Property. With
respect to any Funding Request related to the acquisition of a Property (or
leasehold interest therein), in addition to the foregoing, the Representative
shall also specify: (i) the Property to be acquired or leased, (ii) the seller
or lessor of the Property and the related Land Acquisition Cost, and, with
respect to Improved Property, the Property Improvement Costs (iii) the Estimated
Improvement Costs for such Property. Such Loans and Lessor Amounts made with
respect to each Advance (i) if made on a day other than a Scheduled Payment Date
or an Acquisition Date, shall be Base Rate Loans/Lessor Amounts and (ii) if made
on a Scheduled Payment Date or an Acquisition Date, shall be Eurodollar
Loans/Lessor Amounts, and the duration of the initial Interest Period with
respect to such Advance shall begin on the proposed Acquisition Date or Funding
Date and end on the next succeeding Scheduled Payment Date (the "Initial
Interest Period"). Subject to timely delivery of a Funding Request and the other
terms and conditions of the Operative Documents, each Participant shall make its
Commitment Percentage of the requested Advance available to the Agent Lessor by
2:00 p.m., Eastern time, on the requested Acquisition Date or Funding Date, as
applicable, and the Agent Lessor will forward any such amounts so received to
the Construction Agent not later than 3:00 p.m., Eastern time, on the same day.
The Agent Lessor and the Administrative Agent shall calculate the amounts of the
Lessor Amounts and the Loans required to fund the requested Advance as it
relates to each Property. No more than two (2) Funding Requests shall be made
during each Interest Period other than Funding Requests made pursuant to Section
6.1.
(b) Except as the Participants may otherwise agree in writing, Advances
shall be made solely to provide the Construction Agent with funds with which to
pay any Land Acquisition Costs or pay or reimburse itself for Property
Improvement Costs, as the case may be.
Section 3.5 Interest Rate; Yield Rate. Each Loan and Lessor Amount
shall accrue interest or Yield, as the case may be, by reference to the Base
Rate or the Adjusted Eurodollar Rate in accordance with Section 3.6.
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Section 3.6 Interest Period Selection/ Continuation/Conversion
Elections.
(a) By delivering an Interest Period Selection/Continuation/Conversion
Notice to the Agent Lessor and Administrative Agent with respect to Loans and
Lessor Amounts, the Representative may from time to time during the Basic Lease
Term irrevocably select, on not less than three (3) nor more than five (5)
Business Days' notice, that all or any portion of the outstanding Loans and
Lessor Amounts be, in the case of Base Rate Loans/Lessor Amounts, converted into
Eurodollar Loans/Lessor Amounts or, in the case of Eurodollar Loans/Lessor
Amounts, converted into Base Rate Loans/Lessor Amounts or continued as
Eurodollar Rate Loans/Lessor Amounts and, with respect to Eurodollar
Loans/Lessor Amounts, select the duration for the next succeeding Interest
Period; provided, however, that (a) in the absence of a delivery of an Interest
Period Selection/Continuation/Conversion Notice with respect to any Eurodollar
Loan/Lessor Amount at least three (3) Business Days before the last day of the
then current Interest Period with respect thereto, the Representative (on behalf
of all Lessees) shall be deemed to have selected that such Eurodollar
Loan/Lessor Amount be converted into a Base Rate Loan/Lessor Amount on such last
day, (b) each such conversion or continuation shall be pro rated among the
applicable outstanding Loans and Lessor Amounts of all Participants, (c) no
portion of any Loan or Lessor Amount may be continued as, or converted into, a
Eurodollar Loan/Lessor Amount when any Lease Default has occurred and is
continuing, and (d) the outstanding Loans and Lessor Amounts may not be
apportioned into more than three (3) separate Loans and Lessor Amounts pursuant
to this Section 3.6(a) at any one time.
(b) the Representative, with respect to any Loans and Lessor Amounts
outstanding during the Interim Lease Term, shall be deemed to have (i) converted
Base Rate Loans/Lessor Amounts into Eurodollar Loans/Lessor Amounts at the end
of the Initial Interest Period, (ii) as of each Scheduled Payment Date (other
than the Interim Termination Date), continued all outstanding Eurodollar
Loans/Lessor Amounts as Eurodollar Loans/Lessor Amounts and (iii) as of each
Scheduled Payment Date (other than the Interim Termination Date) selected an
Interest Period ending on the earlier of the next succeeding Scheduled Payment
Date and the Interim Termination Date.
Each Interest Period Selection/Continuation/Conversion Notice so delivered or
deemed delivered by the Representative shall be deemed an effective election by
the Lessors of the method for computing interest on the Loans under the Loan
Agreement.
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ARTICLE IV
YIELD; INTEREST; FEES
Section 4.1 Yield.
(a) the amount of the Lessor Amounts outstanding from time to time
shall accrue yield ("Yield") at the Yield Rate, calculated using the actual
number of days elapsed and, when the Yield Rate is based on the Adjusted
Eurodollar Rate, a 360-day year basis and, if calculated at the Base Rate, a
360-day year basis if the Base Rate is calculated at the Federal Funds Rate, and
a 365-, or, if applicable, 366-, day year basis if the Base Rate is calculated
at the Prime Rate. If all or any portion of the Lessor Amounts, any Yield
payable thereon or any other amount payable hereunder shall not be paid when due
(whether at stated maturity, acceleration thereof or otherwise), such overdue
amount shall bear interest at a rate per annum which is equal to the Overdue
Rate. Upon the occurrence, and during the continuance of an Event of Default,
the principal of and, to the extent permitted by law, interest on (or Yield on)
the Lessor Amounts and any other amounts owing hereunder or under the other
Operative Documents shall bear interest, payable on demand, at a per annum rate
of 2% greater than the rate which would otherwise be applicable (or if no rate
is applicable, whether in respect of interest, fees or other amounts, then 2%
greater than the Base Rate). The Administrative Agent shall, as soon as
practicable, but in no event later than 1:00 p.m., Eastern time, two Business
Days before the effectiveness of each Adjusted Eurodollar Rate, cause to be
determined such Adjusted Eurodollar Rate, the resulting Yield and Lessor Basic
Rent, and notify each Lessor thereof.
(b) the Administrative Agent shall distribute, in accordance with
Article VII, the Lessor Basic Rent and all other amounts due with respect to the
Lessor Amounts paid to the Administrative Agent by the Lessees under the Lease
from time to time.
(c) yield on outstanding Lessor Amounts made with respect to each
Property shall that is not Improved Property be paid from Advances by the
Lessors deemed to have been requested by the Representative pursuant to Section
3.4 on each Scheduled Payment Date occurring prior to the earlier of the
Completion Date and the Outside Completion Date for such Property, and the
Property Improvement Costs of such Property shall be increased on the date of
each such Advance by an amount equal to such Advance; provided that if a
Completion Certificate is delivered less than three (3) Business Days prior to a
Scheduled Payment Date, solely for purposes of this clause (c) such Completion
Certificate shall not be effective until the day after such Scheduled Payment
Date.
(d) after the earlier of the Completion Date and the Outside Completion
Date for any Property, that is not Improved Property Yield on outstanding Lessor
Amounts
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made with respect to each Improved Property shall be due and payable in cash on
each Scheduled Payment Date and not funded pursuant to deemed Advances as
referred to in clause (c) above.
(e) if not repaid sooner, the outstanding aggregate Lessor Amounts
shall be repaid in full on the Maturity Date.
Section 4.2 Interest on Loans.
(a) Each Loan shall accrue interest computed and payable in accordance
with the terms of the Loan Agreement. Each Loan shall become due and payable at
the dates and times provided under the Loan Agreement.
(b) The Administrative Agent shall distribute, in accordance with
Article VII, the Lender Basic Rent and all other amounts due with respect to the
Loans paid to the Administrative Agent by any Lessees under the Lease from time
to time.
Section 4.3 Reductions in Commitments and Prepayments.
(a) Voluntary Reduction of Commitments. The Representative may from
time to time permanently reduce the Aggregate Commitment Amount in whole or in
part (in each such case in a minimum aggregate amount of $2,000,000 and integral
multiples of $1,000,000 in excess thereof) upon three (3) Business Days' prior
written notice to the Administrative Agent; provided, however, that no such
reduction shall be effective if the aggregate amount of outstanding Loans and
Lessor Amounts exceeds the remaining Loan Commitment or Lessor Commitment, as
the case may be.
(b) Voluntary Prepayments. The Representative shall have the right to
prepay an amount equal to the aggregate outstanding Property Balance in whole,
but not in part, in respect of any one or more of the Properties pursuant to the
exercise of purchase options permitted under the Lease without premium or
penalty, provided that such prepayment is in connection with the sale of such
Property to a Person other than a ▇▇▇▇▇▇▇ Entity or any Affiliate thereof and
that no ▇▇▇▇▇▇▇ Entity shall operate or manage such Property after its sale
(other than on a temporary basis in connection with such sale).
(c) Mandatory Prepayments.
(i) If at any time the sum of the aggregate amount of
outstanding Loans and Lessor Amounts shall exceed the Available
Commitments or the Aggregate Commitment Amount, each of Lessees shall
immediately make payment on the Loans or Lessor Amounts in an amount
sufficient to eliminate their pro rata share of such excess. Payments
required to be made hereunder
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shall be applied to Base Rate Loans or Lessor Amounts and then to
Eurodollar Loans or Lessor Amounts in direct order of their Interest
Period maturities.
(ii) All amounts payable by the Representative or any Lessee
pursuant to Article XV, XVI, XVIII or XX of the Master Lease shall be
applied to the Loans and the Lessor Amounts in the manner set forth in
Article VII.
(d) Notice. The Representative will provide notice to the
Administrative Agent of any prepayment by 11:00 A.M. (New York City time) at
least three (3) Business Days prior to the date of prepayment.
Section 4.4 Fees. The Representative agrees to pay the fees set forth
in this Section 4.4.
(a) Commitment Fees. The Representative agrees to pay to the
Administrative Agent for the account of each Participant, for the
period (including any portion thereof when its Commitment is suspended
by reason of any Lessee's inability to satisfy any condition of Article
VI) commencing on the Effective Date and continuing through the Interim
Termination Date, a Commitment fee (collectively, the "Commitment
Fees") as follows:
(i) from the Effective Date to and excluding the
Unavailable Commitment Termination Date, the Commitment Fee,
with respect to each Participant, shall be calculated (x) at a
rate per annum of 0.25% on such Participant's Commitment
Percentage of the average daily Available Commitments and (y)
at a rate per annum of 0.125% on such Participant's Commitment
Percentage of the Unavailable Commitments; and
(ii) from and including the Unavailable Commitment
Termination Date to and including the Interim Termination Date, the
Commitment Fee, with respect to each Participant, shall be at a rate
per annum of 0.25% on such Participant's Commitment Percentage of the
average daily Available Commitments from and including the Unavailable
Commitment Termination Date to and including the Interim Termination
Date.
The Commitment Fees shall be payable by the Representative in arrears on each
Quarterly Payment Date, commencing with the first such day following the
Documentation Date, and on the Interim Termination Date; provided, however, in
the event the Unavailable Commitment Termination Date occurs prior to August 1,
1997, the Commitment Fees shall be immediately payable by the Representative in
arrears on the Unavailable Commitment Termination Date, together with an amount
equal to
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the difference between (x) the Commitment Fees as calculated from the
Documentation Date to but excluding the Unavailable Commitment Termination Date
pursuant to the method under clause (ii) above less (y) the Commitment Fees paid
to the Administrative Agent from the Documentation Date through the Unavailable
Commitment Termination Date (such difference, the "Commitment Fee Shortfall
Amounts"). The Commitment Fees and Commitment Fee Shortfall Amounts, as
applicable, shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such Commitment Fees and Commitment Fee Shortfall Amounts, as
applicable, are payable over a year of 360 days.
(b) Up-Front Fees. The Representative agrees to pay to the
Arranger and the Co-Arranger the Up-Front Fees in accordance with the
Arranger's Fee Letter and each Fee Letter executed in connection with
an increase of the Commitment.
(c) Administrative Agent's Fees. The Representative agrees to
pay to the Administrative Agent for its own account the non-refundable
fees set forth in the Arranger's Fee Letter annually in arrears on each
anniversary of the Documentation Date during the Lease Term and on the
Expiration Date.
(d) Other Fees. The Representative agrees to pay to the Agent
Lessor for its own account, with respect to each Property acquired
pursuant to Section 6.1 in excess of 10 Properties from the
Documentation Date, a non-refundable fee of $2,500 on the Acquisition
Date for such Property.
Section 4.5 Place and Manner of Payments. Except as otherwise
specifically provided herein, all payments by any ▇▇▇▇▇▇▇ Entity hereunder,
under the Master Lease or under any other Operative Document shall be made to
the Administrative Agent in Dollars in immediately available funds, without
offset, deduction, counterclaim or withholding of any kind, to the Account in
New York, New York not later than 1:00 p.m. (New York City time) on the date
when due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. Each ▇▇▇▇▇▇▇ Entity shall, at the
time it makes any payment under any Operative Document, specify to the
Administrative Agent the Loans and Lessor Amounts, fees or other amounts payable
by the Lessees or the Representative, as the case may be, hereunder to which
such payment is to be applied (and in the event that it fails so to specify, or
if such application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the Lenders and the
Lessors in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by such ▇▇▇▇▇▇▇ Entity, subject to
the terms of Section 4.6). The Administrative Agent will distribute such
payments to such Lenders and Lessors in accordance with Article VII, if any such
payment is received prior to 3:00
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p.m. (New York City time) on a Business Day in like funds as received prior to
such time, and otherwise the Administrative Agent will distribute such payment
to such Lenders and Lessors on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and fees for the period of such extension),
except that in the case of Eurodollar Loans or Lessor Amounts, if the extension
would cause the payment to be made in the next following calendar month, then
such payment shall instead be made on the next preceding Business Day.
Section 4.6 Pro Rata Treatment. Except to the extent otherwise provided
herein, each Advance, each payment or repayment of principal on any outstanding
Loan or Lessor Amount, each payment of interest or Yield, and each reduction of
the Aggregate Commitment Amount, shall be allocated pro rata among the relevant
Lenders and Lessors, as the case may be, in accordance with the respective
applicable Commitments (or, if the Commitments of such Lenders or Lessors have
expired or been terminated, in accordance with the respective principal amounts
of their outstanding Loans or Lessor Amounts, as the case may be).
Section 4.7 Sharing of Payments. The Participants agree among
themselves that, in the event that any Participant shall obtain payment in
respect of any Loan or Lessor Amount or any other obligation owing to such
Participant under the Operative Documents through the exercise of a right of
setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Participant
under any applicable bankruptcy, insolvency or other similar law or otherwise,
or by any other means, in excess of its pro rata share of such payment as
provided for in this Agreement, such Participant shall promptly purchase from
the other Participants a participation in such Loans or Lessor Amounts and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Participants share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Participants further agree among themselves that if payment to a
Participant obtained by such Participant through the exercise of a right of
setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each Participant which shall have
shared the benefit of such payment shall, by repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Participant whose
payment shall have been rescinded or otherwise restored. Each ▇▇▇▇▇▇▇ Entity
agrees that any Participant so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Participant were a holder of such Loan or Lessor Amount or
other obligation in the
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amount of such participation. Except as otherwise expressly provided herein, if
any Participant, the Agent Lessor or the Administrative Agent shall fail to
remit to the Administrative Agent, the Agent Lessor or any other Participant an
amount payable by such party to the Administrative Agent, the Agent Lessor or
such other Participant pursuant to the Operative Documents on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Administrative Agent, the Agent Lessor or such other Participant at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Participant receives a secured claim in
lieu of a setoff to which this Section 4.7 applies, such Participant shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Participants under this Section 4.7
to share in the benefits of any recovery on such secured claim.
ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
Section 5.1 Nature of Transaction.
(a) The parties hereto intend that (i) for financial accounting
purposes with respect to the Lessees, the Agent Lessor will be treated as the
owner and the lessor of the Properties and the Lessees will be treated as the
lessees of their respective Properties and (ii) for all other purposes,
including federal and all state and local income tax purposes, state real estate
and commercial law and bankruptcy purposes,
(i) the Lease will be treated as a financing arrangement,
(ii) the Lessors and the Lenders will be deemed lenders making
loans to the Lessees in an amount equal to the sum of the Lessor
Amounts and the outstanding principal amount of the Loans, which
amounts are secured by the Properties, and
(iii) the Lessees will be treated as the owners of the
Properties described in their respective Lease Supplements and will be
entitled to all tax benefits ordinarily available to an owner of
properties like the Properties for such tax purposes. Nevertheless, the
Lessees acknowledge and agree that (other than the representations and
covenants of the Agent Lessor and its parent to the Representative in
the Lessor Letter Agreement) neither the Agent Lessor, the
Administrative Agent nor any of the Lessors or Lenders has made any
representations or warranties to the Lessees concerning the tax,
accounting or legal characteristics of the Operative Documents and that
the
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Lessees have obtained and relied upon such tax, accounting and legal
advice concerning the Operative Documents as they deem appropriate.
(b) Specifically, without limiting the generality of clause (a) of this
Section 5.1, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State or Commonwealth thereof affecting any ▇▇▇▇▇▇▇
Entity, the Lessors, or the Lenders or any collection actions, the transactions
evidenced by the Operative Documents shall be regarded as loans made by the
Lessors and the Lenders as unrelated third party lenders of the Lessees.
Section 5.2 Amounts Due Under the Lease. Anything herein or elsewhere
to the contrary notwithstanding, it is the intention of Lessee, the Lessors and
the Lenders that: (i) with respect to each Lessee, the amount and timing of
installments of Basic Rent due and payable from time to time from such Lessee
under the Lease shall be equal to the aggregate payments due and payable as
interest on the Loans and Yield on the Lessor Amounts on each Scheduled Payment
Date; (ii) if the Representative elects the Purchase Option or any Lessee
becomes obligated to purchase any of the Properties under the Lease, the Loans,
the Lessor Amounts, and all interest, Yield and Commitment Fees thereon and all
other obligations of the Representative and the Lessor or Lessees with respect
to such Property, as the case may be, owing to the Administrative Agent, the
Agent Lessor, the Lessors and the Lenders shall be immediately due and payable
in full by such parties; (iii) if the Representative properly elects the
Remarketing Option, the Representative shall only be required to pay to the
Administrative Agent the proceeds of the sale of each of the Properties, the
Loan Balance, Lessor Amounts that are allocable to Qualified Land and any
amounts due pursuant to Article XIII hereof and Section 20.2 of the Master Lease
(which aggregate amounts may be less than the Lease Balance); and (iv) upon an
Event of Default resulting in an acceleration of the Representative's obligation
to purchase the Properties under the Lease, the amounts then due and payable by
the Representative under the Lease shall include all amounts necessary to pay in
full the Lease Balance, plus all other amounts then due from the Representative
and the Lessees to the Participants under the Operative Documents.
ARTICLE VI
CONDITIONS PRECEDENT: ACQUISITION DATES; FUNDING DATES
Section 6.1 Acquisition Dates. Each closing date with respect to an
acquisition of Land or leasehold interests therein (and the Improvements
existing thereon, if any) (each an "Acquisition Date") shall occur on the date
on which all the
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conditions precedent thereto set forth in this Section 6.1 with respect to such
acquisition of Land or leasehold interests therein shall have been satisfied or
waived by the applicable parties as set forth herein; provided that no
Acquisition Date shall occur within six months of the Interim Termination Date.
The obligation of the Lessors to acquire any Land or leasehold interests therein
on an Acquisition Date, the obligation of each Lessor to make available any
related Lessor Amount on such Acquisition Date and the obligation of each Lender
to make any related Loan on such Acquisition Date, are subject to satisfaction
or waiver of the following conditions precedent:
(a) Funding Request. Each of the Administrative Agent and the
Agent Lessor shall have received a fully executed counterpart of the
applicable Funding Request in accordance with Section 3.4. Each of the
delivery of a Funding Request and the acceptance of the proceeds of
such Advance shall constitute a representation and warranty by the
▇▇▇▇▇▇▇ Entities that on the applicable Acquisition Date (both
immediately before and after giving effect to the making of such
Advance and the application of the proceeds thereof), the statements
made in such Funding Request and Section 8.2 are true and correct.
(b) Fees. All fees due and payable pursuant to this
Participation Agreement shall have been paid, and the Participants
shall have received all Commitment Fees due and payable pursuant to
Section 4.4(a).
(c) Representations and Warranties. On the applicable
Acquisition Date, the representations and warranties of each ▇▇▇▇▇▇▇
Entity in this Agreement and in each of the other Operative Documents
shall be true and correct in all material respects as though made on
and as of such date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(d) Appraisal. At least three (3) Business Days prior to such
Acquisition Date, the Agent Lessor and the Administrative Agent shall
have received an Appraisal, in form and substance satisfactory to the
Administrative Agent and the Agent Lessor, which Appraisal shall show
(i) with respect to each Improved Property, that the Fair Market Sales
Value of such Improved Property as of the Acquisition Date and the end
of the Base Term and each Renewal Term for such Property is not less
than the sum of the Land Acquisition Cost and Property Improvement Cost
for such Property (which, in each case, shall be an Improved Property
Appraisal) and (ii) with respect to each Property other than an
Improved Property, that the Fair Market Sales
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Value of such Land is not less than the Land Acquisition Cost for such
Property.
(e) Governmental Approvals. All necessary Governmental Actions
required by any Requirement of Law for the purpose of authorizing the
Lessors to acquire the applicable Property shall have been obtained or
made and be in full force and effect. With respect to each Improved
Property, such Property shall be ready for occupancy and operation, and
all appropriate Governmental Action (including the issuance by the
appropriate Governmental Authority of a permanent certificate of
occupancy) shall have been taken for the occupancy and operation of
such Property.
(f) Responsible Officer's Certificate. The Agent Lessor and
the Administrative Agent shall have received a Responsible Officer's
Certificate of the Representative, in substantially the form of Exhibit
D-3 attached hereto, addressed to the Administrative Agent, the Agent
Lessor, each Lender and each Lessor and dated as of the applicable
Acquisition Date, stating that (i) to such Responsible Officer's
knowledge the representations and warranties of each ▇▇▇▇▇▇▇ Entity
contained in the Participation Agreement and each other Operative
Document to which it is a party is true and correct in all material
respects on and as of the respective Acquisition Date; (ii) to such
Responsible Officer's knowledge no Default or Event of Default has
occurred and is continuing under any Operative Document to which it is
a party with respect to each ▇▇▇▇▇▇▇ Entity; (iii) to such Responsible
Officer's knowledge each Operative Document to which each ▇▇▇▇▇▇▇
Entity is a party is in full force and effect with respect to it; and
(iv) each ▇▇▇▇▇▇▇ Entity has duly performed and complied with all
conditions contained herein or in any other Operative Document required
to be performed or complied with by it on or prior to the respective
Acquisition Date.
(g) Evidence of Property Insurance. The Agent Lessor and the
Administrative Agent shall have received evidence that the insurance
maintained by the applicable Lessee with respect to such Property
satisfies the requirements set forth in Article XIII of the Master
Lease, setting forth the respective coverage, limits of liability,
carrier, policy number and period of coverage.
(h) Environmental Audit. At least ten (10) Business Days prior
to such Acquisition Date, the Agent Lessor and the Administrative Agent
shall have received an Environmental Audit with respect to the Property
demonstrating as to any preexisting environmental issue identified in
such audit that the risk of loss therefrom is remote and otherwise in
form and
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substance reasonably satisfactory to the Agent Lessor and the
Administrative Agent.
(i) Deed or Ground Lease. The Agent Lessor shall have received
either (A) in the case of Land being acquired from a third-party
Seller, at least one (1) Business Day prior to such Acquisition Date a
Deed with respect to such Property (and/or all Improvements located
thereon) being purchased on such Acquisition Date, conveying fee simple
title to such Property (and/or all Improvements located thereon) to the
Agent Lessor and containing all customary seller's warranties and
subject only to Permitted Property Liens or (B) in the case of Land
owned in fee simple by the applicable Lessee or an Affiliate of any
Guarantor, at least ten (10) days prior to such Acquisition Date, a
ground lease, in form and substance satisfactory to the Agent Lessor,
duly executed by such Lessee or such Affiliate as the case may be, as
ground Lessor thereunder, conveying to the Agent Lessor a leasehold
interest in such Land, which Land shall be a separate tax lot and a
legal subdivision under all applicable zoning laws. Notwithstanding any
other provision of this Participation Agreement or the other Operative
Documents, the Agent Lessor shall receive a Deed for each Improved
Property and in no event shall Improved Property be subject to a ground
lease as provided in clause (B) of this Section.
(j) ▇▇▇▇ of Sale. On or prior to such Acquisition Date, the
Agent Lessor shall have received a special warranty ▇▇▇▇ of sale (a
"▇▇▇▇ of Sale"), conveying title to the Agent Lessor in any
Improvements and other personal property (other than inventory)
comprising part of the applicable Property.
(k) Construction Agency Agreement Supplement. On or prior to
such Acquisition Date, the Construction Agent and the Agent Lessor
shall have delivered to the Lessors and the Lenders a Construction
Agency Agreement Supplement with respect to the applicable Property
fully executed by the Construction Agent and the Agent Lessor.
(l) Supplement to Assignment of Lease and Rent. On or prior to
such Acquisition Date, the Agent Lessor shall have delivered to the
Administrative Agent a supplement to the Assignment of Lease and Rent
with respect to the applicable Property substantially in the form of
Exhibit A thereto, together with a consent to and acknowledgment of
such supplement duly executed by the applicable Lessee.
(m) Lease Supplement. On or prior to such Acquisition Date,
the applicable Lessee and the Agent Lessor shall have delivered the
original
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counterpart of the Lease Supplement executed by such Lessee and the
Agent Lessor with respect to the applicable Property to the Lenders.
(n) Lessor Financing Statements. On or prior to such
Acquisition Date, the applicable Lessee shall have delivered to the
Agent Lessor all Lessor Financing Statements relating to such Property
as the Agent Lessor or any other Lessor may reasonably request in order
to protect the interests of the Agent Lessor and each of the Lessors
under the Master Lease and the Lease Supplement relating to the
applicable Property to the extent the Master Lease and such Lease
Supplement constitute security agreements.
(o) Recordation of Lessor Mortgage and Lessor Financing
Statements; Search Results. Each of the Participants shall have
received (x) evidence reasonably satisfactory to it that each of (i)
the Lease Supplement and any other instrument constituting a Lessor
Mortgage and (ii) the Lessor Financing Statements, in each case
relating to such Property, has been, or are being, recorded in a manner
sufficient to properly perfect each of their interests therein and (y)
copies of file search reports from the Uniform Commercial Code filing
officer in the jurisdiction (i) in which is located such Property or
(ii) in which is located a place of business or the chief executive
office of the applicable Lessee that owns or holds any right, title or
interest in any Property, setting forth the results of such Uniform
Commercial Code file searches.
(p) Property Survey. At least five (5) Business Days prior to
such Acquisition Date, the Representative shall have delivered to each
of the Agent Lessor and the Administrative Agent an American Land Title
Association ("ALTA")/1992 (Urban) Survey of such Property certified to
the Participants and the title company and otherwise in form reasonably
acceptable to the Participants.
(q) Title Insurance. On or prior to such Acquisition Date, the
Representative shall have delivered to the Administrative Agent and the
Agent Lessor a commitment to deliver an ALTA extended owners and
lenders title insurance policy covering such Property in favor of the
Agent Lessor, the Administrative Agent and the Participants,
respectively, such policy in an amount not less than (i) with respect
to Improved Property, the sum of the related Land Acquisition Cost and
Property Improvement Costs and (ii) with respect to any other Property,
the sum of the related Land Acquisition Cost and Estimated Improvement
Costs and to be reasonably satisfactory to the Required Lenders and the
Lessors with such customary endorsements and affirmative assurances
issued by the title company as a routine matter, if requested by the
Agent Lessor or the Administrative Agent.
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(r) No Default. There shall not have occurred and be
continuing any Default or Event of Default under any of the Operative
Documents, and no Default or Event of Default under any of the
Operative Documents will have occurred after giving effect to the
acquisition of the Land requested by such Funding Request.
(s) Opinion of Counsel and of Local Counsel to the Lessee. The
Agent Lessor and the Administrative Agent shall have received (i) an
opinion of counsel qualified with respect to the laws of the
jurisdiction in which the applicable Property is situated, addressed to
the Administrative Agent, the Agent Lessor, each Lender and each
Lessor, substantially in the form of Exhibit G and (ii) if requested by
the Agent Lessor and the Administrative Agent, opinions from such other
counsel and covering such issues as they may reasonably request.
(t) Approval of Proposed Acquisition. The applicable Property
shall have been disclosed to and approved by the Agent Lessor and
Administrative Agent prior to the first anniversary of the Effective
Date.
All documents and instruments required to be delivered pursuant to this Section
6.1 shall be delivered at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other location as may be determined by
the Agent Lessor, the Administrative Agent and the Lessee.
Section 6.2 Funding Dates. The obligations of the Agent Lessor to make
an Advance on each Funding Date occurring after an Acquisition Date, the
obligation of the Lessors to make any related Lessor Amount on such Funding
Date, and the obligation of the Lenders to make available any related Loan on
such Funding Date, are subject to satisfaction or waiver of the following
conditions precedent:
(a) Funding Request. Each of the Administrative Agent and the
Agent Lessor shall have received a fully executed counterpart of the
applicable Funding Request in accordance with Section 3.4. Each of the
delivery of a Funding Request and the acceptance of the proceeds of
such Advance shall constitute a representation and warranty by the
▇▇▇▇▇▇▇ Entities that on the applicable Funding Date (both immediately
before and after giving effect to the making of such Advance and the
application of the proceeds thereof), the statements made in Section
8.3 are true and correct.
(b) As-Built Appraisal. (i) On the earlier of (x) three (3)
Business Days prior to the Initial Construction Date for each Property
that is not an Improved Property and (y) ninety (90) days following the
Acquisition Date for such Property, the Agent Lessor and the
Administrative Agent shall have
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received an As-Built Appraisal of the applicable Property, in form and
substance satisfactory to the Administrative Agent and the Agent
Lessor, which As-Built Appraisal shall show that as of each of the
Completion Date, the last day of the Base Term and the last day of any
Renewal Term for such Property, the Fair Market Sales Value of such
Land and the Improvements to be constructed thereon in accordance with
the Plans and Specifications for such Property shall not be less than
100% of the sum of the Land Acquisition Cost and Estimated Improvement
Costs for such Property and (ii) at least three (3) Business Days prior
to the Funding Date in the event the Property Balance for any Property,
after giving effect to such Advance, would be greater than the Fair
Market Sales Value for any date indicated in the As- Built Appraisal
delivered under clause (i) and subject to Section 3.1 of the
Construction Agency Agreement, a subsequent As-Built Appraisal which
shall show that as of each of the Completion Date, the last day of the
Base Term and the last day of any Renewal Term for such Property, the
Fair Market Sales Value of such Property shall not be less than the
Property Balance after giving effect to such Advance.
(c) Lease Supplement Covering Improvements. If (x) such
Funding Date is an Initial Construction Date for any Property that is
not an Improved Property and (y) the Fair Market Sales Value for such
Property as of the Completion Date therefor, as set forth in the
As-Built Appraisal delivered with respect to such Property pursuant to
clause (b), is greater than or equal to four times the Land Acquisition
Cost for the related Land, then, on or prior to such Initial
Construction Date, the applicable Lessee and the Agent Lessor shall
have delivered to the Lenders the original counterpart of a Lease
Supplement executed by such Lessee and the Agent Lessor covering the
Improvements then located on the applicable Property and all additional
Improvements thereafter located on such Property.
(d) Fees. All fees due and payable pursuant to this
Participation Agreement shall have been paid, and the Participants
shall have received all Commitment Fees due and payable pursuant to
Section 4.4(a).
(e) Representations and Warranties. On the applicable Funding
Date, the representations and warranties of each ▇▇▇▇▇▇▇ Entity in this
Agreement and in each of the other Operative Documents shall be true
and correct in all material respects as though made on and as of such
date, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on
and as of such earlier date.
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(f) Litigation. On the applicable Funding Date, there shall
not be any actions, suits or proceedings pending or, to the knowledge
of any ▇▇▇▇▇▇▇ Entity, threatened with respect to any ▇▇▇▇▇▇▇ Entity
(i) that are reasonably likely to have a Material Adverse Effect, or
(ii) that could reasonably be expected to have a Material Adverse
Effect on the title to, or the use, operation or value of, the Property
which is the subject of the current Advance.
(g) No Default. There shall not have occurred and be
continuing any Default or Event of Default, and no Default or Event of
Default will have occurred after giving effect to the making of the
Advance requested by such Funding Request.
(h) Available Commitments. After giving effect to the
applicable Advance, the conditions set forth in Article III shall not
be violated.
(i) Construction Costs. After giving effect to the applicable
Advance, the estimated as yet unpaid cost to the Construction Agent of
completing the Construction pursuant to the Construction Documents
shall not exceed the Available Commitments, net of any portion of the
Available Commitments that shall be allocated for Advances deemed to
have been requested pursuant to Section 4.1(c) or the Construction
Budget for such Property.
(j) Construction Budget. On or prior to the Initial
Construction Date with respect to each Property, the Construction Agent
shall have delivered a Construction Budget to the Administrative Agent
and Agent Lessor in such detail with respect to the Construction of
such Property, and such Construction Budget shall be reasonably
satisfactory to the Administrative Agent and the Agent Lessor.
(k) Taxes. All taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of the
Operative Documents shall have been paid or provisions for such payment
shall have been made by the Representative to the reasonable
satisfaction of the Agent Lessor, the Administrative Agent, the Lessors
and the Lenders.
(l) Prime Contracts and Subcontracts. All prime contracts and
principal subcontracts with respect to the Construction of each
Property shall contain provisions requiring the Construction Agent to
withhold not less than 10% of total amounts due under such contract or
subcontract until the scope of work covered by such prime or
subcontract has been completed.
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Section 6.3 Conditions to Completion Date. The Completion Date with
respect to any Property shall be deemed to have occurred for purposes of the
Operative Documents on the earliest date on which each of the following events
shall have occurred:
(a) the Construction relating to such Property shall have been
substantially completed in accordance with the applicable Plans and
Specifications and all Applicable Law;
(b) such Property shall be ready for occupancy and operation
in accordance with the Plans and Specifications therefor, and all
appropriate Governmental Action (including the issuance by the
appropriate Governmental Authority of a permanent certificate of
occupancy) shall have been taken for the occupancy and operation of
such Property;
(c) the Representative shall have provided to the
Administrative Agent and the Agent Lessor an updated title report for
such Property in form and substance reasonably satisfactory to each of
the Administrative Agent and the Agent Lessor; and
(d) the Agent Lessor, the Administrative Agent, the Lessors
and the Lenders shall have received a Completion Certificate from the
Construction Agent substantially in the form of Exhibit H hereto (a
"Completion Certificate").
ARTICLE VII
DISTRIBUTIONS
Section 7.1 Basic Rent. Each payment of Basic Rent (and any payment of
interest on overdue installments of Basic Rent) received by the Administrative
Agent shall be distributed by the Administrative Agent to the Lessors and the
Lenders pro rata in accordance with, and for application to, the Lender Basic
Rent and Lessor Basic Rent then due, as well as any overdue interest or Yield
due to the Lessors or the Lenders (to the extent permitted by Applicable Law).
Section 7.2 Purchase Payments by the Representative and the Lessees.
Any payment received by the Administrative Agent as a result of:
(a) the purchase of any or all of the Properties in connection
with the exercise of the Purchase Option under Section 18.1 of the
Master Lease, or
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compliance with the obligation to purchase (or cause its designee to
purchase) all of the Properties in accordance with Section 18.2 or 18.3
of the Master Lease, or
(b) compliance with the obligation to purchase all unsold
Properties in accordance with Section 16.2(f) of the Master Lease, or
(c) any amounts received pursuant to Section 20.3(b) of the
Master Lease, or
(d) the payment of the Property Balance with respect to any
Property in accordance with Section 15.1 of the Master Lease or Section
4.3(b) of the Participation Agreement, or
(e) the payment of the Property Balance with respect to any
Property in accordance with Section 5.3 of the Construction Agency
Agreement,
shall be distributed by the Administrative Agent to the Lessors and the Lenders
pro rata without priority of one over the other, in the proportion that the
Participant Balance of each of the Lenders and the Lessor bears to the aggregate
of all of the Participant Balances.
Section 7.3 Payment of Loan Balance. In accordance with Section 20.2(f)
of the Master Lease upon the exercise of the Remarketing Option, the payment of
the Loan Balance to the Administrative Agent shall be distributed to the Lenders
for application to pay in full the Participant Balance of each Lender, and the
payment of the aggregate amount of Lessor Amounts that are allocable to
Qualified Land shall be distributed to the Lessors.
Section 7.4 Sales Proceeds of Remarketing of Properties. Any payments
received by the Administrative Agent as proceeds from the sale of the Properties
sold pursuant to the exercise of the Remarketing Option pursuant to Article XX
of the Master Lease, together with any payment made as a result of an appraisal
pursuant to Section 13.2, shall be distributed by the Administrative Agent in
the funds so received in the following order of priority:
first, to the Lessors in an amount equal to (x) the aggregate
Lessor Balance minus (y) 3% of the sum of (i) the largest principal amount
outstanding of Lessor Amounts at any one time prior to the distribution
hereunder and (ii) the largest principal amount outstanding of Loans at any one
time prior to the distribution hereunder (such amount under clause (y), the
"Equity Amount"), shall be distributed to the Lessors for application to the
Participant Balance of each Lessor, pro rata among the Lessors without priority
of one over the other in the proportion that the
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Participant Balance of each such Lessor bears to the aggregate Participant
Balances of all Lessors and, in the case where the amounts so distributed shall
be insufficient to pay in full as aforesaid, then pro rata among the Lessors
without priority of one over the other in the proportion that the Participant
Balance of each such Lessor bears to the aggregate Participant Balances of all
Lessors;
second, an amount equal to the Equity Amount shall be
distributed to the Lessors for application to pay in full the Participant
Balance of each Lessor, pro rata among the Lessors without priority of one over
the other in the proportion that the Participant Balance of each such Lessor
bears to the aggregate Participant Balance of all Lessors,
third, the balance, if any, shall be promptly paid to the
Lessors to be distributed as provided in the Lease.
Section 7.5 Supplemental Rent. All payments of Supplemental Rent
received by the Administrative Agent (excluding any amounts payable pursuant to
the preceding provisions of this Article VII) shall be distributed promptly by
the Administrative Agent upon receipt thereof to the Persons entitled thereto
pursuant to the Operative Documents.
Section 7.6 Distribution of Payments after Lease Event of Default.
(a) During the continuance of a Lease Event of Default and subject to
clauses (b) and (c) below, all proceeds from the sale of all or any part of any
one or more Properties shall be distributed by the Administrative Agent in the
following order of priority:
first, so much of such payment or amount as shall be required
to pay or reimburse the Administrative Agent and the Agent Lessor for any tax,
fees, expense, indemnification or other loss incurred by the Administrative
Agent or the Agent Lessor (to the extent incurred in connection with any duties
as the Administrative Agent or Agent Lessor, as the case may be), shall be
distributed to the Administrative Agent and the Agent Lessor without priority of
one over the other for their own accounts in accordance with the amount of such
payment or amount payable to such Person;
second, so much of such payments or amounts as shall be
required to pay the Lenders and the Lessors the amounts payable to them pursuant
to any expense reimbursement or indemnification provisions of the Operative
Documents shall be distributed to each such Lender and Lessor without priority
of one over the other in accordance with the amount of such payment or payments
payable to each such Person;
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third, to the Lessors in an amount equal to the aggregate
Lessor Balance minus the Equity Amount shall be distributed to the Lessors for
application to the Participant Balance of each Lessor, pro rata among the
Lessors without priority of one over the other in the proportion that the
Participant Balance of each such Lessor bears to the aggregate Participant
Balances of all Lessors and, in the case where the amounts so distributed shall
be insufficient to pay in full as aforesaid, then pro rata among the Lessors
without priority of one over the other in the proportion that the Participant
Balance of each such Lessor bears to the aggregate Participant Balances of all
Lessors;
fourth, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders without priority of one over the other in
the proportion that the Participant Balance of each such Lender bears to the
aggregate Participant Balances of all Lenders and, in the case where the amounts
so distributed shall be insufficient to pay in full as aforesaid, then pro rata
among the Lenders without priority of one over the other in the proportion that
the Participant Balance of each such Lender bears to the aggregate Participant
Balances of all Lenders;
fifth, an amount equal to the Equity Amount shall be
distributed to the Lessors for application to pay in full the Participant
Balance of each Lessor, pro rata among the Lessors without priority of one over
the other in the proportion that the Participant Balance of each such Lessor
bears to the aggregate Participant Balance of all Lessors,
sixth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as directed by, the
Representative.
(b) All payments received and amounts realized by the Administrative
Agent in connection with any Casualty or Condemnation during the continuance of
a Lease Event of Default shall be distributed by the Administrative Agent as
follows:
(i) in the event that the Agent Lessor (at the direction of
the Lessors) and the Administrative Agent elect to pay all or a portion
of such amounts to the appropriate Lessee for the repair of damage
caused by such Casualty or Condemnation in accordance with Section
14.1(a) of the Master Lease, then such amounts shall be distributed to
such Lessee, and
(ii) in the event that the Agent Lessor (at the direction of
the Lessors) and the Administrative Agent elect to apply all or a
portion of such amounts to the purchase price of the related Property
in accordance with Section 14.1(a) and Article XV of the Master Lease,
then such amounts shall be distributed in accordance with clause (a).
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(c) During the continuance of a Construction Agency Event of Default
during which recourse is limited by Section 5.4 of the Construction Agency
Agreement, all payments received and amounts realized with respect to the
relevant Properties by the Administrative Agent shall be distributed by the
Administrative Agent as follows:
first, so much of such payment or amount as shall be required
to pay or reimburse the Administrative Agent and the Agent Lessor for any tax,
fees, expense, indemnification or other loss incurred by the Administrative
Agent or the Agent Lessor (to the extent incurred in connection with any duties
as the Administrative Agent or Agent Lessor, as the case may be), shall be
distributed to the Administrative Agent and the Agent Lessor without priority of
one over the other for their own accounts in accordance with the amount of such
payment or amount payable to such Person;
second, so much of such payments or amounts as shall be
required to pay the Lenders and the Lessors the amounts payable to them pursuant
to any expense reimbursement or indemnification provisions of the Operative
Documents shall be distributed to each such Lender and Lessor without priority
of one over the other in accordance with the amount of such payment or payments
payable to each such Person;
third, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders without priority of one over the other in
the proportion that the Participant Balance of each such Lender bears to the
aggregate Participant Balances of all Lenders and, in the case where the amounts
so distributed shall be insufficient to pay in full as aforesaid, then pro rata
among the Lenders without priority of one over the other in the proportion that
the Participant Balance of each such Lender bears to the aggregate Participant
Balances of all Lenders;
fourth, to the Lessors in an amount equal to the aggregate
Lessor Balance minus the Equity Amount shall be distributed to the Lessors for
application to the Participant Balance of each Lessor, pro rata among the
Lessors without priority of one over the other in the proportion that the
Participant Balance of each such Lessor bears to the aggregate Participant
Balances of all Lessors and, in the case where the amounts so distributed shall
be insufficient to pay in full as aforesaid, then pro rata among the Lessors
without priority of one over the other in the proportion that the Participant
Balance of each such Lessor bears to the aggregate Participant Balances of all
Lessors;
fifth, an amount equal to the Equity Amount shall be
distributed to the Lessors for application to pay in full the Participant
Balance of each Lessor, pro rata among the Lessors without priority of one over
the other in the proportion that the
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Participant Balance of each such Lessor bears to the aggregate Participant
Balance of all Lessors,
sixth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as directed by, the
Representative.
Section 7.7 Other Payments.
(a) Except as otherwise provided in Sections 7.1, 7.2, 7.6 and clause
(b) below, any payment received by the Administrative Agent for which no
provision as to the application thereof is made in the Operative Documents or
elsewhere in this Article VII (including any balance remaining after the
application in full of amounts to satisfy any expressed provision) shall be
distributed pro rata among the Lenders and the Lessors without priority of one
over the other, in the proportion that the Participant Balance of each bears to
the aggregate of all the Participant Balances.
(b) Except as otherwise provided in Sections 7.1, 7.2 and 7.6, all
payments received and amounts realized by the Administrative Agent or the Agent
Lessor under the Master Lease or otherwise with respect to the Properties to the
extent received or realized at any time after indefeasible payment in full of
the Participant Balances of all of the Lenders and the Lessors and any other
amounts due and owing to the Lenders or the Lessors, shall be distributed
forthwith by the Administrative Agent or the Agent Lessor, as the case may be,
in the order of priority set forth in Section 7.6(a).
(c) Except as otherwise provided in Sections 7.1 and 7.2, any payment
received by the Administrative Agent or the Agent Lessor for which provision as
to the application thereof is made in an Operative Document but not elsewhere in
this Article VII shall be distributed forthwith by the Agent Lessor or the
Administrative Agent to the Person and for the purpose for which such payment
was made in accordance with the terms of such Operative Document.
Section 7.8 Casualty and Condemnation Amounts. Subject to Section
7.6(b), any amounts payable to the Administrative Agent as a result of a
Casualty or Condemnation pursuant to Section 14.1 of the Master Lease and the
Assignment of Lease and Rent shall be distributed as follows:
(a) all amounts payable to the appropriate Lessee for the
repair of damage caused by such Casualty or Condemnation in accordance
with Section 14.1(a) of the Master Lease shall be distributed to such
Lessee, and
(b) all amounts that are to be applied to the purchase price
of the related Property in accordance with Section 14.1(a) and Article
XV of the Master Lease shall be distributed by the Administrative Agent
to the Lenders
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and the Lessors pro rata without priority of one over the other, in the
proportion that the Participant Balance of each bears to the aggregate
of all of the Participant Balances.
Section 7.9 Order of Application. To the extent any payment made to any
Lender or any Lessor pursuant to sections 7.2, 7.3, 7.4, 7.6 or 7.7 is
insufficient to pay in full the Participant Balance of such Lender or Lessor,
then each such payment shall first be applied to accrued interest or Yield and
then to principal on the Loans or the Lessor Amounts, as applicable.
Section 7.10 Payments to Account. All payments made to the
Administrative Agent pursuant to the Operative Documents shall be made to the
Account.
ARTICLE VIII
REPRESENTATIONS
Section 8.1 Representations of the Participants. Each Participant
represents and warrants to each other Participant, the Agent Lessor, the
Administrative Agent, the Representative and each Lessee that:
(a) ERISA. Such Participant is not and will not be making its
Loans or funding its Lessor Amounts hereunder, and is not performing
its obligations under the Operative Documents, with the assets of an
"employee benefit plan" (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA, or "plan" (as defined in Section
4975(e)(1) of the Code).
(b) Status. Such Participant meets at least one of the
definitions (other than as a "Lessor" or a "Lender") of the term
"Eligible Assignee".
(c) Securities. Each Participant is participating in the
Transactions for its own account and not with a view toward
redistribution; provided that disposition of its rights hereunder shall
remain in its control and the foregoing shall not affect the ability of
any Participant to assign or sell participations in its rights in
accordance with the Operative Documents.
Section 8.2 Representations of the ▇▇▇▇▇▇▇ Entities. Each of the
Lessees and the Representative hereby represents and warrants to each
Participant, the Agent Lessor and the Administrative Agent that:
(a) Organization; Powers. Each ▇▇▇▇▇▇▇ Entity and their
respective Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all
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requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted,
(iii) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would
not result in a Material Adverse Effect, (iv) has the corporate power
and authority to execute, deliver and perform its obligations under
each of the Operative Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party hereunder, and
(v) has its chief executive office located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Authorization. The execution, delivery and performance by
each ▇▇▇▇▇▇▇ Entity of each of the Operative Documents to which it is a
party (i) have been duly authorized by all requisite corporate and, if
required, stockholder action and (ii) will not (A) violate (x) any
provision of law, statute, rule or regulation, or of the certificate or
articles of incorporation or other constitutive documents or bylaws of
such ▇▇▇▇▇▇▇ Entity or any of its Subsidiaries (y) any order, writ,
ruling, injunction or decree of any Governmental Authority or (z) any
provision of any indenture, agreement or other instrument to which such
▇▇▇▇▇▇▇ Entity or any of its Subsidiaries is a party or by which any of
them, or any of their property is or may be bound, (B) be in conflict
with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under any such indenture, agreement or
other instrument or (C) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon or with respect to any
property or assets now owned or hereafter acquired by such ▇▇▇▇▇▇▇
Entity or any of its Subsidiaries.
(c) Enforceability.
(i) This Participation Agreement has been duly
executed and delivered by the Representative and each Lessee
and constitutes, and each other Operative Document to which a
▇▇▇▇▇▇▇ Entity is a party when executed and delivered by such
party will constitute, a legal, valid and binding obligation
of such ▇▇▇▇▇▇▇ Entity enforceable against it in accordance
with its terms.
(ii) Each of the Lessor Financing Statements, Lessor
Mortgages and the Lease Supplements relating to each Property
create valid security interests in and mortgage liens on the
Property purported to be covered thereby, which security
interests and mortgage liens are and will remain perfected
security interests and mortgage liens, prior to all Liens
other than Permitted Property Liens.
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(d) Governmental and Other Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority or any third party is or will be required in
connection with the activities of any ▇▇▇▇▇▇▇ Entity pursuant to the
Transactions or the enforceability of any Operative Document against
any ▇▇▇▇▇▇▇ Entity to which such ▇▇▇▇▇▇▇ Entity is a party, except such
as have been made or obtained and are in full force and effect and
except with respect to Properties for which Advances have not been
made.
(e) Financial Statements. The Representative has heretofore
furnished to the Administrative Agent, the Agent Lessor and each
Participant the consolidated balance sheet of the Representative and
its Consolidated Subsidiaries as of December 31, 1997 and the related
consolidated statements of operations, stockholders' equity and cash
flows for the year then ended, together with the notes thereto,
included in the Representative's 1997 Form 10-K and reported on by
Ernst & Young LLP (the "Submitted Financial Statements"). Such
financial statements present fairly the consolidated financial
condition and consolidated results of operations of the Representative
and its Consolidated Subsidiaries (including the Lessees) as of such
date and for such period. Such financial statements were prepared in
conformity with GAAP.
(f) No Material Adverse Change. There has been no material
adverse change in the business, financial position, results of
operations or prospects of the Representative and its Consolidated
Subsidiaries, considered as a whole, since June 30, 1998.
(g) Title to Properties; Possession Under Leases.
(i) The Representative and its Subsidiaries have good
and marketable title to all of the properties and other assets
(real or personal, tangible, intangible or mixed) they own or
purport to own.
(ii) All leases to which the Representative or any of
its Subsidiaries is a party as lessee or sublessee are in full
force and effect, except for such defects in title and such
invalidity or unenforceability of leases as, in the aggregate,
could not materially adversely affect the condition (financial
or otherwise), earnings, business affairs or business
prospects of the Representative and its Subsidiaries taken as
a whole.
(h) Subsidiaries. Item 8.2(h) of Schedule III sets forth as of
the Effective Date a list of the Representative's Subsidiaries and the
percentage ownership interest of the Representative therein. The
capital stock of each
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such Subsidiary is duly authorized, validly issued and fully paid and
nonassessable. Each Guarantor (other than the Parent Guarantor) and
each Lessee is a Wholly-Owned Subsidiary of the Representative, and
each Wholly-Owned Subsidiary of the Representative (other than ▇▇▇▇▇▇▇
Funding, Inc., ▇▇▇▇▇▇▇ Indemnity, Limited and Pharmacy and its
Subsidiaries) is a Guarantor.
(i) Litigation; Compliance with Laws.
Except as disclosed in the Representative's 1997 Form
10-K or the Representative's quarterly report for the fiscal
quarter ended June 30, 1998 as filed with the Securities and
Exchange Commission on Form 10-Q, there are no actions, suits
or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of any
▇▇▇▇▇▇▇ Entity threatened against or affecting the
Representative or any of its Subsidiaries or any business,
property or rights of any such Person (A) which involve any
Operative Document or the Transactions or (B) as to which
there is a reasonable possibility of an adverse determination
and which, if adversely determined, could materially adversely
affect the business, consolidated financial position or
consolidated results of operations of the Representative and
its Consolidated Subsidiaries.
(j) Federal Reserve Regulations.
(i) No ▇▇▇▇▇▇▇ Entity or any of its respective
Subsidiaries is engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock.
(ii) No part of the proceeds of any Advance will be
used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (A) to purchase or carry Margin
Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (B) for any purpose
which entails a violation of, or which is inconsistent with
the provisions of the Regulations of the F.R.S. Board,
including Regulation G, U or X.
(k) Governmental Regulation. No ▇▇▇▇▇▇▇ Entity or any of its
respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (ii) subject to
regulation under the Public Utility Holding Company Act of 1935.
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(l) Use of Proceeds. The proceeds of each Advance will be used
only for the purpose of financing the acquisition of Land or leasehold
interests therein (and Improvements existing thereon, if any) and the
payment of Property Improvement Costs incurred in connection therewith.
(m) Tax Returns. United States Federal income tax returns of
the Representative and its Subsidiaries have been closed through the
fiscal year ended December 31, 1992. The Representative and its
respective Subsidiaries have filed or caused to be filed all United
Stated Federal income tax returns and all other material tax returns
which are required to have been filed by it and has paid or caused to
be paid all Taxes shown to be due and payable on such returns or on any
assessments received by it, except Taxes that are being contested in
good faith by appropriate proceedings and for which such ▇▇▇▇▇▇▇ Entity
or such Subsidiary shall have set aside on its respective books
adequate reserves in conformity with GAAP. The charges, accruals and
reserves on the books of the Representative and its Subsidiaries in
respect of Taxes or other governmental charges are, in the opinion of
the Representative, adequate.
(n) No Material Misstatements. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of
any ▇▇▇▇▇▇▇ Entity or any of its respective Subsidiaries to the
Administrative Agent, the Agent Lessor or any Participant in connection
with the negotiation of any Operative Document or included therein or
delivered pursuant thereto contained, contains or will contain any
material misstatement of fact or omitted, omits or will omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made,
not misleading.
(o) Employee Benefit Plan. Each member of the ERISA Group has
complied with its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and is in compliance in
all material respects with the presently applicable provisions of ERISA
and the Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standards under Section
412 of the Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any
amendment to any Plan, which has resulted or could reasonable be
expected to result, prior to the first anniversary of the Expiration
Date, in the imposition of a Lien or the posting of a bond or other
security under Section 302(f) of ERISA or Section 401(a)(29) or 412(n)
of the Code, (iii) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA
or (iv) within the preceding five plan years, with respect to any Other
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Plan, engaged in any transaction described in Section 4069 or Section
4212(c) of ERISA.
(p) Environmental and Safety Matters.
(a) In the ordinary course of its business, the
Representative conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties
of the Representative and its Subsidiaries, in the course of
which it identifies and evaluates associated liabilities and
costs. On the basis of this review, the Representative has
reasonably concluded that Environmental Laws are unlikely to
have a material adverse effect on the business, financial
condition, results of operations or prospects of the
Representative and its Consolidated Subsidiaries, considered
as a whole.
(b) As of the Documentation Date and the Effective
Date, to the knowledge of the Representative and its
Subsidiaries no material claim, investigation or written
inquiry has been made, and the Representative is not aware of
any circumstance which would warrant or give rise to such a
claim, investigation or inquiry, with regard to the
Representative or any of its Subsidiaries, in respect of any
facility owned, or to the knowledge of the Representative and
its Subsidiaries, leased or operated, either now or in the
past, by the Representative or any of its Subsidiaries, under
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended and in effect, or pursuant
to any other Environmental Law, or by the Environmental
Protection Agency or by any state, local, municipal or foreign
enforcement agency having jurisdiction over the protection of
the environment, or by any other Person in respect of or under
any Environmental Law.
(q) Patents, Licenses, Franchises and Formulas. Each ▇▇▇▇▇▇▇
Entity and its respective Subsidiaries own all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises
and formulas, or rights with respect to the foregoing, and has obtained
assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain
which, as the case may be, would result in a Material Adverse Effect on
the business, operations, property, assets, condition (financial or
otherwise) or prospects of such Person or of the ▇▇▇▇▇▇▇ Entities and
their respective Subsidiaries taken as a whole.
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(r) Offer of Securities, etc. No ▇▇▇▇▇▇▇ Entity or any of its
respective Subsidiaries or any Person authorized to act on their behalf
has, directly or indirectly, offered any interest in any Property or
any other interest similar thereto (the sale or offer of which would be
integrated with the sale or offer of such interest in each such
Property), for sale to, or solicited any offer to acquire any of the
same from, any Person other than each Participant and the
Administrative Agent, the Agent Lessor and other "accredited investors"
(as defined in Regulation D of the Securities and Exchange Commission).
(s) Property. Each Property as improved in accordance with the
applicable Plans and Specifications and the contemplated use thereof by
the applicable Lessee and its agents, assignees, employees, lessees,
licensees and tenants will comply with all Requirements of Law
(including, without limitation, all zoning and land use laws and
Environmental Laws) and Material Insurance Requirements, except for
such Requirements of Law as it shall be contesting in good faith by
appropriate proceedings. There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under
any Environmental Law) pending or, to the best of its knowledge,
threatened with respect to it, its Affiliates, or any Property which
materially adversely affects the title to, or the use, operation or
value of, any Property.
(t) Plans and Specifications. Upon Completion of the
applicable Construction for each Property, all water, sewer, electric,
gas, telephone and drainage facilities and all other utilities required
to adequately service the applicable Improvements for such Property's
intended use will be available pursuant to adequate permits (including
any that may be required under applicable Environmental Laws). No fire
or other casualty with respect to any Property has occurred which fire
or other casualty has had a Material Adverse Effect on any such
Property. Upon Completion of the applicable Construction, each Property
will have available all Material services of public facilities and
other utilities necessary for use and operation of each Property and
the other Improvements for their primary intended purposes including,
without limitation, adequate water, gas and electrical supply, storm
and sanitary sewerage facilities, telephone, other required public
utilities and means of access between such Improvements and public
highways for pedestrians and motor vehicles. All utilities serving each
Property, or proposed to serve each Property in accordance with the
applicable Plans and Specifications, are located in, and vehicular
access to the Improvements on each Property is provided by, either
public rights-of-way abutting each Property or Appurtenant Rights. All
Material licenses, approvals, authorizations, consents, permits
(including, without limitation, building, demolition and environmental
permits, licenses, approvals, authorizations and consents), easements
and rights-of-way, including proof and dedication,
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required for (x) the use, treatment, storage, transport, disposal or
disposition of any Hazardous Substance on, at, under or from each
Property during the construction of the Improvements thereon, and (y)
construction of the Improvements on each Property in accordance with
the applicable Plans and Specifications and the Construction Agency
Agreement have either been irrevocably obtained from the appropriate
Governmental Authorities having jurisdiction or from private parties,
as the case may be, or will be irrevocably obtained from the
appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be, prior to commencing any such
construction or use and operation, as applicable. Prior to any Advance
with respect of any Land or Improvements, each Lessee has obtained (or
will obtain prior to the Completion Date of the respective Property)
all appropriate Governmental Action, and has and will keep in full
force and effect, all operating permits necessary to allow for Property
to be operated in accordance with its intended use.
(u) Deeds; Ground Leases. Each Deed is in form and substance
sufficient to convey good and marketable title to the applicable
Property in fee simple. Each ground lease conveys to the Agent Lessor a
leasehold interest in the Land covered thereby, which Land is a
separate tax lot and a legal subdivision under all applicable zoning
laws, and the term of each ground lease is for a term not less than the
reasonably estimated useful life of the Improvements to be constructed
on the applicable Land.
(v) Insurance. Each Lessee has obtained insurance coverage
covering its Properties which meets the requirements of the Master
Lease, and such coverage is in full force and effect. Each ▇▇▇▇▇▇▇
Entity carries insurance with reputable insurers in respect of its
material assets in such manner, in such amounts and against such risks
as is customarily maintained by other Persons of similar size engaged
in similar business.
(w) Flood Hazard Areas. Except as otherwise identified on the
applicable survey delivered pursuant to Section 6.1(p), no portion of
any Property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency. If any Property is located in an area identified as a special
flood hazard area by the Federal Emergency Management Agency or other
applicable agency, then flood insurance has been obtained for such
Property in accordance with Article XIII of the Master Lease and in
accordance with the National Flood Insurance Act of 1968, as amended.
(x) Title to Assets. Each ▇▇▇▇▇▇▇ Entity and its respective
Subsidiaries have good and marketable title to all of its Material
assets
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reflected on the balance sheets in the Submitted Financial Statements,
except for such assets as have been disposed of in the ordinary course
of business (or as have been disclosed to the Participants on or prior
to the Effective Date), and all such assets are free and clear of any
Lien, except as reflected in the Submitted Financial Statements and/or
notes thereto or as otherwise permitted by the provisions hereof or
under the Operative Documents, and except for Permitted Property Liens.
Each ▇▇▇▇▇▇▇ Entity and its respective Subsidiaries have such
trademarks, trademark rights, trade names, trade name rights,
franchises, copyrights, patents, patent rights and licenses as to allow
it to conduct its business as now operated, without known conflict with
the rights of others.
(y) Solvency. The Representative and its Consolidated
Subsidiaries, taken as a whole, are Solvent.
Section 8.3 Representations with Respect to each Funding Date and
Acquisition Date. Each of the Lessees and the Representative represents and
warrants to the Administrative Agent, the Agent Lessor and each Participant as
of each Funding Date and Acquisition Date as follows:
(a) Representations and Warranties. The representations and
warranties set forth in Section 8.2 are true and correct on and as of
such Funding Date or Acquisition Date, except to the extent such
representations or warranties relate solely to an earlier date, in
which case such representations and warranties shall have been true and
correct on and as of such earlier date. Each ▇▇▇▇▇▇▇ Entity is in
compliance with its obligations under the Operative Documents and there
exists no Default or Event of Default. No Default or Event of Default
will occur as a result of, or after giving effect to, the Advance
requested by the Funding Request on such date.
(b) Improvements. The Construction of the Improvements on the
applicable Land to date has, to the best of each ▇▇▇▇▇▇▇ Entity's
knowledge, been performed in a good and workmanlike manner,
substantially in accordance with the applicable Plans and
Specifications and the Construction Budget for such Property and in
compliance with all Insurance Requirements and Requirements of Law.
(c) Liens. No ▇▇▇▇▇▇▇ Entity has permitted any Liens to be
placed against any Property other than Permitted Property Liens.
(d) Advance. The amount of the Advance requested represents
amounts advanced or to be advanced by the Construction Agent to third
parties (except for the Construction Agency Fee) in connection with
Land
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Acquisition Costs or Property Improvement Costs or amounts paid by the
Construction Agent in respect of Property Improvements Costs. With
respect to each Advance, the conditions precedent to such Advance and
the related Lessor Amounts and Loans set forth in Article VI have been
satisfied.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
The Representative agrees, for the benefit of the Arranger,
the Agent Lessor, the Administrative Agent, the Lessors and the Lenders, that:
Section 9.1 Transaction Expenses.
(a) The Representative shall request Advances for and pay from such
Advances from time to time all Transaction Expenses in respect of the
transactions on the Documentation Date, the Effective Date, each Acquisition
Date and each Funding Date; provided, however, that, if the Representative has
not received written invoices therefor at least two (2) Business Days prior to
such date, such Transaction Expenses shall be paid within thirty (30) days after
the Representative has received written invoices therefor.
(b) The Representative shall pay or cause to be paid (i) all
Transaction Expenses incurred by the Agent Lessor, the Administrative Agent or
the Arranger in entering into any future amendments or supplements with respect
to any of the Operative Documents, whether or not such amendments or supplements
are ultimately entered into, or giving or withholding of waivers or consents
hereto or thereto, in each case which have been requested by or approved by the
Representative, (ii) all Transaction Expenses incurred by the Arranger, the
Agent Lessor, the Administrative Agent, the Lenders or the Lessors in connection
with any purchase of the Property by the Lessee or other Person pursuant to
Articles XVIII and XXI of the Master Lease and (iii) after the occurrence and
during the continuance of a Lease Event of Default or a Construction Agency
Event of Default all Transaction Expenses incurred by any of the Participants,
the Agent Lessor, the Administrative Agent or the Arranger in respect of
enforcement of any of their rights or remedies against any ▇▇▇▇▇▇▇ Entity of any
of the foregoing in respect of the Operative Documents.
Section 9.2 Brokers' Fees and Stamp Taxes. The Representative shall pay
or cause to be paid any brokers' fees and any and all stamp, transfer and other
similar taxes, fees and excises, if any, including any interest and penalties,
which are payable
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in connection with the transactions contemplated by this Participation Agreement
and the other Operative Documents.
Section 9.3 Loan Agreement and Related Obligations. The Representative
shall pay, without duplication of any other obligation of the Representative to
pay any such amount under the Operative Documents, before the due date thereof,
all costs, expenses and other amounts (other than principal and interest on the
Loans which are payable to the extent otherwise required by the Operative
Documents) required to be paid by the Agent Lessor, Administrative Agent or any
of the Lenders or Lessors under the Loan Agreement, the Assignment of Lease and
Rent and the Construction Agency Agreement Assignment.
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
Section 10.1 Affirmative Covenants of the Representative. The
Representative covenants and agrees with the Arranger, the Agent Lessor, the
Administrative Agent, the Lessors and the Lenders that, so long as this
Participation Agreement shall remain in effect or the principal or interest on
any Loan, any Lessor Amount or Yield thereon, or any Commitment Fees, other fees
or any other expenses or amounts payable under any Operative Document shall be
unpaid, and until all Commitments shall have been permanently terminated, unless
the Required Participants shall otherwise consent in writing, the Representative
will, and will cause each of its Subsidiaries (including all other ▇▇▇▇▇▇▇
Entities) to:
(a) Existence; Businesses and Properties. The Representative
will keep, and will cause each of its Subsidiaries to keep, all
property necessary in its business in good working order and condition,
ordinary wear and tear excepted.
(b) Insurance. The Representative will, and will cause each of
its Subsidiaries to, maintain (either in the name of the Representative
or in such Subsidiary's own name) with financially sound and
responsible insurance companies, insurance on all their respective
properties in at least such amounts and against at least such risks
(and with such risk retention and self insurance) as are usually
insured against in the same general area by companies of established
repute engaged in the same or a similar business at a substantial
number of different facilities. The Representative will furnish to the
Participants, upon request from the Administrative Agent or Agent
Lessor, information presented in reasonable detail as to the insurance
so carried.
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(c) Compliance with Laws. The Representative will comply, and
will cause each of its Subsidiaries to comply, with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder)(except (i) where the
failure to so comply would not materially adversely affect the
business, consolidated financial position or consolidated results of
operations of the Representative and its Subsidiaries and would not in
any manner draw into question the validity of any Operative Document or
(ii) where the necessity of compliance therewith is contested in good
faith by appropriate proceedings and for which adequate reserves have
been established in accordance with generally accepted accounting
principles) and will maintain and cause each of its Subsidiaries to
maintain all governmental licenses, approvals, authorizations and
consents necessary for the conduct of the business of the
Representative and its Subsidiaries (except where the failure to
maintain such governmental licenses, approvals, authorizations and
consents would not materially adversely affect the business,
consolidated financial position or consolidated results of operations
of the Representative and its Subsidiaries and would not in any manner
draw into question the validity of any Operative Documents).
(d) Financial Statements, Reports, etc. In the case of the
Representative, furnish to the Administrative Agent, each Lender, each
Lessor and the Agent Lessor:
(i) as soon as available and in any event within
forty-five (45) days after the end of each of the first three
fiscal quarters of each fiscal year of the Representative,
consolidated balance sheets of the Representative and its
Consolidated Subsidiaries (including the other ▇▇▇▇▇▇▇
Entities), as at the end of such period, and the related
consolidated statements of operations and cash flows for such
fiscal quarter and for the portion of the Representative's
fiscal year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the
corresponding periods of the previous fiscal year, all
certified by a Financial Officer of the Representative that
they fairly present the financial condition of the
Representative and its Consolidated Subsidiaries and that they
consistently comply with Section C of Appendix A to this
Participation Agreement, subject to changes resulting from
normal year-end adjustment;
(ii) as soon as available and in any event within
ninety (90) days after the end of each fiscal year of the
Representative, consolidated balance sheets of the
Representative and its Consolidated Subsidiaries, as at the
end of such year, and the related consolidated
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statements of operations, stockholders' equity and cash flows
for such fiscal year, setting forth in each case, in
comparative form the consolidated figures for the previous
year, all in reasonable detail and reported in a manner
acceptable to the Securities and Exchange Commission by Ernst
& Young LLP or other independent certified public accountants
of recognized national standing selected by the Representative
and certified by a Financial Officer of the Representative
that they fairly present the financial condition of the
Representative and its Consolidated Subsidiaries and that they
consistently comply with Section C of Appendix A to this
Participation Agreement;
(iii) together with each delivery of financial
statements of the Representative and its Subsidiaries pursuant
to Sections 10.1(d)(i) and 10.1(d)(ii) above, (A) a
certificate of a Financial Officer (x) stating that the signer
thereof has reviewed the terms of this Participation Agreement
and the Master Lease and has made, or caused to be made under
his supervision, a review in reasonable detail of the
transactions and condition of the Representative and its
Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) during the
accounting period covered by such financial statements and
that such review has not disclosed the existence during or at
the end of such accounting period, and that the signer does
not have knowledge of the existence as at the date of such
certificate, of any condition or event which constitutes a
Lease Event of Default or Lease Default, or, if any such
condition or event existed or exists, specifying the nature
and period of existence thereof and what action the
Representative has taken, is taking and proposes to take with
respect thereto and (y) setting forth in reasonable detail
calculations of the Pricing Ratio as of the date of the
Balance Sheet contained therein and for the period of four
fiscal quarters ending on such date; and (B) a Compliance
Certificate demonstrating in reasonable detail compliance
during and at the end of such accounting periods with the
restrictions contained in Section 10.2(a), Section 10.2(b),
Section 10.2(c), clause v of Section 10.2(e), Section 10.2(f),
Section 10.2(g), Section 10.2(i) and Section 10.2(l);
(iv) promptly upon (i) the mailing thereof to the
shareholders of the Representative generally, copies of all
financial statements, reports and proxy statements so mailed
and (ii) the filing thereof, copies of all registration
statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and
reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the
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Representative shall have filed with the Securities and
Exchange Commission;
(v) forthwith upon the occurrence of any Default or
Event of Default, a certificate of a Financial Officer setting
forth the details thereof and the action the Representative
has taken, is taking and proposes to take with respect
thereto; and
(vi) with reasonable promptness, such other
information with respect to the financial position or business
of the Representative or any of its Subsidiaries (including
the other ▇▇▇▇▇▇▇ Entities) as from time to time may be
reasonably requested by any Participant.
(e) ERISA. If and when any member of the ERISA Group (i)
provides or is required to provide notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect
to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has provided or is required to provide notice of any such
reportable event, a copy of the notice of such reportable event
provided or required to be provided to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV or ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of such
notice; (iv) applies for a waiver of the minimum funding standards
under Section 412 of the Code with respect to any Plan, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and such other
information as is filed with the PBGC in connection therewith; (vi)
gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; (vii) receives notice from the PBGC or
any plan administrator of an intent to impose liability on any member
of the ERISA Group with respect to any Other Plan on account of a
transaction described in Section 4069 or 4212(c) of ERISA, a copy of
such notice; (viii) receives notice from the PBGC or any plan
administrator of an intent to impose liability on any member of the
ERISA Group with respect to any Other Plan on the basis that such
member of the ERISA Group is a member of the "controlled group" with
respect to such Other Plan under Section 412(c)(11) of the Code or
Section 4001(a)(14) of ERISA, a copy of such notice; or (ix) fails to
make any payment or contribution to any Plan or Multiemployer Plan or
makes any amendment to any Plan which has resulted or could result in
the imposition of a Lien or the posting of a bond or other security
under Section
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302(f) of ERISA or Section 401(a)(29) or 412(n) of the Code, a
certificate of an Authorized Financial Officer of the Representative
setting forth all material and relevant details as to such occurrence
or event and the action, if any, which the Representative, the
Representative or the applicable member of the ERISA Group proposes or,
after consultation with counsel, believes that it is required to take.
(f) Maintaining Records; Access to Properties and Inspections.
The Representative will keep, and will cause each of its Subsidiaries
to keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in
relation to its business and activities and will permit, and will cause
each such Subsidiary to permit, representatives of any Participant to
visit and inspect any of its properties, to examine and make abstracts
from any of its books and records and to discuss its affairs, finances
and accounts with its officers, employees and independent public
accountants, all at such reasonable times and upon reasonable notice to
the Representative and as often as may reasonably be desired; provided
that (i) subject to the provisions of Article IX, the Representative
shall not be obligated to pay the expenses of the Participants'
respective representatives and (ii) the Representative will have an
opportunity to participate in any discussions that take place between
representatives of any Participant and the Representative's independent
public accountants.
(g) Use of Proceeds. Use the proceeds of Advances only as
contemplated by the Operative Documents.
(h) Corporate Franchises, Patents and Licenses. Do or cause to
be done, all things necessary to preserve and keep in full force and
effect its existence and its material rights, franchises, licenses and
patents; provided, however, that nothing in this Section 10.1(h) shall
prevent the withdrawal by the Representative or any of its Subsidiaries
(including the other ▇▇▇▇▇▇▇ Entities) of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
have a Material Adverse Effect on the business, operations, property,
assets, condition (financial or otherwise) or prospects of the
Representative or such Subsidiary.
(i) Additional Lessees and Guarantors. The Representative
agrees to cause each Person, other than a Special Purpose Receivables
Financing Subsidiary, that shall, at any time after the Documentation
Date, become a Wholly-Owned Subsidiary of the Representative to enter
into the Guaranty promptly (and in any event within 10 Business Days
thereafter) after becoming a Wholly-Owned Subsidiary, and to provide
written evidence thereof reasonably satisfactory to the Administrative
Agent. Upon written request
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from the Representative, the Agent Lessor and the Administrative Agent
may in their sole discretion permit a wholly-owned Subsidiary of the
Representative to enter into the Operative Documents as a "Lessee" in
place of a then current Lessee provided the Agent Lessor and
Administrative Agent shall have received executed documentation
reasonably satisfactory to it confirming such substitution.
(j) Construction with respect to each Property. The
Representative, as Construction Agent, agrees to cause Construction for
each Property within the period specified in Section 2.7(g) of the
Construction Agency Agreement.
(k) Liquidity Facility. The Representative shall at all times
maintain sufficient undrawn credit facilities to ensure adequate
liquidity to meet working capital and other needs.
Section 10.2 Negative Covenants of the Representative. The
Representative covenants and agrees with the Arranger, the Agent Lessor, the
Administrative Agent, the Lessors and the Lenders that, so long as this
Participation Agreement shall remain in effect or the principal of or interest
on any Loan, any Lessor Amount or Yield thereon, or any Commitment Fees, other
fees or any other expenses or amounts payable under any Operative Document shall
be unpaid, and until all Commitments have been permanently terminated, unless
Required Participants shall otherwise consent in writing, the Representative and
each Lessee will not, and will not cause or permit any of their Subsidiaries
(including all other ▇▇▇▇▇▇▇ Entities) to:
(a) Minimum Consolidated Net Worth. Permit Consolidated Net
Worth of the Representative to be less than the sum of (i) $690,000,000
plus (ii) 50% of the aggregate positive Consolidated Net Income of the
Representative and its Consolidated Subsidiaries (excluding any
consolidated net loss) for each fiscal quarter ending after January 1,
1998.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio at any date during the periods specified below to be
less than the ratio set forth below opposite the period in which such
date falls:
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========================================================================================
Period Ratio
----------------------------------------------------------------------------------------
Amendment Effective Date through (and including) 1.25 to 1.0
March 30, 1999
----------------------------------------------------------------------------------------
March 31, 1999 through (and including) March 30, 2000 1.35 to 1.0
----------------------------------------------------------------------------------------
March 31, 2000 through (and including) March 30, 2001 1.45 to 1.0
----------------------------------------------------------------------------------------
March 31, 2001 and thereafter 1.50 to 1.0
========================================================================================
(c) Adjusted Consolidated Debt Ratio. Permit the Adjusted
Consolidated Debt Ratio at any date during the periods specified below
to be more than the ratio set forth below opposite the period in which
such date falls:
========================================================================================
Period Ratio
----------------------------------------------------------------------------------------
Amendment Effective Date through (and including) 4.95 to 1.0
June 29, 1999
----------------------------------------------------------------------------------------
June 30, 1999 through (and including) December 30, 1999 4.85 to 1.0
----------------------------------------------------------------------------------------
December 31, 1999 through (and including) June 29, 2000 4.75 to 1.0
----------------------------------------------------------------------------------------
June 30, 2000 through (and including) December 30, 2000 4.60 to 1.0
----------------------------------------------------------------------------------------
December 31, 2000 through (and including) June 29, 2001 4.50 to 1.0
----------------------------------------------------------------------------------------
June 30, 2001 and thereafter 4.45 to 1.0
========================================================================================
(d) Ownership of Stock of Wholly-Owned Subsidiaries. Fail to
at all times maintain, or cause a Wholly-Owned Subsidiary of the
Representative to maintain, ownership of 100% of each class of voting
securities of, and all other equity securities (except for directors'
qualifying shares) in, each of their Subsidiaries that are Wholly-Owned
Subsidiaries of the Representative on the Effective Date and each
Person that shall become a Wholly-Owned Subsidiary of the
Representative after the Effective Date, except in each case (i) any
such Wholly-Owned Subsidiary that shall hereafter be disposed of in its
entirety, consolidated or merged with or into the Representative or
another such Wholly-Owned Subsidiary or liquidated, (ii) any Subsidiary
of Pharmacy that shall hereafter be consolidated or merged with or into
Pharmacy or any Wholly-Owned Subsidiary of Pharmacy or liquidated, in
each case in accordance with the provisions hereof, or (iii) sales or
dispositions of Pharmacy and any Subsidiary of Pharmacy in whole or in
part at any time.
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(e) Investments. Make or acquire after the Effective Date any
Investment in any Person other than:
(i) Investments in the Representative or in Persons
that are Subsidiaries of the Representative (including any
other ▇▇▇▇▇▇▇ Entity) on the Effective Date (other than, after
the Release Date, Pharmacy and the Subsidiaries of Pharmacy)
(ii) Investments in Persons that are (i) primarily
engaged in the health-care business and (ii) after the making
of such Investment, are Subsidiaries of the Representative;
(iii) Temporary Cash Investments;
(iv) extensions of credit or Guarantees of
obligations of one or more other Persons (other than Encore
Nursing Center Partners, Ltd.-85 and Encore Retirement
Partners, Ltd.-85) as an integral part of the financing of the
acquisition, construction, equipping or improving of
facilities from which the Representative or its Subsidiaries
(including the other ▇▇▇▇▇▇▇ Entities) will provide medical or
related services;
(v) other miscellaneous Investments related to the
acquisition and financing (in the ordinary course of the
Representative's business) of health-care facilities through
industrial development revenue bonds issued for the benefit of
the Representative and its Subsidiaries (including the other
▇▇▇▇▇▇▇ Entities);
(vi) capital contributions required to be made by the
Representative to ▇▇▇▇▇▇▇ Indemnity, Ltd. in accordance with
applicable law and insurance regulations;
(vii) stock, obligations or securities received from
nursing home patients in the ordinary course of business of
the Representative and its Subsidiaries;
(viii) negotiable instruments endorsed for deposit or
collection or similar instruments in the ordinary course of
business;
(ix) promissory notes and other Investments received
as consideration for facilities sold, provided that the
aggregate net book value of all outstanding Investments
permitted by this clause (ix) shall not, at any time, exceed
$25,000,000;
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(x) Guarantees permitted by Section 10.2(i);
(xi) any Investment made by the Representative or any
of its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) in
connection with and as part of a Workout Transaction;
(xii) Investments made by the Representative or any
of its Subsidiaries (including the other ▇▇▇▇▇▇▇ Entities) in
one or more Special Purpose Receivables Financing Subsidiaries
by means of the sale of, or the granting of security interests
in, Medicare, Medicaid or other patient accounts receivable
owing to the Representative or such Subsidiary (including the
other ▇▇▇▇▇▇▇ Entities), in either case to such Special
Purpose Receivables Financing Subsidiaries pursuant to a
Receivables Financing Program, provided that the net amount of
all uncollected accounts receivable owing to the
Representative or any of its Subsidiaries (including the other
▇▇▇▇▇▇▇ Entities) that have been so sold or in which a
security interest has been so granted shall not exceed 200% of
the aggregate principal or redemption amount of all Permitted
Receivables Financing Securities then outstanding;
(xiii) Investments made in ▇▇▇▇▇▇▇ Japan Corporation
in an aggregate amount outstanding at any time not to exceed
$10,000,000;
(xiv) Investments made in Persons that are primarily
engaged in the health-care business, the consideration for
which consists exclusively of common stock of the
Representative or Permitted Preferred Stock; and
(xv) any Investment not otherwise permitted by the
foregoing clauses of this Section (other than promissory notes
and other Investments received as consideration for facilities
sold) in any Person engaged primarily in the health-care
business if, immediately after such Investment is made or
acquired, the aggregate net book value of all such Investments
then held by the Representative or its Subsidiaries (including
the other ▇▇▇▇▇▇▇ Entities) and permitted by this clause (xv)
does not exceed $75,000,000.
(f) Restricted Payments on Stock. (x) Declare or make any
dividend payment or other distribution on any capital stock of the
Representative (other than dividends payable solely in shares of the
Representative's capital stock) or (y) declare or make any payment on
account of the purchase, redemption, retirement or acquisition of the
Representative's capital stock; provided that,
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so long as at the time of and after giving effect to any such payment
no Event of Default shall have occurred and be continuing,
(i) the Representative may make any such payment or
distribution from the proceeds of the sale by the
Representative (other than a sale to a Subsidiary of the
Representative, including any other ▇▇▇▇▇▇▇ Entity) after the
Documentation Date of its common stock,
(ii) the Representative may make dividend payments
with respect to its preferred stock (A) from any source in an
amount not to exceed an aggregate of $2,500,000 in any fiscal
quarter and (B) from proceeds of the sale by the
Representative (other than a sale to a Subsidiary of the
Representative, including the other ▇▇▇▇▇▇▇ Entities) after
the Documentation Date of Permitted Preferred Stock in any
amount,
(iii) the Representative may make payments on account
of the purchase, redemption, retirement or acquisition of its
preferred stock from the proceeds of the sale by the
Representative (other than a sale to a Subsidiary of the
Representative) after the Documentation Date of any Permitted
Preferred Stock,
(iv) the Representative may make odd-lot repurchases
of their common stock for an aggregate consideration not
exceeding $10,000 in any calendar year,
(v) the Representative may consummate the New BEI
Spin-Off as part of the Pharmacy Divestiture Transaction on
the Release Date, and
(vi) the Representative may make any such payment or
distribution if, after giving effect thereto, the aggregate
amount of all such payments or distributions made after the
Amendment Effective Date (including, without limitation, any
such payments or distributions permitted under subclause
(ii)(A) or clause (iv) above) does not exceed the sum of
$75,000,000 plus 50% of Consolidated Net Income for the period
after June 30, 1997 through the date of such declaration,
payment or distribution.
Nothing in this Section shall prohibit the payment of any dividend or
distribution within 45 days after the declaration thereof if such declaration
was not prohibited by this Section.
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(g) Negative Pledge.
Create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(1) Liens existing on the Documentation Date
securing Indebtedness and other obligations
outstanding on the Documentation Date;
(2) Liens created by the Operative
Documents;
(3) any Lien on any asset of any corporation
that becomes a Consolidated Subsidiary of the
Representative after the Documentation Date that
exists at the time such corporation becomes such a
Consolidated Subsidiary and (other than in a Workout
Transaction) not created in contemplation thereof;
(4) any Lien existing on any asset prior to
the acquisition thereof, acquired after the
Documentation Date by the Representative or a
Subsidiary of the Representative (including any other
▇▇▇▇▇▇▇ Entity) and (other than in a Workout
Transaction) not created in contemplation thereof;
(5) any Lien on any asset securing
Indebtedness or lease obligations incurred or assumed
for the purpose of fi nancing all or any part of the
cost of acquiring or constructing such asset or
reconstructing substantially all of such asset,
provided that such Lien attaches to such asset
concurrently with or within one year after such
acquisition, construction or reconstruction;
(6) any Lien on any asset securing
Indebtedness or lease obligations incurred or assumed
for the purpose of im proving or making any addition
to such asset, provided that (x) such Lien attaches
to such asset concurrently with or within one year
after the completion of the improvement thereof or
addition thereto and (y) the aggregate outstanding
principal amount of all such Indebtedness incurred
after the Documentation Date secured by such Liens
shall not, at any time, exceed $30,000,000;
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(7) Liens securing Indebtedness incurred in
connection with Lease Cancellation Payments, provided
that the aggregate amount of all such Indebtedness
incurred after the Documentation Date secured by such
Liens shall not, at any time, exceed $20,000,000;
(8) Liens securing industrial development
revenue bonds (or securing contingent obligations to
issuers of letters of credit issued to support
industrial development revenue bonds) arising in
connection with the conversion of the inter est rate
on such bonds from floating to long-term fixed rates
or from fixed rates to other long-term fixed rates;
(9) any Lien arising out of the refinancing,
extension, renewal or refunding of any Indebtedness
secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that the principal
amount of such Indebtedness is not increased and such
Indebtedness is not secured by any additional assets
other than assets that relate directly to the
facility subject to the original financing;
(10) Liens on Medicare, Medicaid or other
patient accounts receivable of the Representative or
any of its Subsidiaries (including the other ▇▇▇▇▇▇▇
Entities), or on Permitted Receivables Financing
Securities, granted to secure Permitted Receivables
Financing Securities, provided that the net amount of
all uncollected accounts receivable owing to the
Representative or any of its Subsidiaries (including
the other ▇▇▇▇▇▇▇ Entities) over which such a Lien is
granted, together, without duplication, with the net
amount of all uncollected accounts receivable owing
to the Representative or any of its Subsidiaries
(including the other ▇▇▇▇▇▇▇ Entities) that are
assigned to secure such Permitted Receivables
Financing Securities, shall not exceed, at any time,
200% of the aggregate principal or redemption amount
of all Permitted Receivables Financing Securities
then outstanding;
(11) Liens incidental to the conduct of its
business or the ownership of its assets which (x) do
not secure Indebtedness or Derivatives Obligations
and (y) do not in the aggregate materially detract
from the value of its assets or materially impair the
use thereof in the operation of its business;
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(12) Liens on cash and cash equivalents
securing Derivatives Obligations, provided that the
aggregate amount of cash and cash equivalents subject
to such Liens may at no time exceed $10,000,000;
(13) Liens on nursing homes and related real
estate improvements and equipment ("Mortgage Assets")
given in substitution for Liens on Mortgage Assets
existing on the Documentation Date or for Liens on
Mortgage Assets incurred pursuant to this clause (13)
or clause (15) below, provided that the sum of (A)
the excess of the Appraised Value of all Mortgage
Assets subjected to Liens pursuant to this clause
(13) on or after the Amendment Effective Date over
the Appraised Value of all such Mortgage Assets
released from Liens on or after the Amendment
Effective Date and (B) all Indebtedness incurred
after the Amendment Effective Date and secured by
Liens permitted under clause (15) below shall not at
any time exceed $50,000,000;
(14) Liens on the capital stock of Pharmacy
and its Subsidiaries securing the ▇▇▇▇▇▇ Credit
Agreement as of the Release Date and Liens consisting
of the pledge of the capital stock of the
Subsidiaries of the Representative in favor of the
lenders under the ▇▇▇▇▇▇ Credit Agreement in the
event that Pharmacy and its Subsidiaries are no
longer Wholly-Owned Subsidiaries of the
Representative and the capital stock of Pharmacy and
its Subsidiaries is released from such Liens;
provided, that after the Release Date, no capital
stock of any Subsidiary of the Representative shall
be pledged in replacement of or in addition to any
capital stock of any Subsidiary pledged in favor of
the lenders under the ▇▇▇▇▇▇ Credit Agreement as of
the Release Date, and no capital stock of any
Subsidiary released from such pledge on any date
shall be pledged after such date; and
(15) Liens not otherwise permitted under
clauses (1) through (14) of this Section, provided
that the sum of the amounts set forth in subclause
(A) of clause (13) above and the aggregate principal
amount of all indebtedness incurred after the
Documentation Date and secured by Liens permitted
under this clause (15) shall not at any time exceed
$50,000,000.;
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(h) Consolidations, Mergers and Sales of Assets. (i)(A)
Consolidate or merge with or into any other Person, unless the
Representative or, except in the case of a merger or consolidation to
which the Representative is a party, a Wholly-Owned Subsidiary of the
Representative is the surviving corporation, or (B) sell, lease or
otherwise transfer all or any substantial part of the assets of the
Representative and its Subsidiaries (including the other ▇▇▇▇▇▇▇
Entities), taken as a whole, to any other Person, provided that (I)
this Section shall not apply to mergers, dissolutions, reorganizations
or liquidations of Subsidiaries of the Representative that have
disposed of all or substantially all of their assets in accordance with
the terms of this Agreement, (II) the Representative and its
Subsidiaries (other than Pharmacy or any of its Subsidiaries) may
assign or grant security interests in their Medicare, Medicaid or other
patient accounts receivable to a Special Purpose Receivables Financing
Subsidiary to secure Permitted Receivables Financing Securities
(provided that the net amount at any time of all uncollected accounts
receivable owing to the Representative or any of its Subsidiaries that
are so assigned or in which a security interest is so granted shall not
exceed 200% of the aggregate principal or redemption amount of all
Permitted Receivables Financing Securities then outstanding) and (III)
this Section shall not prohibit the consummation of the Pharmacy
Divestiture Transaction or the Merger on the Release Date.
(ii) So long as Pharmacy is a Wholly-Owned Subsidiary
of the Representative, permit Pharmacy or any of its
Subsidiaries to (A) consolidate or merge with or into any
other Person, unless Pharmacy or, except in the case of a
merger or consolidation to which Pharmacy is a party, a
Wholly-Owned Subsidiary of Pharmacy is the surviving
corporation or (B) sell, lease or otherwise transfer all or
any substantial part of its assets to any Person other than
Pharmacy.
(i) Incurrence of Indebtedness.
Incur, assume or suffer to exist any Indebtedness,
except:
(1) Indebtedness outstanding on the
Effective Date and included in the Base Financials or
listed under item 10.2(i) in Schedule III hereto;
(2) Indebtedness incurred after the
Effective Date in connection with Lease Cancellation
Payments, provided that the aggregate principal
amount of all such Indebtedness outstanding at any
time shall not exceed $20,000,000;
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(3) Indebtedness secured by a Lien permitted
pursuant to clause (4) of Section 10.2(g);
(4) Indebtedness of any corporation that
becomes a Consolidated Subsidiary of the
Representative after the Documentation Date that
exists at the time such corporation becomes such a
Consolidated Subsidiary and (other than in a Workout
Transaction) not created in contemplation thereof;
(5) Indebtedness ("Refinancing
Indebtedness") incurred to refinance Indebtedness
("Refinanced Indebtedness") permitted under clauses
(1) through (4) above, provided that (I) the
principal amount of such Refinancing Indebtedness
shall not exceed the principal amount of such
Refinanced Indebtedness and (II) such Refinancing
Indebtedness shall have a weighted average life of
not less than the remaining weighted average life of
such Refinanced Indebtedness or such Refinancing
Indebtedness shall not have any required payments of
principal prior to the fifth anniversary of the
Documentation Date;
(6) Permitted Receivables Financing
Securities, provided that the aggregate principal and
redemption amount of all Permitted Receivables
Financing Securities outstanding at any time shall
not exceed $150,000,000;
(7) Indebtedness incurred under the
Operative Documents;
(8) guarantees by any Subsidiary of the
Representative of any obligation of the
Representative or any of its Subsidiaries (including
the other ▇▇▇▇▇▇▇ Entities) that such guaranteeing
Subsidiary would have been permitted to incur
hereunder as a primary obligation;
(9) Indebtedness consisting of advances from
the Representative or any of its Subsidiaries in
connection with the normal operation of the business
of the Representative and its Subsidiaries (including
the other ▇▇▇▇▇▇▇ Entities);
(10) Indebtedness incurred in connection
with and as part of a Workout Transaction;
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(11) Indebtedness incurred or assumed for
the purpose of financing the cost of acquiring,
constructing or improving an asset of the
Representative or any of its Subsidiaries (including
the other ▇▇▇▇▇▇▇ Entities);
(12) Permitted Preferred Stock;
(13) Indebtedness under the ▇▇▇▇▇▇ Credit
Agreement; and
(14) Indebtedness not otherwise permitted
under clauses (1) through (13) of this Section,
provided that the aggregate principal amount of all
Indebtedness permitted under this clause (14) that is
incurred on or after the Amendment Effective Date
shall not at any time exceed $75,000,000
(j) Lease Conversions. Make any Lease Conversion in any
calendar year unless:
(i) the aggregate consideration paid or to be paid by
the Representative and its Subsidiaries (including the other
▇▇▇▇▇▇▇ Entities) in connection with the termination of leases
or the acquisition of facilities and related property
pursuant to such Lease Conver sion and all other Lease
Conversions made during such calendar year would not exceed
$100,000,000;
(ii) to the extent such Lease Conversion is financed
or will be financed with Indebtedness of the Representative or
any of its Subsidiaries (including the other ▇▇▇▇▇▇▇
Entities), such Indebtedness is incurred within one year of
such Lease Conversion; and
(iii) such Lease Conversion, after giving effect
thereto, will not result in an Event of Default.
(k) Transactions with Affiliates. Enter into any transaction
or arrangement with any Affiliate (including, without limitation, the
purchase from, sale to or exchange of property with, or the rendering
of any service by or for, any Affiliate), except in the ordinary course
of and pursuant to the reasonable requirements of the Representative's
or such Subsidiary's (as the case may be) business and upon fair and
reasonable terms no less favorable to the Representative or such
Subsidiary than would be obtained in a comparable arm's-length
transaction with a Person other than an Affiliate.
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Section 10.3 Affirmative Covenant of the Agent Lessor. The Agent Lessor
covenants and agrees with the Arranger, the Representative, the Administrative
Agent and the Lenders that, so long as this Participation Agreement shall remain
in effect or the principal or interest on any Loan, or any Commitment Fees,
other fees or any other expenses or amounts payable under any Operative Document
to the Administrative Agent or the Lenders shall be unpaid, and until all
Commitments of the Lenders shall have been permanently terminated, unless the
Required Lenders shall otherwise consent in writing, the Agent Lessor will, upon
the written request of the Required Lenders after the occurrence and during the
continuance of an Event of Default qualify to do business in every jurisdiction
where such qualification is necessary for the Agent Lessor to exercise its
remedies under the Master Lease or any other Operative Document.
ARTICLE XI
RENEWALS
Section 11.1 Extensions of Maturity Date and Expiration Date;
Replacement of Participants.
(a) So long as the Representative has not elected the Remarketing
Option on behalf of the Lessees, the Representative may, not earlier than six
months and not later than three months prior to the Maturity Date, direct a
written request to the Agent Lessor and the Administrative Agent that the
Expiration Date then in effect under the Master Lease be extended to the date
occurring one year after such Expiration Date and concurrently therewith request
that the Administrative Agent and the Agent Lessor direct a written request to
the Lessors and the Lenders that the applicable Maturity Date be extended to the
same date (each such additional year, a "Renewal Term"). In no event may the
Expiration Date or the Maturity Date be extended more than twice pursuant to
this Section 11.1(a). Each Participant may grant or deny its consent to a
Renewal Term in its sole discretion by notifying the Administrative Agent and
the Agent Lessor in writing (with a copy to the Representative); provided,
however, that any Participant that fails to respond to such request for a
Renewal Term within sixty (60) days after its receipt thereof shall be deemed to
have denied such request for a Renewal Term.
(b) In connection with a written request of the Representative for a
Renewal Term, upon the request of the Representative, the Administrative Agent
and the Agent Lessor shall be permitted to replace any non-consenting
Participant and any Participant that fails to respond to the Administrative
Agent's and the Agent Lessor's written request for a Renewal Term within the
time period specified in clause (a) above (each, a "Non-Consenting Participant")
with a replacement bank or other
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financial institution (a "Replacement Participant") satisfactory to the
Representative, the Lessors and the Lenders, with such replacement to be
effective as of the Expiration Date and Maturity Date in effect prior to the
requested Renewal Term; provided, however, that (i) such replacement does not
conflict with any Requirement of Law, (ii) the Replacement Participant shall
purchase from the Non-Consenting Participant (A) at par, all Loans, in the case
of a Lender, and all Lessor Amounts, in the case of a Lessor, (B) all accrued
interest, in the case of a Lender, and all accrued Yield, in the case of a
Lessor, and (C) all other amounts owing to such Non-Consenting Participant on or
prior to the date of replacement, in each case, (iii) the Representative shall
be liable to such Non-Consenting Participant under Section 13.10 if any Loan or
Lessor Amount, as the case may be, owing to such Non-Consenting Participant
shall be prepaid (or purchased) other than on the last day of the Interest
Period or Interest Periods relating thereto, (iv) such replacement shall be made
in accordance with the provisions of Article XII (provided that the
Representative or the relevant Replacement Participant shall be obligated to pay
the Transaction Expenses arising in connection therewith), and (v) the
Replacement Participant shall have agreed to be subject to all of the terms and
conditions of the applicable Operative Documents (including the extension of the
Maturity Date contemplated by the relevant request for a Renewal Term and the
related extension). The Administrative Agent and the Agent Lessor hereby agree
to cooperate with the Representative in its efforts to arrange one or more
Replacement Participants as contemplated by this Section 11.1(b).
(c) Any Renewal Term and extension of the Maturity Date and the
Expiration Date as contemplated by Section 11.1(a) shall be effective only upon
the consent of all Participants after giving effect to the provisions of Section
11.1(b). Except as otherwise provided in this Article XI, all other terms of the
Operative Documents shall remain unchanged and with the same force and effect
(including the Pricing Categories and Pricing Ratios), and there shall not be
any additional up-front fee in connection with such Renewal Term.
Section 11.2 Replacement of Defaulting Participant. The Representative
shall have the right (but not the obligation) to require any Defaulting
Participant to assign and delegate in accordance with Section 12.1 all of such
Lender's or Lessor's total Loans or Lessor Amounts, as the case may be, and
Commitment to any other financial institution selected by the Representative
that, in each case, is willing to accept such assignment and delegation and
shall be satisfactory to the Administrative Agent and the Agent Lessor.
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ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
Section 12.1 Assignments. Each Participant may, with the prior written
consent of the Representative, the Administrative Agent and the Agent Lessor
(which consents shall not be unreasonably withheld), assign all or a portion of
its rights and obligations hereunder pursuant to an assignment agreement
substantially in the form of Exhibit F to one or more Eligible Lender Assignees,
with respect to Lender Commitments and Loans, and/or Eligible Lessor Assignees
with respect to Lessor Commitments and Lessor Amounts, each such assignment
shall be of a constant, not varying, percentage of all of the assigning
Participant's rights and obligations under the Operative Documents. In the case
of assignments made by a Lender, any such assignment shall be in a minimum
aggregate amount of $5,000,000 of its Loan Commitment (or the balance of such
Loan Commitment, if less) and the aggregate remaining Loan Commitment of the
assigning Lender shall, after giving effect to the proposed assignment, be at
least $5,000,000 or if less, zero. In the case of assignments made by a Lessor,
any such assignment shall be in a minimum aggregate amount of $1,000,000 of its
Lessor Commitment (or the balance of such Lessor Commitment, if less) and the
aggregate remaining Lessor Commitment of the assigning Lessor shall, after
giving effect to the proposed assignment, be at least $1,000,000 or if less,
zero. Any assignment hereunder shall be effective upon delivery to the
Administrative Agent and the Agent Lessor of written notice of the assignment
together with a transfer fee of $2,500 payable by the assignor Participant or
the assignee Participant to the Administrative Agent for its own account. The
assigning Participant will give prompt notice to the Administrative Agent of any
such assignment. Upon the effectiveness of any such assignment (and after notice
to and consent of the Lessee, the Administrative Agent and the Agent Lessor, as
provided herein), the assignee shall become a "Lender" or "Lessor", as the case
may be, for all purposes of the Operative Documents and, to the extent of such
assignment, the assigning Participant shall be relieved of its obligations
hereunder to the extent of the Loans or Lessor Amounts, as the case may be, and
Commitment components being assigned. The Administrative Agent agrees that upon
notice of any such assignment and surrender of the appropriate Note or Notes, it
will promptly provide to the assigning Lender and to the assignee separate
promissory notes in the amount of their respective interests substantially in
the form of the original Note (but with notation thereon that it is given in
substitution for and replacement of the original Note or any replacement notes
thereof). The Representative shall not be responsible for any costs or expenses
incurred by any Participant in connection with an assignment of all or any of
its rights and obligations in connection with an assignment pursuant to this
Section 12.1.
Section 12.2 Participations. Each Participant may sell, transfer, grant
or assign participations in all or any part of such Participant's interests and
obligations hereunder; provided that (i) such selling Participant shall remain a
"Lender" or "Lessor", as the case may be, for all purposes under the Operative
Documents (such selling Participant's obligations under the Operative Documents
remaining
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unchanged) and the sub-participant shall not constitute a Lender or a Lessor, as
the case may be, hereunder, (ii) no such sub-participant shall have, or be
granted, rights to approve any amendment or waiver relating to the Operative
Documents except to the extent any such amendment or waiver would (A) reduce the
principal of or rate of interest on or fees in respect of any Loans or Lessor
Amounts in which the sub-participant is participating, (B) postpone the date
fixed for any payment of principal (including extension of the Expiration Date
or the date of any mandatory prepayment), interest or fees in which the
sub-participant is participating, or (C) release all or substantially all of the
collateral or guarantees (except as expressly provided in the Operative
Documents) supporting any of the Loans or Lessor Amounts or Commitments in which
the sub-participant is participating, and (iii) sub-sub-participations by the
sub-participant (except to an Affiliate, parent company or Affiliate of a parent
company of the participant) shall be prohibited. In the case of any such
participation, the sub-participant shall not have any rights under the Operative
Documents (the sub-participant's rights against the selling Participant in
respect of such participation to be those set forth in the participation
agreement with such Participant creating such participation) and all amounts
payable by any ▇▇▇▇▇▇▇ Entity hereunder shall be determined as if such
Participant had not sold such participation; provided, however, that such
sub-participant shall be entitled to receive additional amounts under Sections
13.5, 13.10 and 13.11 on the same basis as if it were a Participant (but only to
the extent that the Participant would have been entitled to receive such
additional amounts with respect to the interest participated had it not sold
such participation). No ▇▇▇▇▇▇▇ Entity shall be responsible for any costs or
expenses incurred by any Participant in connection with a sale, transfer, grant
or assignment of participations pursuant to this Section 12.2.
Section 12.3 Withholding Taxes; Disclosure of Information; Pledge Under
Regulation A.
(a) If any Participant (or the assignee of or subparticipant of a
Participant, each a "Transferee") is organized under the laws of any
jurisdiction other than the United States or any State thereof, then such
Participant or the Transferee of such Participant, as applicable, shall (as a
condition precedent to acquiring or participating in such Loan or Lessor Amount
and as a continuing obligation to the Lessor and the Lender) (i) furnish to each
of the Administrative Agent, the Agent Lessor and the Representative in
duplicate, for each taxable year of such Participant or Transferee during the
term of the Lease, a properly completed and executed copy of either Internal
Revenue Service Form 4224 or Internal Revenue Service Form 1001 and Internal
Revenue Service Form W-8 or Internal Revenue Service Form W-9 and any additional
form (or such other form) as is necessary to claim complete exemption from
United States withholding taxes (wherein such Transferee claims entitlement to
complete exemption from United States withholding taxes on all payments
hereunder), and (ii) provide to each of the Administrative Agent, the Agent
Lessor
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and the Representative a new Internal Revenue Service Form 4224 or Internal
Revenue Service Form 1001 and Internal Revenue Service Form W-8 or Internal
Revenue Service Form W-9 and any such additional form (or any successor form or
forms) upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable United States laws and
regulations and amendments duly executed and completed by such Participant or
Transferee, and to comply from time to time with all applicable United States
laws and regulations with regard to such withholding tax exemption. By its
acceptance of a participation or assignment hereunder, each Transferee shall be
deemed bound by the provisions set forth in this Article XII.
(b) Any Participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Article
XII, disclose to such assignee or participant or proposed assignee or
participant, any information relating to any ▇▇▇▇▇▇▇ Entity or the Transactions,
subject to appropriate confidentiality requirements relating to such
information.
(c) Anything in this Article XII to the contrary notwithstanding, any
Participant may without the consent of any ▇▇▇▇▇▇▇ Entity, the Administrative
Agent or the Agent Lessor, assign and pledge all or any portion of the Notes
held by it to any Federal Reserve Bank, the United States Treasury or to any
other financial institution as collateral security pursuant to Regulation A of
the F.R.S. Board and any operating circular issued by the Federal Reserve System
and/or the Federal Reserve Bank or otherwise; provided, any payment by any
▇▇▇▇▇▇▇ Entity for the benefit of the assigning or pledging Participant shall be
deemed to satisfy such ▇▇▇▇▇▇▇ Entity's obligations with respect thereto.
ARTICLE XIII
INDEMNIFICATION
Section 13.1 General Indemnification. (a) The Representative agrees
that, with respect to each Completed Property and Improved Property, to assume
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After Tax Basis, from and against any and all Claims that may
be imposed on, incurred by or asserted against such Indemnitee (whether because
of action or omission by such Indemnitee or otherwise), whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other Person
and whether or not such Claim arises or accrues prior to the applicable
Acquisition Date or after the Expiration Date, in any way relating to or arising
out of:
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(i) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(ii) the Properties or any part thereof or interest therein;
(iii) the purchase, design, construction, preparation,
installation, inspection, delivery, nondelivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition
or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, disposition, operation, condition, sale
(including, without limitation, any sale pursuant to Section 16.2(d) or
16.2(f) of the Master Lease or any sale pursuant to Article XV, XVIII
or XX of the Master Lease), return or other disposition of all or any
part or any interest in the Properties or the imposition of any Lien
(or incurring of any liability to refund or pay over any amount as a
result of any Lien) thereon, including, without limitation: (1) Claims
or penalties arising from any violation of law or in tort (on the basis
of strict liability or otherwise), (2) latent or other defects, whether
or not discoverable, (3) any Claim based upon a violation or alleged
violation of the terms of any restriction, easement, condition or
covenant or other matter affecting title to the Properties, (4) the
making of any Modifications in violation of any standards imposed by
any insurance policies required to be maintained by each Lessee
pursuant to the Lease which are in effect at any time with respect to
the Properties or any part thereof, (5) any Claim for patent, trademark
or copyright infringement, and (6) Claims arising from any public
improvements with respect to the Properties resulting in any change or
special assessments being levied against the Property or any plans to
widen, modify or realign any street or highway adjacent to any of the
Properties, or any Claim for utility "tap-in" fees;
(iv) the breach by any ▇▇▇▇▇▇▇ Entity of any covenant,
representation or warranty made by it or deemed made by it in any
Operative Document or any certificate reclaimed to be delivered by any
Operative Document;
(v) the retaining or employment of any broker, finder or
financial advisor by any ▇▇▇▇▇▇▇ Entity to act on its behalf in
connection with this Participation Agreement or any other Operative
Document;
(vi) the existence of any Lien on or with respect to the
Properties, the Improvements, any Basic Rent or Supplemental Rent,
title thereto, or any interest therein including any Liens which arise
out of the possession, use, occupancy, construction, repair or
rebuilding of the Property or by reason of
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labor or materials furnished or claimed to have been furnished to any
Lessee, or any of its contractors or agents or by reason of the
financing of any personalty or equipment purchased or leased by any
Lessee or Modifications constructed by such Lessee, except Lessor Liens
and Liens in favor of the Lenders or the Lessors;
(vii) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code.
(b) The Representative agrees that, with respect to each Construction
Period Property, to assume liability for, and to indemnify, protect, defend,
save and keep harmless each Lessor (which right to indemnity may be assigned by
such Lessor), from and against any and all Claims that may be imposed on,
incurred by or asserted against such Lessor, whether or not such Lessor shall
also be indemnified as to any such Claim by any other Person and whether or not
such claim arise or accrues prior to the applicable Acquisition Date, in any way
relating to or arising out of the circumstances described in clauses (i) through
(vii) of paragraph 13.1(a) where such Claims relate to the action or omission of
any ▇▇▇▇▇▇▇ Entity while any such ▇▇▇▇▇▇▇ Entity is located on, in possession
of, controlling or acting or failing to act with respect to such Construction
Period Property.
Provided, however, that the Representative shall not be required to indemnify
any Indemnitee under this Section 13.1 for any of the following: (1) any Claim
to the extent resulting from the willful misconduct or gross negligence of such
Indemnitee (it being understood that the Representative shall be required to
indemnify an Indemnitee even if the ordinary (but not gross) negligence of such
Indemnitee caused or contributed to such Claim) or the breach of any
representation, warranty or covenant of such Indemnitee set forth in any
Operative Document, (2) any Claim resulting from Lessor Liens which the Agent
Lessor, the Administrative Agent or any of the Lessors or Lenders is responsible
for discharging under the Operative Documents, (3) any Claim arising from a
breach or alleged breach by the Lenders or the Lessors of any agreement entered
into in connection with the assignment or participation of any Loan or Lessor
Amount and (4) any Claim arising in respect to any Property in the period after
the respective Lessee ceases to lease such Property from the Lessors under the
related Lease, provided that the facts supporting such Claim occur after such
period. It is expressly understood and agreed that the indemnity provided for
herein shall survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document.
Without limiting the express rights of any Indemnitee under this Section 13.1,
this Section 13.1 shall be
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construed as an indemnity only and not a guaranty of residual value of the
Properties or as a guaranty of the Notes.
Section 13.2 End of Term Indemnity.
(a) If the Representative elects the Remarketing Option and there
would, after giving effect to the proposed remarketing transactions, be a
Shortfall Amount, then prior to the Expiration Date and as a condition to the
Representative's right to complete the remarketing of the Properties pursuant to
Article XX of the Master Lease, the Representative shall cause to be delivered
to the Agent Lessor at least one hundred twenty (120) days prior to the
Expiration Date, at the Representative's sole cost and expense, a report from
the Appraiser in form and substance satisfactory to the Agent Lessor, the
Administrative Agent and the Participants (the "End of the Term Report") which
shall state the appraiser's conclusions as to the reason for any decline in the
Fair Market Sales Value of any of the Property from that anticipated for such
date in the As-Built Appraisal delivered with respect to such Property.
(b) On or prior to the Expiration Date the Representative shall pay to
the Agent Lessor for the account of each of the Lessors an amount (not to exceed
the Shortfall Amount) equal to the portion of the Shortfall Amount that the End
of the Term Report demonstrates was the result of a decline in the Fair Market
Sales Value of the applicable Property due to
(i) extraordinary use; failure to maintain, repair, restore,
rebuild or replace; failure to comply with all applicable laws; failure
to use; workmanship; method of installation or removal or maintenance,
repair, rebuilding or replacement, (excepting in each case ordinary
wear and tear), or
(ii) any change to the Plans and Specifications, or any
Modification made to, or any rebuilding of, the applicable Properties
or any part thereof by the applicable Lessee or the Construction Agent,
or
(iii) the existence of any Hazardous Activity, Hazardous
Materials or Environmental Violations, the indemnity for which shall
not exceed the cost of the remediation thereof, or
(iv) any restoration or rebuilding carried out by the
applicable Lessee or the Construction Agent, or
(v) any condemnation of any portion of any of the applicable
Properties pursuant to Article XIV of the Master Lease, or
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(vi) any use of any of the applicable Properties or any part
thereof by the Lessee or any sublessee other than (i) with respect to
the New ▇▇▇▇▇▇▇ Headquarters, an office headquarters for the
Representative and the other ▇▇▇▇▇▇▇ Entities and other office and
retail facilities customarily found in office buildings and (ii) with
respect to each other Property, an assisted living facility or nursing
facility as contemplated by the applicable As-Built Appraisal, or
(vii) any grant, release, dedication, transfer, annexation or
amendment made pursuant to Section 11.2 of the Master Lease, or
(viii) the failure of the Lessors to have good and marketable
title to any of the applicable Properties free and clear of all Liens
(excluding Permitted Property Liens), or
(ix) the existence of any sublease relating to any of the
applicable Properties that shall survive the Expiration Date.
Section 13.3 Environmental Indemnity. Without limitation of the other
provisions of this Article XIII, the Representative hereby agrees to indemnify,
hold harmless and defend each Indemnitee from and against any and all claims
(including, without limitation, third party claims for personal injury or real
or personal property damage), losses (including but not limited to, to the
extent the Lease Balance has not been fully paid, any loss of value of the
Property related thereto), damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, requirements, enforcement actions of any
kind, and all reasonable and documented costs and expenses incurred in
connection therewith (including but not limited to reasonable and documented
attorneys' and/or paralegals' fees and expenses), including, but not limited to,
all costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local Governmental Authority, arising in whole or in part, out
of:
(a) the presence on or under any of the Properties of any
Hazardous Materials, or any Releases of any Hazardous Materials on,
under, from or onto any of the Properties,
(b) any activity, including, without limitation, construction,
carried on or undertaken on or off any of the Properties, and whether
by any Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of any Lessee or any predecessor in
title, or any other Persons (including such Indemnitee), or in
connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous
Materials that at any time are located or present on or under or
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that at any time migrate, flow, percolate, diffuse or in any way move
onto or under any of the Properties,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, costs of corrective action, costs of
financial assurance, fines and penalties and natural resource damages),
or death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and fauna,
and any mitigative action required by or under Hazardous Materials
Laws,
(d) any claim concerning lack of compliance with Hazardous
Materials Laws, or any act or omission causing an environmental
condition that requires remediation or would allow any Governmental
Authority to record a Lien on the land records, or
(e) any residual contamination on or under any of the Land, or
affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Materials, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances;
provided, however, that the Representative shall not be required to indemnify
any Indemnitee under this Section 13.3 for any Claim (i) to the extent resulting
from the willful misconduct or gross negligence of such Indemnitee and (ii)
relating to an Environmental Violation which preexisted the acquisition of the
Property by the Agent Lessor but solely to the extent that (x) such
Environmental Violation was identified in the Environmental Audit delivered
pursuant to Section 6.1(h) hereof, (y) such Audit indicated that the risk of
loss with respect to such Environmental Violation was less than remote and (z)
notwithstanding the requirements of Section 6.1(h), the Property was acquired by
the Agent Lessor. It is expressly understood and agreed that the indemnity
provided for herein shall survive the expiration or termination of the Lease
Term with respect to any Claim based on facts or circumstances arising prior to
or during the Lease Term, and shall be separate and independent from any remedy
under the Lease or any other Operative Document.
Section 13.4 Proceedings in Respect of Claims.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Representative of the commencement
thereof, and the Representative shall be entitled, at the Representative's
expense, to participate in, and, to the extent that the Representative desires
to, assume and control the defense
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thereof; provided, however, that the Representative shall have acknowledged in
writing its obligation to fully indemnify such Indemnitee in respect of such
action, suit or proceeding, and the Representative shall keep such Indemnitee
fully apprised of the status of such action, suit or proceeding and shall
provide such Indemnitee with all information with respect to such action, suit
or proceeding as such Indemnitee shall reasonably request, and provided,
further, that the Representative shall not be entitled to assume and control the
defense of any such action, suit or proceeding if and to the extent that, (A) in
the reasonable opinion of such Indemnitee, (x) such action, suit or proceeding
involves any risk of imposition of criminal liability or will involve a risk of
the sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Property Lien) on any Property or any part thereof unless, in the case
of civil liability, the Representative shall have posted a bond or other
security satisfactory to take relevant Indemnitees in respect to such risk or
(y) the control of such action, suit or proceeding would involve an actual or
potential conflict of interest, (B) such proceeding involves Claims not fully
indemnified by the Representative which the Representative and the Indemnitee
have been unable to sever from the indemnified claim(s), or (C) an Event of
Default under the Lease has occurred and is continuing. The Indemnitee will join
in the Representative's efforts to sever such action. The Indemnitee may
participate at its own expense and with its own counsel in any proceeding
conducted by the Representative in accordance with the foregoing. The
Representative shall not enter into any settlement or other compromise with
respect to any Claim which is entitled to be indemnified under Section 13.1 or
13.3 without the prior written consent of the Indemnitee, which consent shall
not be unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Representative supply the
Representative with such information and documents reasonably requested by the
Representative as are necessary or advisable for the Representative to
participate in any action, suit or proceeding to the extent permitted by Section
13.1 or 13.3.
Upon payment in full of any Claim by the Representative pursuant to
Section 13.1 or 13.3 to or on behalf of an Indemnitee, the Representative,
without any further action, shall be subrogated to any and all claims that such
Indemnitee may have relating thereto (other than claims in respect of insurance
policies maintained by such Indemnitee at its own expense), and such Indemnitee
shall execute such instruments of assignment and conveyance, evidence of claims
and payment and such other documents, instruments and agreements as may be
necessary to preserve any such claims and otherwise cooperate with the
Representative and give such further assurances as are necessary or advisable to
enable the Representative vigorously to pursue such claims.
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Any amount payable to an Indemnitee pursuant to Section 13.1 or 13.3
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
Section 13.5 General Tax Indemnity.
(a) Indemnification. The Representative shall pay and assume liability
for, and does hereby agree to indemnify, protect and defend the applicable
Property and all Tax Indemnitees, and hold them harmless against, all
Impositions on an After Tax Basis.
(b) Contests. If any claim shall be made against any Tax Indemnitee or
if any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Imposition as to which the
Representative may have an indemnity obligation pursuant to this Section 13.5,
or if any Tax Indemnitee shall determine that any Imposition to which the
Representative may have an indemnity obligation pursuant to this Section 13.5
may be payable, such Tax Indemnitee shall promptly (and in any event, within 30
days) notify the Representative in writing (provided that failure to so notify
the Representative within 30 days shall not alter such Tax Indemnitee's rights
under this Section 13.5 except to the extent such failure precludes or
materially adversely affects the ability to conduct a contest of any
Impositions) and shall not take any action with respect to such claim,
proceeding or Imposition without the written consent of the Representative (such
consent not to be unreasonably withheld or unreasonably delayed) for 30 days
after the receipt of such notice by the Representative; provided, however, that
in the case of any such claim or proceeding, if such Tax Indemnitee shall be
required by law or regulation to take action prior to the end of such 30-day
period, such Tax Indemnitee shall in such notice to the Representative, so
inform the Representative and such Tax Indemnitee shall not take any action with
respect to such claim, proceeding or Imposition without the consent of the
Representative (such consent not to be unreasonably withheld or unreasonably
delayed) for 10 days after the receipt of such notice by the Representative
unless such Tax Indemnitee shall be required by law or regulation to take action
prior to the end of such 10-day period.
The Representative shall be entitled for a period of 30 days from
receipt of such notice from such Tax Indemnitee (or such shorter period as such
Tax Indemnitee has notified the Lessee is required by law or regulation for such
Tax Indemnitee to commence such contest), to request in writing that such Tax
Indemnitee contest the imposition of such Tax, at the Representative's expense.
If (x) such contest can be pursued in the name of the Representative and
independently from any other proceeding involving a Tax liability of such Tax
Indemnitee for which the Representative has not agreed to indemnify such Tax
Indemnitee, (y) such contest
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must be pursued in the name of such Tax Indemnitee, but can be pursued
independently from any other proceeding involving a Tax liability of such Tax
Indemnitee for which the Representative has not agreed to indemnify such Tax
Indemnitee or (z) such Tax Indemnitee so requests, then the Representative shall
be permitted to control the contest of such claim, provided that in the case of
a contest described in clause (y), if such Tax Indemnitee determines reasonably
and in good faith that such contest by the Representative could have a material
adverse impact on the business or operations of such Tax Indemnitee and provides
a written explanation to the Representative of such determination, such Tax
Indemnitee may elect to control or reassert control of the contest, and provided
that by taking control of the contest, the Representative acknowledges that it
is responsible for the Imposition ultimately determined to be due by reason of
such claim, and provided, further, that in determining the application of
clauses (x) and (y) above, each Tax Indemnitee shall take any and all reasonable
steps to segregate claims for any Taxes for which the Representative indemnifies
hereunder from Taxes for which the Representative is not obligated to indemnify
hereunder, so that the Representative can control the contest of the former. In
all other claims requested to be contested by the Representative, such Tax
Indemnitee shall control the contest of such claim, acting through counsel
reasonably acceptable to the Representative. In no event shall the
Representative be permitted to contest (or such Tax Indemnitee required to
contest) any claim, (A) if such Tax Indemnitee provides the Representative with
a legal opinion of counsel reasonably acceptable to the Representative that such
action, suit or proceeding involves a risk of imposition of criminal liability
or will involve a material risk of the sale, forfeiture or loss of, or the
creation of any Lien (other than a Permitted Lien) on any Property or any part
thereof unless the Representative shall have posted and maintained a bond or
other security satisfactory to the relevant Tax Indemnitee in respect to such
risk, (B) if an Event of Default has occurred and is continuing, (C) unless the
Representative shall have agreed to pay and shall pay, to such Tax Indemnitee on
demand all reasonable out-of-pocket costs, losses and expenses that such Tax
Indemnitee may incur in connection with contesting such Imposition including all
reasonable legal, accounting and investigatory fees and disbursements, or (D) if
such contest shall involve the payment of the Tax prior to the contest, unless
the Representative shall provide to such Tax Indemnitee an interest-free advance
in an amount equal to the Imposition that the Indemnitee is required to pay
(with no additional net after-tax costs to such Tax Indemnitee). In addition for
Tax Indemnitee controlled contests and claims contested in the name of such Tax
Indemnitee in a public forum, no contest shall be required: (A) unless the
amount of the potential indemnity (taking into account all similar or logically
related claims that have been or could be raised in any audit involving any or
all such Tax Indemnitees with respect to any period for which the Representative
may be liable to pay an indemnity under this Sec 13.5(b)) exceeds $75,000 and
(B) unless, if requested by such Tax Indemnitee, the Representative shall have
provided to such Tax Indemnitee an opinion of counsel selected by the
Representative (which may be in-house counsel) (except, in the case
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of income taxes indemnified hereunder, in which case such opinion shall be an
opinion of independent tax counsel selected by such Tax Indemnitee and
reasonably acceptable to the Representative) that a reasonable basis exists to
contest such claim. In no event shall a Tax Indemnitee be required to appeal an
adverse judicial determination to the United States Supreme Court.
The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such claim for Taxes
(or claim for refund) but the decisions regarding what actions to be taken shall
be made by the controlling party in its sole judgment, provided, however, that
if such Tax Indemnitee is the controlling party and the Representative
recommends the acceptance of a settlement offer made by the relevant
Governmental Authority and such Tax Indemnitee rejects such settlement offer
then the amount for which the Representative required to indemnify such Tax
Indemnitee with respect to the Taxes subject to such offer shall not exceed the
amount which it would have owed if such settlement offer had been accepted. In
addition, the controlling party shall keep the non-controlling party reasonably
informed as to the progress of the contest, and shall provide the noncontrolling
party with a copy of (or appropriate excerpts from) and reports or claims issued
by the relevant auditing agents or taxing authority to the controlling party
thereof, in connection with such claim or the contest thereof.
Each Tax Indemnitee shall, at the Representative's expense, supply the
Representative with such information and documents reasonably requested by the
Representative as are necessary or advisable for the Representative to
participate in any action, suit or proceeding to the extent permitted by this
Section 13.5(b). Notwithstanding anything in this Section 13.5(b) to the
contrary, no Tax Indemnitee shall enter into any settlement or other compromise
or fail to appeal an adverse ruling with respect to any claim which is entitled
to be indemnified under this Section 13.5 (and with respect to which contest is
required under this Section 13.5(b)) without the prior written consent of the
Representative, unless such Tax Indemnitee waives its right to be indemnified
under this Section 13.5 with respect to such claim.
Notwithstanding anything contained herein to the contrary, a Tax
Indemnitee will not be required to contest (and the Representative shall not be
permitted to contest) a claim with respect to the imposition of any Tax if such
Tax Indemnitee shall waive its right to indemnification under this Section 13.5
with respect to such claim (and any claim with respect to such year or any other
taxable year the contest of which is materially adversely affected as a result
of such waiver).
(c) [Intentionally left blank]
(d) Payments. Any Imposition indemnifiable under this Section 13.5
shall be paid directly when due to the applicable taxing authority if direct
payment is
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practicable and permitted. If direct payment to the applicable taxing authority
is not permitted or is otherwise not made, any amount payable to a Tax
Indemnitee pursuant to Section 13.5 shall be paid within thirty (30) days after
receipt of a written demand therefor from such Tax Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before two Business Days prior to the date that the relevant Taxes are due. Any
payments made pursuant to this Section 13.5 shall be made directly to such Tax
Indemnitee entitled thereto or the Representative, as the case may be, in
immediately available funds at such bank or to such account as specified by the
payee in written directions to the payor, or, if no such direction shall have
been given, by check of the payor payable to the order of the payee by certified
mail, postage prepaid at its address as set forth in Schedule II hereto. Upon
the request of any Tax Indemnitee with respect to a Tax that the Representative
is required to pay, the Representative shall furnish to such Tax Indemnitee the
original or a certified copy of a receipt for the Representative's payment of
such Tax or such other evidence of payment as is reasonably acceptable to such
Tax Indemnitee.
(e) Reports. In the case of any report, return or statement required to
be filed with respect to any Taxes that are subject to indemnification under
this Section 13.5 and of which the Representative or any Lessee has knowledge,
the Representative shall promptly notify such Tax Indemnitee of such requirement
and, at the Representative's expense (i) if the Representative is permitted
(unless otherwise requested by such Tax Indemnitee) by Applicable Law, timely
file such report, return or statement in its own name or (ii) if such report,
return or statement is required to be in the name of or filed by such Tax
Indemnitee or such Tax Indemnitee otherwise requests that such report, return or
statement be filed in its name, prepare and finish such statement for filing by
such Tax Indemnitee in such manner as shall be satisfactory to such Tax
Indemnitee and send the same to such Tax Indemnitee for filing no later than 15
days prior to the due date therefor. In any case in which such Tax Indemnitee
will file any such report, return or statement, the Representative shall, upon
written request of such Tax Indemnitee, provide such Tax Indemnitee with such
information as is reasonably necessary to allow such Tax Indemnitee to file such
report, return or statement.
(f) [Intentionally left blank]
(g) Tax Ownership. Each Tax Indemnitee represents and warrants that it
will not, prior to the termination of the Master Lease, claim ownership of (or
any tax benefits, including depreciation, with respect to) any Property for any
income tax purposes (unless required to do so by a Governmental Authority), it
being understood that the Lessees are and will remain the owners of the
Properties for such income tax purposes until the termination of the Master
Lease.
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Section 13.6 Indemnity Payments in Addition to Lease Obligations. The
Representative acknowledges and agrees that the Representative's obligations to
make indemnity payments under this Article XIII are separate from, in addition
to, and do not reduce, any ▇▇▇▇▇▇▇ Entity's obligation to pay any amounts owing
from time to time under the Lease.
Section 13.7 Eurodollar Rate Lending Unlawful. Notwithstanding any
other provision herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof occurring after the
Documentation Date shall make it unlawful for any Participant to make, continue
or maintain Eurodollar Loans/Lessor Amounts as contemplated by the Operative
Documents, (i) such Participant shall promptly give written notice of such
circumstances to the Representative, the Lessor Agent and the Administrative
Agent (which notice shall be withdrawn whenever such circumstances no longer
exist), (ii) the commitment of such Lender or Lessor, as the case may be,
hereunder to make, continue or maintain Eurodollar Loans/Lessor Amounts shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Participant to make, continue or maintain Eurodollar Loans/Lessor Amounts,
such Participant shall then have a commitment only to make or maintain Base Rate
Loans/Lessor Amounts when a Eurodollar Loans/Lessor Amounts is requested and (c)
such Participant's Loans and Lessor Amounts then outstanding as Eurodollar
Loans/Lessor Amounts, if any, shall be converted automatically to Base Rate
Loans/Lessor Amounts on the respective last days of the then current Interest
Periods with respect to such Loans and Lessor Amounts or within such earlier
period as required by law. If any such conversion of Eurodollar Loans/Lessor
Amounts occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Representative shall pay to such Participant
such amounts, if any, as may be required pursuant to Section 13.10. In any such
case, interest and principal (if any) shall be payable contemporaneously with
the related Eurodollar Loans/Lessor Amounts of the other Participants.
Section 13.8 Deposits Unavailable. If any of the Participants shall
have determined that:
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Participant in its
relevant market; or
(b) by reason of circumstances affecting the Participant's
relevant market, adequate means do not exist for ascertaining the
interest rate or Yield, as the case may be, applicable to such
Participant's Eurodollar Loans/Lessor Amounts;
then, upon notice from such Participant to the Representative, the Lessor Agent,
the Administrative Agent and the other Participants, (x) the obligations of the
Participants
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to make or continue any Loans or Lessor Amounts as, or to convert any Loans or
Lessor Amounts into Eurodollar Loans/Lessor Amounts shall be suspended, and (y)
each outstanding Eurodollar Loan/Lessor Amount shall automatically convert into
a Base Rate Loan/Lessor Amount on the last day of the then current Interest
Period applicable thereto.
Section 13.9 Increased Costs, etc.
(a) If the adoption of or any change in a Requirement of Law or in the
interpretation or application thereof applicable to any Participant, or
compliance by any Participant with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority,
in each case made subsequent to the Documentation Date (or, if later, the date
on which such Participant becomes a Participant):
(i) shall subject such Participant to any tax of any kind
whatsoever with respect to any Eurodollar Loans/Lessor Amounts made,
continued or maintained by it or its obligation to make, continue or
maintain Eurodollar Loans/Lessor Amounts, or change the basis of
taxation of payments to such Participant in respect thereof (except for
excluded Impositions, any changes in taxes measured by or imposed upon
the overall gross or net income, franchise or other taxes (imposed in
lieu of such net income tax), of such Participant or its applicable
lending office, branch, or any affiliate thereof); or
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, Loans
and Lessor Amounts, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Participant which is
not otherwise included in the determination of the Adjusted Eurodollar
Rate hereunder; or
(iii) shall impose on such Participant any other condition
(excluding any Tax of any kind) whatsoever in connection with the
Operative Documents;
and the result of any of the foregoing is to increase the cost to such
Participant, by an amount which such Participant deems to be material, of
making, continuing or maintaining Eurodollar Loans/Lessor Amounts or to reduce
any amount receivable hereunder in respect thereof, then, in any such case, upon
notice to the Representative from such Participant, through the Administrative
Agent and/or the Agent Lessor, in accordance herewith, the Representative shall
pay such Participant any additional amounts necessary to compensate such
Participant for such increased cost or reduced amount receivable; provided that,
in any such case, the Representative may elect to
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convert the Eurodollar Loans/Lessor Amounts made by such Participant hereunder
to Base Rate Loans/Lessor Amounts by giving the Administrative Agent at least
one Business Day's notice of such election, in which case the Representative
shall promptly pay to such Participant, upon demand, without duplication, such
amounts, if any, as may be required pursuant to Section 13.10. All payments
required by this Section 13.9(a) shall be made by the Representative within 10
Business Days after demand by the affected Participant. The Representative shall
not be obligated to reimburse any Participant for any increased cost or reduced
return incurred more than 120 days after the date that such Participant receives
actual notice of such increased cost or reduced return unless such Participant
gives notice thereof to the Representative in accordance with this Section 13.9
during such 120 day period. If any Participant becomes entitled to claim any
additional amounts pursuant to this subsection, it shall provide prompt notice
thereof to the Representative, through the Administrative Agent and/or the Agent
Lessor, certifying (x) that one of the events described in this clause (a) has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Participant and a reasonably detailed
explanation of the calculation thereof (including the method by which such
Participant allocated such amounts to the applicable Lessee or Lessees). Such a
certificate as to any additional amounts payable pursuant to this clause
submitted by such Participant, through the Administrative Agent and/or the Agent
Lessor, to the Representative shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and Lessor Amounts and all other amounts payable hereunder.
(b) Each Participant shall use its reasonable efforts to reduce or
eliminate any claim for compensation pursuant to this Section 13.9, including,
without limitation, a change in the office of such Participant at which its
obligations related to this Participation Agreement are maintained if such
change will avoid the need for, or reduce the amount of, such compensation and
will not, in the reasonable judgment of such Participant, be otherwise
disadvantageous to it. If any such claim for compensation shall not be
eliminated or waived, the Representative shall have the right to replace the
affected Participant with a new financial institution that shall succeed to the
rights of such Participant under this Participation Agreement; provided,
however, that such Participant shall not be replaced hereunder until it has been
paid in full such claim and all other amounts owed to it hereunder.
Section 13.10 Funding Losses. The Representative agrees to indemnify
each Indemnitee and to hold each Indemnitee harmless from any loss or expense
which such Indemnitee may sustain or incur (other than through such Person's own
gross negligence or willful misconduct) as a consequence of (a) default by any
Lessee in making a borrowing of, conversion into or continuation of Loans or
Lessor Amounts which are Eurodollar Loans/Lessor Amounts after such Lessee has
given a notice
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requesting the same in accordance with the provisions of this Participation
Agreement, (b) default by such Lessee in making any prepayment of a Loan or
Lessor Amounts which is a Eurodollar Loan/Lessor Amount after the Lessee has
given a notice thereof in accordance with the provisions of this Participation
Agreement, or (c) the making of a prepayment of Loans or Lessor Amounts which
are Eurodollar Loans/Lessor Amounts on a day which is not the last day of an
Interest Period with respect thereto. This covenant shall survive the
termination of this Participation Agreement or any other Operative Document and
the payment of the Loans, Lessor Amounts and all other amounts payable under the
Operative Documents.
Section 13.11 Capital Adequacy.
(a) If the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Participant with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, in each case made subsequent to the Documentation Date has or
will have the effect of reducing the rate of return on any Participant's or its
parent company's capital by an amount such Participant deems to be material, as
a consequence of its commitments or obligations hereunder to a level below that
which such Participant or its parent company could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Participant's or its parent company's policies with respect to capital
adequacy), then, upon notice from such Participant, the Representative shall pay
to such Participant such additional amount or amounts as will compensate such
Participant and its parent company for such reduction (it being understood that
such parent company shall not be reimbursed to the extent its subsidiary
Participant is reimbursed by the Representative in connection with the same or a
similar law, rule, regulation, change, request or directive applicable to such
Participant). All payments required by this Section 13.11 shall be made by the
Representative within 10 Business Days after demand by the affected Participant.
The Representative shall not be obligated to reimburse any Participant for any
reduced return incurred more than 120 days after the date that such Participant
receives actual notice of such reduced return unless such Participant gives
notice thereof to the Representative in accordance with this Section 13.11
during such 120 day period. If any Participant becomes entitled to claim any
additional amounts pursuant to this clause, it shall provide prompt notice
thereof to the Representative, through the Administrative Agent and/or the Agent
Lessor, certifying (x) that one of the events described in this clause (a) has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Participant and a reasonably detailed
explanation of the calculation thereof (including the method
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by which such Participant allocated such amounts to the applicable Lessee or
Lessees). Such a certificate as to any additional amounts payable pursuant to
this clause submitted by such Participant, through the Administrative Agent
and/or the Agent Lessor, to the Representative shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Participation Agreement and the other Operative Documents and the payment of the
Loans, Lessor Amounts and all other amounts payable hereunder and thereunder.
(b) Each Participant shall use its commercially reasonable efforts to
reduce or eliminate any claim for compensation pursuant to this Section 13.11,
including, without limitation, a change in the office of such Participant at
which its obligations related to the Operative Documents are maintained if such
change will avoid the need for, or reduce the amount of, such compensation and
will not, in the reasonable judgment of such Participant, be otherwise
disadvantageous to it. If any such claim for compensation shall not be
eliminated or waived, the Representative shall have the right to replace the
affected Participant with a new financial institution that shall succeed to the
rights of such Participant under the Operative Documents; provided, however,
that such Participant shall not be replaced hereunder until it has been paid in
full such claim and all other amounts owed to it hereunder.
ARTICLE XIV
THE AGENT LESSOR
Section 14.1 Appointment and Authorization. Each Lessor irrevocably
appoints and authorizes Bank of Montreal Global Capital Solutions, Inc. as Agent
Lessor (in such capacity as Agent Lessor hereunder and under the other Operative
Documents, the "Agent Lessor") of such Lessor to enter into the Operative
Documents (including, without limitation, the Master Lease and each Lease
Supplement) on behalf of such Lessor and to act as specified herein and in the
other Operative Documents, and each such Lessor hereby authorizes the Agent
Lessor as agent for such Lessor, to take such action on its behalf under the
provisions of this Participation Agreement and the other Operative Documents and
to exercise such powers and perform such duties as are expressly delegated by
the terms hereof and thereof, together with such other powers as are reasonably
incidental thereto (including, without limitation, the execution and delivery
from time to time with the Lenders' unanimous consent of Lease Supplements,
Construction Agency Agreement Supplements, Assignment of Lease and Rent
Supplements and the various other documents, conveyances, terminations,
assignments and instruments contemplated herein to be delivered by the Agent
Lessor on behalf of the Lessors). Each action taken by the Agent Lessor under
any Operative Document shall be deemed to be on behalf of each the Lessors,
unless otherwise indicated. Notwithstanding any provision
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to the contrary elsewhere herein or in the other Operative Documents, the Agent
Lessor shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lessor, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Participation Agreement or any of the other
Operative Documents, or shall otherwise exist against the Agent Lessor.
Section 14.2 Delegation of Duties. The Agent Lessor may execute any of
its duties hereunder or under the other Operative Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent Lessor shall not be responsible for
the negligence or misconduct of any agents or attorneys in fact selected by it
with reasonable care.
Section 14.3 Agent Lessor and Affiliates. The Agent Lessor shall have
the same rights and powers under this Participation Agreement and under the
other Operative Documents as any other Lessor, and may exercise or refrain from
exercising the same as though it were not the Agent Lessor.
Section 14.4 Action by Agent Lessor. The obligations of the Agent
Lessor hereunder and under the other Operative Documents are only those
expressly set forth herein and therein. Without limiting the generality of the
foregoing, the Agent Lessor shall not be required to take any action with
respect to any Default or Event of Default, except as expressly provided herein
and in the other Operative Documents.
Section 14.5 Consultation with Experts. The Agent Lessor may consult
with legal counsel (who may be counsel for a ▇▇▇▇▇▇▇ Entity, a Participant, the
Administrative Agent, the Arranger or any Affiliate of any of them), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 14.6 Exculpatory Provisions. Neither the Agent Lessor nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be responsible for or have any duty to ascertain, inquire into or verify
(a) any statement, warranty or representation made in connection with the
Operative Documents; (b) the performance or observance of any of the covenants
or agreements of any ▇▇▇▇▇▇▇ Entity; (c) the satisfaction of any condition
precedent specified herein or in any other Operative Document; (d) the validity,
effectiveness or genuineness of any of the Operative Documents or any other
instrument or writing furnished in connection herewith or therewith; (e) the use
of the proceeds of the Advances; (f) the existence of any Default or Event of
Default; or (g) the properties, books or records of any ▇▇▇▇▇▇▇ Entity.
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Section 14.7 Reliance on Communications. The Agent Lessor shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any
▇▇▇▇▇▇▇ Entity, independent accountants and other experts selected by the Agent
Lessor with reasonable care). The Agent Lessor may deem and treat the
Participants as the owner of their respective interests hereunder and under the
other Operative Documents for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Agent
Lessor in accordance with Section 12.1 of the Participation Agreement. The Agent
Lessor, acting in its capacity as Agent Lessor, shall be fully justified in
failing or refusing to take any action under this Participation Agreement or
under any of the other Operative Documents unless it shall first receive such
advice or concurrence of the Lessors as it deems appropriate or it shall first
be indemnified to its satisfaction by the Participants against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent Lessor shall in all cases be fully
protected in acting, or in refraining from acting, hereunder or under any of the
other Operative Documents in accordance with a request of the Lessors and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Participants (including their successors and assigns).
Section 14.8 Notice of Default. The Agent Lessor shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent Lessor has received notice from a Participant or a
▇▇▇▇▇▇▇ Entity referring to the Operative Document, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Agent Lessor receives such a notice, the Agent Lessor shall give
prompt notice thereof to the Participants. The Agent Lessor shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Lessors.
Section 14.9 Non-Reliance on Agent Lessor and Other Participants. Each
Participant expressly acknowledges that neither the Agent Lessor (other than in
its role as Participant) nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent Lessor or any affiliate thereof hereafter taken,
including any review of the affairs of any ▇▇▇▇▇▇▇ Entity, shall be deemed to
constitute any representation or warranty by the Agent Lessor to any
Participant. Each Participant represents to the Agent Lessor that it has,
independently and without reliance upon the Agent Lessor or any other
Participant, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions,
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prospects and creditworthiness of each ▇▇▇▇▇▇▇ Entity and made its own decision
to make its proportionate share of all Advances hereunder and under the other
Operative Documents and enter into this Participation Agreement and the other
Operative Documents. Each Participant also represents that it will,
independently and without reliance upon the Agent Lessor or any other
Participant, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Participation Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of each ▇▇▇▇▇▇▇ Entity. Except for notices,
reports and other documents expressly required to be furnished to the
Participants by the Agent Lessor hereunder, the Agent Lessor shall not have any
duty or responsibility to provide any Participant with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of any ▇▇▇▇▇▇▇ Entity which may
come into the possession of the Agent Lessor or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 14.10 Indemnification. The Lessors agree to indemnify the Agent
Lessor in its capacity as such (to the extent not reimbursed by the ▇▇▇▇▇▇▇
Entities and without limiting the obligation of the ▇▇▇▇▇▇▇ Entities to do so),
ratably according to their respective Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent Lessor in
its capacity as such in any way relating to or arising out of this Participation
Agreement or the other Operative Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent Lessor under or in connection with
any of the foregoing; provided that no Lessor shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent Lessor. If any indemnity
furnished to the Agent Lessor for any purpose shall, in the opinion of the Agent
Lessor, be insufficient or become impaired, the Agent Lessor may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section shall survive the payment in full of the Obligations and all other
amounts payable hereunder and under the other Operative Documents.
Section 14.11 Failure to Act. Except for action expressly required of
the Agent Lessor hereunder, the Agent Lessor shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be indemnified
to its satisfaction by the
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Lessors against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
Section 14.12 Resignation and Removal. The Agent Lessor may resign at
any time upon at least 30 days' prior notice to the Representative and the
Participants, and may be removed as such at any time by vote of the Required
Lessors and notice to the retiring Agent Lessor, the Administrative Agent and
the Representative. In the Event of any such resignation or removal, the
Required Lessors shall as promptly as practicable (but with five Business Days'
prior written notice being given to the Representative) appoint a successor
Agent Lessor, provided that such successor Agent Lessor shall be approved by the
Administrative Agent, and, unless an Event of Default is continuing, be approved
by the Representative (which approval shall not be unreasonably withheld or
delayed) and, if the Representative has not responded within such five Business
Day period, the Representative shall be deemed to have approved such new Agent
Lessor. If no successor Agent Lessor shall have been so appointed and shall have
accepted such appointment within 30 days after either the retiring Agent
Lessor's giving of notice of resignation or the Required Lessors' vote to remove
the retiring Agent Lessor, then the retiring Agent Lessor may, on behalf of the
Lessors, appoint a successor Agent Lessor, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
or under the laws of another country that is doing business in the United States
and having a combined capital, surplus and undivided profits of at least
$100,000,000, or a wholly owned subsidiary of such bank. Upon its acceptance of
its appointment, such successor Agent Lessor shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent Lessor, and the retiring Agent Lessor shall be discharged from all further
duties and obligations as Agent Lessor under this Participation Agreement and
under the other Operative Documents. After any retiring Agent Lessor's
resignation or removal hereunder as Agent Lessor, the provisions of this
Participation Agreement and of the other Operative Documents shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent Lessor under this Participation Agreement. No resignation or
renewal of the Agent Lessor may become effective until a successor Agent Lessor
has been appointed as provided above.
Section 14.13 Distributions. The Agent Lessor shall, as promptly as
practicable, distribute to each Participant its appropriate portion, if any, of
payments received (in good, collected funds) by the Agent Lessor from the
▇▇▇▇▇▇▇ Entities for the account of the Participants or of any such payments so
received for the account of such Participant.
Section 14.14 Rights of Each ▇▇▇▇▇▇▇ Entity. Except where a ▇▇▇▇▇▇▇
Entity is expressly referenced in this Article XIV, (w) the Agent Lessor shall
act solely as agent of the Lessors and does not assume and shall not be deemed
to have assumed
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any obligation or relationship of agency or trust with or for any ▇▇▇▇▇▇▇
Entity, (x) this Article XIV is for the benefit of the Agent Lessor and the
Participants only, (y) each ▇▇▇▇▇▇▇ Entity shall have no right to enforce any
part of this Article XIV and shall have no rights as third party beneficiary or
otherwise therein, and (z) this Article XIV may be amended by the approval of
Agent Lessor and the Required Participants, without any need to obtain the
approval of any ▇▇▇▇▇▇▇ Entity, provided no such amendment shall be permitted
without the consent of the Representative, which consent shall not be
unreasonably withheld. The Agent Lessor shall send the Representative a copy of
any such amendments.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Participation Agreement, the
transfer of any and all Property to the Agent Lessor, the construction of any
Improvements, any disposition of any interest of the Agent Lessor or any
Participant in any Property or any Improvements and the payment of the Notes and
any disposition thereof, and shall be and continue in effect notwithstanding any
investigation made by any party and the fact that any party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Documents. Except as otherwise expressly set forth herein or in the other
Operative Documents, the indemnities of the parties provided for in the
Operative Documents shall survive the expiration or termination of any thereof.
Section 15.2 No Broker, etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser (other than Capstar Partners, Inc.) to act on its behalf in connection
with this Participation Agreement or the transactions contemplated herein or in
the other Operative Documents nor has it authorized any broker, finder or
financial adviser (other than Capstar Partners, Inc.) retained or employed by
any other Person so to act. Any party which is in breach of this representation
shall indemnify and hold the other parties harmless from and against any
liability arising out of such breach of this representation.
Section 15.3 Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service, by hand or by facsimile, and any such notice shall become
effective (i) if
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delivered by United States mail, five (5) Business days after being deposited in
the mail, certified or registered with appropriate postage prepaid, (ii) if
delivered by a nationally recognized courier service, two (2) Business Days
after delivery to a nationally recognized courier service specifying overnight
delivery, (iii) if delivered by hand, when received or (iv) if delivered by
facsimile, when transmitted (upon electronic confirmation thereof), and shall be
directed to the address or facsimile number of such Person as indicated on
Schedule II. From time to time any party may designate a new address or
facsimile number for purposes of notice hereunder by written notice to each of
the other parties hereto in accordance with this Section.
Section 15.4 Counterparts. This Participation Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 15.5 Amendments, etc. Neither any Operative Document nor any of
the terms thereof may be terminated (except upon payment in full of the Lease
Balance or effective exercise and consummation of the Remarketing Option in
accordance with Article XX of the Master Lease and payment in full of all
amounts due in accordance therewith), amended, supplemented, waived or modified
without the written agreement or consent of each party thereto and, regardless
of whether the Lenders and the Lessors are parties thereto, the Required
Participants; provided, however, that:
(a) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
Participant:
(i) modify any of the provisions of this Section
15.5, change the definition of "Required Participants" or
modify or waive any provision of any Operative Document
requiring action by the foregoing;
(ii) amend, modify, waive or supplement any of the
provisions of Section 2.5, 2.6 or 2.7 of the Loan Agreement;
(iii) reduce, modify, amend or waive any fees or
indemnities in favor of any Participant, including without
limitation amounts payable pursuant to Article XIII (except
that any Person may consent to any reduction, modification,
amendment or waiver of any indemnity payable to it);
(iv) modify, postpone, reduce or forgive, in whole or
in part, any payment of Rent (other than pursuant to the terms
of any
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Operative Document), any Loan or Lessor Amount, the Lease
Balance, the Loan Balance, Commitment Fees, amounts due
pursuant to Section 20.2 of the Master Lease, interest or
Yield (except that any Person may consent to any modification,
postponement, reduction or forgiveness of any payment of any
Commitment Fee payable to it) or, subject to subclause (iii)
above, any other amount payable under the Lease or this
Participation Agreement, or modify the definition or method of
calculation of Rent (other than pursuant to the terms of any
Operative Document), Loans or Lessor Amounts, Lease Balance,
Loan Balance, Commitment Fees, Commitment Fee Shortfall
Amounts, Shortfall Amount, Property Improvement Costs,
Estimated Improvement Costs, Participant Balance, or any other
definition which would affect the amounts to be advance or
which are payable under the Operative Documents;
(v) consent to any assignment of the Master Lease or
any Lease Supplement by any Lessee, releasing such Lessee from
its obligations in respect of the payments of Rent, Loan
Balance or Lease Balance or changing the absolute and
unconditional character of such obligations; or
(vi) consent to any change in clause (i) of the
definition of Unavailable Commitment Termination Date from
August 1, 1997; and
(b) no such termination, amendment, supplement, waiver or
modification that would increase the obligations of any ▇▇▇▇▇▇▇ Party
thereunder or deprive any ▇▇▇▇▇▇▇ Party of any of its rights thereunder
shall be effective against such ▇▇▇▇▇▇▇ Party without its written
agreement or consent.
Section 15.6 Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
Section 15.7 Parties in Interest. Except as expressly provided herein,
none of the provisions of this Participation Agreement is intended for the
benefit of any Person except the parties hereto. No ▇▇▇▇▇▇▇ Entity shall assign
or transfer any of its rights or obligations under the Operative Documents
except in accordance with the terms and conditions thereof.
Section 15.8 GOVERNING LAW. THIS AGREEMENT AND THE OTHER OPERATIVE
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE
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CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
Section 15.9 Severability. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 15.10 Liability Limited.
(a) The parties hereto agree that except as specifically set forth
herein or in any other Operative Document, no Lessor shall have any personal
liability whatsoever to any Participant or their respective successors and
assigns for any claim based on or in respect hereof or any of the other
Operative Documents or arising in any way from the transactions contemplated
hereby or thereby and recourse, if any, shall be solely had against such
Lessor's interest in the Property; provided, however, that each Lessor shall be
liable in its individual capacity (a) for its own willful misconduct or gross
negligence, (b) breach of any of its representations, warranties or covenants
under the Operative Documents, or (c) for any Tax based on or measured by any
fees, commission or compensation received by it for acting as a Lessor as
contemplated by the Operative Documents. It is understood and agreed that,
except as provided in the preceding sentence: (i) no Lessor shall have any
personal liability under any of the Operative Documents as a result of acting
pursuant to and consistent with any of the Operative Documents; (ii) all
obligations of each Lessor to any Lender are solely nonrecourse obligations
except to the extent that such Lessor has received payment from others
(including, without limitation, obligations with respect to the Loans); and
(iii) all such personal liability of any Lessor is expressly waived and released
as a condition of, and as consideration for, the execution and delivery of the
Operative Documents by such Lessor.
(b) No Participant shall have any obligation to any other Participant
or to any ▇▇▇▇▇▇▇ Entity, the Lessors or the Lenders with respect to
transactions contemplated by the Operative Documents, except those obligations
of such Participant expressly set forth in the Operative Documents or except as
set forth in the instruments delivered in connection therewith, and no
Participant shall be liable for performance by any other party hereto of such
other party's obligations under the Operative Documents except as otherwise so
set forth.
Section 15.11 Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Representative, all such further acts, conveyances, documents and assurances
as the
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other parties may from time to time reasonably request in order to carry out and
preserve the security interests and liens (and the priority thereof) intended to
be created pursuant to this Participation Agreement, the other Operative
Documents, and the transactions thereunder (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected). The Representative, at
its own expense and without need of any prior request from any other party,
shall take such action as may be necessary (including any action specified in
the preceding sentence), or as so requested, in order to maintain and protect
all security interests provided for hereunder or under any other Operative
Document.
Section 15.12 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY OF THE OTHER OPERATIVE
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 15.13 Setoff. The Lenders and the Lessors shall, upon the
occurrence of any Lease Event of Default or Construction Agency Event of
Default, have the right to appropriate and, subject to Section 4.7, apply to the
payment of any ▇▇▇▇▇▇▇ Entity's obligations under the Lease, the Construction
Agency Agreement and the other Operative Documents as security for the payment
of such obligations, any and all balances, credits, deposits, accounts or moneys
of such ▇▇▇▇▇▇▇ Entity then or thereafter maintained with any Lender or any
Lessor. The rights of the Lenders and the Lessors under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Person may have.
Section 15.14 WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY
83
90
OF THE PARTIES HERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY WILL NOT SEEK
TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A JURY
TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 15.14 HAVE
BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO NO
EXCEPTIONS. EACH ▇▇▇▇▇▇▇ ENTITY PARTY HERETO ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE AGENT LESSOR, THE
ADMINISTRATIVE AGENT, THE ARRANGER AND EACH OF THE PARTICIPANTS ENTERING INTO
THIS PARTICIPATION AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
Section 15.15 No Participant Responsible for Other Participants. The
obligations of each Participant under this Participation Agreement and the other
Operative Documents are several and not joint; and, in the event of a failure by
a Participant to perform any of its obligations hereunder or under any other
Operative Document, neither the Agent Lessor nor the Administrative Agent nor
any other Participant (other than the defaulting Participant) shall have any
liability as a consequence thereof.
Section 15.16 Each Lessor to Have an Undivided Interest. The Agent
Lessor hereby confirms that it is holding each Property on behalf of the
Lessors, each of which shall hold an undivided interest in the Property (and all
proceeds thereof), in each case such interest to be equal to the Commitment of
such Lessor relative to the aggregate amount of the Lessor Commitment of all
Lessors.
Section 15.17 Authority of Representative. Each of the Lessees hereby
appoints and designates (which appointment and designation is irrevocable and
coupled with an interest) ▇▇▇▇▇▇▇ Enterprises, Inc., as its attorney in fact and
legal representative (the "Representative") for the purposes of the Operative
Documents and all transactions contemplated thereby, and hereby authorizes each
Participant to conclusively rely on such designation. Each Lessee hereby
confirms that the Representative, acting alone, has sufficient power and
authority to bind such Lessee in respect of all matters contemplated by the
Operative Documents, and hereby agrees to indemnify and hold each Participant
harmless from and against any Claims it may suffer in relying on the
Representative as above indicated.
84
91
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
▇▇▇▇▇▇▇ ENTERPRISES, INC., as
Representative, Construction Agent and
Parent Guarantor
By
----------------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK
OF JAPAN, LTD., LOS ANGELES
AGENCY, as Arranger and as a Lender
By
----------------------------------------------
Name:
Title:
BANK OF MONTREAL GLOBAL
CAPITAL SOLUTIONS, INC.
By
----------------------------------------------
Name:
Title:
BANK OF MONTREAL, as Co-
Arranger, Administrative Agent and as
a Lender
By
----------------------------------------------
Name:
Title:
85
92
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION as Documentation
Agent and as a Lender
By
--------------------------------------------
Name:
Title:
VANTAGE HEALTHCARE
CORPORATION, as Lessee and
Structural Guarantor
By
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ HEALTH CARE, INC., as
Lessee and Structural Guarantor
By
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ SAVANA CAY MANOR,
INC., as Lessee and Structural
Guarantor
By
--------------------------------------------
Name:
Title:
86
93
▇▇▇▇▇▇▇ ENTERPRISES -
GEORGIA, INC., as Lessee and
Structural Guarantor
By
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ HEALTH AND
REHABILITATION SERVICES, INC.,
as Lessee and Structural Guarantor
By
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ENTERPRISES -
ARKANSAS, INC., as Lessee and
Structural Guarantor
By
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ENTERPRISES -
FLORIDA, INC., as Lessee and
Structural Guarantor
By
--------------------------------------------
Name:
Title:
87
94
▇▇▇▇▇▇▇ ENTERPRISES -
WASHINGTON, INC., as Lessee and
Structural Guarantor
By
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ENTERPRISES -
CALIFORNIA, INC., as Lessee and
Structural Guarantor
By
--------------------------------------------
Name:
Title:
88
95
SCHEDULE I
TO PARTICIPATION AGREEMENT
COMMITMENTS
COMMITMENT
PARTICIPANT COMMITMENT PERCENTAGE
--------------------------------------------------------------------------------
LENDERS
LTCB $ 50,000,000 40%
Bank of Montreal $ 28,750,000 23%
Bank of America $ 25,000,000 20%
LESSORS
Bank of Montreal Global $ 21,250,000 17%
Capital Solutions, Inc.
TOTAL $125,000,000 100%
I-1
96
SCHEDULE II
TO PARTICIPATION AGREEMENT
Notice Information, Wire Instructions and Funding Offices
Representative, Construction Agent and Parent Guarantor
▇▇▇▇▇▇▇ ENTERPRISES, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇-▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Chase Manhattan Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: ▇▇▇▇▇▇▇ Enterprises, Inc.
Account Number: 323-213448
Ref: Synthetic Lease Draws
Agent Lessor:
BANK OF MONTREAL GLOBAL CAPITAL SOLUTIONS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Citibank N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: BMO Leasing
Account Number: 3602-3029
Ref: ▇▇▇▇▇▇▇ Enterprises
II-1
97
Administrative Agent:
BANK OF MONTREAL
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: Bank of Montreal
Account Number: 124-8566
Ref: ▇▇▇▇▇▇▇ Enterprises
Lessors:
BANK OF MONTREAL GLOBAL CAPITAL SOLUTIONS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Citibank N.A.
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: BMO Leasing
Account Number: 3602-3029
Ref: ▇▇▇▇▇▇▇ Enterprises
II-2
98
Lenders:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
Credit issues office:
The Long Term Credit Bank of Japan, Ltd.
Los Angeles Agency
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Funding office:
The Long-Term Credit Bank of Japan, Ltd.,
New York Branch
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Assistant Manager
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: Chase Manhattan Bank, New York
ABA Number: ▇▇▇▇▇▇▇▇▇
Name of Account: The Long-Term Credit Bank of Japan, Ltd., New York
Branch
Account Number: ▇▇▇-▇-▇▇▇▇▇
Ref: ▇▇▇▇▇▇▇ Enterprises, Inc./BMO Leasing
II-3
99
BANK OF MONTREAL
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: Bank of Montreal
Account Number: 124-8566
Ref: ▇▇▇▇▇▇▇ Enterprises
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
Credit Contact:
Exact Name of Signing Officer: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title of Signing Officer: Vice President
Bank Address:
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Back-up:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Operations Contact:
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Administration Contact:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
II-4
100
Wire Instructions to your Bank:
Bank of America NT&SA
ABA # 1210-00358
Acct # 12331-83980
Re: ▇▇▇▇▇▇▇/BMO Leasing
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Lessees and
Structural Guarantors:
c/o ▇▇▇▇▇▇▇ Enterprises, Inc.
II-5
101
SCHEDULE III
TO PARTICIPATION AGREEMENT
Subsidiaries & Indebtedness
III
102
SCHEDULE V
TO PARTICIPATION AGREEMENT
Existing Properties
Tampa (Hillsborough Co.), FL.
Marietta (▇▇▇▇ Co.), GA.
Fort ▇▇▇▇▇ (▇▇▇ Co.), FL
Lakeland (Polk Co.), FL.
Arkadelphia (▇▇▇▇▇ Co.), AR.
Larzo (Pinellas Co.), FL.
Murrieta (Riverside Co.), CA.
(Health & Rehab/Assisted Living)
Federal Way (King Co.), WA
El Dorado (Union Co.), AR.
Corporate Headquarters, Forth ▇▇▇▇▇, AR
Bradenton (Manatee Co.), FL.
Crestview (Okaloosa Co.), FL.
North Little Rock (Pulaski Co.), AR
V-II
103
SCHEDULE IV
TO PARTICIPATION AGREEMENT
PRICING CATEGORY
For purposes of the Pricing Categories used in the definitions of "Loan
Margin" and "Lessor Margin", the following terms have the following meanings:
"Pricing Ratio" means the ratio of Consolidated EBITDAR to the sum of
Consolidated Interest Charges and Consolidated Rental Expense.
"Category I Pricing" applies on any day after March 31, 1997 if, as of
the last day of the fiscal quarter of the Representative most recently ended on
or prior to such day and as to which the Representative shall have delivered, or
been required to deliver, on or prior to such day a certificate pursuant to
Section 10.1(d)(iii), the Pricing Ratio is greater than 2.50 to 1.0.
"Category II Pricing" applies on any day after March 31, 1997 if, as of
the last day of the fiscal quarter of the Representative most recently ended on
or prior to such day and as to which the Representative shall have delivered, or
been required to deliver, on or prior to such day a certificate pursuant to
Section 10.1(d)(iii), (i) the Pricing Ratio is greater than 2.25 to 1.0 and (ii)
Category I Pricing does not apply.
"Category III Pricing" applies on any day if, as of the last day of the
fiscal quarter of the Representative most recently ended on or prior to such day
and as to which the Representative shall have delivered, or been required to
deliver, on or prior to such day a certificate pursuant to Section 10.1(d)(iii),
(i) the Pricing Ratio is greater than 2.00 to 1.0 and (ii) neither Category I
Pricing nor Category II Pricing applies.
"Category IV Pricing" applies on any day if, as of the last day of the
fiscal quarter of the Representative most recently ended on or prior to such day
and as to which the Representative shall have delivered, or been required to
deliver, on or prior to such day a certificate pursuant to Section 10.1(d)(iii),
(i) Pricing Ratio is greater than 1.75 to 1.0 and (ii) none of Category I
Pricing, Category II Pricing or Category III Pricing applies.
"Category V Pricing" applies on any day if, on such day, no other
Pricing Category applies.
"Pricing Category" means any one of the five pricing categories
denominated Category I Pricing, Category II Pricing, Category III Pricing,
Category IV Pricing or Category V Pricing.
IV-I
104
SCHEDULE V
Additional Properties
New ▇▇▇▇▇▇▇ Headquarters
North Little Rock (Pulaski Co.) AR
Crestview (Okaloosa Co.) FL
Bradenton (Manatee Co.) FL
Callaway (Bay Co.) FL
V-I
105
EXHIBIT A
TO PARTICIPATION AGREEMENT
FORM OF LEGAL OPINION OF REPRESENTATIVE,
LESSEES AND GUARANTORS(1)
SEE TABS 11 AND 12
--------
(1)These opinions may be divided between Lessee's New York counsel with respect
to opinions 3, 9 and 10 and Lessee's general counsel with respect to all other
opinions.
A-I
106
SCHEDULE A
A-II
107
EXHIBIT B
TO PARTICIPATION AGREEMENT
FORM OF FUNDING REQUEST
(Date)
TO: Agent Lessor and the Administrative Agent, pursuant to the Amended and
Restated Participation Agreement (the "Participation Agreement") dated
as of August 28, 1998 among the Lessees, Representative, Construction
Agent, Parent Guarantor, the Structural Guarantors, the Agent Lessor,
the Lessors, the Lenders, the Administrative Agent, the Arranger and
the Co-Arranger as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time (capitalized terms
used herein shall have the meanings ascribed thereto in the
Participation Agreement).
FROM: ▇▇▇▇▇▇▇ Enterprises, Inc., as Construction Agent
RE: [Funding Date][Acquisition Date] Closing
1. This irrevocable Funding Request is hereby delivered by Lessee pursuant
to Section 3.4(a) of the Participation Agreement.
2. The [Funding Date][Acquisition Date] is scheduled for _______________,
199_ [, and such date will also be an Acquisition Date].
3. The amount of the Advance is $__________________.
4. The Loans and Lessor Amounts comprising such Advance will be [Base Rate
Loans/Lessor Amounts][Eurodollar Loans/Lessor Amounts]. The initial
Interest Period for such Eurodollar Loans/Lessor Amounts will extend
from the [Funding Date] [Acquisition Date] to the next Scheduled
Payment Date.
5. The Advance will be allocated among each of the Properties listed in
Schedule I attached hereto. With respect to each acquisition of
Property, Schedule II specifies (i) a description of the Property, (ii)
the seller or lessor of the Property, (iii) the related Land
Acquisition Cost and (iv) the Estimated Improvement Costs.
6. After giving effect to the Advance requested hereby, the Property Cost
for each Property in respect of which the Advance is being drawn is set
forth on Schedule A hereto and such amount does not exceed the Fair
Market Sales Value for such Property as set forth in (i) the Improved
Property Appraisal, with respect to any Improved Property, therefor as
delivered pursuant to Section 6.1(d) of the
B-I
108
Participation Agreement, and (ii) the As-Built Appraisal, with respect
to any other Property,". therefor as delivered pursuant to clause (i)
or (ii) of Section 6.2(b) of the Participation Agreement.
7. Funds shall be sent by wire transfer as follows:
a. Each Lessor and Lender shall transfer its Commitment
Percentage of $______________ to the following account of
Agent Lessor:
Bank:
ABA Number:
Account Name:
Account Number:
Ref:
Further Credit to:
[amount to be provided by Lessee]
b. Construction Agent hereby instructs Agent Lessor to distribute
the funds as follows:
[information to be provided by Construction Agent]
8. All of the costs being funded pursuant to this Funding Request relate
to the acquisition of Land and all Improvements thereon and to the
construction of such other Improvements subject to the Construction
Agency Agreement and all moneys advanced to Construction Agent pursuant
to this Funding Request relate to supplies purchaser for Construction
work actually performed on such Construction and will be applied by the
Construction Agent solely to the payment (or reimbursement) of such
costs and for no other purposes.
In connection with such requested Advance, the Construction Agent
hereby represents and warrants to you as follows:
a. On the proposed Funding Date or Acquisition Date, both
immediately before and after giving effect to the making of
the requested Advance and the application of the proceeds
thereof, the statements made by each ▇▇▇▇▇▇▇ Entity in Section
8 of the Participation Agreement are true and correct in all
material respects.
b. After giving effect to the Advance requested hereby (i) the
aggregate outstanding amounts of each of the Loans and the
Lessor Amounts to all Lessees does not exceed the Commitments
of the Lenders and the Lessors, respectively, (ii) in the case
of an acquisition of a fee simple interest or
B-II
109
leasehold interest in the applicable Land, the Land
Acquisition Cost for such Property does not exceed the Fair
Market Sales Value of such Property as set forth in the
Appraisal of such Property delivered pursuant to Section
6.1(d) of the Participation Agreement and (iii) the total
amount advanced with respect to each Construction Period
Property is within the Construction Budget for such Property.
c. All of the conditions precedent set forth in Article VI of the
Participation Agreement applicable to the Advance requested
hereby have been satisfied or waived.
IN WITNESS WHEREOF, I have signed my name this ______ day of
_______, 199_.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Construction Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
B-III
110
SCHEDULE A TO FUNDING REQUEST
ALLOCATION OF ADVANCES
Property Land Acquisition Improvement Costs
Description (City, Lease Supp. Costs (Current (Current Advance
State) No. Advance Only) Only)
1._______ No. __ $________ $________
2._______ No. __ $________ $________
3._______ No. __ $________ $________
4._______ No. __ $________ $________
5._______ No. __ $________ $________
Aggregate Property As-Built Appraisal Land Acquisition
Cost (all Advances for Property as of Costs and
to date, including Completion Date Estimated
Current Advance) Improvement
Costs
1._______ $________ $________
2._______ $________ $________
3._______ $________ $________
4._______ $________ $________
5._______ $________ $________
B-IV
111
SCHEDULE B TO FUNDING REQUEST
INFORMATION REQUIRED
FOR FUNDING ACQUISITION OF LAND
1. Description of the subject Property:__________.
2. The subject Property consists of [Land only] [Land and
Improvements].
3. The Land comprising part of the subject Property is to be [ground
leased by the Lessors] [acquired by the Lessors in fee simple].
4. [name of Seller/Ground lessor] is the [Seller] [Ground lessor] of
the Land comprising part of the subject Property.
5. */Land Acquisition Cost for the subject Property: Indicated on
Schedule A.
6. Estimated Improvement Costs for the subject Property in the
aggregate are $_____________.
--------
*/ Insert in the case of an acquisition of a fee simple interest in the
applicable Land.
B-V
112
EXHIBIT C
TO PARTICIPATION AGREEMENT
FORM OF INTEREST PERIOD SELECTION/CONTINUATION/CONVERSION
NOTICE*/
Re:(▇▇▇▇▇▇▇ Enterprises, Inc.)
TO: Agent Lessor and Administrative Agent
This Interest Period Selection/Continuation/Conversion Notice is delivered to
you pursuant to Section 3.6 of the Amended and Restated Participation Agreement
dated as of August 28, 1998 (the "Participation Agreement"), among the Lessees,
Representative, Construction Agent, Parent Guarantor, the Structural Guarantors,
the Agent Lessor, the Lessors, the Lenders, the Administrative Agent, the
Arranger and the Co-Arranger as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time.
▇▇▇▇▇▇▇ Enterprises, Inc. (the "Representative") hereby requests that
on _____ __, 19__, all or any portion of the presently outstanding principal
amount of the Loans and Lessor Amounts:
(1) which are presently [Base Rate Loans/Lessor Amounts] [Eurodollar
Loans/Lessor Amounts with an Interest Period ending on ______ __, 19__],
(2) be [continued as] [converted into],
(3) [Eurodollar Loans/Lessor Amounts having an Interest Period of ____
months].
Any and all capitalized terms used in this Notice for
Selection/Continuation/Conversion shall have the meaning ascribed thereto in the
Participation Agreement, unless specifically defined herein.
The Representative hereby certifies, represents and warrants that no
Default or Event of Default exists or will (after giving effect to the
selection, continuation or conversion requested hereby) exist.
--------
*/ Subject to Section 3.6(b) of the Participation Agreement, this notice
is only applicable with respect to Loan and Lessor Amounts outstanding
during the Basic Lease Term.
C-I
113
The Representative has caused this notice to be executed and delivered
by its Responsible Officer this _____ day of ______ __, 19__.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
C-II
114
EXHIBIT D-1
TO PARTICIPATION AGREEMENT
FORM OF OFFICER'S CERTIFICATE
Pursuant to the Amended and Restated Participation Agreement dated as of August
28, 1998 (the "Participation Agreement") among the Lessees, Representative,
Construction Agent, Parent Guarantor, the Structural Guarantors, the Agent
Lessor, the Lessors, the Lenders, the Administrative Agent, the Arranger and the
Co- Arranger as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time. I, _______________, _______________ of
[Representative/Lessee], do hereby certify as follows (capitalized terms used
herein shall have the meanings ascribed thereto in the Participation Agreement):
(1) The representations and warranties of [Representative/Lessee] contained in
the Participation Agreement and other Operative Documents to which it is a party
are true, correct and complete on and as of the date hereof with the same effect
as if such representations and warranties had been made on and as of the date
hereof.
(2) [Representative/Lessee] has performed all agreements on its part required to
be performed under the Participation Agreement and the other Operative Documents
to which it is a party on or prior to the date hereof.
(3) There exists on the date hereof no Default or Event of Default.
IN WITNESS WHEREOF, I have signed my name this _____ day of _____________,
199__.
[REPRESENTATIVE/LESSEE]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
▇-▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
TO PARTICIPATION AGREEMENT
FORM OF SECRETARY'S CERTIFICATE
The undersigned, _________________, [Assistant] Secretary of
[Representative/Lessee], a ______ corporation [("Representative/Lessee"],
pursuant to the Amended and Restated Participation Agreement dated as of August
28, 1998 (the "Participation Agreement") among the Representative, Construction
Agent, Parent Guarantor, the Structural Guarantors, the Agent Lessor, the
Lessors, the Lenders, the Administrative Agent, the Arranger and the Co-Arranger
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time, does hereby certify as follows (capitalized terms
used herein shall have the meanings ascribed thereto in the Participation
Agreement):
1. Attached hereto as Exhibit C are true, correct and complete copies
of all resolutions adopted by the [Board of Directors] (and shareholders) of
[Representative/Lessee] relating to the [Participation Agreement/Master Lease]
and the other Operative Documents to which [Representative/Lessee] is a party,
which resolutions have not been amended or rescinded and are in full force and
effect on the date hereof.
2. No proceeding for merger, consolidation, liquidation, reorganization
or dissolution of [Representative/Lessee] or the sale of all or substantially
all of its assets is pending or contemplated.
3. The following persons are on the date hereof duly qualified and
acting officers of [Representative/ Lessee], duly elected or appointed to the
offices set forth beside their respective names and signatures, and each such
person who, as an officer of [Representative/Lessee], signed the [Participation
Agreement/Master Lease], any of the other Operative Documents or any other
document delivered before or on the date hereof in connection with such
agreements and documents and the transactions contemplated therein was, at the
respective times of such signing and delivery, and is now duly elected or
appointed, qualified and acting as such officer, and the signatures of such
persons appearing on such documents are their genuine signatures:
D-2-I
116
NAME OFFICE SIGNATURE
---- ------ ---------
----------- ------------- ------------------------
----------- ------------- ------------------------
----------- ------------- ------------------------
IN WITNESS WHEREOF, I have signed my name this _____ day of
_____________, 199__.
[REPRESENTATIVE/LESSEE]
By:
---------------------------------------
Name:
-------------------------------------
Title: [Assistant] Secretary
I, ___________________, [Vice] President of
[Representative/Lessee], hereby certify that ______________________ is on the
date hereof the duly elected, qualified and acting [Assistant] Secretary of
[Representative/Lessee], and that the signature set forth above is such person's
true and correct signature.
Dated: _________________, 199__
[REPRESENTATIVE/LESSEE]
By:
----------------------------------------
Name:
--------------------------------------
Title: [Vice] President
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117
EXHIBIT D-3
TO PARTICIPATION AGREEMENT
FORM OF RESPONSIBLE OFFICER'S CERTIFICATE
Pursuant to the Amended and Restated Participation Agreement dated
as of August 28, 1998, among the Lessees, Representative, Construction Agent,
Parent Guarantor, the Structural Guarantors, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent, the Arranger and the Co-Arranger as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time, I, [name of Responsible Officer], [position of Responsible
Officer] of ▇▇▇▇▇▇▇ Enterprises, Inc. (the "Representative"), do hereby certify
as follows (capitalized terms used herein shall have the meanings ascribed
thereto in the Participation Agreement):
1. The representations and warranties of each ▇▇▇▇▇▇▇ Entity
contained in the Participation Agreement and other Operative Documents to which
it is a party are true, correct and complete on and as of the date hereof with
the same effect as if such representations and warranties had been made on and
as of the date hereof.
2. Each ▇▇▇▇▇▇▇ Entity has performed all agreements on its part
required to be performed under the Participation Agreement and the other
Operative Documents to which it is a party on or prior to the date hereof.
3. Each Operative Document to which any ▇▇▇▇▇▇▇ Entity is a party
is in full force and effect with respect to it.
4. There exists on the date hereof no Default or Event of Default.
D-3-I
118
IN WITNESS WHEREOF, I have signed my name this _____ day of
_______________ 199_ and certify that I am the [position of Responsible Officer]
of the Representative.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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119
EXHIBIT E
TO PARTICIPATION AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
TO: Agent Lessor, Administrative Agent, Lessors and Lenders
1. This Compliance Certificate is hereby delivered by the
Representative pursuant to Section 10.1(d)(iii)(B) of the Amended
and Restated Participation Agreement dated as of August 28, 1998,
among the Lessees, Representative, Construction Agent, Parent
Guarantor, the Structural Guarantors, the Agent Lessor, the
Lessors, the Lenders, the Administrative Agent, the Arranger and
the Co-Arranger as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time (the
"Participation Agreement").
2. As described below, the Representative and each Lessee has been in
compliance during and at the end of such accounting periods covered
by the financial statements delivered pursuant to Sections
10.1(d)(i) and 10.1(d)(ii) of the Participation Agreement with the
restrictions contained in Section 10.2(a), Section 10.2(b), Section
10.2(c), clause v of Section 10.2(e), Section 10.2(f), Section
10.2(g), Section 10.2(i) and Section 10.2(1) of the Participation
Agreement.
[Representative to provide reasonable detail evidencing compliance with
aforementioned section references]
Any and all capitalized terms used in this Compliance Certificate
shall have the meaning ascribed thereto in the Participation Agreement, unless
specifically defined herein.
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120
IN WITNESS WHEREOF, I have signed my name this _____ day of
_______________ 199_.
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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121
EXHIBIT F
TO PARTICIPATION AGREEMENT
FORM OF ASSIGNMENT AGREEMENT
To: ▇▇▇▇▇▇▇ Enterprises, Inc.
Bank of Montreal Global Capital Solutions, Inc., as Agent Lessor
Reference is made to Section 12.1 of the Amended and Restated
Participation Agreement dated as of August 28, 1998, among the Lessees,
Representative, Construction Agent, Parent Guarantor, the Structural Guarantors,
the Agent Lessor, the Lessors, the Lenders, the Administrative Agent, the
Arranger and the Co-Arranger as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time (the "Participation
Agreement"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings given thereto in the Participation Agreement.
[Name of assigning Participant] (the "Assignor") and [Name of
Eligible Lender Assignee/Eligible Lessor Assignee] hereby agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, a
[__]% interest in and to all the Assignor's rights and obligations under the
Operative Documents as of the Effective Date (as defined below) (including,
without limitation, such percentage interest in the [Lender][Lessor] Commitment
of the Assignor on the Effective Date and such percentage interest in each
[Loan][Lessor Amounts] owing to the Assignor outstanding on the Effective Date
together with such percentage interest in all unpaid [interest][Yield] and fees
(including those fees under Section 4.4 of the Participation Agreement) accrued
to the Effective Date).
2. The Assignor (a) represents and warrants that as of the date
hereof its [Lender][Lessor] Commitment (without giving effect to assignments
thereof which have not yet become effective) is $[_______], and the outstanding
aggregate principal balance of its [Loans][Lessor Amounts] (without giving
effect to assignments thereof which have not yet become effective) is $[_______]
and (b) makes no representation or warranty and assumes no responsibility (i)
with respect to any statements, warranties or representations made in or in
connection with any Operative Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Operative Document or
any other instrument or document furnished thereunder or pursuant thereto,
except that it represents and warrants that it is the legal and beneficial owner
of the interests being assigned by it hereunder and that such interests are free
and clear of adverse claims, and (ii) with respect to the financial position of
the Representative, Lessee or any Guarantor or the performance or observance by
the Representative, any Lessee or any Guarantor of any of their
F-I
122
respective obligations under any Operative Document or any other instrument or
document furnished thereunder or pursuant thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment Agreement; (b) confirms that it has
received a copy of each of the Participation Agreement, Lease, Construction
Agency Agreement and Loan Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 10.1(d) of the Participation
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment
Agreement; (c) agrees that it will, independently and without reliance upon the
Administrative Agent, the Agent Lessor, the Assignor or any other Participant
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under any Operative Document; (d) appoints and authorizes the Administrative
Agent and the Agent Lessor, as applicable, to take such action on its behalf and
to exercise such powers under the Operative Documents as are delegated to the
Administrative Agent and the Agent Lessor, as applicable, by the terms thereof,
together with such powers as are reasonably incidental thereto; and (e) agrees
that it will perform in accordance with its terms all the obligations which by
the terms of the Operative Documents are required to be performed by it as a
Participant.
4. From and after the Effective Date (a) the Assignee shall be
party to and be bound by the provisions of the Operative Documents as a
[Lender][Lessor] and, to the extent of its interests assigned by this Assignment
Agreement, have the rights and obligations of a ["Lender"] ["Lessor"] and as a
"Participant" thereunder and (b) the Assignor shall, to the extent of its
interests assigned by this Assignment Agreement, relinquish its rights and be
released from its obligations under the Operative Documents.
5. This Assignment Agreement will be delivered to each of the
Administrative Agent and the Agent Lessor together with a transfer fee of $2,500
payable by the Assignor or the Assignee to the Administrative Agent for its own
account.
[6. The Assignor shall surrender to the Administrative Agent its
Note or Notes representing the Assignor's interest in and to all the Assignor's
rights and obligations under the Operative Documents, and the Administrative
Agent will (upon execution and delivery thereof by the Representative) promptly
provide to the Assignor and the Assignee separate promissory notes in the amount
of their respective interests substantially in the form of the original Note
(each such note with
F-II
123
a notation thereon that it is given in substitution for and replacement of the
original Note or any replacement notes thereof).]*
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8. The effective date of this Assignment Agreement shall be ______
__, 19__ (the "Effective Date").
[THIS SPACE INTENTIONALLY LEFT BLANK]
--------
* This Section to apply only if the Assignor is a Lender.
F-III
124
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed and delivered by their respective duly authorized
officers as of the date first written above.
Adjusted Commitment [__________________],
as Assignor
Commitment to make Loans:
$
---------
Commitment Percentage: ___% By:
---------------------------
Name:
----------------------
Commitment to advance Title:
Lessor Amounts: ---------------------
$
---------
Commitment Percentage: ___%
Commitment
Commitment to make Loans: [__________________],
$
--------- as Assignee
Commitment Percentage: ___%
Commitment to advance By:
Lessor Amounts: ---------------------------
$ Name:
------- ----------------------
Commitment Percentage: ___% Title:
---------------------
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125
Agreed to and Accepted:
▇▇▇▇▇▇▇ ENTERPRISES, INC.,
as Representative
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
BANK OF MONTREAL
as Administrative Agent
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
BANK OF MONTREAL GLOBAL CAPITAL SOLUTIONS, INC.,
as Agent Lessor
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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126
EXHIBIT G
TO PARTICIPATION AGREEMENT
FORM OF LEGAL OPINION OF LOCAL COUNSEL TO LESSEE
[Letterhead of Local Counsel]
___________________, 19___
TO: Bank of Montreal Global Capital Solutions, Inc.
Bank of Montreal
The Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency
Bank of America National Trust and Savings Association
Re: ▇▇▇▇▇▇▇ Enterprises, Inc.
Ladies and Gentlemen:
We have acted as special ___________________ counsel to
_______________, a ____________ corporation (together with its permitted
successors and assigns, the "Company") in connection with the transactions
contemplated by the Amended and Restated Participation Agreement dated as of
August 28, 1998 (the "Participation Agreement"), entered into by and among the
Lessees, Representative, Construction Agent, Parent Guarantor, the Structural
Guarantors, the Agent Lessor, the Lessors, the Lenders, the Administrative
Agent, the Arranger and the Co-Arranger.
Capitalized terms used but not otherwise defined herein have the
respective meanings specified in Appendix A to the Participation Agreement.
This opinion is being furnished to you at the request of [Lessee]
(the "Lessee") pursuant to Section 6.1(s) of the Participation Agreement.
In connection with the opinions contained herein, we have examined
and are familiar with originals of or copies identified to our satisfaction of
the documents listed on Schedule I attached hereto (the "Subject Documents"). In
addition, we have
G-I
127
examined and are familiar with such legal matters as we have deemed necessary
for the purpose of rendering this opinion.
In rendering this opinion we have assumed: (a) the genuineness of
the signatures on all documents and instruments and the authenticity of all
documents submitted as originals, and the conformity to originals of all
documents submitted as photostatic or certified copies; (b) that each of the
parties to the Subject Documents has all the legal capacity, power and authority
required for it to enter into the Subject Documents to which it is a party, and
to perform its respective obligations thereunder; (c) that all such matters have
received any corporate or other authorization required by any applicable
charter, by-law, law or regulation; (d) the due execution and delivery of the
Subject Documents by each of the parties thereto; and (e) that there are no
agreements between any parties which would alter the agreements set forth in the
Subject Documents. To the extent that the assumptions in clauses (b) and (c)
relate to any laws or regulations, such assumptions relate only to those laws
and regulations as to which we are not opining herein.
Based upon the foregoing, we are of the opinion that:
1. Neither Bank of Montreal Global Capital Solutions, Inc. nor any
Participant is required under the laws of the State of ____________ (the
"State") to qualify as a foreign corporation or otherwise in the State solely as
a result of its execution, delivery and performance of the Subject Documents to
which it is a party.
2. Title to the Property situated in the State may be held in the
name of the Agent Lessor as follows: Bank of Montreal Global Capital Solutions,
Inc., as Agent Lessor under the Amended and Restated Master Lease and Open End
Mortgage dated as of August 28, 1998, among Bank of Montreal Global Capital
Solutions, Inc., as Agent ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Enterprises, Inc., as Representative
and the various Lessees identified therein.
3. To the extent local law is applicable to the Subject Documents,
each of the Subject Documents delivered on the Acquisition Date for the related
Property situated in the State or previously delivered constitutes the legal,
valid and binding obligation of the parties thereto enforceable against each
such party in accordance with the terms thereof, except as such enforceability
may be limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable principles.
[4. The [Deed] [Ground Lease] delivered on the Acquisition Date for
the related Property situated in the State is in form sufficient under the laws
of the State to convey all interests in the property described therein intended
to be conveyed thereby, and such instrument, when filed or recorded with
_______________________ (the "Recording Office") will have been filed or
recorded in the appropriate public offices in the State in which such filing or
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128
recording is necessary to convey valid title to the property described therein
to the Agent Lessor.
5. The Subject Documents create rights in the Agent Lessor for the
ratable benefit of all Participants, and the Agent Lessor has the power to
exercise remedies granted to it by the Subject Documents without naming the
other Participants.
6. No registration, filing or qualification is required to permit
the Agent Lessor to exercise remedies in the State under the Lease, and the
validity and enforceability of the Lease will not be affected by any failure of
the Agent Lessor to qualify.
7. If the transactions contemplated by the Master Lease and Lease
Supplement No. __ (the "Subject Lease Supplement") delivered on the Acquisition
Date for the related Property situated in the State are characterized as a lease
transaction, the Master Lease and the Subject Lease Supplement are in form
sufficient under the laws of the State to demise to the Lessee a valid leasehold
interest in such Property. The Subject Lease Supplement, when recorded with the
Recording Office, will have been filed or recorded in all public offices in the
State in which such filing or recording is necessary to provide constructive
notice of the Subject Lease Supplement to third Persons and to establish of
record the interest of the Agent Lessor thereunder.
8. If the transactions as provided for in the Master Lease and the
Subject Lease Supplement are characterized as a loan transaction:
a. Section 6 of the Subject Lease Supplement is
effective to create a power of sale in favor of the Lessee.
b. The Master Lease and the Subject Lease Supplement
are in form sufficient under the laws of the State to create a
valid lien or security interest, in favor of the Agent Lessor and
to secure all the obligations of the Lessee under the Operative
Documents, including future Advances, in the Property situated in
the State described therein. The Subject Lease Supplement, when
recorded with the Recording Office, will have been filed or
recorded in all public offices in the State in which such filing or
recording is necessary to perfect the lien of the Agent Lessor
thereunder to the extent that such Property situated in the State
constitutes real estate. The Master Lease and the Subject Lease
Supplement each provide the Agent Lessor with all remedies
customarily obtained by lenders in the State in connection with the
type of loan and security provided thereby. [There is no "one form
of action" or similar rule limiting
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129
the remedies available for the enforcement of the Lease. There is
no limitation on remedies resulting from the exercise of remedies
against any leased property located outside the State.]*
9. The Assignment of Lease and Rent and the Supplement to the
Assignment of Lease and Rent delivered on the Acquisition Date for the related
Property situated in the State are in form sufficient under the laws of the
State to create valid liens or security interests in favor of the Lenders in the
collateral described therein, and when recorded with the Recording Office, will
have been filed or recorded in all public offices in the State in which such
filing or recording is necessary to perfect the lien of the Lenders thereunder
to the extent that such collateral constitutes real estate. The Assignment of
Lease and Rent and the Supplement to the Assignment of Lease and Rent delivered
on the Acquisition Date for the related Property situated in the State provide
the Lenders with all remedies customarily obtained by lenders in the State in
connection with the type of loan and security provided for by the Loan
Agreement.
10. The law (statutory or otherwise) of the State does not require
a lienholder to make an election of remedies where such lienholder holds
security interests and liens on both the real and the personal property of a
debtor or to take recourse first or solely against or otherwise exhaust its
remedies against its collateral before otherwise proceeding to enforce against
such debtor the obligations of such debtor.
11. The UCC Financing Statements which are to be recorded or filed
within the State, the forms of which are attached as Schedule II hereto, are in
form sufficient under the laws of the State for filing or recording, and when
recorded with the Recording Office and the ____________ Secretary of State will
have been filed or recorded in all public offices in the State in which such
filing or recording is necessary to perfect the interest of the Agent Lessor in
the collateral described therein to the extent the same can be perfected by
filing or recording in the State.
12. Neither the execution and delivery of the Subject Documents,
nor the fulfillment of or the compliance with the provisions thereof by the
Agent Lessor results in a violation of, or contravenes any State statute, law,
rule, code, ordinance or regulation to which the Agent Lessor is subject.
13. Except for the filings and recordings described above, no
approval, consent, or withholding of objection on the part of, or filing or
registration with, any governmental authority or regulatory body in the State is
required to be made or taken in the State to establish, protect and preserve
title to, interests in, liens on and security interests in the Property as
contemplated by the Subject Documents, except for UCC continuation statements.
--------
* Bracketed language to be replaced in opinions from California.
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130
14. Subject to the following sentence and except for federal, state
and local franchise, withholding and income taxes, no taxes, fees or other
charges imposed by the State, ___________ County or any other local governmental
entity are payable by the Agent Lessor or the Lenders solely as a result of the
execution, delivery, recordation or filing (where applicable) of the Subject
Documents and all other instruments delivered in connection with the
transactions contemplated thereby (except for nominal filing or recording fees
payable at the time of filing or recording).
15. Under the laws of the State and local jurisdictions therein,
there are no statutory or regulatory requirements relating to the transfer of
ownership or operation, sale or foreclosure of the Property situated in the
State which require notification of the State or the local jurisdiction of such
transfer, sale or foreclosure, certification that there has been no discharge of
Hazardous Materials or other substances.
16. The courts of the State would recognize the choice of New York
law as to all matters of construction, validity and performance of the Operative
Documents (excluding the lease documents which are governed by the internal laws
of any other jurisdiction). The lease documents that are governed by the laws of
the State are enforceable under the laws of the State.
We are members of the Bar of the State. The opinions expressed
herein are limited exclusively to the laws of the State and the rules and
regulations, if any, under each of said laws. Certain of the Subject Documents
purport to be governed by laws of states other than the State. With your
permission, we have assumed for the purposes of this opinion (contrary to the
express provisions thereof) that such agreements would be governed by and
construed and interpreted in accordance with the laws of the State.
Very truly yours,
--------------------------
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131
SCHEDULE I
List of Subject Documents
1. Master Lease
2. Lease Supplement No. __
3. [Deed] [Ground Lease] dated as of _______ __, 19___, from ____________,
as [grantor] [landlord], to Bank of Montreal Global Capital Solutions,
Inc., as Lessor Agent
4. Construction Agency Agreement
5. Supplement No. __ to Construction Agency Agreement
6. Assignment of Lease and Rent
7. Construction Agency Agreement Assignment
8. Supplement No. __ to Assignment of Lease and Rent
9. UCC financing statements described on Schedule II hereto
10. Construction Documents Assignment
11. Participation Agreement
12. Loan Agreement
13. Structural Guaranty
14. Guaranty
132
SCHEDULE II
UCC Financing Statements
[Attach Forms of UCC Financing Statements]
133
EXHIBIT H
TO PARTICIPATION AGREEMENT
FORM OF COMPLETION CERTIFICATE
TO: Agent Lessor, Administrative Agent, Lessors and Lenders pursuant to the
Amended and Restated Participation Agreement (the "Participation
Agreement") dated as of August 28, 1998 among the Lessees,
Representative, Construction Agent, Parent Guarantor, the Structural
Guarantors, the Agent Lessor, the Lessors, the Lenders, the
Administrative Agent, the Arranger and the Co-Arranger as the same may
be amended, supplemented, amended and restated or otherwise modified
from time to time (capitalized terms used herein shall have the
meanings ascribed thereto in the Participation Agreement).
With respect to the Property that is subject to Lease Supplement No. ___, the
Construction Agent certifies to each of you, as of _____, 19__, as follows:
1. The construction of Improvements, the identification of and assistance
with the acquisition of Land, and the construction of Improvements on
such Land have been completed in all material respects in accordance
with the applicable Plans and Specifications, the Construction Agency
Agreement and the other Operative Documents, and in compliance in all
material respects with all Requirements of Law and Insurance
Requirements and in all material respects with all information,
requirements and assumptions used in delivering the As-Built Appraisal
with respect to such Property.
2. The Property is ready for occupancy and operation in accordance with
the Plans and Specifications therefor, as evidenced by the issuance by
the appropriate Governmental Authority of a permanent certificate of
occupancy for all of the Improvements contemplated by the Plans and
Specifications for such Property and all applicable Governmental Action
has been taken;
3. The Property is subject to and governed by all of the provisions of the
Master Lease and the other Operative Documents.
4. The representations and warranties set forth in Section 8.2 and 8.3 of
the Participation Agreement (other than any representations and
warranties made only as of a specific date, each of which was true and
correct as of the date when made) are true and correct as of the date
hereof as if such representations and warranties were set forth herein
in full.
5. The aggregate Property Cost for the Property is $______. $______ of the
Property Cost is allocable to Improvement Costs.*
--------
* These amounts may be adjusted by a supplement to this certificate
reflecting any adjustments required by the final amounts described in
Item 6 hereof.
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134
6. Substantially all amounts owing to third parties for the Construction
of the Improvements on the Property have been paid in full. We estimate
that $__________ remain to be paid to subcontractors and that such
amount has been included in Item 5.
7. No changes or modifications were made to the Plans and Specifications
relating to the Property after the related Acquisition Date that have
had a Material Adverse Effect on the value, use or useful life of the
Property.
H-II