Exhibit 10.9
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PARTICIPATION AGREEMENT
Dated as of July 24, 1996
Among
GENESIS ELDERCARE PROPERTIES, INC.
as Lessee,
MELLON FINANCIAL SERVICES CORPORATION #4,
as Lessor
PERSONS NAMED ON SCHEDULE I,
as Lenders,
and
MELLON BANK, N.A.
not in its individual capacity except as expressly
stated herein, but solely as Agent
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TABLE OF CONTENTS
(Participation Agreement)
Page
ARTICLE I
DEFINITIONS.............................................. 2
ARTICLE II
EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS. 2
SECTION 2.1 Effectiveness of Agreement............................... 2
SECTION 2.2 Agreement to Acquire and Lease........................... 2
SECTION 2.3 Participation by Lenders................................. 2
SECTION 2.4 Participation by Lessor.................................. 3
SECTION 2.5 Advances for Transaction Costs........................... 3
SECTION 2.6 Structuring/Underwriting Fee............................. 4
SECTION 2.7 Payments to Participants................................. 5
SECTION 2.8 Nature of Transaction.................................... 5
SECTION 2.9 Computations............................................. 6
SECTION 2.10 Renewal Term............................................. 6
SECTION 2.11 Highest Lawful Rate...................................... 9
ARTICLE III
[INTENTIONALLY OMITTED].................................. 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES........................... 12
SECTION 4.1 Representations and Warranties of Lessee................. 12
SECTION 4.2 Representations and Warranties of each Lender............ 20
SECTION 4.3 Representations and Warranties of Lessor................. 22
SECTION 4.4 Representations and Warranties of Agent.................. 24
ARTICLE V
COVENANTS OF LESSEE...................................... 25
SECTION 5.1 Further Assurances....................................... 25
SECTION 5.2 Consolidation, Merger, Sale, etc......................... 26
SECTION 5.3 Corporate Existence...................................... 28
SECTION 5.4 Guaranty................................................. 28
SECTION 5.5 Liens.................................................... 28
SECTION 5.6 Compliance Certificates.................................. 28
SECTION 5.7 Change of Name or Address................................ 29
SECTION 5.8 Environmental Matters.................................... 29
SECTION 5.9 Investigation by Authorities............................. 29
SECTION 5.10 Financial and Other Information.......................... 30
SECTION 5.11 Securities............................................... 32
SECTION 5.12 Interest Rates........................................... 32
SECTION 5.13 Appraisals............................................... 32
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SECTION 5.14 Environmental Audits..................................... 32
SECTION 5.15 Additional Compensation in Certain Circumstances......... 33
ARTICLE VI
OTHER COVENANTS AND AGREEMENTS........................... 33
SECTION 6.1 Cooperation with Lessee.................................. 33
SECTION 6.2 Covenants of Lessor and Lenders.......................... 34
SECTION 6.3 Restrictions on and Effect of Transfer
by any Lender........................................ 35
SECTION 6.4 Covenants and Agreements of Lenders...................... 38
SECTION 6.5 Future Lenders........................................... 39
SECTION 6.6 Agent under Participation Agreement and Mortgages........ 39
SECTION 6.7 Syndication by Agent..................................... 39
SECTION 6.8 Prepayment by Lessor..................................... 40
SECTION 6.9 Foreclosure against Lessor............................... 40
ARTICLE VII
INDEMNIFICATION.......................................... 40
SECTION 7.1 General Indemnification.................................. 40
SECTION 7.2 General Tax Indemnity.................................... 41
SECTION 7.3 Withholding Tax Exemption................................ 46
SECTION 7.4 Excessive Use Indemnity.................................. 46
SECTION 7.5 Gross Up................................................. 47
ARTICLE VIII
THE AGENT................................................ 47
SECTION 8.1 Appointment of Agent; Powers and
Authorization to Take Certain Actions................ 47
SECTION 8.2 Reliance................................................. 49
SECTION 8.3 Action Upon Instructions Generally....................... 49
SECTION 8.4 Indemnification.......................................... 50
SECTION 8.5 Independent Credit Investigation......................... 51
SECTION 8.6 Refusal to Act........................................... 52
SECTION 8.7 Resignation or Removal of Agent;
Appointment of Successor............................. 52
SECTION 8.8 Separate Agent........................................... 53
SECTION 8.9 Termination of Agency.................................... 53
SECTION 8.10 Compensation of Agency................................... 53
SECTION 8.11 Limitations.............................................. 54
SECTION 8.12 Agent May Be a Participant............................... 54
ARTICLE IX
MISCELLANEOUS............................................ 55
SECTION 9.1 Survival of Agreements................................... 55
SECTION 9.2 No Broker, etc........................................... 55
SECTION 9.3 Notices.................................................. 55
SECTION 9.4 Counterparts............................................. 56
SECTION 9.5 Amendments............................................... 56
SECTION 9.6 Headings, etc............................................ 57
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SECTION 9.7 Parties in Interest...................................... 57
SECTION 9.8 GOVERNING LAW; Submission to
Jurisdiction; Waiver of Jury Trial.................... 57
SECTION 9.9 Payment of Transaction Costs and Other Costs............. 57
SECTION 9.10 Severability............................................. 58
SECTION 9.11 Limited Liability of Lessor.............................. 58
SECTION 9.12 Liabilities of the Lenders............................... 59
SECTION 9.13 Liabilities of Agent..................................... 59
SECTION 9.14 Reproduction of Documents................................ 59
SECTION 9.15 Consideration for Consents to Waivers
and Amendments........................................ 60
SECTION 9.16 Payment Directions....................................... 60
SECTION 9.17 Action of and Notices to Lessor under
Loan Agreement........................................ 60
SECTION 9.18 Submission to Jurisdiction; Waivers...................... 60
SECTION 9.19 Final Agreement.......................................... 61
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APPENDIX 1 Definitions
APPENDIX 2 Conditions to Document Closing
SCHEDULE I Lenders and Commitments
SCHEDULE II Addresses For Notice; Wire Instructions
SCHEDULE III Sites
SCHEDULE IV Stock Sellers
SCHEDULE 4.1A Governmental Actions
SCHEDULE 4.1B Filings and Recordings
SCHEDULE 4.1C Computation under Section 5.9 of 1995 Subordinated
Note Indenture
SCHEDULE 4.1D ERISA Plans
EXHIBIT A Form of Lease and Agreement
Exhibit A - Form of Lease Supplement and
Memorandum of Lease and Agreement
EXHIBIT B-1 Form of Guaranty of Lease
EXHIBIT B-2 Form of Structural Guaranty
EXHIBIT C Form of Loan Agreement
Exhibit A - Form of Note
EXHIBIT D-1 Form of Mortgage
EXHIBIT D-2 Form of Deed of Trust
EXHIBIT E-1 Form of Opinion of In-House Counsel to Lessee
EXHIBIT E-2 Form of Opinion of Special Counsel to Lessee
EXHIBIT E-3 Form of Local Counsel Opinion
EXHIBIT E-4 Form of Opinion of Special Counsel to Lessee
regarding "Senior Indebtedness"
EXHIBIT E-5 Form of Local Counsel Questionnaire
EXHIBIT F Form of Officer's Certificate
EXHIBIT G Form of Investor's Letter
EXHIBIT H Form of Assignment of Lease and Agreement and
Lease Supplements and Memoranda of Lease and
Agreement
EXHIBIT I-1 Form of Amendment to Security Agreement
EXHIBIT I-2 Form of Amendment to Collateral Agency Agreement
EXHIBIT J Form of Assignment of Licenses
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L INTENTIONALLY OMITTED
EXHIBIT M Form of Ground Lease
EXHIBIT N Form of Advance Request
EXHIBIT O Form of Assignment and Assumption by Participant
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of July 24, 1996 (this
"Agreement"), is among GENESIS ELDERCARE PROPERTIES, INC., as Lessee; MELLON
FINANCIAL SERVICES CORPORATION #4, as Lessor; the Persons named on Schedule I
hereto (together with their respective permitted successors, assigns and
transferees), as Lenders; and MELLON BANK, N.A., a national banking association,
not in its individual capacity except as expressly stated herein, but solely as
Agent for Lessor and Lenders.
W I T N E S E T H:
WHEREAS, Lessee, Lessor, Lenders and Agent have entered into this
Agreement for the purpose of providing financing for the acquisition of certain
parcels of real property (each a "Land Interest") and the acquisition of certain
facilities currently located thereon (each, a "Facility") (each such Land
Interest, together with such Facility and the other real estate or related
interests described in the definition of Site in Appendix 1 hereto, are referred
to individually as a "Site" and collectively as the "Sites"); and
WHEREAS, the Sites are identified on Schedule III hereto; and
WHEREAS, on the Document Closing Date Lessor shall lease the Sites to
Lessee and Lessee shall lease the Sites from Lessor for the Lease Term pursuant
to the Lease in the form of Exhibit A hereto; and
WHEREAS, Lessee shall sublease the Sites (other than the Sites located
at Tierra Pines Health Care Center and Eatle Crest Nursing Center) to
Subtenants pursuant to the Subleases;
WHEREAS, Lessor shall contribute a portion of the Total Costs through
an equity investment in the Sites (the "Equity Amount"); and
WHEREAS, Lessor wishes to obtain, and the Lenders are willing to
provide, financing (the "Financing") of the remaining portion of the Total
Costs; and
WHEREAS, concurrently with the execution and delivery of this Agreement
Lessee shall cause the Guarantors to execute and deliver guaranties (the
"Guaranties") in the forms of Exhibit B-1 and
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Exhibit B-2 attached hereto from the Guarantors for the benefit of Lessor,
Lenders and Agent; and
WHEREAS, to secure the Financing, Agent, on behalf of the Lenders, will
have the benefit of a Lien from Lessor on all of Lessor's right, title and
interest in each Site and on substantially all of Lessor's rights against Lessee
under the Lease with respect to each Site.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix 1 hereto
for all purposes hereof.
ARTICLE II
EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS
SECTION 2.1. Effectiveness of Agreement. This Agreement shall become
effective on the date (on or before July 24, 1996) on which all the conditions
precedent thereto set forth in Appendix 2 hereto shall have been satisfied or
waived by the applicable parties as set forth therein (the "Document Closing
Date").
SECTION 2.2. Agreement to Acquire and Lease. Lessee hereby directs
Lessor to acquire the Sites on the Document Closing Date. On the Document
Closing Date, after Lessor's acquisition of the Sites, Lessor and Lessee shall
enter into the Lease pursuant to which Lessor shall lease the Sites to Lessee,
and Lessor and Lessee shall enter into, and Lessee shall cause to be recorded,
the Lease Supplement.
SECTION 2.3. Participation by Lenders. Subject to the terms and
conditions of this Agreement and in reliance on the representations and
warranties of each of the parties hereto contained herein or made pursuant
hereto, on the Document Closing Date each Lender shall finance, in part, the
Total Costs by making a secured loan to Lessor (in accordance with Lessor's
payment instructions set forth on Schedule II) in an amount in immediately
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available funds on such Document Closing Date equal to such Lender's Commitment
Percentage of the Total Costs and in the aggregate not more than its Commitment
as set forth on Schedule I hereto. Each loan shall be evidenced by one or more
Notes issued to the Lender(s) under and repayable in accordance with the terms
of the Loan Agreement (which shall be substantially in the form of Exhibit A
thereto).
SECTION 2.4. Participation by Lessor. Subject to the terms and
conditions of this Agreement and in reliance on the representations and
warranties of each of the parties hereto contained herein or made pursuant
hereto, on the Document Closing Date Lessor shall acquire an equity interest in
the Overall Transaction by contributing the Equity Amount in immediately
available funds. In consideration for its contribution of the Equity Amount
Lessor shall be paid the Yield on the Equity Amount on each Payment Date.
SECTION 2.5. Advances for Transaction Costs. For Transaction Costs
payable by Lessor pursuant to Section 9.9 below after the Document Closing Date,
the following procedures shall be applicable.
(a) Notices and Closing. At least five (5) Business Days prior
to each Advance Date, Lessee or Agent shall deliver to the other and to the
Participants an irrevocable written notice substantially in the form of Exhibit
N (an "Advance Request"), setting forth:
(i) the proposed Advance Date;
(ii) a description of such Transaction Costs and a
statement specifying the Site or Sites to which such Transaction Costs
are allocable; and
(iii) wire transfer instructions for the disbursement of
funds.
(b) Commitment Limits. The aggregate amount disbursed by the
Participants hereunder shall not exceed the aggregate Commitments. For any
Advance Request made by Lessee, or to be funded, after the occurrence of a Lease
Event of Default, Agent shall have (i) the right, but shall not be obligated
(unless so directed by the Required Participants), to cancel such Advance
Request prior to the honoring of such Advance Request, and (ii) the right, but
shall not be obligated (unless so directed by the Required Participants),
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to terminate the Commitments; provided that if Agent shall terminate the
Commitments of the Lenders, the Commitment of Lessor shall automatically be
terminated and Lessor shall have no further obligation to make any other
Advances hereunder.
(c) Required Dates. For Lessor's payment of Transaction
Costs, the Advance Date or Dates for any calendar month shall be the date or
dates selected by Agent, on behalf of Lessor.
(d) Obligations Several. The obligations of the parties hereto
or elsewhere in the Operative Documents shall be several and not joint; and no
party shall be liable or responsible for the acts or defaults of any other party
hereunder or under any other Operative Document.
(e) Termination of Commitment. Notwithstanding anything in
this Agreement to the contrary, no party hereto shall be obligated to make any
fundings pursuant to this Agreement after 5:00 P.M., New York time, on July 31,
1996 (for the initial advance) and September 24, 1996 (for any subsequent
advance for Transaction Costs), and no Advance Date may occur following such
latter date.
(f) Notes and Certificates; Notations. Upon the consummation
of each Advance, each Lender may make a notation on the grid attached to such
Lender's Note indicating the amount of the Loan advanced by such Lender on such
Advance Date, and the Agent, on behalf of Lessor and the Lenders, shall make a
notation on its records indicating the amount of the Loan advanced by each
Lender and the portion of the Equity Amount so advanced by Lessor on such
Advance Date. Each Participant is hereby authorized to record the date and
amount of each Advance made by such Participant, each continuation thereof, the
date and amount of each payment or repayment of principal or Equity Amount
thereof (as the case may be) and the length of each Interest Period with respect
thereto, on the grid annexed to and constituting a part of each Note held by
such Participant or the records of Agent, as applicable, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided, however that the failure to make any such
recordation or any error in such recordation shall not affect the obligation of
Lessor under any Note or the obligation of Lessee to pay Rent.
(g) Initial Interest and Yield on Advances. Interest and Yield
on each Advance shall be determined by reference to the Prime Rate or LIBO Rate,
whichever is applicable, for the period from the date of such Advance until the
commencement of the next succeeding Interest Period.
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SECTION 2.6. Structuring/Underwriting Fee. Genesis shall pay to Agent a
fully-earned, non-refundable Structuring/Underwriting Fee (the
"Structuring/Underwriting Fee") to be earned and payable as outlined in the
Commitment Letter, which fee shall be paid by Lessor as part of Transaction
Costs pursuant to Section 2.5 and repaid by Lessee as part of Basic Rent as
specified in clause (iii)(y) of the definition thereof.
SECTION 2.7. Payments to Participants. The parties to this Agreement
hereby agree that any payment required to be made by Lessee to Lessor or any of
the Lenders, or by Lessor to Lenders out of amounts paid by Lessee to Lessor,
pursuant to any Operative Document may be made directly to Agent on behalf of
the applicable Participants by Lessee in lieu of the corresponding payment
required to be made by Lessee to such Participants, or by Lessor to Lenders out
of amounts payable by Lessee to Lessor, pursuant to any Operating Document. Such
payment by Lessee to Agent shall be deemed to constitute (a) the required
payment from Lessee to Lessor or any other applicable Participant and (b) the
corresponding payment by Lessor to the Lenders. Agent shall promptly (and in any
case, within one Business Day) remit to each of the Participants its respective
share of any such amounts.
SECTION 2.8. Nature of Transaction. (a) It is the intent of the parties
hereto that: (i) the transaction contemplated hereby constitutes an operating
lease from Lessor to Lessee for purposes of Lessee's financial reporting, (ii)
the transaction contemplated hereby preserves ownership in the Sites to Lessee
for purposes of Federal and state tax and bankruptcy purposes, (iii) Lessee,
pursuant to the Lease, grants a security interest or lien, as the case may be,
in the Sites and the other Collateral to Lessor, (iv) for purposes of Federal
and state tax and bankruptcy purposes, the payment by Lessee of Basic Rent shall
be treated as payments of interest, and the payment by Lessee of any amounts in
respect of the Lease Balance shall be treated as repayments of principal, and
(v) the Mortgage and Assignment of Lease create a lien and security interest in
the Collateral, subject to certain limited exceptions. Nevertheless, Lessee
acknowledges and agrees that none of Lessor, Agent or any Lender has provided or
will provide tax, accounting, health care regulatory or legal advice to Lessee
regarding the Overall Transaction or made any representations or warranties
concerning the tax, accounting, regulatory or legal characteristics of the
Operative Documents and that Lessee has obtained and relied upon such tax,
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accounting, regulatory and legal advice concerning the Operative Documents as
it deems appropriate.
(b) Specifically, without limiting the generality of
subsection (a) of this Section 2.8, but understanding that the parties'
characterization is not the sole determinant of the issue, the parties hereto
intend and agree that with respect to the nature of the transactions evidenced
by the Lease in the context of the exercise of remedies under the Operative
Documents, relating to and arising out 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 Lessee, Lessor or any Lender or any
enforcement or collection actions, the transactions evidenced by the Operative
Documents are loans made by the Lenders as unrelated third party lenders to
Lessee secured by the Sites.
SECTION 2.9. Computations. For all purposes under the Operative
Documents, all computations of interest, Yield and other accrued amounts
(including the Overdue Rate) shall be made on the basis of actual number of days
elapsed in a 360-day year (or in the case of calculations based upon the Prime
Rate, on the basis of actual number of days elapsed in a 365 (366) day year),
except as otherwise specifically provided in any Operative Document.
SECTION 2.10. Renewal Term.
(a) Lessee's Renewal Request. Pursuant to Section 6.1 of the
Lease, so long as no Lease Payment/Bankruptcy Default or Lease Event of Default
shall have occurred and be continuing at the time Lessee delivers the Renewal
Request and at the commencement of the Renewal Term, Lessee may request that
Agent, Lessor and the Lenders extend the Lease and the Financing for the Renewal
Term (such request by Lessee is herein called the "Renewal Request"). In the
event Lessee makes such request, within thirty (30) days, Agent will prepare a
proposal setting forth the terms and conditions upon which Lessor and each
Lender may agree to extend the Lease for the Renewal Term, to present to Lessee,
Lessor and each Lender. Within fifteen (15) days of its receipt of Agent's
proposal, Lessee shall inform Agent in writing of whether Agent's proposal is
acceptable to Lessee, such approval by Lessee being in Lessee's sole discretion.
Failure of Lessee to inform Agent in writing of its approval or rejection within
fifteen (15) days of its receipt of Agent's proposal shall be deemed to
constitute Lessee's rejection thereof, in which event, Lessee's Renewal Request
shall be deemed void and of no force or effect.
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(b) Agent's Solicitation of Lessor and Lenders. If Lessee shall
approve of Agent's proposal in writing, Agent shall solicit approval from each
of Lessor and the Lenders of such proposal; provided, that neither Lessor nor
any Lender shall be required to approve a proposal submitted by Agent. Within
thirty (30) days of solicitation by Agent, Lessor and each Lender shall indicate
its approval or rejection of the proposal submitted by Agent, such approval by
Lessor and each Lender being in such party's sole discretion. Failure of Lessor
or any Lender to indicate its approval or rejection within thirty (30) days of
solicitation shall be deemed to constitute such party's rejection thereof. If
Lessor or any Lender rejects (or is deemed to have rejected) Agent's proposal to
extend the Lease and the Financing for the Renewal Term (such Lessor or Lender,
in either case, is herein called a "Non- Renewing Participant"), then within
five (5) Business Days after the expiration of the aforementioned 30-day period,
Lessee shall be required to take one of the following actions:
(i) Lessee may elect to cancel its Renewal Request, in which
event, Lessee shall not have any right to extend the Lease and the
Financing for the Renewal Term. Lessee shall make such election by
written notice delivered to Agent not later than the end of such five
(5) Business Day period. In the event that Lessee desires then to
elect the Sale Option, Lessee shall make such election in its notice
cancelling its Renewal Request delivered pursuant to the preceding
sentence, and failing such election of the Sale Option, Lessee shall
be deemed to have irrevocably waived such Sale Option and elected the
Purchase Option.
(ii) Lessee may elect to replace the Non-Renewing Participant
with another Person which will constitute a replacement Lessor or
Lender (a "Replacement Participant") upon expiration of the Basic Term,
provided that Lessee certifies that the agreement between Lessee and
the Replacement Participant to become a Replacement Participant is not
based on terms more favorable to the Replacement Participant than terms
available to the other Participants (except for Lessee's payment of
the Replacement Participant's legal fees and expenses). Lessee shall
make such election by written notice delivered to Agent not later than
the end of such five (5) Business Day period, which notice shall
identify the Replacement Participant. The date of expiration of the
Basic Term shall be treated as the Final Maturity Date with respect
to the Non-Renewing Participant, and on such date Lessee shall cause
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the Replacement Participant to purchase in immediately available funds
all of the interest of the Non-Renewing Participant in the Sites or
the Notes, as applicable, and the Operative Documents, for cash at a
price equal to: (x) in the case of Lessor, the aggregate outstanding
Equity Amount and accrued but unpaid Yield, or (y) in the case of a
Lender, the aggregate outstanding amount of principal and accrued but
unpaid interest then outstanding on the Notes then held by the
Non-Renewing Participant. Any such transfer of a Non-Renewing
Participant's interests shall comply with the provisions of Section
6.3 of this Agreement, except those provisions that require a
Non-Renewing Participant to pay its own costs and expenses in
connection with such transfer. If Lessee fails (for any reason,
including a default by the Replacement Participant) to cause the
Replacement Participant to pay any such amounts when due pursuant to
the preceding sentence, the Lease shall not be renewed for the Renewal
Term, Lessee shall not be entitled to the Renewal Term, and such date
of expiration of the Basic Term shall be deemed the Final Maturity
Date with respect to all Participants. Each Replacement Participant
shall be subject to each of the terms and conditions of this Agreement
and each of the other Operative Documents imposed upon Lenders (or
upon Lessor in the case of a Replacement Participant for Lessor), and
shall make the representations, warranties and covenants and perform
its obligations required hereunder and thereunder. Specifically,
without limitation, a Person shall not become a Replacement
Participant unless Agent consents to the Replacement Participant (such
consent not to be unreasonably withheld) and Agent shall receive prior
to such Person becoming a Replacement Participant the Non-Renewing
Participant's written assignment and the Replacement Participant's
written assumption of the Non- Renewing Participant's rights and
obligations under the Operative Documents, such assignment and
assumption to be substantially in the form of Exhibit O hereto and to
otherwise be in form and substance reasonably acceptable to Agent.
If Lessee shall fail to duly elect either of the options under clauses (i) and
(ii) above within the applicable five (5) Business Day period, Lessee shall be
deemed to have made its election under clause (i) above and shall be deemed to
have elected the Purchase Option.
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If at any time after Lessee shall have made a Renewal Request and prior
to the commencement of the Renewal Term, a Lease Event of Default shall have
occurred, then Lessee's rights under this Section 2.10 shall automatically
terminate and Lessee shall not be entitled to the Renewal Term.
Any provision in this Section 2.10 to the contrary notwithstanding, in
the event Lessee, Lessor and the Lenders accept Agent's proposal to renew the
Lease and the Financing for the Renewal Term, then all renewing and replacement
Lenders must extend the Financing upon the same terms and conditions; and if the
foregoing condition shall not be satisfied, Lessee shall not be entitled to the
Renewal Term.
Lessee hereby agrees to pay all reasonable costs and expenses
(including reasonable legal fees and expenses) incurred by Agent, the then
existing Participants (including any Non-Renewing Participants) and any
Replacement Participants in connection with the provisions of this Section 2.10;
provided, however, that Lessee shall not be responsible for any legal fees and
expenses of more than two counsel for all of Agent and the Participants
(including, without limitation, special Credit Agreement counsel) and any
special local counsel required by Agent. Lessee shall not be responsible for the
legal fees and expenses of other counsel for the Non-Renewing Participants and
Replacement Participants unless Lessee and such parties mutually agree on the
amount of such fees and expenses to be paid by Lessee.
SECTION 2.11. Highest Lawful Rate. It is the intention of the parties
hereto to conform strictly to applicable usury laws and, anything herein to the
contrary notwithstanding, the obligations of (a) Lessee to Lessor under this
Agreement and the Lease, (b) Lessor to the Lenders under this Agreement, the
Notes and the Loan Documents and (c) either Lessee or Lessor or any other party
under any other Operative Document, shall be subject to the limitation that
payments of interest or of other amounts constituting interest under Applicable
Laws and Regulations shall not be required to the extent that receipt thereof
would be in excess of the Highest Lawful Rate (as defined below), or otherwise
contrary to provisions of law applicable to the recipient limiting rates of
interest which may be charged or collected by the recipient. Accordingly, if the
transactions or the amount paid or otherwise agreed to be paid for the use,
forbearance or detention of money under this Agreement, the Lease, the Loan
Documents and any other Operative Document would exceed the Highest Lawful Rate
or otherwise be usurious under Applicable Laws and Regulations (including
without limitation the federal and state laws of the United States of America,
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or of any other jurisdiction whose laws may be mandatorily applicable) with
respect to the recipient of any such amount then, in that event, notwithstanding
anything to the contrary in this Agreement, the Lease, the Loan Documents, or
any other Operative Document, it is agreed as follows as to the recipient of any
such amount:
(a) the provisions of this Section 2.11 shall govern and
control over any other provision in this Agreement, the Lease, the Loan
Documents, and any other Operative Document and each provision set
forth therein is hereby so limited;
(b) the aggregate of all consideration which constitutes
interest under Applicable Laws and Regulations that is contracted for,
charged or received under this Agreement, the Lease, the Loan
Documents, or any other Operative Document shall under no circumstances
exceed the maximum amount of interest allowed by Applicable Laws and
Regulations of the Commonwealth of Pennsylvania, excluding any
conflicts law (or, if and to the extent required by the Applicable Laws
and Regulations of any state in which any Site is located, the
Applicable Laws and Regulations of such state), it being the intention
of the parties that the Applicable Laws and Regulations of the
Commonwealth of Pennsylvania, excluding any conflicts laws, shall
govern the determination of the Highest Lawful Rate (such maximum
lawful interest rate, if any, with respect to such Lender herein called
the "Highest Lawful Rate"), and all amounts owed under this Agreement,
the Lease, the Loan Documents and any other Operative Document shall be
held subject to reduction and (i) the amount of interest which would
otherwise be payable to the recipient hereunder and under the Lease,
the Loan Documents and any other Operative Document, shall be
automatically reduced to the amount allowed under Applicable Laws and
Regulations and (ii) any unearned interest paid in excess of the
Highest Lawful Rate shall be credited to the payor by the recipient
(or, if such consideration shall have been paid in full, refunded to
the payee);
(c) all sums paid, or agreed to be paid for the use,
forbearance and detention of the money under this Agreement, the Lease,
the Loan Documents, or any other Operative Document shall, to the
extent permitted by Applicable Laws and Regulations, be amortized,
prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest
is uniform throughout the full term thereof;
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(d) if at any time the interest, together with any other fees,
late charges and other sums payable pursuant to or in connection with
this Agreement, the Lease, the Loan Documents, and any other Operative
Document executed in connection herewith or therewith, and deemed
interest under Applicable Laws and Regulations, exceeds that amount
which would have accrued at the Highest Lawful Rate, the amount of
interest and any such fees, charges and sums to accrue to the recipient
of such interest, fees, charges and sums pursuant to the Operative
Documents shall be limited, notwithstanding anything to the contrary in
the Operative Documents to that amount which would have accrued at the
Highest Lawful Rate for the recipient, but any subsequent reductions,
as applicable, shall not reduce the interest to accrue pursuant to the
Operative Documents below the recipient's Highest Lawful Rate until the
total amount of interest payable to the recipient (including all
consideration which constitutes interest) equals the amount of interest
which would have been payable to the recipient (including all
consideration which constitutes interest), plus the amount of fees
which would have been received but for the effect of this Section 2.11.
ARTICLE III
[INTENTIONALLY OMITTED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of Lessee. As of the date
hereof, Lessee makes the representations and warranties set forth in this
Section 4.1 to each of the other parties hereto.
(a) Due Organization, etc. Lessee is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and Lessee has full corporate power and authority
to conduct its business as presently and presently proposed to be conducted, to
own or hold under lease its properties, to enter into and perform its
obligations under each of the Operative Documents to which it is or is to be a
party and each other agreement, instrument and document to be executed and
delivered by it on or before the Document Closing Date in connection with or as
contemplated by each such Operative Document to which it is or is to be a party
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and it is duly qualified as a foreign corporation authorized to do business and
is in good standing in every jurisdiction in which its failure to be so
qualified would have a Material Adverse Effect. Lessee is a single purpose
corporation wholly-owned by Genesis, the sole purpose of which is to enter into
and perform its obligations under the transactions contemplated by the Operative
Documents and hold its rights in and to the Sites.
(b) Authorization; No Conflict. The execution and delivery by
Lessee of each of the Operative Documents to which it is or is to be a party,
and the performance by Lessee of its obligations under such Operative Documents,
have been duly authorized by all necessary corporate action (including any
necessary stockholder action) on its part, and do not and will not: (i)
contravene any Applicable Laws and Regulations currently in effect applicable to
or binding on it or the Sites; (ii) violate any provision of its charter or
bylaws; (iii) result in a breach of or constitute a default under any indenture,
loan or credit agreement, or any other agreement or instrument to which Lessee
is a party or by which Lessee or its properties may be bound or affected, which
breaches or defaults would have, individually or in the aggregate, a Material
Adverse Effect; (iv) result in, or require, the creation or imposition of any
Lien of any nature upon or with respect to any of the properties now owned or
hereafter acquired by Lessee (other than the security interests created pursuant
to the Operative Documents); or (v) require any Governmental Action by any
Authority, except for (A) the filings and recordings listed on Schedule 4.1B to
perfect the rights of Lessor, the Lenders and Agent intended to be created by
the Operative Documents, and (B) those Governmental Actions required with
respect to Lessee or any of its Affiliates listed on Schedule 4.1A, each of
which have been duly effected and are, or on the initial Advance Date will be,
in full force and effect; and Lessee is not in default under or in violation of
its charter or bylaws. Attached as Schedule 4.1C are correct and complete
computations demonstrating compliance by Genesis with Section 5.9 of the
Indenture after giving effect as Indebtedness under such Indenture to the
obligations of Lessee and Guarantors under or in connection with the Operative
Documents.
(c) Enforceability, etc. Each Operative Document to which
Lessee is or is to be a party constitutes the legal, valid and binding
obligation of Lessee, enforceable against Lessee 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.
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Participation Agreement
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(d) Litigation. There is no action, proceeding or
investigation pending or, to Lessee's knowledge, threatened which questions the
validity of the Operative Documents to which Lessee is or is to be a party or
any action taken or to be taken pursuant to the Operative Documents to which
Lessee is or is to be a party, and there is no action, proceeding or
investigation pending or, to Lessee's knowledge, threatened which, if adversely
determined, would have a Material Adverse Effect.
(e) Taxes. Lessee has filed or caused to be filed all United
States Federal and all other material tax returns that are required to be filed
by Lessee, and has paid or caused to be paid all taxes shown to be due and
payable on such returns or on any assessment received by Lessee to the extent
that such taxes have become due and payable except to the extent that taxes due,
but unpaid, are being contested in good faith by Lessee by appropriate action or
proceeding and, to the extent (if any) that such taxes are not due and payable,
Lessee has established or caused to be established reserves that are adequate
for the payment thereof in accordance with GAAP.
(f) Rights in Respect of the Sites. Lessee is not a party to
any contract or agreement to sell any interest in the Sites or any part thereof
other than pursuant to or in accordance with this Agreement and the Lease.
(g) No Lease Default, Loss, etc. As of the Document Closing
Date: no Lease Default, Lease Event of Default, Event of Loss, Condemnation or
Casualty has occurred and is continuing; there is no action pending or, to the
best of Lessee's knowledge, threatened by an Authority to initiate a
Condemnation; no condition exists that constitutes, or with the giving of notice
or lapse of time or both would constitute an event of default by Lessee under
any material indenture, mortgage, chattel mortgage, deed of trust, lease,
conditional sales contract, loan or credit arrangement or other material
agreement or instrument to which Lessee is a party or by which Lessee or any of
its properties may be bound which individually or in the aggregate with all such
events of default could have a Material Adverse Effect.
(h) Chief Executive Office of Lessee. The principal place of
business and chief executive office, as such terms are used in Section 9-103(3)
of the UCC, of Lessee are each located at 148 West State Street, Kennett Square,
Pennsylvania 19348. Lessee does not do business in more than one county in the
Commonwealth of Pennsylvania.
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Participation Agreement
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(i) Compliance With Law. With respect to each Site, except as
otherwise set forth in the Environmental Audit of such Site, (i) Lessee is in
material compliance with and will comply with all Applicable Laws and
Regulations, including all Environmental Laws, (ii) each Site and the use
thereof by Lessee and its agents, assignees, employees, invitees, lessees,
licensees and tenants complies in all material respects with all Applicable Laws
and Regulations (including all zoning and land use laws and Environmental Laws)
and Insurance Requirements, except for any violations which would not have,
individually or in the aggregate, a Material Adverse Effect on Lessee or any
Site; and (iii) such Facility on such Site do not encroach in any material
manner onto any adjoining land (except as permitted by express written easements
or as insured by appropriate title insurance). Except as otherwise set forth in
the Environmental Audit of such Site, with respect to each Site, there are no
underground storage tanks at such Site and Lessee shall not cause or permit any
underground storage tanks to be constructed or located at any Site. Lessee will
not direct Lessor to acquire any Site pursuant to Section 2.2 unless (x) such
Site and operation and condition thereof shall comply with all Applicable Laws
and Regulations, including all Environmental Laws, except for any violations
which would not have, individually or in the aggregate, a Material Adverse
Effect on Lessee or any Site, and (y) no condition regarding Hazardous Materials
exists on or with respect to such Site except as otherwise set forth in the
Environmental Audit of such Site.
(j) Investment Company Act. Lessee is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(k) Public Utility Holding Company. Lessee is not subject to
regulation as a "holding company," an "affiliate" of a "holding company", or a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(l) Licenses, Registrations and Permits. Except as set forth
on the Environmental Audit, all material licenses, approvals, authorizations,
consents, permits, easements and rights-of-way, including proof and dedication,
(collectively, the "Permits") required for the use and occupancy of the Sites
and for the operation thereof (including a certificate or certificates of
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Participation Agreement
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occupancy for such Site or other legally equivalent permission to occupy such
Site) have been obtained from the appropriate Authorities having jurisdiction or
from private parties, as the case may be except for those which will not cause a
Material Adverse Effect. Lessee shall deliver to Agent, upon request, true,
correct and complete copies of all Permits issued prior to the date that this
representation is made or remade, as the case may be.
(m) Nature, Condition and Use of Sites. Each Site consists of
a Land Interest on which a Facility exists. Such Land Interest is located in the
United States (but not in California). No notices, complaints or orders of
violation or non-compliance or liability of any nature whatsoever have been
issued or, to Lessee's knowledge, threatened by any Authority with respect to
the Sites or any present or intended future use thereof, except for such
violations and instances of non-compliance as could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on any
Site, and Lessee is not aware of any circumstances which could give rise to the
issuance of any such notices, complaints or orders. There are no material
defects to such Facility including the plumbing, heating, air conditioning and
electrical systems thereof and all water, sewer, electric, gas, telephone and
drainage facilities.
(n) Utility Services. Each Site has available all material
utilities necessary for use and operation of the Facility thereon for its
primary intended purposes and means of access between such Facility and public
highways for pedestrians and motor vehicles. All utilities serving each Site are
located in, and vehicular access to the Facility on such Site is provided by,
either public rights-of-way abutting such Site or by Appurtenant Rights.
(o) Use and Operation of Sites. All material agreements,
easements and other rights, public or private, which are necessary to permit the
lawful use and operation of the Sites as Lessee intends to use the Sites under
the Lease and which are necessary to permit the lawful intended use and
operation of all presently intended utilities, driveways, roads and other means
of egress and ingress to and from the same (including certificates of occupancy)
have been obtained and are in full force and effect and Lessee has no actual
knowledge of any pending modification or cancellation of any of the same.
(p) Securities Act. Neither Lessee nor anyone authorized to
act on its behalf (including, without limitation, any of the Guarantors) has,
directly or indirectly, in violation of
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Participation Agreement
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Section 5 of the Securities Act or any state securities laws, offered or sold
any interest in the Notes, the Sites or the Lease, or in any security or lease
the offering of which, for purposes of the Securities Act or any state
securities laws, would be deemed to be part of the same offering as the offering
of the aforementioned securities or leases, or solicited any offer to acquire
any of the aforementioned securities or leases.
(q) Title. Neither Lessee nor any of its Affiliates has taken
or caused to be taken any action which would have a material adverse effect on
Lessor's title to the Sites from that indicated in the Title Policies delivered
pursuant to Appendix 2. Neither Lessee nor any of its Affiliates has created,
consented to, incurred or suffered to exist any Lien upon any of the Sites other
than Permitted Liens.
(r) Federal Reserve Regulations. Neither Lessee nor any
Affiliate of Lessee will, directly or indirectly, use any of the proceeds of the
sale of the Notes or of the purchase by Lessor of the Sites for the purpose of
purchasing or carrying any "margin security" or "margin stock" within the
meaning of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System, respectively, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry a margin
security or margin stock or for any other purpose which might cause any of the
transactions contemplated by this Agreement or any other Operative Document to
constitute a "purpose credit" within the meaning of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System, or for the purpose of
purchasing or carrying any security, and neither Lessee nor any Affiliate of
Lessee has taken or will otherwise take or permit any action by Lessee or any of
its Affiliates in connection with any of the transactions contemplated by any of
the Operative Documents which would involve a violation of Regulation G, T, U,
or X, or any other regulation of the Board of Governors of the Federal Reserve
System.
(s) ERISA. (i) A copy of the most recent Annual Report (5500
Series Form) including all attachments thereto as filed with the Internal
Revenue Service for each Plan (if any) relating to Lessee or Genesis or any
other Guarantor has been provided to the Agent and Lessor and fairly presents
the funding status of such Plan N Health status. There has been no material
deterioration in any Plan's funding status since the date of such Annual Report.
Schedule 4.1D hereto sets forth a list of all Plans and Multiemployer Plans
relating to the Lessee or Genesis or any other Guarantor, and all information
available to Lessee or Genesis or any other Guarantor with respect to the
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Participation Agreement
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direct, indirect or potential withdrawal liability to any Multiemployer Plan of
Lessee or Genesis or any other Guarantor or any Controlled Group Member. Copies
have been provided to Agent of all of the documents provided to Genesis pursuant
to Section 4.16 of the Stock Purchase Agreement and the representations
contained in Section 4.16(d) and (e) are, to the best knowledge of Lessee and
Genesis, true, correct and complete. Except as set forth in such Schedule 4.1D,
none of Lessee or Genesis or any other Guarantor has or (after giving effect to
the consummation of the transactions contemplated by the Stock Purchase
Agreement) will have any liability (contingent or otherwise) in excess of
$100,000 for or in connection with, and none of their respective properties is
subject to a Lien in connection with, any Pension-Related Event. Neither Lessee
nor Genesis nor any other Guarantor nor any Controlled Group Member (both as of
the Document Closing Date and after giving effect to the consummation of the
transactions contemplated by the Stock Purchase Agreement) has or (after giving
effect to the consummation of the transactions contemplated by the Stock
Purchase Agreement) will have any liability (contingent or otherwise) for or in
connection with, any Postretirement Benefits.
(ii) Neither Lessee, nor any Controlled Group Member,
presently maintains, participates in, or contributes to, a Plan (A) which is
subject to Title IV of ERISA, but is not a Multiemployer Plan whose assets do
not at least equal the present value of its accrued benefits based on the
actuarial methods and assumptions included in the most recent actuarial
valuation reports, (B) which is a Multiemployer Plan for which Lessee or any
Controlled Group Member has received notice that the plan is in reorganization
or insolvent, (C) for which material actions, lawsuits or claims have been
asserted, or (D) for which penalties or taxes have been imposed under Sections
502(i) and 502(l) of ERISA or Section 4975 of the Code. Neither Lessee nor any
Controlled Group Member has in the immediate six year period had a complete or
partial withdrawal from any Multiemployer Plan and the liability to which Lessee
or any Controlled Group Member would become subject under ERISA were there to be
a complete withdrawal from all Multiemployer Plans to which Lessee and its
Controlled Group Members contribute is not in excess of $500,000.
(iii) The execution and delivery of this Agreement, including
the issuance and sale of the Notes and the consummation of the transactions
contemplated hereby and thereby under the Operative Documents, will not involve
any prohibited transactions, within the meaning of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975 of the
Code.
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Participation Agreement
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The representation by Lessee in the preceding sentence is made in reliance upon
and subject to the correctness of the representation by each of the Lenders in
Section 4.2(e) and the representation by Lessor in Section 4.3(i).
(t) Financial Information.
(i) Audited Financial Statements. Lessee has heretofore
furnished to Agent and each Lender the consolidated balance sheet of
Genesis and its Consolidated Subsidiaries (including Lessee) as of
September 30, 1995 and the related consolidated statements of income,
cash flows and changes in stockholders' equity for the fiscal year then
ended, as examined and reported on by KPMG Peat Marwick, independent
certified public accountants for Lessee and Genesis, who delivered an
unqualified opinion in respect thereof. Such financial statements
(including the notes thereto), fairly present, in conformity with GAAP,
the consolidated financial position of Genesis and its Consolidated
Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such fiscal year.
(ii) Interim Financial Statements. Lessee has heretofore
furnished to Agent and each Lender interim consolidated balance sheets
of Genesis and its Consolidated Subsidiaries as of March 31, 1996 and
the related consolidated statements of income, cash flows and changes
in stockholders' equity for the portion of Genesis's fiscal year ended
at the end of such quarter. Such financial statements fairly present,
in conformity with GAAP, the consolidated financial position of Genesis
and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and changes in financial position
for such fiscal quarter, subject to normal year-end auditing
adjustments and except that such financial statements do not contain
all of the footnote disclosures required by GAAP.
(iii) Since March 31, 1996 there has been no Material Adverse
Effect.
(u) No Other Filings. Except for the filings and recordings
listed in Schedule 4.1B, no other filings or recordings are necessary to validly
and effectively convey to Lessor and Agent such interests in the Site and the
Collateral as contemplated by the Operative Documents, in each case free and
clear of all Liens, other than Permitted Liens.
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Participation Agreement
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(v) Zoning. Each Site complies in all material respects with
all applicable zoning and subdivision laws, ordinances, regulations and
restrictive covenants, and all requirements thereof necessary for the use,
occupancy and operation of such Site have been satisfied in all material
respects, and the current use and intended use under the Lease of such Site is a
conforming use in each case, except for violations which would not create a
Material Adverse Effect.
(w) Disclosure. The information disclosed in writing by Lessee
or any of its Affiliates (or any Person authorized or employed by any such
Person as agent or otherwise) to the Lenders in connection with the negotiation
of the Operative Documents and the transactions contemplated thereby, when taken
as a whole with all other written disclosures to such parties, do not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, misleading.
There is no particular fact of which Lessee or any of its
Affiliates has knowledge that has not been disclosed by Lessee or any of its
Affiliates (or by any Person authorized or employed by Lessee or any of its
Affiliates as agent or otherwise) in writing to the Lenders that, as far as
Lessee or any of its Affiliates can reasonably foresee, is reasonably likely to
have a Material Adverse Effect.
(x) Appraisal Data. The information provided by Lessee and its
Affiliates to the Appraiser and forming the basis for the conclusions set forth
in each Appraisal, taken as a whole, was true and correct in all material
respects and did not omit any information known and available to Lessee
necessary to make the information provided not materially misleading.
(y) Subjection to Government Regulation. None of Agent, Lessor
nor any Lender will become (i) solely by reason of entering into the Operative
Documents or consummation of the transactions contemplated thereby (other than
upon exercise of remedies under the Lease or upon the expiration thereof)
subject to ongoing regulation of its operations by any Authority having
jurisdiction, or be required to hold any license, permit or approval, solely by
reason of Lessee's business activities or the nature of the Sites; or (ii)
except for regulation the applicability of which depends upon the existence of
facts in addition to the ownership of, or the holding of any interest in, the
Sites or any interest therein upon the exercise of remedies under the Lease or
upon the expiration thereof, subject to ongoing regulation of its operations by
any Authority having jurisdiction, or be required to hold any license, permit or
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Participation Agreement
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approval, solely by reason of Lessee's business activities or the nature of the
Sites.
SECTION 4.2. Representations and Warranties of each Lender. Each Lender
represents and warrants severally and only as to itself to each of the other
parties hereto as follows:
(a) Due Organization, etc. It is duly organized and validly
existing under the laws of the jurisdiction of its organization and has full
corporate power and authority to enter into and perform its obligations as
Lender under each Operative Document to which it is or is to be a party and each
other agreement, instrument and document to be executed and delivered by it in
connection with or as contemplated by each such Operative Document to which it
is or is to be a party.
(b) Authorization; Enforceability, etc. This Agreement and
each other Operative Document to which it is or is to be a party have been or
will be, duly authorized, executed and delivered by or on behalf of it and are,
or upon execution and delivery will be, legal, valid and binding obligations of
it, enforceable against it in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by general equitable
principles.
(c) No Conflict. Neither the execution and delivery of the
Operating Documents, nor the consummation of the transactions contemplated
thereby, nor compliance by it with any of the terms and provisions thereof (i)
requires any approval of its stockholders or approval or consent of any trustee
or holders of any of its indebtedness or obligations, (ii) contravenes or will
contravene any Applicable Laws and Regulations currently in effect applicable to
or binding on it (except no representation or warranty is made as to any
Applicable Laws and Regulations to which it or the Sites, directly or
indirectly, may be subject because of the lines of business or other activities
of Lessee) or (iii) results in any breach of or constitutes any default under,
any indenture, mortgage, chattel mortgage, deed of trust, lease, conditional
sales contract, loan or credit arrangement, other material agreement or
instrument, corporate charter, by-laws or other agreement or instrument to which
it is a party or by which it or its properties may be bound or affected.
(d) Lessor Liens. Each Site is free and clear of all
Lessor Liens attributable to it.
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(e) ERISA. It is purchasing its interest in the Note(s) with
assets that are either (i) not assets of any Plan (or its related trust) which
is subject to Title I of ERISA or Section 4975 of the Code; or (ii) assets of
any Plan (or its related trust) which is subject to Title I of ERISA or Section
4975 of the Code, but there is available an exemption from the prohibited
transaction rules under Section 406(a) of ERISA and Section 4975 of the Code and
such exemption is immediately applicable to each transaction contemplated by the
Operative Documents to the extent that any other party to such transaction is a
"party in interest" as defined in Section 3(14) of ERISA with respect to such
plan assets.
SECTION 4.3. Representations and Warranties of Lessor. Lessor hereby
represents and warrants to Lessee, Agent and Lenders as set forth in this
Section 4.3.
(a) Chief Executive Office. Lessor's chief executive
office and principal place of business and the place where the
documents, accounts and records relating to the Overall Transaction
are kept is located at One Mellon Bank Center, Rm 151-4444,
Pittsburgh, PA 15258-0001, Attention: Leasing Group.
(b) Due Organization, etc. Lessor is a corporation duly
organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania and has full corporate power and authority to
execute, deliver and perform its obligations as Lessor under each Operative
Document to which it is or is to be a party and each other agreement, instrument
and document to be executed and delivered by it in connection with or as
contemplated by each such Operative Document to which it is or is to be a party.
(c) Authorization; Enforceability, etc. This Agreement and
each other Operative Document to which Lessor is or is to be a party have been
or will be, duly authorized, executed and delivered by or on behalf of Lessor
and are, or upon execution and delivery will be, legal, valid and binding
obligations of Lessor, enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general equitable principles.
(d) No Conflict. Neither the execution and delivery thereof,
nor the consummation of the transactions contemplated thereby, nor compliance
by it with any of the terms and provisions thereof (i) requires any approval of
its stockholders or approval or consent of any trustee or holders of any of its
indebtedness or obligations, (ii) contravenes or will contravene any Applicable
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Participation Agreement
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Laws and Regulations currently in effect applicable to or binding on it (except
no representation or warranty is made as to any Applicable Laws and Regulations
to which it or the Sites, directly or indirectly, may be subject because of the
lines of business or other activities of Lessee) or (iii) results in any breach
of or constitutes any default under, any indenture, mortgage, chattel mortgage,
deed of trust, lease, conditional sales contract, loan or credit arrangement,
other material agreement or instrument, corporate charter, by-laws or other
agreement or instrument to which it is a party or by which it or its properties
may be bound or affected.
(e) Lessor Liens. Each Site is free and clear of all Lessor
Liens attributable to Lessor.
(f) Litigation. There is no action, proceeding or
investigation pending or, to Lessor's knowledge, threatened which questions the
validity of the Operative Documents to which Lessor is or is to be a party or
any action taken or to be taken pursuant to the Operative Documents to which
Lessor is or is to be a party, and there is no action, proceeding or
investigation pending or, to Lessor's knowledge, threatened which, if adversely
determined, would have a Material Adverse Effect.
(g) Use of Proceeds. The Proceeds shall be used solely in
accordance with the terms and provisions of the Operative Documents.
(h) Financial Information. Lessor (i) holds assets other than
the Sites and unrelated to this transaction and (ii) was not created at the
request of Lessee in connection with the transactions contemplated by the
Operative Documents.
(i) ERISA. Lessor is purchasing its interest in the Sites with
assets that are either (i) not assets of any Plan (or its related trust) which
is subject to Title I of ERISA or Section 4975 of the Code; or (ii) assets of
any Plan (or its related trust) which is subject to Title I of ERISA or Section
4975 of the Code, but there is available an exemption from the prohibited
transaction rules under Section 406(a) of ERISA and Section 4975 of the Code and
such exemption is immediately applicable to each transaction contemplated by the
Operative Documents to the extent that any other party to such transaction is a
"party in interest" as defined in Section 3(14) of ERISA with respect to such
plan assets. The representation by Lessor in the preceding sentence is made in
reliance upon and subject to the correctness of the representation by each of
the Lenders in Section 4.2(e).
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SECTION 4.4. Representations and Warranties of Agent. Mellon Bank,
N.A., in its individual capacity, hereby represents and warrants to Lessor and
Lenders as set forth in this Section 4.4.
(a) Organization and Authority. Agent is a national banking
association duly organized and validly existing in good standing under the laws
of the United States of America and has the requisite power and authority to
enter into and perform its obligations under the Operative Documents.
(b) Authorization; Binding Effect. The Operative Documents to
which Agent is or will be a party have been or will be, on the date required to
be delivered hereby, duly authorized, executed and delivered by Agent, and this
Participation Agreement is, and such other Operative Documents are, or, when so
executed and delivered by Agent will be, valid, legal and binding agreements of
Agent, enforceable against Agent in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
(c) Non-Contravention. Neither the execution and delivery by
Agent of the Operative Documents to which it is or will be a party, either in
its individual capacity, as Agent, or both, nor compliance with the terms and
provisions thereof, conflicts with, results in a breach of, constitutes a
default under (with or without the giving of notice or lapse of time or both),
or violates any of the terms, conditions or provisions of: (i) the articles of
organization or by-laws of Agent; (ii) any bond, debenture, note, mortgage,
indenture, agreement, lease or other instrument to which Agent, either in its
individual capacity, as Agent, or both, is now a party or by which it or its
property, either in its individual capacity, as Agent, or both, is bound or
affected, where such conflict, breach, default or violation would be reasonably
likely to materially and adversely affect the ability of Agent, either in its
individual capacity, as Agent or both, to perform its obligations under any
Operative Document to which it is or will be a party, either in its individual
capacity, as Agent, or both; or (iii) any of the terms, conditions or provisions
of any law, rule, regulation, order, injunction or decree of any Authority
applicable to it in its individual capacity, as Agent, or both, where such
conflict, breach, default or violation would be reasonably likely to materially
and adversely affect the ability of Agent, either in its individual capacity, as
Agent or both, to perform its obligations under any Operative Document to which
it is or will be a party.
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Participation Agreement
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(d) Absence of Litigation, etc. There is no litigation
(including derivative actions), arbitration or governmental proceedings pending
or, to the best knowledge of Agent, threatened against it which would be
reasonably likely to adversely affect Agent's ability to perform its obligations
under the Operative Documents to which it is party.
(e) Consents, etc. No authorization, consent, approval,
license or formal exemption from, nor any filing, declaration or registration
with, any Authority, is or will be required in connection with the execution and
delivery by Agent of the Operative Documents to which it is a party or the
performance by Agent of its obligations under such Operative Documents.
ARTICLE V
COVENANTS OF LESSEE
SECTION 5.1. Further Assurances. Lessee, at its own cost and expense,
will cause to be promptly and duly taken, executed, acknowledged and delivered
all such further acts, documents and assurances as any Lender, Lessor or Agent
reasonably may request from time to time in order to carry out more effectively
the intent and purposes of this Agreement and the other Operative Documents and
the Overall Transaction. Lessee, at its own cost and expense, will cause all
financing statements (including precautionary financing statements), fixture
filings and other documents, to be recorded or filed at such places and times in
such manner, and will take all such other actions or cause such actions to be
taken, as may be necessary or as may be reasonably requested by any Lender,
Lessor or Agent in order to establish, preserve, protect and perfect the title
of Lessor to the Sites and Lessor's and Lenders' rights under this Agreement and
the other Operative Documents and to perfect, preserve and protect the first and
prior Lien of the Mortgage on the Collateral. Without limiting the foregoing,
Lessee shall furnish to Lessor and Agent, by the ninetieth day (but not earlier
than the 180th day) prior to the fifth anniversary of the Document Closing Date,
and if the Renewal Term is entered into, by the ninetieth day (but not earlier
than the 180th day) prior to the expiration of the Renewal Term, an opinion of
counsel with respect to the continued perfection of the security interests
created pursuant to the Operative Documents. Lessee will maintain in full force
and effect all Permits. Upon any transfer of the Sites, whether pursuant to any
provision of the Operative Documents (including Article VI of the Lease) or
after the occurrence of a Lease Event of Default or otherwise, Lessee, at its
own cost and expense, will cause to be promptly and duly taken, executed,
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acknowledged and delivered all such further acts, documents and assurances as
any Lender, Lessor or Agent reasonably may request from time to time in order to
cause the Permits to be transferred or reissued in the name of the Person
acquiring the Sites.
SECTION 5.2. Consolidation, Merger, Sale, etc.
(a) Lessee shall not consolidate with any Person, merge with
or into any Person or convey, transfer or lease to any Person (except as
permitted by Section 12.1 of the Lease) all or substantially all of its assets
in any single transaction (or series of related transactions), unless,
immediately after giving effect to such transaction, the conditions set forth in
clauses (i) through (v) shall have been satisfied:
(i) The Person formed by such consolidation with or into which
Lessee shall be merged or the Person which shall acquire by conveyance,
transfer or lease all or substantially all of the assets of Lessee (the
"Surviving Company"), if other than Lessee immediately prior to such
transaction, shall be a corporation that is organized under the laws of
the United States of America, a state thereof or the District of
Columbia;
(ii) the Surviving Company shall be a single purpose,
wholly-owned direct or indirect subsidiary of Genesis, the sole purpose
of which is to enter into (or assume) and perform its obligations under
the transactions contemplated by the Operative Documents and hold its
rights in and to the Sites;
(iii) the Surviving Company, if other than Lessee immediately
prior to such transaction, shall execute and deliver to each of the
parties hereto an agreement, in form and substance reasonably
satisfactory to Lessor and Agent, containing the assumption by the
Surviving Company of the due and punctual payment, performance and
observation of each obligation, covenant and agreement of Lessee under
this Agreement and each other Operative Document to which, immediately
prior to such transaction, Lessee was a party;
(iv) no Lease Payment/Bankruptcy Default or Lease Event of
Default (including as a result of the breach of Section 3 of either of
the Guaranties) shall have occurred and be continuing or would occur as
a result thereof and no Event of Loss shall have occurred or would
occur as a result thereof;
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(v) the title of Lessor to the Sites and Lessor's and Lenders'
rights under this Agreement and the other Operative Documents and the
first and prior Lien of the Mortgage on the Collateral shall not be
adversely affected; and
(vi) Lessee shall have delivered to Agent, on behalf of Lessor
and the Lenders, an Officer's Certificate and an opinion of counsel
reasonably satisfactory to each such Person stating that such
transaction complies with this Section 5.2, that all conditions to the
consummation of such transaction have been fulfilled and that all
Governmental Actions required in connection with such transaction have
been obtained, given or made.
Upon the consummation of such transaction, the Surviving Company, if
other than Lessee immediately prior thereto, shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee immediately
prior to such transaction under this Agreement and each other Operative Document
to which Lessee was a party immediately prior to such transaction, with the same
effect as if the Surviving Company had been named herein and therein.
Notwithstanding the foregoing provisions of this Section 5.2, no conveyance,
transfer or lease of all or substantially all of the assets of Lessee shall
release Lessee from its payment or other obligations under this Agreement or any
other Operative Document without the written consent of Lessor and Agent.
SECTION 5.3. Corporate Existence. Subject to Section 5.2, Lessee shall
at all times maintain its existence as a corporation in good standing under the
laws of the Commonwealth of Pennsylvania and shall use commercially reasonable
efforts to preserve and keep in full force and effect its franchises material to
its business. Lessee shall remain a single purpose corporation, the sole purpose
of which is to enter into and perform its obligations under the transactions
contemplated by the Operative Documents and hold its rights in and to the Sites.
SECTION 5.4. Guaranty. Concurrently with the execution and delivery of
this Agreement, Lessee shall cause the Guarantors to execute and deliver the
Guaranties attached hereto as Exhibit B-1, which guaranties all obligations of
Lessee under the Lease and other Operative Documents, and Exhibit B-2, which
guaranties (subject to certain limitations therein) payment of all amounts
funded by Lessor and Lenders pursuant to the investment of the Equity Amount and
the Financing.
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SECTION 5.5. Liens. Lessee shall not incur, suffer or permit
to exist any Lien on any of the Sites other than Permitted Liens.
SECTION 5.6. Compliance Certificates.
(a) Lease Defaults. Lessee shall furnish, following the
Document Closing Date and until the termination of the Lease, to Lessor, Agent
and each Lender a certificate of Lessee signed by a Responsible Officer of
Lessee promptly after Lessee obtains knowledge that there exists a Lease Default
or Lease Event of Default, which such certificate shall describe such Lease
Default or Lease Event of Default in reasonable detail, with a statement of
Lessee's action with respect thereto taken or proposed to be taken.
(b) Annual Certificates. Within 90 days after the close of
each fiscal year, Lessee shall deliver to Lessor, Agent and each Lender a
certificate of Lessee signed by a Responsible Officer of Lessee to the effect
that the signer is familiar with or has reviewed the relevant terms of this
Agreement, the Lease and each other Operative Document to which Lessee is a
party and has made, or caused to be made under his or her supervision, a review
of the transactions contemplated hereby and thereby and the condition of the
Sites during the preceding fiscal year, and that such review has not disclosed
the existence during such fiscal year of any condition or event which
constitutes a Lease Event of Default, an Event of Loss, Condemnation (except as
described therein) or Casualty (except as described therein), nor does the
signer have knowledge, after due inquiry, of the existence as of the date of
such certificate, of any condition or event which constitutes a Lease Default, a
Lease Event of Default, an Event of Loss, Condemnation or Casualty or, if any
such condition or event existed or exists, specifying the nature and period of
existence thereof and what action Lessee has taken or is taking or proposes to
take with respect thereto.
SECTION 5.7. Change of Name or Address. Lessee shall provide Lessor,
each Lender and Agent thirty (30) days prior written notice of (i) any change in
name, identity or corporate structure or the address of its chief executive
office and principal place of business or the office where it keeps its records
concerning its accounts and the Sites, or (ii) any change with respect to its
places of business whereby it will thereafter have a place of business in only
one county in the Commonwealth of Pennsylvania or will thereafter have no place
of business in the Commonwealth of Pennsylvania.
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SECTION 5.8. Environmental Matters. (a) Lessee shall comply at all
times with all Applicable Laws and Regulations affecting a Site, the
non-compliance of which would have a Material Adverse Effect on such Site and
shall maintain at any Site only such minimum quantities of Hazardous Materials,
if any, as are necessary for the operation of any Site or held for resale by
Lessee, and in all events, such Hazardous Materials shall be held in compliance
with all Applicable Laws and Regulations; (b) Lessee shall not cause or permit
the installation of any underground storage tanks at any Site; and (c) Lessee
shall maintain and comply with appropriate and customary written operations and
maintenance plans (including, without limitation, for asbestos-containing
materials) for the Sites.
SECTION 5.9. Investigation by Authorities. Lessee shall deliver to
Lessor, each Lender and to Agent promptly upon Lessee's receiving written notice
of the intent by any Authority to (x) take an action which would constitute a
Condemnation or an Event of Taking, (y) investigate any Site for a material
violation of any Applicable Laws and Regulations on or at such Site, including
any Environmental Law, under which liability may be imposed upon Lessor, any
Lender or Agent or under which liability having a Material Adverse Effect may be
imposed on Lessee or (z) investigate any Site (other than routine fire,
life-safety and similar inspections) for any violation of Applicable Laws and
Regulations under which criminal liability may be imposed upon Lessor, any
Lender or Agent or under which liability having a Material Adverse Effect may be
imposed on Lessee.
SECTION 5.10. Financial and Other Information. Lessee shall deliver to
Agent, with sufficient counterpart originals for Agent to distribute to Lessor
and each Lender, the following financial and other information:
(a) Audited Statements. As soon as practicable, and in any
event within ninety (90) days after the close of each fiscal year of Lessee, a
consolidated balance sheet of Genesis and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of,
operations, cash flows and changes in stockholders' equity for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year. Such statements shall be accompanied by an opinion of KPMG Peat
Marwick or other certified public accountants of nationally recognized standing
selected by Lessee and satisfactory to Agent. Such opinion shall be without
qualifications that are of "going concern" or like nature or that relate to a
limited scope of examination. Such opinion in any event shall contain a written
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statement of such accountants substantially to the effect that (i) such
accountants examined such financial statements in accordance with generally
accepted auditing standards and accordingly made such tests of accounting
records and such other auditing procedures as such accountants considered
necessary under the circumstances and (ii) in the opinion of such accountants
such financial statements present fairly the financial position of Genesis and
its Consolidated Subsidiaries as of the end of such fiscal year and the results
of their operations and their cash flows and changes in stockholders' equity for
such fiscal year, in conformity with GAAP.
(b) Quarterly Statements. As soon as practicable, and in any
event within forty-five (45) days after the close of each of the first three
fiscal quarters of each fiscal year of Genesis, the consolidated balance sheet
of Genesis and its Consolidated Subsidiaries as of the end of such quarter and
the related consolidated statement of operations and cash flows of Genesis and
its Consolidated Subsidiaries for the portion of Lessee's fiscal year ended at
the end of such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter of, and the corresponding portion of
Genesis's preceding fiscal year, all certified (subject, in the case of such
quarterly financial statements, to normal year-end auditing adjustments) by a
Responsible Officer of Genesis as to fairness of presentation and preparation in
accordance with GAAP applied on a basis consistent with those used in preparing
the financial statements referred to in Section 5.10(a) hereof (subject to such
changes in accounting principles as shall be described in such certificate and
shall have been approved in writing attached to such certificate by Genesis's
independent accountants);
(c) Compliance Certificates. As soon as practicable, and in
any event within forty-five (45) days after the close of each of the first three
fiscal quarters of each fiscal year of Genesis and ninety (90) days after the
close of each fiscal year of Genesis, a compliance certificate for Genesis and
its Consolidated Subsidiaries. Such certificates shall be certified by a
Responsible Officer of Genesis as presenting fairly the compliance of Genesis
and each Subsidiary with the Financial Covenants as of the end of such fiscal
quarter for the year to date or fiscal year, as the case may be, in conformity
with GAAP (exclusive of principles of consolidation), subject (in the case of
quarterly reports) to normal and recurring year-end audit adjustments.
(d) Shareholder Mailings. Promptly upon the mailing thereof
to the shareholders of Genesis generally, copies of all financial statements,
reports and proxy statements so mailed;
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(e) Supplemental Environmental Information. Promptly upon
receipt thereof, copies of all environmental audits and updates regarding the
environmental condition of any of the Sites; and
(f) Genesis's Funded Debt/Cash Flow Ratio. Lessee shall
deliver to Agent within forty-five (45) Business Days after the end of each
fiscal quarter (including the fourth fiscal quarter) an Officer's Certificate of
Genesis setting forth Genesis's Funded Debt/Cash Flow Ratio (as defined in the
definition of Applicable Margin) as of the last day of the immediately preceding
fiscal quarter of Genesis and setting forth in reasonable detail the manner in
which such ratio was calculated and any other related information requested by
Agent; provided that if at any time Lessee shall fail to deliver such Officer's
Certificate on or before the date such information is required to be delivered,
then for purposes of Section 2.7 of the Loan Agreement, Genesis's Funded
Debt/Cash Flow Ratio shall be deemed to be greater than 4.5 for the applicable
Interest Period(s); and provided, further, that if, when delivered, such
Officer's Certificate sets forth a Funded Debt/Cash Flow Ratio which is less
than that determined in accordance with the foregoing proviso, the amounts
calculated under said Section 2.7 using such deemed Funded Debt/Cash Flow Ratio
shall be revised as of the next fiscal quarter using Genesis's actual Funded
Debt/Cash Flow Ratio for such Interest Period(s), except to the extent that the
Officer's Certificate for such subsequent fiscal quarter shall indicate a change
in the Funded Debt/Cash Flow Ratio from that set forth in the delinquent
Officer's Certificate.
(g) Other. With reasonable promptness, unless disclosure
thereof is prohibited by Applicable Laws and Regulations and subject to
appropriate confidentiality undertakings with respect thereto, such other data
and information (financial or otherwise) which is either maintained in the
ordinary course of Lessee's business or can be obtained or derived without undue
burden to Lessee as to the business of Lessee or as to any Site as from time to
time may be reasonably requested in writing by Agent after a Lease Default or
Lease Event of Default shall have occurred and be continuing.
SECTION 5.11. Securities. Lessee shall not, nor shall it permit anyone
authorized to act on its behalf to, take any action which would subject the
issuance or sale of the Notes, any Site or the Lease, or in any security or
lease the offering of which, for purposes of the Securities Act or any state
securities laws, would be deemed to be part of the same offering as the offering
of the aforementioned securities or leases to the registration requirements of
Section 5 of the Securities Act or any state securities laws.
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SECTION 5.12. Interest Rates. With respect to each
determination of an interest rate pursuant to the Loan Agreement,
Lessee agrees to be bound by Section 2.7 of the Loan Agreement.
SECTION 5.13. Appraisals. Lessee will pay all costs of any Appraisal of
any or all of the Sites which Agent may from time to time require; provided,
however, that Lessee shall only be obligated to pay for appraisals of any Site
once every three years and at any time while a Lease Event of Default shall have
occurred and is continuing; and provided, further, that prior to the occurrence
of a Lease Event of Default, Agent will not require an Appraisal the costs of
which are payable by Lessee under this Section 5.13 unless the Agent, in its
reasonable judgment, determines that such an Appraisal is necessary based upon
the Agent's concern regarding the diminution in value of the applicable Site or
based upon bank regulatory requirements.
SECTION 5.14. Environmental Audits. For each Site, Lessee will deliver
to Agent, upon Agent's request, but not more often than annually, or at any time
upon request while a Lease Event of Default shall have occurred and is
continuing, an Environmental Audit in form and substance satisfactory to Agent,
which (with Agent's consent) may be updates of previously furnished
Environmental Audits; provided, that prior to the occurrence of a Lease Event of
Default, Agent will not require an Environmental Audit under this Section 5.14
unless the Agent, in its reasonable judgment, determines that such an
Environmental Audit is necessary based upon the Agent's concern regarding the
environmental condition of the applicable Site or based upon bank regulatory
requirements. If Lessee shall fail to so deliver any such Environmental Audit,
Agent may obtain such an Environmental Audit and Lessee will pay all reasonable
costs and expenses thereof.
SECTION 5.15. Additional Compensation in Certain
Circumstances.
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves,
Capital Adequacy Requirements, Expenses, Etc. If any Applicable Laws and
Regulations or guideline or interpretation or application thereof by any
Authority charged with the interpretation or administration thereof or
compliance with any request or directive of any Authority (whether or not having
the force of Applicable Laws and Regulations) now existing or hereafter adopted:
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(i) subjects Lessor or any LIBOR Office to any tax or changes
the basis of taxation with respect to this Participation Agreement, the
Lease, the Notes, the Loans or payments by the Lessee or Genesis of
Basic Rent, the Lease Balance, principal, interest, commitment fee or
other amounts due from any such party hereunder or under the Lease
(except for taxes on the overall net income or overall gross receipts
of Lessor or such LIBOR Office imposed by the jurisdictions (federal,
state and local) in which Lessor's principal office or LIBOR Office is
located),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend
credit extended by, assets (funded or contingent) of, deposits with or
for the account of, or other acquisitions of funds by, Lessor or any
LIBOR Office (other than requirements expressly included herein in the
determination of the LIBO Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
Lessor or any LIBOR Office, or (B) otherwise applicable to the
obligations of Lessor or any LIBOR Office under this Participation
Agreement, the Lease or any of the other Operative Documents, or
(iv) imposes upon any Lender or any LIBOR Office any other
condition or expense with respect to this Participation Agreement, the
Lease, the Notes or any of the other Operative Documents or its making,
maintenance or funding of any Loan or any security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender, any LIBOR Office or, in the case of clause (iii) hereof, any Person
controlling a Lender, with respect to this Agreement, the Notes or the issuance,
making, maintenance or funding of any Loan (or, in the case of any capital
adequacy or similar requirement, to have the effect of reducing the rate of
return on such Lender's or such controlling Person's capital, taking into
consideration Lessor's or such controlling Person's policies with respect to
capital adequacy) by an amount which Lessor deems to be material (Lessor being
deemed for this purpose to have made, maintained or funded each portion of the
Equity Amount bearing interest based upon LIBO Rate from a Corresponding Source
of Funds), Lessor may from time to time notify the Agent and Lessee, of the
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amount determined in good faith (using any averaging and attribution methods) by
Lessor (which determination shall be conclusive) to be necessary to compensate
Lessor or such LIBOR Office for such increase, reduction or imposition. Such
amount shall be due and payable by Lessee to Lessor 30 days after such notice is
given, together with an amount equal to interest on such amount from the date
two Business Days after the date demanded until such due date at the Prime Rate
plus the Applicable Margin (calculated on the basis of a year of 360 days and
actual days elapsed). A certificate by Lessor as to the amount due and payable
under this Section 5.15(a) from time to time and the method of calculating such
amount shall be conclusive.
(b) Funding Breakage. In addition to all other amounts payable
hereunder, if and to the extent for any reason any part of any portion of the
Equity Amount bearing Yield based upon the LIBO Rate becomes due (by
acceleration or otherwise), or is paid, prepaid or converted to Equity Amount
bearing Yield based upon the Prime Rate (whether or not such payment, prepayment
or conversion is mandatory or automatic and whether or not such payment or
prepayment is then due), on a day other than the last day of the corresponding
LIBO Period, Lessee shall pay Lessor an amount determined as provided below in
this Section 5.15(b).
Furthermore, in addition to all other amounts payable hereunder, if
Standard Notice has been given for the conversion to or renewal of any portion
of the Equity Amount to Equity Amount bearing Yield based upon the LIBO Rate or
for the making of any Advance which shall bear Yield based upon the LIBO Rate or
for the selection of a LIBO Period for any Equity Amount bearing Yield based
upon the LIBO Rate shall be applicable in whole or in part and (x) Lessee
attempts to revoke (expressly, by later inconsistent notices or otherwise) such
Standard Notice or (y) (A) an applicable condition precedent is not satisfied
and (B) such conversion or renewal does not take place as specified in such
Standard Notice or (z) (A) an applicable condition precedent is not satisfied
and (B) the portion of such Advance to bear Yield based upon the LIBO Rate is
not made as specified in such Standard Notice, then in each case Lessee shall
pay Lessor an amount determined as provided below in this Section 5.15(b) if
Lessor has delivered to Lessee and the Agent a certificate stating that Lessor
has incurred costs as a result of the events described in this sentence.
"Funding Breakage Date" shall mean, in a case described in the first
sentence of this Section 5.15(b), the date that any part of any Equity Amount
bearing Yield based upon the LIBO Rate becomes due, or is paid, prepaid or
converted, as described in such sentence, or in a case described in the
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second sentence of this Section 5.15(b), the date for the conversion to or
renewal of Equity Amount bearing Yield based upon the LIBO Rate, or for the
making of a Advance, specified in the Standard Notice described in such
sentence. In a case described in the first sentence of this Section 5.15(b),
"Adjusted Contract Rate" for a particular amount of Equity Amount shall mean the
rate of Yield (including the Applicable Margin) applicable to such amount on the
Funding Breakage Date, less the Applicable Margin, and in a case described in
the second sentence of this Section 5.15(b), "Adjusted Contract Rate" for a
particular principal amount of to-be-made Advances shall mean the rate of Yield
(including the Applicable Margin) which would have applied to such amount on the
Funding Breakage Date absent the failure to renew, convert or borrow, less the
Applicable Margin. "Redeployment Rate" shall mean (x) so long as no
determination by Lessor described in Section 2.11 of the Loan Agreement (mutadis
mutandis) is then applicable, a Yield rate per annum equal to the LIBO Rate
(without the Applicable Margin) determined by the Agent for the applicable
amount using as the LIBO Period a period as equal as practicable to the
Redeployment Period (as hereinafter defined) or (y) if any determination by
Lessor described in Section 2.11 of the Loan Agreement (mutadis mutandis) is
then applicable, a Yield rate per annum equal to the Treasury Rate, in each case
as of or as soon as practicable after the Funding Breakage Date. In each case,
the amount determined as being payable pursuant to this Section 5.15(b) may be
referred to as the "Funding Breakage Indemnity." The calculation of the Adjusted
Contract Rate and the Redeployment Rate shall be made on the assumption that the
LIBO Rate Reserve Percentage shall remain constant throughout the applicable
LIBO Period; in the event that such assumption proves to be inaccurate and
Lessor would have received greater indemnification absent such assumption, then
Lessor shall be entitled to receive such additional indemnification on demand.
The Agent shall calculate Lessor's Funding Breakage Indemnity
as follows:
(i) For each portion of the Equity Amount owing to Lessor
which so became due, or which was so paid, prepaid or converted, or as
to which such Equity Amount were to have been renewed or converted to
Equity Amount bearing Yield based upon the LIBO Rate, or which was to
be disbursed (to the extent applicable to such to-be-borrowed
Advances), the Agent shall calculate the product (the "Future Value
Amount") of
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(1) the amount of such portions of the Equity
Amount
multiplied by
(2) the greater of
(x) zero or
(y) the Adjusted Contract Rate minus the
Redeployment Rate, in each case for such amount,
multiplied by
(3) the number of days from and including the Funding
Breakage Date to but not including the last day of such LIBO
Period (or scheduled LIBO Period in the case of a failure to
renew, convert or borrow) (the "Redeployment Period"), divided
by 360.
(ii) The Agent shall then determine the present value as of the
Funding Breakage Date (discounted at the Treasury Rate as of such
Funding Breakage Date, and calculated on the basis of a year of 365 or
366 days, as the case may be, and the actual number of days in the
Redeployment Period) (each a "Present Value Amount") of each Future
Value Amount (assuming for this purpose that each Future Value Amount
is payable on the last day of the corresponding Funding Period (or
scheduled Funding Period in the case of a failure to renew, convert or
borrow)).
(iii) The Agent finally shall total Lessor's Present Value Amounts
for all of its affected portions of the Loans, and this total shall be
the amount of the Funding Breakage Indemnity to be paid by Lessee to
Lessor.
Such Funding Breakage Indemnity shall be due and payable on demand. In addition,
Lessee shall, on the due date for payment of any Funding Breakage Indemnity, pay
to Lessor an additional amount equal to interest on such Funding Breakage
Indemnity from the Funding Breakage Date to but not including such due date at
the Prime Rate plus the Applicable Margin (calculated on the basis of a year of
360 days and actual days elapsed). The amount payable to Lessor under this
Section 5.15(b) shall be determined in good faith by the Agent, and such
determination shall be conclusive.
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ARTICLE VI
OTHER COVENANTS AND AGREEMENTS
SECTION 6.1. Cooperation with Lessee. Lessor, Agent and each Lender
shall, to the extent reasonably requested by Lessee (but without assuming
additional liability on account thereof), at Lessee's expense, cooperate to
allow Lessee to (a) perform its covenants contained in Section 5.1, including at
any time and from time to time, upon the reasonable request of Lessee, to
promptly and duly execute and deliver any and all such further instruments,
documents and financing statements (and continuation statements related thereto)
as Lessee may request in order to perform such covenants and (b) further
Lessee's requirements as lessee of the Sites, including to file any statement
with respect to any tax abatements or other requirements.
SECTION 6.2. Covenants of Lessor and Lenders.
(a) Discharge of Liens. Lessor covenants that it will not
create or permit to exist at any time, and will, at its own cost and expense,
promptly (and in any event, within 90 days) take such action as may be necessary
duly to discharge, or to cause to be discharged, all Lessor Liens attributable
to it unrelated to the transactions contemplated by the Operative Documents.
Notwithstanding the foregoing, Lessor shall not be required to so discharge any
such Lessor Lien while the same is being contested in good faith by appropriate
proceedings diligently prosecuted so long as such proceedings shall not involve
any meaningful danger of the impairment of the Lien of the Mortgages or of the
sale, forfeiture or loss of, and shall not interfere with the use or disposition
of, any part of the Sites or the Lease or title thereto or any interest therein
or the payment of Rent; provided, however, that Lessor shall discharge or bond
over any such Lessor Lien attributable to it unrelated to the transactions
contemplated by the Operative Documents, whether or not subject to contest as
provided above, upon the purchase of any Site by Lessee pursuant to the Lease.
(b) Change of Principal Place of Business. Lessor shall give
prompt notice to Lessee and Agent, if Lessor's principal place of business or
chief executive office, or the office where the records concerning the accounts
or contract rights relating to the Sites or the Overall Transaction are kept,
shall cease to be located at One Mellon Bank Center, Rm 151-4444, Pittsburgh, PA
15258-0001, Attention: Leasing Group or if it shall change its name or identity.
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(c) Loan Agreement. As between Lessor and Lessee, Lessor and
each Lender hereby agree that, so long as the Lease is in effect, Lessor shall
not consent to or permit any amendment of the terms and provisions of the Loan
Agreement, the Mortgages or any Note, whether or not any Lease Event of Default
shall have occurred and be continuing, if any such amendment or action would
have the effect of increasing the obligations of Lessee or decreasing the rights
of Lessee, in each case without the prior written consent of Lessee, except that
without such consent, Lessor may waive performance by Agent of obligations to
Lessor the non-performance of which does not materially adversely affect Lessee.
(d) Depreciation. From the date hereof unless and until
Lessor's interest in the Sites is unencumbered by the Lease, neither Lessor nor
any Lender shall claim any federal or state tax attributes or benefits
(including depreciation) relating to the Sites unless required to do so by an
appropriate taxing authority or after a clearly applicable change in Applicable
Laws and Regulations or as a protective response to a proposed adjustment by an
Authority; provided, however, that if an appropriate taxing authority shall
require Lessor to claim any such federal or state tax attributes or benefits,
such Person shall promptly notify Lessee thereof and shall permit Lessee to
contest such requirement in a manner similar to the contest rights provided in,
and subject to any applicable limitation to a contest contained in, Section
7.2(b) hereof.
(e) Transfer by Lessor. Lessor shall not transfer its interest
in the Sites (other than a transfer pursuant to the provisions of the Operative
Documents) without the consent of Agent and, so long as no Lease Event of
Default shall have occurred and be continuing, Lessee, each such consent not to
be unreasonably withheld. The foregoing limitation shall not be applicable to
the transfer of any stock or other ownership interests in Lessor, nor of any
assets of Lessor other than its rights in the Sites.
(f) No Voluntary Bankruptcy. Lessor shall not (i) commence any
case, proceeding or other action under any existing or future law of any
jurisdiction (domestic or foreign) relating to bankruptcy, insolvency,
reorganization, arrangement, winding up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial benefit of its creditors.
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Participation Agreement
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SECTION 6.3. Restrictions on and Effect of Transfer by any Lender. No
Lender shall assign, convey or otherwise transfer (including pursuant to a
participation) all or any portion of its right, title or interest in, to or
under any of the Operative Documents or any Note, unless the provisions of this
Section 6.3 are satisfied. With respect to any assignment, conveyance or other
transfer, other than a loan participation, the conditions set forth in clauses
(a) through (g) of this Section 6.3 are applicable. With respect to any loan
participation, the conditions set forth in Section 6.4 shall be applicable.
(a) Required Notice and Effective Date. Any Lender desiring to
effect a transfer of its interest shall give written notice of each
such proposed transfer to Lessee and Agent at least ten (10) Business
Days prior to such proposed transfer (other than with respect to
transfers of a Lender's interest on the Document Closing Date, notice
of which may be given on the Document Closing Date), setting forth the
name of such proposed transferee, the percentage or interest to be
retained by such Lender, if any, and the date on which such transfer is
proposed to become effective. All reasonable out-of-pocket costs
incurred by Agent and Lessor in connection with any such disposition by
a Lender under this Section 6.3 shall be borne by such Lender. In the
event of a transfer under this Section 6.3, any expenses incurred by
the transferee in connection with its review of the Operative Documents
and its investigation of the transactions contemplated thereby shall be
borne by such transferee or the relevant Lender, as they may determine,
but shall not be considered costs and expenses which Lessee is
obligated to pay or reimburse under Section 9.9.
(b) Required Consent; Securities Laws. No Lender may make any
such assignment, conveyance or transfer unless (i) Lessee and Agent
shall have consented to the transfer and the transferee, such consents
not to be unreasonably withheld, and (ii) the applicable Lender and
transferee shall have complied with all applicable securities laws with
respect to such transfer.
(c) Employee Benefit Plans. No Lender may make any such
assignment, conveyance or transfer to or in connection with any
arrangement or understanding in any way involving any employee benefit
plan (or its related trust), as defined in Section 3(3) of ERISA, or
with the assets of any such plan (or its related trust), as defined in
Section 4975(e)(1) of the Code (other than a governmental plan, as
defined in Section 3(32) of ERISA), with respect to which Lessee or
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Participation Agreement
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such Lender or any of their Affiliates is a party in interest within
the meaning of ERISA or a "disqualified person" within the meaning of
the Code.
(d) Representations and Warranties. Notwithstanding anything
to the contrary set forth above, no Lender may assign, convey or
transfer its interest to any Person, unless such Person shall have
delivered to Agent and Lessee a certificate confirming the accuracy of
the representations and warranties set forth in Section 4.2 with
respect to such Person (other than as such representation or warranty
relates to the execution and delivery of Operative Documents).
(e) [Intentionally Omitted.]
(f) Assumption of Obligations. Upon satisfaction of all
applicable conditions set forth in this Section 6.3 and the
consummation of the transfer (other than a loan participation), the
obligations of the transferring Lender under the Operative Documents
shall be proportionately released and reduced to the extent of such
transfer. Upon any such transfer as above provided, the transferee
shall be deemed to be bound by all obligations (whether or not yet
accrued) under, and to have become a party to, all Operative Documents
to which its transferor was a party, shall be deemed the pertinent
"Lender" for all purposes of the Operative Documents and shall be
deemed to have made that portion of the payments pursuant to this
Agreement previously made or deemed to have been made by the transferor
represented by the interest being conveyed; and each reference herein
and in the other Operative Documents to the pertinent "Lender" shall
thereafter be deemed a reference to the transferee, to the extent of
such transfer, for all purposes. Upon any such transfer, Agent shall
deliver to Lessor and Lessee new Schedules I and II to this
Participation Agreement, revised to reflect the relevant information
for such new Lender and the Commitment of such new Lender (and the
revised Commitment of the transferor Lender if it shall not have
transferred its entire interest).
(g) Affidavit. If a new Note is to be issued upon transfer,
the transferring Lender shall have the transferee and Lessor execute an
affidavit to the Note, affirming that the Note was executed and
delivered outside of the State of Florida.
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Participation Agreement
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(h) Effect. From and after any transfer of its Notes in
accordance with this Section 6.3 (other than a loan participation) the
transferring Lender shall be released, to the extent assumed by the
transferee, from its liability and obligations hereunder and under the
other Operative Documents relating to the Sites to which such
transferor is a party in respect of obligations to be performed on or
after the date of such transfer. Upon any transfer by a Lender as above
provided, any such transferee shall be deemed a "Lender" for all
purposes of such documents and each reference herein to a Lender shall
thereafter be deemed a reference to such transferee for all purposes,
except as the context may otherwise require. Notwithstanding any
transfer as provided in this Section 6.3, the transferor shall be
entitled to all benefits accrued and all rights vested prior to such
transfer, including rights to indemnification under this Agreement or
any other Operative Document.
(i) Documentation; Agent's Fee. Each such transfer (including,
without limitation, a loan participation) shall be subject to the
requirement that (i) the transferee (or loan participant, as
applicable) shall have executed and delivered to Agent, Lessee and
Lessor a letter in substantially the form of the Investor's Letter
attached hereto as Exhibit G, and (ii) the applicable Lender and
transferee shall have executed and delivered such other documents,
certificates and opinions of counsel which Lessee or Agent shall
reasonably request to confirm the satisfaction of the conditions of
this Section 6.3. The applicable Lender or transferee shall pay to
Agent for each transfer: (i) a fee of $3,000, and (ii) the reasonable
fees and expenses of counsel to Agent. The obligations of the
applicable Lender and the transferee under the immediately preceding
sentence shall be joint and several.
SECTION 6.4. Covenants and Agreements of Lenders.
(a) Participations. Each Lender covenants and agrees that it
will not grant participations in its Notes to any Person (a "Loan Participant")
unless the conditions of clauses (a) through (g) and clause (i) of Section 6.3
shall have been satisfied. In the event of any such sale by a Lender of a
participating interest to a Loan Participant, such Lender's obligations under
this Agreement and under the other Operative Documents shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of its Note for all purposes under this Agreement
and under the other Operative Documents, and Lessor, Agent and, except as set
forth in Section 6.4(b), Lessee shall continue to deal solely and directly with
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Participation Agreement
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such Lender in connection with such Lender's rights and obligations under this
Agreement and under the other Operative Documents. Notwithstanding any such loan
participation, no Loan Participant shall have any right to vote with respect to
the transactions contemplated by the Operative Documents other than with respect
to changes in principal amount of the Note in which such Loan Participant has a
participation, the interest rate payable under such Note and the stated maturity
date of such Note.
(b) Transferee Indemnities. Each Loan Participant shall be
entitled to the benefits of Sections 2.11 and 2.12 of the Loan Agreement with
respect to its Notes or participation in the Loans outstanding from time to
time; provided, that no Loan Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the Notes or participation
transferred by such transferor Lender to such Loan Participant had no such
transfer or participation occurred.
SECTION 6.5. Future Lenders. Each Lender, by its acceptance of its Note
or Notes, shall be deemed to be bound by and, upon compliance with the
requirements of Section 6.4, will be entitled to all of the benefits of the
provisions of this Agreement.
SECTION 6.6. Agent under Participation Agreement and Mortgages. For
purposes of this Agreement and the Mortgages, the parties hereto agree that
Agent shall be the agent of the Lenders, with Agent's duties and obligations
hereunder and thereunder being subject to the limitations, and Agent being
entitled to the rights, set forth in Article VII of the Loan Agreement. The
foregoing provisions of this Section 6.6 shall not limit the provisions of
Article 8 of this Participation Agreement or the rights and obligations of Agent
as Agent for all of the Participants pursuant to said Article 8.
SECTION 6.7. Syndication by Agent. Lessee acknowledges that promptly
after the Document Closing Date, Agent expects, but shall not be required to,
syndicate the Notes to the lenders under the Credit Agreement or others, and
Lessee shall cooperate, and, on a timely basis, shall cause the Guarantors to
cooperate, with Agent and take, or cause to be taken, all actions and execute
and deliver, or cause to be executed and delivered, all agreements, documents,
certificates, opinions of counsel and other materials reasonably requested by
Agent in connection therewith.
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Participation Agreement
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SECTION 6.8. Prepayment by Lessor. Except as expressly permitted by the
Operative Documents, each Lender acknowledges and agrees that Lessor may not
voluntarily prepay the Notes, or any part thereof, without the written consent
of Lessee; provided, however, that Lessor may prepay, or cause to be prepaid,
all or any portion of the Notes at any time during the continuance of a Lease
Event of Default.
SECTION 6.9. Foreclosure against Lessor. If Lessor's interest in the
Sites is foreclosed by reason of a Loan Event of Default while no Lease Event of
Default shall have occurred and be continuing, Lessee shall not be responsible
for any costs or expenses incurred by Agent in connection with such foreclosure
or as a result thereof.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. General Indemnification. Lessee agrees, whether or not any
of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and keep harmless on an
after-tax basis (in accordance with Section 7.5) each Indemnitee 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, negligent or
otherwise, 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 Document Closing Date or after
the Lease Termination Date, in any way relating to or arising out of (a) any of
the Operative Documents or any of the transactions contemplated thereby or any
investigation, litigation or proceeding in connection therewith, and any
amendment, modification or waiver in respect thereof; or (b) any Site or any
part thereof or interest therein; or (c) the acquisition, mortgaging, design,
preparation, installation, inspection, delivery, non-delivery, acceptance,
rejection, purchase, ownership, possession, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition or
substitution, storage, transfer or title, redelivery, use, financing,
refinancing, operation, condition, sale (including any sale pursuant to Section
6.3 of the Lease or any sale pursuant to Article XVIII of the Lease), return or
other disposition of all or any part of any interest in the Sites or the
imposition of any Lien (or incurrence of any liability to refund or pay over any
amount as a result of any Lien) thereon, including, without limitation: (i)
Claims or penalties arising from any violation of law, including Applicable Laws
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Participation Agreement
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and Regulations, or in tort (strict liability or otherwise), (ii) loss of or
damage to the environment (including investigation costs, clean-up costs,
response costs, remediation and removal costs, costs of corrective action, costs
of financial assurance, and all other damages, costs, fees and expenses, fines
and penalties, including 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 Environmental Laws, (iii) latent or other defects, whether or not
discoverable by Lessee or any Indemnitee, (iv) any Claims resulting from the
existence or Release of any Hazardous Materials at or from any Site and (v) any
Claim for patent, trademark, tradename or copyright infringement, provided that
the matters in this clause (c) shall be without duplication of any matter for
which indemnification is provided pursuant to the Environmental Indemnity; (d)
the offer, issuance, sale or delivery of the Notes; (e) the breach or alleged
breach by Lessee of any representation or warranty, covenant or agreement made
by it or deemed made by it in any Operative Document; (f) the transactions
contemplated hereby 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 or (g) any other
agreement entered into or assumed by Lessee in connection with any Site
(including, in each case, matters based on or arising from the negligence of any
Indemnitee).
Lessee shall not be required to indemnify under this Section 7.1 for
(1) as to an Indemnitee, any Claim to the extent resulting from the willful
misconduct or gross negligence of such Indemnitee, as determined by a court of
competent jurisdiction or to the extent resulting from the breach of
representations, warranties or covenants of such Indemnitee (including, in the
case of clause (f) of this Section 7.1, the representation of such Lender set
forth in Section 4.2(e) and the covenant of such Lender set forth in Section
6.3(c)), (2) any Claims in respect of Taxes (such Claims to be subject to
Section 7.2), other than a payment necessary to make payments under this Section
7.1 on an after-tax basis, provided, that this clause (2) does not apply to any
taxes or penalties included in Claims against which the Indemnitee is provided
an indemnification under clause (f) of this Section 7.1 and (3) as to an
Indemnitee, any Claim resulting from Lessor Liens which such Indemnitee is
responsible for discharging under the Operative Documents. In the event that the
indemnification provided for herein is prohibited by Applicable Laws and
Regulations, Lessee will contribute to a Claim to the maximum extent permitted
by law.
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Participation Agreement
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SECTION 7.2. General Tax Indemnity.
(a) Tax Indemnity. Lessee shall pay, defend and, on written
demand, indemnify and hold each Indemnitee harmless (on an after-tax basis in
accordance with Section 7.5) from and against, any and all Taxes, howsoever
imposed, on or with respect to any Indemnitee, the Sites or any portion thereof,
any Operative Document or Lessee or any sublessee or user of a Site by any
Authority in connection with or in any way relating to (i) the acquisition,
mortgaging, design, preparation, installation, inspection, delivery,
non-delivery, acceptance, rejection, purchase, ownership, possession, rental,
lease, sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, operation, condition, sale, return or other application
or disposition of all or any part of the Sites or the imposition of any Lien (or
incurrence of any liability to refund or pay over any amount as a result of any
Lien) thereon, (ii) Basic Rent or Supplemental Rent or the receipts or earnings
arising from or received with respect to the Sites or any part thereof, or any
interest therein or any applications or dispositions thereof, (iii) any other
amount paid or payable pursuant to the Notes or any other Operative Documents,
(iv) the Sites or any part thereof or any interest therein, (v) all or any of
the Operative Documents, any other documents contemplated thereby and any
amendments and supplements thereto, and (vi) otherwise with respect to or in
connection with the transactions contemplated by the Operative Documents;
provided, however, that the indemnification obligation of this Section 7.2(a)
shall not apply to (i) Taxes which are based upon or measured by the
Indemnitee's net income (including taxes based on minimum taxes or capital
gains), or which are expressly in substitution for, or relieve Indemnitee from,
any actual Tax based upon or measured by Indemnitee's net income; (ii) any Tax
or imposition to the extent, but only to such extent, it relates to any act,
event or omission that occurs after the termination of the Lease and the
discharge of all of Lessee's obligations under the Operative Documents which
were matured at the time of such termination (but not any Tax or imposition that
relates to any period prior to the discharge of all of Lessee's obligations
under the Operative Documents which were matured at the time of such
termination) unless such termination is the result of a Lease Event of Default
or the Site has been transferred to Lessee; (iii) any interest or penalties
imposed on an Indemnitee as a result of the failure of such Indemnitee to comply
with its obligations set forth in Section 7.2(d) unless such failure results
from the failure of Lessee to comply with its obligations set forth in Section
7.2(d); (iv) any Taxes which are imposed on an Indemnitee as a result of a
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Participation Agreement
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breach of a covenant or representation by such Indemnitee in any Operative
Document (unless caused by the Lessee's breach of its representation, warranties
or covenants) or is a result of the gross negligence or willful misconduct of
such Indemnitee itself (as opposed to gross negligence or willful misconduct
imputed to such Indemnitee), but not Taxes imposed as a result of ordinary
negligence of such Indemnitee; (v) Taxes based upon the voluntary transfer,
assignment or disposition by Agent, Lessor or any Lender of any interest in any
of the Sites (other than a transfer pursuant to the exercise of remedies under
the Operative Documents, transfers pursuant to the exercise of the Sale Option
or Purchase Option, a transfer to Lessee or otherwise pursuant to the Lease) or
any involuntary transfer of any interest in any of the Sites resulting from the
bankruptcy or insolvency of the Agent, Lessor or any Lender (other than in
connection with the existence of a Lease Event of Default or a Credit Agreement
Event of Default); (vi) any gift, inheritance, franchise or estate Taxes (vii)
taxes and impositions that are imposed by any state or local jurisdiction or
taxing authority within any state or local jurisdiction and that are based upon
or measured by the net income or net receipts (including any minimum taxes,
withholding taxes or taxes on or measured by capital, net worth, excess profits
or items of tax preference or taxes that are capital stock, franchise or doing
business taxes); (viii) any Tax or imposition for so long as, but only for so
long as, it is being contested in accordance with the provisions of the
Participation Agreement; (ix) any Taxes or impositions that are enacted or
adopted by their express terms as a substitute for any Tax that would not have
been indemnified against pursuant to the terms of Section 7.2(a) of the
Participation Agreement; (x) any Taxes or impositions to the extent that such
Taxes are actually reimbursed to the Lessor by another Person other than an
Affiliate of the Lessor; (xi) in the event of a voluntary transfer, assignment
or disposition, or any involuntary transfer of any interest in any of the Sites
resulting from the bankruptcy or insolvency of Lessor (other than in connection
with the existence of a Lease Event of Default or a Credit Agreement Event of
Default), any Tax or imposition imposed on a direct or indirect transferee,
successor or assign of the Lessor to the extent of the excess of such Taxes over
the amount of such Taxes that would have been imposed had there not been a
transfer by the original Lessor of an interest arising under the Operative
Documents, unless a Lease Event of Default shall have occurred and be
continuing; and (xii) any Taxes or impositions imposed on the Lessor that are a
result of the Lessor not being considered a "United States person" as defined in
Section 7701(a)(30) of the Code. Notwithstanding the proviso of the preceding
sentence, Lessee shall pay or reimburse, and indemnify and hold harmless, any
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Participation Agreement
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Indemnitee which is not incorporated under the laws of the United States, or a
state thereof, and which has complied with Section 7.3, from any deduction or
withholding of any United States Federal, state or local income tax. All
indemnities contained in this Section 7.2(a) are expressly made for the benefit
of, and shall be enforceable by, each Indemnitee.
(b) Contests. Lessee shall pay on or before the time or times
prescribed by law any Taxes (except any Taxes excluded by the proviso to Section
7.2(a)); provided, however, that Lessee shall be under no obligation to pay any
such Tax so long as the payment of such Tax is not delinquent or is being
contested by a Permitted Contest. If any claim or claims is or are made against
any Indemnitee for any Tax which is subject to indemnification as provided in
Section 7.2(a), Indemnitee shall as soon as practicable, but in no event more
than 20 days after receipt of formal written notice of the Tax or proposed Tax,
notify Lessee and if, in the reasonable opinion of Lessee and (in the case of
any Tax which may reasonably be expected in the aggregate to exceed $50,000) tax
counsel acceptable to the Indemnitee, there exists a basis to contest such Tax
which satisfies the requirements of ABA Formal Opinion 85-352 (and if the
provisos of the definition of "Permitted Contest" continues to be satisfied and
so long as no Lease Event of Default exists), Lessee at its expense may, to the
extent permitted by Applicable Laws and Regulations, contest such Tax, and
subsequently may appeal any adverse determination, in the appropriate
administrative and legal forums; provided that in all other circumstances, upon
notice from Lessee to such Indemnitee that there exists a basis to contest any
such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as
supported by an opinion of tax counsel to Lessee acceptable to the Indemnitee),
the Indemnitee, at Lessee's expense, shall contest any such Tax. Lessee shall
pay all expenses incurred by the Indemnitee in contesting any such Tax
(including all reasonable attorneys' and accountants' fees, including the
allocated costs of internal counsel), upon demand by the Indemnitee. Lessee
shall have the right to participate in the conduct of any proceedings controlled
by the Indemnitee to the extent that such participation by such Person does not
interfere with the Indemnitee's control of such contest and Lessee shall in all
events be kept informed, to the extent practicable, of material developments
relative to such proceedings. The Indemnitee shall have the right to participate
in the conduct of any proceedings controlled by Lessee and the Indemnitee shall
in all events be kept informed, to the extent practicable, of material
developments relative to such proceedings. The Indemnitees agree that a
contested claim for which Lessee would be required to make a reimbursement
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Participation Agreement
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payment hereunder will not be settled or compromised without Lessee's prior
written consent (which consent shall neither be unreasonably delayed nor
withheld), unless the provisos of the definition of "Permitted Contest" would
not continue to be satisfied. Indemnitee shall endeavor to settle or compromise
any such contested claim in accordance with written instructions received from
Lessee, provided that: (x) Lessee on or before the date the Indemnitee executes
a settlement or compromise pays the contested Tax to the extent agreed upon or
makes an indemnification payment to the Indemnitee in an amount acceptable to
the Indemnitee; and (y) the settlement or compromise does not, in the reasonable
opinion of the Indemnitee materially adversely affect the right of such Lessor
to receive Rent or the Lease Balance or any other payment pursuant to the
Operative Documents, or involve a material risk of sale, forfeiture or loss of
any Site or any interest therein or any matter described in the provisos to the
definition of "Permitted Contest". The failure of an Indemnitee to timely
contest a claim against it for any Tax which is subject to indemnification under
Section 7.2(a) and for which it has an obligation to Lessee to contest under
this Section 7.2(b) in the manner required by Applicable Laws and Regulations
where Lessee has timely requested that such Indemnitee contest such claim shall
relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with
respect to such claim to the extent such failure results in the loss of an
effective contest. If Applicable Laws and Regulations require the payment of a
contested Tax as a condition to, or regardless of, its being contested, and
Lessee chooses to contest such Tax or to direct the Indemnitee to contest such
Tax in accordance with this Section, then Lessee shall provide the Indemnitee
with the funds to pay such Tax, such provision of funds to be deemed a
non-interest bearing loan by Lessee to the Indemnitee to be repaid by any
recovery of such Tax from such contest and any remaining unpaid amount not
recovered to offset Lessee's obligation to indemnify the Indemnitee for such
Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis (in accordance
with Section 7.5) for and against any adverse tax consequences of such
interest-free loan. In the event that the Indemnitee receives a refund (or like
adjustment) in respect of any Tax for which the Indemnitee has been reimbursed
by Lessee, the Indemnitee shall immediately remit the amount of such refund (or
like adjustment) to Lessee, net of all costs and expenses incurred by such
Indemnitee.
(c) Payments. Any Tax indemnifiable under Section 7.2(a) shall
be paid directly to the applicable taxing authority if direct payment is
practicable and permitted. If direct payment to the applicable taxing authority
is not permitted or is otherwise not made, any amount payable to an Indemnitee
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Participation Agreement
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pursuant to Section 7.2(a) shall be paid within thirty (30) days after receipt
of a written demand therefor from such Indemnitee accompanied by a written
statement describing in reasonable detail the amount so payable, but not before
the date that the relevant Taxes are due. Any payments made pursuant to Section
7.2(a) directly to the Indemnitee entitled thereto or Lessee, as the case may
be, shall be made 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 this
Participation Agreement. Upon the request of any Indemnitee with respect to a
Tax that Lessee is required to pay, Lessee shall furnish to such Indemnitee the
original or a certified copy of a receipt for Lessee's payment of such Tax or
such other evidence of payment as is reasonably acceptable to such Indemnitee.
Taxes imposed with respect to the Property for a billing period during which the
Lease expires or terminates (provided that the Lessee surrenders possession of
the Property to Lessor) shall be adjusted and prorated on a daily basis between
the Lessee and the Lessor, whether or not such Imposition is imposed before or
after such expiration or termination and each party shall pay or reimburse the
other for each party's pro rata share thereof. At Lessee's request, the amount
of any indemnification payment by Lessee pursuant to subsection (a) shall be
verified and certified by an independent public accounting firm mutually
acceptable to Lessee and the Indemnitee. The fees and expenses of such
independent public accounting firm shall be paid by Lessee unless such
verification shall result in an adjustment in Lessee's favor of 5% or more of
the payment as computed by the Indemnitee, in which case such fee shall be paid
by the Indemnitee. In no event shall Lessee have the right to review the
Indemnitee's tax returns or receive any other confidential information from the
Indemnitee in connection with such verification. Any information provided to
such accountants by any Person shall be and remain the exclusive property of
such Person and shall be deemed by the parties to be (and the accountants will
confirm in writing that they will treat such information as) the private,
proprietary and confidential property of such Person, and no Person other than
such Person and the accountants shall be entitled thereto and all such materials
shall be returned to such Person. Such accounting firm shall be requested to
make its determination within 30 days of Lessee's request for verifications and
the computations of the accounting firm shall be final, binding and conclusive
upon Lessee and the Indemnitee. The parties agree that the sole responsibility
of the independent public accounting firm shall be to verify the amount of
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Participation Agreement
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a payment pursuant to this Participation Agreement and that matters of
interpretation of this Participation Agreement are not within the scope of the
independent accounting firm's responsibilities.
(d) Reports. If any report, return or statement is required to
be filed with respect to any Taxes that are subject to indemnification under
Section 7.2(a), Lessee shall, if Lessee is permitted by Applicable Laws and
Regulations, timely prepare and file such report, return or statement; provided,
however, that if Lessee is not permitted by Applicable Laws and Regulations to
file any such report Lessee will promptly so notify the appropriate Indemnitee,
in which case the Indemnitee will file any such report after preparation thereof
by Lessee. Lessee will deliver any such return, together with immediately
available funds for payment of any Tax due, to such Indemnitee at least ten (10)
days in advance of the date such return or payment is due.
SECTION 7.3. Withholding Tax Exemption. On or before the first date on
which any payment is due under any Note for the account of any Lender not
incorporated under the laws of the United States or a state thereof, such Lender
agrees that it will have delivered to each of Lessee, Lessor and Agent (i) two
valid, duly completed copies of United States Internal Revenue Service Form 1001
or 4224, certifying in either case that such Lender is entitled to receive
payments under the Operative Documents without deduction or withholding of any
United States federal income taxes and (ii) a valid, duly completed Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Lender which so delivers a Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms, further undertakes to deliver to each of Lessee, Lessor and
Agent two additional copies of such form on or before the date that such form
expires (currently, three successive calendar years for Form 1001 and one
calendar year for Form 4224) or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by Lessee, Lessor or Agent, in each case certifying that such Lender
is entitled to receive payments under the Operative Documents without deduction
or withholding of any United States Federal income taxes, unless any change in
treaty, law or regulation has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises Lessee, Lessor and Agent that it
is not capable of receiving payments without any withholding of United States
Federal income tax.
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SECTION 7.4. Excessive Use Indemnity. In the event that at the end of
the Lease Term: (a) Lessee elects the Sale Option; and (b) after paying to
Lessor all amounts due under Section 6.3 of the Lease, including Proceeds and
the aggregate Applicable Percentage Amount, Lessor does not have sufficient
funds to reduce the Lease Balance to zero, then Lessee shall promptly pay over
to Lessor the shortfall unless Lessee delivers a report from an independent
appraiser in form and substance satisfactory to Lessor and the Agent which
establishes that the decline in value in the Sites from the aggregate amount
anticipated for such date in the Appraiser's report delivered with respect to
each Site on or about the Document Closing Date was not due to the excessive use
of any Facility or any Site, failure to maintain any Facility or any Site,
modifications or restorations which reduce the value of any Facility or any
Site, any adverse change in the environmental condition of any Facility or any
Site, any easements granted pursuant to Section 8.3 of the Lease which reduce
the value of any Facility or Site or any other cause or condition within the
power of Lessee to control or affect differing from ordinary wear and tear.
SECTION 7.5. Gross Up. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Lessee is required to pay or reimburse under any other provision of this Article
VII (each such payment or reimbursement under this Article VII, an "original
payment") and which original payment constitutes income to such Indemnitee, then
Lessee shall pay to such Indemnitee on demand the amount of such original
payment on a grossed-up basis such that, after subtracting all Taxes imposed on
such Indemnitee with respect to such original payment by Lessee (including any
Taxes otherwise excluded by Section 7.2(b) and assuming for this purpose that
such Indemnitee was subject to taxation at the highest Federal marginal rates
applicable to widely held corporations for the year in which such income is
taxable and at an assumed state and local income tax rate of 9.5%, such payments
shall be equal to the original payment to be received or paid (net of any
credits, deductions or other tax benefits then actually recognized that arise
from the payment by such Indemnitee of any amount, including taxes, for which
the payment to be received is made).
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ARTICLE VIII
THE AGENT
SECTION 8.1. Appointment of Agent; Powers and Authorization to Take
Certain Actions.
(a) Each Participant irrevocably appoints and authorizes Agent
to act as its agent hereunder, with such powers as are specifically
delegated to Agent by the terms hereof, together with such other powers
as are reasonably incidental thereto. Each Participant authorizes and
directs Agent to, and Agent agrees for the benefit of the Participant,
that, on the Document Closing Date it will accept the Operative
Documents and thereafter, it will accept all documents to be delivered
to Agent on behalf of the Participants or the Lenders under the
Operative Documents. Specifically, without limitation, Lessor hereby
appoints Agent as its agent hereunder and under the Operative Documents
to accept delivery of all documents to be delivered to Lessor under the
Operative Documents and to take all action on behalf of Lessor required
to be taken by Lessor under the Operative Documents, subject to the
remaining provisions of this Article 8. Agent accepts the agency hereby
created applicable to it and agrees to receive all payments and
proceeds pursuant to the Operative Documents and disburse such payments
or proceeds in accordance with the Operative Documents. Agent shall
have no duties or responsibilities except those expressly set forth in
the Operative Documents. Agent shall not be responsible to any
Participant (or to any other Person) (i) for any recitals, statements,
representations or warranties of any party contained in any of the
Operative Documents or in any certificate or other document referred to
or provided for in, or received by any of them under, the Operative
Documents, other than the representations and warranties made by Agent
in Section 4.4, or (ii) for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Collateral or the
title thereto or of the Loan Agreement or any other document referred
to or provided for therein or (iii) for any failure by any Lessee,
Lessor, any Lender or any other third party (other than Agent) to
perform any of its obligations under any Operative Document. Agent may
employ agents, trustees or attorneys-in-fact, may vest any of them with
any property, title, right or power deemed necessary for the purposes
of such appointment and shall not be responsible for the negligence or
misconduct of any of them selected by it with reasonable care. Neither
Agent nor any of its directors, officers, employees or agents shall be
liable or responsible for any action taken or omitted to be taken by it
or them hereunder, or in connection herewith, except for its or their
own gross negligence or willful misconduct.
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(b) Agent shall not have any duty or obligation to manage,
control, use, operate, store, lease, sell, dispose of or otherwise deal
with any Site, any other Collateral or the Lease, or to otherwise take
or refrain from taking any action under, or in connection with, this
Agreement or any related document to which Agent is a party, except as
expressly provided by the terms hereof, and no implied duties of any
kind shall be read into any Operative Document against Agent. The
permissive right of Agent to take actions enumerated in this Agreement
or any other Operative Document shall never be construed as a duty,
unless Agent is instructed or directed to exercise, perform or enforce
one or more rights by the Required Participants (provided that Agent
has received indemnification reasonably satisfactory to it). Subject to
Section 8.1(c) below, no provision of the Operative Documents shall
require Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its obligations under
the Operative Documents, or in the exercise of any of its rights or
powers thereunder. It is understood and agreed that the duties of Agent
are ministerial in nature.
(c) Except as specifically provided herein, Agent is acting
hereunder solely as agent and, except as specifically provided herein,
is not responsible to any party hereto in its individual capacity,
except with respect to any claim arising from Agent's gross negligence
or willful misconduct or any breach of a representation or covenant
made in its individual capacity.
(d) Agent may accept deposits from, lend money to and
otherwise deal with Lessee or any of its Affiliates with the same
rights as it would have if it were not the named Agent hereunder.
SECTION 8.2. Reliance. Agent may rely upon, and shall not be bound or
obligated to make any investigation into the facts or matters stated in, any
certificate, notice or other communication (including any communication by
telephone, facsimile, telex, telegram or cable) reasonably believed by it to be
genuine and correct and to have been made, signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Agent with due care
(including any expert selected by Agent to aid Agent in any calculations
required in connection with its duties under the Operative Documents).
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SECTION 8.3. Action Upon Instructions Generally. Subject to Sections
8.4 and 8.6, upon written instructions of the Required Participants, Agent
shall, on behalf of the Participants, give such notice or direction, exercise
such right, remedy or power hereunder or in respect of any Site, and give such
consent or enter into such amendment to any document to which it is a party as
Agent as may be specified in such instructions. Agent shall deliver to each
Participant a copy of each material notice, report and certificate received by
Agent pursuant to the Operative Documents. Agent shall have no obligation to
investigate or determine whether there has been a Lease Default or Lease Event
of Default. Agent shall not be deemed to have notice or knowledge of any Lease
Default or Lease Event of Default unless a Responsible Officer of Agent is
notified in writing of such Lease Default or Lease Event of Default, provided
that Agent shall be deemed to have been notified in writing of any failure of
Lessee to pay Basic Rent in the amounts and at the times set forth in Article IV
of the Lease. If Agent receives notice of a Lease Default or Lease Event of
Default, Agent shall give prompt notice thereof, at Lessee's expense, to each
Participant. Subject to Sections 8.4, 8.6 and 9.5 hereof, and subject to the
terms and provisions of the Collateral Agency Agreement, Agent shall take action
or refrain from taking action with respect to such Lease Default or Lease Event
of Default as directed by the Required Participants or, in the case of a Lease
Event of Default by virtue of the failure of Lessee to pay any portion of Basic
Rent, as directed by any Participant; provided that, unless and until Agent
receives such directions, Agent may refrain from taking any action, or may act
in its discretion, with respect to such Lease Default or Lease Event of Default.
Prior to the date the Lease Balance shall have become due and payable by
acceleration pursuant to Article 18 of the Lease, the Required Participants may
deliver written instructions to Agent to waive, and Agent shall waive pursuant
thereto, any Event of Default and its consequences; provided that in the absence
of written instructions from all Participants, Agent shall not waive any (i)
Lease Event of Default by virtue of the failure of Lessee to pay any portion of
Basic Rent or (ii) covenant or provision which, under Section 9.5, cannot be
modified or amended without the consent of all Participants. As to any matters
not expressly provided for by this Agreement, Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Participants and such instructions of the
Required Participants and any action taken or failure to act pursuant thereto
shall be binding on each Participant.
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SECTION 8.4. Indemnification. Each Participant shall reimburse and hold
Agent harmless, ratably in accordance with its Commitment at the time the
indemnification is required to be given, (but only to the extent that any such
indemnified amounts have not in fact been paid to Agent by, or on behalf of,
Lessee in accordance with Section 7.1) from any and all claims, losses, damages,
obligations, penalties, liabilities, demands, suits, judgments, or causes of
action, and all legal proceedings, and any reasonable costs or expenses in
connection therewith, including allocated charges, costs and expenses of
internal counsel of Agent and all other reasonable attorneys' fees and expenses
incurred by Agent, in any way relating to or arising in any manner out of (i)
any Operative Document, the enforcement hereof or thereof or the consummation of
the transactions contemplated thereby, or (ii) instructions from the Required
Participants (including, without limitation, the costs and expenses that Lessee
is obligated to and does not pay hereunder, but excluding normal administrative
costs and expenses incident to the performance by Agent of its agency duties
hereunder other than materially increased administrative costs and expenses
incurred as a result of an Event of Default), provided that no Participant shall
be liable for any of the foregoing to the extent they arise from (a) the gross
negligence or willful misconduct of Agent as determined by a court of competent
jurisdiction, (b) the inaccuracy of any representation or warranty or breach of
any covenant given by Agent in Section 4.4 hereof or in the Loan Agreement, (c)
negligence of Agent in the case of Agent's handling of funds or (d) any taxes,
fees or other charges payable by Agent based on or measured by any fees,
commissions or compensation received by it for acting as Agent in connection
with the transactions contemplated by the Operative Documents.
SECTION 8.5. Independent Credit Investigation. Each Participant by
entering into this Agreement agrees that it has, independently and without
reliance on Agent or any other Participant and based on such documents and
information as it has deemed appropriate, made its own credit analysis of Lessee
and the Guarantors and its own decision to enter into this Agreement and each of
the other Operative Documents to which it is a party and that it will,
independently and without reliance upon Agent or any other Participant and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking action under this
Agreement and any related documents to which it is a party. Agent shall not be
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required to keep itself informed as to the performance or observance by Lessee
of any other document referred to (directly or indirectly) or provided for
herein or to inspect the properties or books of Lessee. Except for notices or
statements which Agent is expressly required to give under this Agreement and
for notices, reports and other documents and information expressly required to
be furnished to Agent alone hereunder or under any other Operative Document,
Agent shall not have any duty or responsibility to provide any Participant with
copies of notices or with any credit or other information concerning the
affairs, financial condition or business of Lessee (or any of its Affiliates)
that may come into the possession of Agent or any of its Affiliates.
SECTION 8.6. Refusal to Act. Except for notices and actions expressly
required of Agent hereunder, Agent shall in all cases be fully justified in
failing or refusing to act unless (a) it is indemnified to its reasonable
satisfaction by Lessor against any and all liability and reasonable expense
which may be incurred by it by reason of taking or continuing to take any such
action (provided that such indemnity shall not be required to extend to
liability or expense arising from any matter described in clauses (a) through
(d) of Section 8.4, it being understood that no action taken by Agent in
accordance with the instructions of the Required Participants shall be deemed to
constitute any such matter) and (b) it is reasonably satisfied that such action
is not contrary to any Operative Document or to any applicable law.
SECTION 8.7. Resignation or Removal of Agent; Appointment of Successor.
Subject to the appointment and acceptance of a successor Agent as provided
below, Agent may resign at any time by giving 30 days' prior written notice
thereof to Lessor, Lenders and Lessee or may be removed at any time for cause by
30 days' prior written notice from the Required Participants to Agent, the other
Participants and Lessee. Upon any such resignation or removal, the Required
Participants at the time of the resignation or removal shall have the right to
appoint a successor Agent. If, within thirty (30) calendar days after the
retiring Agent's giving of notice of resignation or receipt of a written notice
of removal, a successor Agent is not so appointed and does not accept such
appointment, then the retiring or removed Agent may (but shall not be required
to) appoint a successor Agent and transfer to such successor Agent all rights
and obligations of the retiring Agent. Such successor Agent shall be a Lender if
any Lender shall at the time be willing to become the successor Agent, and if no
Lender is so willing, then the successor Agent shall be a financial institution.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
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rights, powers, privileges and duties of the retiring or removed Agent. Upon the
effective date of resignation or removal, the retiring or removed Agent shall be
discharged from duties and obligations as Agent thereafter arising hereunder and
under any related document, but the provisions of this Agreement and the other
Operative Documents shall inure to its benefit as to any actions taken or
omitted by it while it was Agent under this Agreement and the other Operative
Documents. If the Required Participants or the retiring Agent does not appoint a
successor in accordance with the foregoing provisions of this Section 8.7, any
Participant shall be entitled to apply to a court of competent jurisdiction for
such appointment, and such court may thereupon appoint a successor to act until
such time, if any, as a successor shall have been appointed as above provided.
SECTION 8.8. Separate Agent. Agent may, for the purpose of meeting any
legal requirements of any jurisdiction in which any Site or Collateral may be
located, appoint one or more individuals or corporations either to act as
co-agent jointly with Agent or to act as separate agent of all or any part of
the Collateral, and vest in such individuals or corporations, in such capacity,
such title to such Collateral or any part thereof, and such rights or duties as
Agent may consider necessary or desirable. Agent shall not be required to
qualify to do business in any jurisdiction where it is not now so qualified.
Agent shall execute, acknowledge and deliver all such instruments as may be
required by any such co-agent or separate agent more fully confirming such
title, rights or duties to such co-agent or separate agent. Upon the acceptance
in writing of such appointment by any such co-agent or separate agent, it, she
or he shall be vested with such interest in the Collateral or any part thereof,
and with such rights and duties, not inconsistent with the provisions of the
Operative Documents, as shall be specified in the instrument of appointment,
jointly with Agent (except insofar as local law makes it necessary for any such
co-agent or separate agent to act alone), subject to all terms of the Operative
Documents. Any co-agent or separate agent, to the fullest extent permitted by
legal requirements of the relevant jurisdiction, at any time, by an instrument
in writing, shall constitute Agent its attorney-in-fact and agent, with full
power and authority to do all acts and things and to exercise all discretion on
its behalf and in its name. If any co-agent or separate agent shall die, become
incapable of acting, resign or be removed, the interest in the Collateral or
Sites and all rights and duties of such co-agent or separate agent shall, so far
as permitted by law, vest in and be exercised by Agent, without the appointment
of a successor to such co-agent or separate agent.
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SECTION 8.9. Termination of Agency. The agency created hereby shall
terminate upon the final disposition by Lessor of all Sites and the final
distribution by Agent of all monies or other property or proceeds received
pursuant to the Lease and Loan Agreement in accordance with their respective
terms, provided that at such time Lessee shall have complied fully with all the
terms hereof.
SECTION 8.10. Compensation of Agency. Lessee shall pay Agent (i) the
Structuring/Underwriting Fee pursuant to Section 2.6 hereof and (ii) Agent's
reasonable fees, costs and expenses for the performance of Agent's obligations
hereunder.
SECTION 8.11. Limitations. It is expressly understood and agreed by and
among the parties hereto that, except as otherwise provided herein or in the
other Operative Documents: (a) this Participation Agreement and the other
Operative Documents to which Agent is a party are executed by Agent, not in its
individual capacity (except with respect to the representations and covenants of
Agent in Section 4.4), but solely as Agent under the Operative Documents in the
exercise of the power and authority conferred and vested in it as such Agent;
(b) each and all of the undertakings and agreements herein made on the part of
Agent are each and every one of them made and intended not as personal
undertakings and agreements by Agent, or for the purpose or with the intention
of binding Agent personally, but are made and intended for the purpose of
binding only the interests of Lessor and the Lenders in the Sites and Collateral
unless expressly provided otherwise; (c) actions to be taken by Agent pursuant
to its obligations under the Operative Documents may, in certain circumstances,
be taken by Agent only upon specific authority of the Participants or Required
Participants; (d) nothing contained in the Operative Documents shall be
construed as creating any liability on Agent, individually or personally, or any
incorporator or any past, present or future subscriber to the capital stock of,
or stockholder, officer or director, employee or agent of, Agent to perform any
covenants either express or implied contained herein, all such liability, if
any, being expressly waived by the other parties hereto and by any Person
claiming by, through or under them; and (e) so far as Agent, individually or
personally, is concerned, the other parties hereto and any Person claiming by,
through or under them shall look solely to the Collateral and Lessee for the
performance of any obligation under any of the instruments referred to herein;
provided, however, that nothing in this Section 8.11 shall be construed to limit
in scope or substance the general corporate liability of Agent in respect of its
gross negligence or willful misconduct or those representations, warranties and
covenants of Agent in its individual capacity set forth herein or in any of the
other agreements contemplated hereby.
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SECTION 8.12. Agent May Be a Participant. Lessee and each Participant
(a) acknowledge and agree that Agent may be a Participant and Agent, (as well as
an agent and a Lender under the Credit Agreement and the Collateral Agent under
the Collateral Agency Agreement), and in such other capacities, shall have no
obligation to Lessee or the other Participants greater than it would have were
Agent solely a Participant and not Agent hereunder, or not the agent or a Lender
under the Credit Agreement or Collateral Agent under the Collateral Agency
Agreement and (b) waive any conflict or potential conflict by virtue of Agent
also being a Participant from time to time.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. 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 and the termination or expiration of
this Agreement and any of the Operative Documents, including the termination of
the Lease with respect to any Site, the transfer of the interest in the Sites to
or by Lessor as provided herein or in any other Operative Documents (and shall
not be merged into the Deeds or any other conveyance or transfer document), any
disposition of any interest of Lessor in the Sites, the purchase and sale of the
Notes, payment therefor and any disposition thereof and shall be and continue in
effect notwithstanding any investigation made by any party hereto or to any of
the other Operative Documents and the fact that any such party may waive
compliance with any of the other terms, provisions or conditions of any of the
Operative Documents.
SECTION 9.2. No Broker, etc. Except for Agent (the fees and expenses of
which shall be payable by Lessee in accordance with the provisions of this
Participation Agreement), each of the parties hereto represents to the others
that it has not retained or employed any broker, finder or financial advisor to
act on its behalf in connection with this Agreement, nor has it authorized any
broker, finder or financial adviser retained or employed by any other Person so
to act, nor has it incurred any fees or commissions to which Lessor or any other
Participant might be subjected by virtue of its entering into the transactions
contemplated by this Agreement. Any party who is in breach of this
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representation shall indemnify and hold the other parties harmless from and
against any liability arising out of such breach of this representation.
SECTION 9.3. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be made in writing and shall be deemed to have been given (i) in
the case of notice by letter, the earlier of when delivered to the addressee by
hand or courier if delivered on a Business Day and, if not delivered on a
Business Day, the first Business Day thereafter or on the third Business Day
after depositing the same in the mails, registered or certified mail, postage
prepaid, return receipt requested, addressed as provided on Schedule II hereto,
and (ii) in the case of notice by facsimile or bank wire, when receipt is
confirmed if delivered on a Business Day and, if not delivered on a Business
Day, the first Business Day thereafter, addressed as provided on Schedule II
hereto, or to such other address as any of the parties hereto may designate by
written notice. Copies of all notices given by facsimile or bank wire shall be
contemporaneously sent by overnight courier.
SECTION 9.4. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 9.5. Amendments. Except as otherwise specifically provided in
any Operative Document, neither this Agreement nor any of the other Operative
Documents nor any of the terms hereof or thereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by the party against which the enforcement of the termination, amendment,
supplement, waiver or modification shall be sought; and no such termination,
amendment, supplement, waiver or modification shall be effective unless a signed
copy thereof shall have been delivered to Lessor, Lessee and Agent. Lessor and
Lessee shall not be permitted to amend, modify or supplement the Lease without
the written consent of the Required Participants; provided, that without the
prior written consent of each Lender, Lessor shall not:
(a) modify any of the provisions of this Section 9.5, change
the definition of "Required Participants" or modify or waive any
provision of any Operative Document requiring action by any of the
foregoing, or release any collateral (except as otherwise specifically
provided in any Operative Document);
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(b) modify, amend, waive or supplement any of the provisions
of Articles XI, XIII, XVI and XVII of the Lease;
(c) reduce, modify, amend or waive any indemnities in favor of
any Lender;
(d) reduce the amount or change the time of payment of Rent or
the Lease Balance;
(e) consent to any assignment of the Lease releasing Lessee
from its obligations to pay Rent or the Lease Balance or changing the
absolute and unconditional character of such obligations; or
(f) permit the creation of any Lien on the Sites or any part
thereof except as contemplated by the Operative Documents, or deprive
any Lender of the benefit of the security interest and lien secured by
the Sites.
SECTION 9.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Agreement are for convenience of reference
only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 9.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Agreement is intended for the benefit of any
Person except the parties hereto, their successors and permitted assigns.
SECTION 9.8. GOVERNING LAW; Submission to Jurisdiction; Waiver of Jury
Trial. THIS AGREEMENT HAS BEEN DELIVERED IN, AND SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.
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SECTION 9.9. Payment of Transaction Costs and Other Costs.
(a) Transaction Costs. On the Document Closing Date, if the
transactions contemplated by this Agreement are consummated, Lessor shall pay
the Transaction Costs to the Person or Persons entitled to payment as evidenced
by bills or invoices for such payment; provided, however, that Lessor shall not
be required to pay any Transaction Costs in excess of $2,000,000.00 in the
aggregate. Lessee shall elect which Transaction Costs Lessor shall so pay,
provided that such election must include the Structuring/Underwriting Fee and
Agent's attorneys fees, and Lessor shall obtain the funds necessary for such
payment in accordance with Section 2.5. Any additional Transaction Costs shall
be paid by Lessee. If such transactions are not consummated, Lessee shall pay
all of the Transaction Costs.
(b) Continuing Expenses. The Transaction Costs not paid on the
Document Closing Date and the continuing expenses and disbursements (including
reasonable counsel fees and expenses) of Lessor and Agent shall be paid by
Lessee as Supplemental Rent; and provided, further that if Lessor shall not have
paid $2,000,000 of Transaction Costs in the aggregate, Lessor shall continue to
pay Transaction Costs (the specific Transaction Costs being so paid by Lessor
being in Lessor's discretion) in accordance with Section 2.5 until it shall have
paid $2,000,000 of Transaction Costs in the aggregate.
(c) Amendments, Supplements and Appraisal. Without limitation
of the foregoing, Lessee agrees to pay to the Lessor, Agent and the Lenders all
reasonable costs and expenses (including reasonable legal fees and expenses)
incurred by any of them in connection with: (i) the considering, evaluating,
investigating, negotiating and entering into or giving or withholding of any
amendments or supplements or waivers or consents with respect to any Operative
Document; (ii) any Event of Loss or termination of the Lease or any other
Operative Document; (iii) the negotiation and documentation of any restructuring
or "workout," whether or not consummated, of any Operative Document; (iv) the
enforcement of the rights or remedies under the Operative Documents; or (v) any
transfer by Agent or a Lender of any interest in the Operative Documents during
the continuance of a Lease Event of Default; provided, however, that in the case
of clauses (i) and (ii) Lessee shall not be responsible for any legal fees and
expenses of more than two special counsel for all of Agent and the Lenders
(including, without limitation, special Credit Agreement counsel) and any
special local counsel required by Agent.
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SECTION 9.10. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.11. Limited Liability of Lessor. The parties hereto agree
that Lessor shall have no personal liability whatsoever to Lessee, the Lenders,
Agent or any of their respective successors and assigns for any Claim based on
or in respect of this Agreement or any of the other Operative Documents or
arising in any way from the transactions contemplated hereby or thereby;
provided, however, that Lessor shall be personally liable: (a) for its own
willful misconduct or gross negligence, (b) for liabilities that may result from
the incorrectness of any representation or warranty expressly made by it in
Section 4.3 or from the failure of Lessor to perform the covenants and
agreements set forth in Section 6.2(a) hereof, or (c) for any Tax based on or
measured by any fees, commission or compensation received by it for actions
contemplated by the Operative Documents. It is understood and agreed that,
except as provided in the preceding proviso: (i) Lessor shall have no 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
Lessor to Lessee, the Lenders, Agent or any of their respective successors and
assigns are solely nonrecourse obligations (with liability payable solely out of
the Sites and the other Collateral) except to the extent that it has received
payment from others; (iii) all such personal liability of Lessor is expressly
waived and released as a condition of, and as consideration for, the execution
and delivery of the Operative Documents by Lessor; and (iv) this Participation
Agreement (except as provided in Section 4.3) is executed and delivered by
Lessor solely in the exercise of the powers expressly conferred upon it as
Lessor under the Operative Documents.
SECTION 9.12. Liabilities of the Lenders. No Lender shall have any
obligation to any other Lender or to Lessee, Lessor or Agent with respect to the
transactions contemplated by the Operative Documents except those obligations of
such Lender expressly set forth in the Operative Documents or except as set
forth in the instruments delivered in connection therewith, and no Lender 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.
62
Participation Agreement
-----------------------
SECTION 9.13. Liabilities of Agent. Agent shall have no duty, liability
or obligation to any party to this Agreement with respect to the transactions
contemplated hereby except those duties, liabilities, or obligations expressly
set forth in this Agreement or the Loan Agreement, and any such duty, liability
or obligation of Agent shall be as expressly limited by this Agreement or the
Loan Agreement, as the case may be.
SECTION 9.14. Reproduction of Documents. This Agreement, all documents
constituting Schedules or Exhibits hereto, and all documents relating hereto
received by a party hereto, including, without limitation: (a) consents, waivers
and modifications that may hereafter be executed; (b) documents received by the
Lenders, Agent or Lessor in connection with the receipt and/or acquisition of
the Sites; and (c) financial statements, certificates, and other information
previously or hereafter furnished to Agent, Lessor or any Lender may be
reproduced by the party receiving the same by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. Each of
the parties hereto agrees and stipulates that, to the extent permitted by law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 9.15. Consideration for Consents to Waivers and Amendments.
Lessee hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to any Lender in connection with, in exchange for, or as an inducement to, such
Lender's consent to any waiver in respect of, any modification or amendment of,
any supplement to, or any other consent or approval under, any Operative
Document unless such consideration or benefit is offered ratably to all Lenders.
SECTION 9.16. Payment Directions. It is understood and agreed that
during the Lease Term, for administrative convenience and notwithstanding the
terms and provisions of the Lease or any Loan Document, Lessee will pay all
amounts due Lessor under the Lease and this Agreement, on behalf of Lessor, to
or at the direction of Agent (which direction may change from time to time, so
long as such direction does not require Lessee to make any payment due on any
date to more than one Person) for application in accordance with the terms of
Article III of the Loan Agreement.
63
Participation Agreement
-----------------------
SECTION 9.17. Action of and Notices to Lessor under Loan Agreement.
Notwithstanding anything to the contrary in the Loan Agreement, the Lenders,
Lessor and Lessee hereby agree that any notice or demand to be delivered to
Lessor pursuant to the Loan Agreement and any action to be taken by Lessor under
the Loan Agreement shall, so long as no Lease Event of Default is continuing, be
delivered directly to or taken by Lessee, with a copy to or notice to Lessor.
SECTION 9.18. Submission to Jurisdiction; Waivers. EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY: (a) AGREES THAT ANY ACTION, SUIT OR PROCEEDING
BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER OPERATIVE
DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT OR OMISSION, OR EVENT
OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN ALLEGHENY COUNTY OR PHILADELPHIA COUNTY, PENNSYLVANIA,
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED
BY LAW AGREES THAT, TO THE EXTENT THAT ANY SUCH COURT HAS OR IS ABLE TO OBTAIN
PERSONAL JURISDICTION OVER THE PARTY AGAINST WHICH SUCH PARTY IS SEEKING TO
BRING RELATED LITIGATION, IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER
FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER TO BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);
(b) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION
BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH
PARTY;
(c) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S.
MAIL, POSTAGE PREPAID, TO SUCH PARTY'S ADDRESS FOR NOTICES DESCRIBED IN SCHEDULE
II HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY
RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE
VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW); AND
(d) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
SECTION 9.19. Final Agreement. THIS AGREEMENT, TOGETHER WITH THE LEASE,
LOAN DOCUMENTS, THE OTHER OPERATIVE DOCUMENTS AND OTHER DOCUMENTS EXECUTED
64
Participation Agreement
-----------------------
IN CONNECTION HEREWITH OR THEREWITH REPRESENT THE ENTIRE FINAL AGREEMENT BETWEEN
THE PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREIN AND
CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED, RESCINDED OR CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.
[SIGNATURE PAGES FOLLOW]
65
Participation Agreement
-----------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
GENESIS ELDERCARE PROPERTIES, INC.,
as Lessee
By:___________________________________
Name Printed: George V. Hager, Jr.
Title: Senior Vice President
MELLON FINANCIAL SERVICES
CORPORATION #4, as Lessor
By:___________________________________
Name Printed: Arthur A. Folsom, Jr.
Title: Senior Vice President
MELLON BANK, N.A., not in its
individual capacity except as
expressly stated herein, but solely
as Agent
By:___________________________________
Name Printed: Carol Paige
Title: Vice President
MELLON BANK, N.A., as Lender
By:___________________________________
Name Printed: Carol Paige
Title: Vice President
66
Participation Agreement
-----------------------
SCHEDULE I
Lessor and Lender Commitments
Transaction Total
Lessor Acquisition Costs Commitment
- ------ ----------- ----------- ----------
Mellon Financial $ 2,031,000 $60,000.00 $ 2,091,000
Lender
- ------
Mellon Bank, N.A. $65,669,000 $1,940,000 $67,609,000
----------- ----------- -----------
Total $67,700,000 $2,000,000 $69,700,000
67
Participation Agreement
-----------------------
SCHEDULE II
Notice Information and Funding Offices
Lessee: Genesis Eldercare Properties, Inc.
148 West State Street
Kennett Square, PA 19348
Attention: George V. Hager, Jr.
Telephone: (610) 444-6350
Facsimile: (610) 444-7483
Lessor: Mellon Financial Services
Corporation #4
One Mellon Bank Center
Rm 151-4444
Pittsburgh, PA 15258-0001
Attention: Leasing Group
Telephone: (412) 234-0934
Facsimile: (412) 234-3948
Lender and Agent: Mellon Bank, N.A.
(address for notices) Plymouth Meeting Executive Campus
610 West Germantown Pike
Suite 200
Plymouth Meeting, PA 19462
Attention: Carol Paige
Telephone: (610) 941-8409
Facsimile: (610) 941-4136
Lender and Agent: Mellon Bank, N.A.
(funding office) Loan Administration
701 Market Street
Room 199-5220
Philadelphia, PA 19106
Attention: Sally Gaymon
Telephone: (215) 553-2450
Facsimile: (215) 553-1016
1
Participation Agreement
-----------------------
SCHEDULE III
Sites
Quarterly
Financing Principal
Sites Seller Amount 1 Amortization
- ----- ------ --------- ------------
Atlantis Rehabilitation NHCA $ 8,030428.36 $0
and Health Care Center
Old Congress Road,
Lantana, Florida
Bowman's Health Care Center NHCA $ 6,486,115.21 $0
South Ridgewood
Ormand Beach, Florida
Eagle Crest Nursing Center NHCA $14,413,589.36 $0
Parental Home Road
Jacksonville, Florida
Oakwood Rehabilitation NHCA $ 7,103,840.47 $0
and Health Care Center
South East Bay Street
Eustis, Florida
Tierra Pines Health NHCA $ 2,264,992.61 $0
Care Center
- ----------------
(1) This amount includes the allocable share of the maximum Transaction Costs
of $2,000,000 which may be funded by Lessor pursuant to Section 2.5 of the
Participation Agreement.
Participation Agreement
-----------------------
Ulmerton Road
Largo, Florida
Woodlands Nursing Center NHCA $ 2,779,763.66 $0
North 46th Street
Tampa, Florida
Williamsburg Health Care NHCA $12,972,230.43 $0
and Rehabilitation Center
Mount Vernon Avenue
Williamsburg, Virginia
Windham NHCA $ 1,544,313.15 $0
Main Street, Route 240
Crozet, Virginia
Woodmont Health Care Center NHCA $14,104,726.75 $0
Dairy Lane
Fredricksburg, Virginia
Total $69,700,000
(Sites, if any, marked with an asterisk (*) indicate that Lessor is not
acquiring fee title to the applicable Land Interest, but rather is becoming the
ground lessee thereof.)
Participation Agreement
-----------------------
SCHEDULE IV
Stock Sellers
Mark E. Hamister
George E. Hamister
Julia L. Hamister
The George E. Hamister Trust
The Oliver C. Hamister Trust
National Health Care Affiliates, Inc.
Oak Hill Health Care Center, Inc.
Derby Nursing Center Corporation
Delaware Avenue Partnership
EIDOS, Inc.
VersaLink, Inc.
Participation Agreement
-----------------------
SCHEDULE 4.1A
Government Actions
No Government Actions are required other than the obtaining of such licenses,
approvals, authorizations, consents, permits (including, without limitation,
environmental permits, licenses, approvals, authorizations and consents),
easements and rights-of-way, including proof and dedication required under
applicable law for the use and occupance of the Sites and for the operation
thereof.
Participation Agreement
-----------------------
SCHEDULE 4.1B
Filings and Recordings
Recordation of the deeds evidencing the acquisition of a particular site, and
recordation of the Lease Supplement relating to the Site with the appropriate
county office.
In addition, for each State in which a Site is located, all filings and
recordings specified in the local counsel questionnaire delivered by local
counsel for such State pursuant to Appendix 2 shall be deemed included on this
Schedule 4.1B.
Participation Agreement
-----------------------
SCHEDULE 4.1C
Computation under Section 5.9
of 1995 Subordinated Note Indenture
Participation Agreement
-----------------------
SCHEDULE 4.1D
ERISA Plans
Meridian Healthcare, Inc. Union Retirement Savings Plan, established December 1,
1989
Genesis Health Ventures, Inc. Retirement Plan, established January 1, 1989
Genesis Health and Welfare Plan
Definitions Appendix
--------------------
APPENDIX 1
to
Participation Agreement
In the Participation Agreement and each other Operative Document,
unless the context otherwise requires:
(a) any term defined below by reference to another instrument or
document shall continue to have the meaning ascribed thereto whether or not such
other instrument or document remains in effect;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender include any gender;
(d) a reference to a part, clause, section, article, exhibit or
schedule is a reference to a part, clause, section and article of, and exhibit
and schedule to, such Operative Document;
(e) a reference to any statute, regulation, proclamation, ordinance or
law includes all statutes, regulations, proclamations, ordinances or laws
amending, supplementing, supplanting, varying, consolidating or replacing them,
and a reference to a statute includes all regulations, proclamations and
ordinances issued or otherwise applicable under that statute;
(f) a reference to a document includes any amendment or supplement to,
or replacement or novation of, that document;
(g) a reference to a party to a document includes that party's
successors and permitted assigns; and
(h) references to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement
followed by or referable to an enumeration of specific matters to matters
similar to those specifically mentioned.
Further, each of the parties to the Operative Documents and their
counsel have reviewed and revised the Operative Documents, or requested
revisions thereto, and the usual rule of construction that any ambiguities are
to be resolved against the drafting party shall be inapplicable in construing
and interpreting the Operative Documents.
A1-1
Definitions Appendix
--------------------
"Accrued Variable Rent" means, as of any date of determination, (A)
with respect to the Lease, the sum of the aggregate amount of interest that has
accrued on the outstanding Notes to the date of determination, and (B) with
respect to any Lease Supplement, the product of the Allocated Share in respect
of such Lease Supplement multiplied by the amount determined pursuant to the
preceding clause (A).
"Additional Costs" mean (i) the amounts payable pursuant to Sections
2.11 and 2.12 of the Loan Agreement, (ii) the amounts payable pursuant to
Section 5.15 of the Participation Agreement and (iii) the other amounts due and
payable by the Borrower under any Loan Document other than principal and
interest on the Notes.
"Adjusted Contract Rate" has the meaning set forth in Section
2.12 of the Loan Agreement.
"Advance" means, as the context may require, each advance of a Loan by
a Lender and each advance of a portion of the Equity Amount by Lessor.
"Advance Date(s)" means each of the actual dates, on or prior to the
date on which the Commitments shall terminate as set forth in Section 2.5 of the
Participation Agreement, on which the transactions contemplated in Article II of
the Participation Agreement are completed.
"Advance Request" has the meaning set forth in Section 2.5 of
the Participation Agreement.
"Affiliate" of a Person (the "Specified Person") shall mean (a) any
Person which directly or indirectly controls, is controlled by, or is under
common control with, the Specified Person, (b) any director or officer (or, in
the case of a Person which is not a corporation, any individual having analogous
powers) of the Specified Person or of a Person who is an Affiliate of the
Specified Person within the meaning of the preceding clause (a), and (c) for
each individual who is an Affiliate of the Specified Person within the meaning
of the foregoing clauses (a) or (b), any other individual related to such
Affiliate by consanguinity within the third degree or in a step or adoptive
relationship within such third degree or related by affinity with such Affiliate
or any such individual. For purposes of the preceding sentence, "control" of a
Person means (a) the possession, directly or indirectly, of the power to direct
A1-2
Definitions Appendix
--------------------
or cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by contract or otherwise and (b) in
any case shall include direct or indirect ownership (beneficially or of record)
of, or direct or indirect power to vote, 5% or more of the outstanding shares of
any class of capital stock of such Person (or in the case of a Person that is
not a corporation, 5% or more of any class of equity interest).
"Agent" means Mellon Bank, N.A., a national banking association, in its
capacity as administrative agent for the Participants under the Loan Agreement
and the Participation Agreement.
"Allocated Amount" means, with respect to a Site, the product of (a)
the Lease Balance multiplied by (b) a fraction, the numerator of which is
Lessor's Cost of such Site and the denominator of which is the aggregate
Lessor's Cost of all Sites.
"Allocated Share", with respect to any Lease Supplement, means a
fraction (expressed as a percentage) the numerator of which is Lessor's Cost of
a Site or Group subject to the Lease Supplement in question and the denominator
of which is the Lease Balance.
"Alterations" has the meaning set forth in Section 9.2(a) of the Lease.
"Amendment to Collateral Agency Agreement" means that certain First
Amendment to Amended and Restated Collateral Agency Agreement dated as of July
24, 1996, among Genesis, as a Borrower and as a Shared Obligor, certain other
Subsidiary Grantors referred to therein, the RCA Lender Parties referred to
therein, by Mellon, as RCA Agent, the ACA Lender Parties referred to therein, by
Mellon, as ACA Agent, the SLT Parties referred to therein, by Mellon, as SLT
Agent, and Mellon as Collateral Agent, in the form of Exhibit I-2 to the
Participation Agreement.
"Amendment to Security Agreement" means that certain First Amendment to
Amended and Restated Security Agreement dated as of July 24, 1996, among Genesis
and certain of its Subsidiaries, as Grantors, and Mellon, as Collateral Agent,
in the form of Exhibit I-1 to the Participation Agreement.
"Applicable Laws and Regulations" mean all existing and future
applicable laws, rules, regulations (including Environmental Laws), statutes,
treaties, codes, ordinances, permits, certificates, orders and licenses of and
interpretations by, any Authority, Insurance Requirements and applicable
A1-3
Definitions Appendix
--------------------
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction (including those pertaining to health, safety
or the environment and those pertaining to the use or occupancy of any Site) and
any restrictive covenant or deed restriction or easement of record affecting a
Site.
"Applicable Margin" means:
(a) for any Interest Period occurring entirely prior to the earlier
of (i) October 1, 1996 and (ii) the date that the Operative
Documents are amended to increase the amount of the Commitments
set forth in Schedule I to the Participation Agreement, zero basis
points for interest determined by reference to the Prime Rate and
100 basis points for interest determined by reference to the LIBO
Rate; and
(b) for any Interest Period occurring in whole or in part after the
earlier of the dates specified in clauses (i) and (ii) of the
immediately preceding clause (a), the Applicable Margin set forth
in the Credit Agreement, with (x) the Applicable Margin thereunder
applicable to the Prime Rate Option thereunder being the
Applicable Margin hereunder for interest determined by reference
to the Prime Rate under the Operative Documents and (y) the
Applicable Margin thereunder applicable to the Euro-Rate Option
being the Applicable Margin hereunder for interest determined by
reference to the LIBO Rate under the Operative Documents;
provided, that the Applicable Margin for the Renewal Term shall be determined by
the mutual agreement of Agent and Lessee; and provided, further, that during any
Holdover Period, the Applicable Margin shall be increased by 50 basis points.
"Applicable Percentage" for each Lease Supplement means, as of the end
of the Basic Term and the Renewal Term, the percentage set forth opposite each
such date on Schedule II to such Lease Supplement, and shall be determined on or
about the Document Closing Date; provided that in no event shall such percentage
be less than 80%.
"Applicable Percentage Amount" means, (a) with respect to any Lease
Supplement, the product obtained by multiplying Lessor's Cost of the Site
covered by such Lease Supplement by the Applicable Percentage of such Lease
A1-4
Definitions Appendix
--------------------
Supplement and (b) with respect to the Lease, the sum of all amounts determined
pursuant to the foregoing clause (a) for each Lease Supplement then in effect.
"Appraisal" means any appraisal of any one or more Sites prepared by
the Appraiser and delivered to Agent, on behalf of Lessor and the Lenders.
"Appraiser" means Valuation Counselors or such other appraisal firm as
Agent may select from time to time.
"Appurtenant Rights" mean (i) all agreements, easements, rights of way
or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to any Land Interest or the Facilities, including the use of any streets, ways,
alleys, vaults or strips of land adjoining, abutting, adjacent or contiguous to
any Land Interest and (ii) all permits, licenses and rights, whether or not of
record, appurtenant to any Land Interest.
"Assignment of Lease" means the Assignment of Lease and Agreement and
Lease Supplements and Memoranda of Lease and Agreement in the form of Exhibit H
to the Participation Agreement from Lessor in favor of Agent for the benefit of
the Lenders, as the same may be supplemented from time to time, together with
the Consent and Agreement of Lessee attached thereto.
"Assignment of Licenses" means the Collateral Assignment of Licenses,
Permits and Approvals from Lessee, NHCA and the Property Sellers to Agent, in
the form of Exhibit J to the Participation Agreement.
"Authority" means any entity involved in any way in the administration
of Federal or state healthcare-related programs, including the U.S. Department
of Health & Human Services, the Health Care Finance Administration, Medicare
carriers or intermediaries or Medicaid agencies, bureaus or departments and any
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Authorized Officer" means any officer in the Leasing Department of
Mellon who shall be duly authorized to execute the Operative Documents.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978.
A1-5
Definitions Appendix
--------------------
"Basic Rent" means an amount payable on each Payment Date during the
Basic Term, the Renewal Term, if applicable, and the Holdover Period, if
applicable, equal to the sum of (i) the aggregate amount of interest payable on
such Payment Date on the Notes, plus (ii) the aggregate amount of the Yield
payable on such Payment Date on the Equity Amount (calculated in accordance with
the definition of "Yield" and in a manner consistent with the calculation of the
amounts under clause (i) on such Payment Date) plus (iii) starting with the
Payment Date October 24, 1996, principal amortization equal to the sum of (x)
level principal amortization amounts, if any, for each Site as shown on Schedule
III to the Participation Agreement, plus (y) level principal amortization equal
to the lesser of (1) $100,000 per quarterly Payment Date and (2) the remaining
unamortized portion of Transaction Costs funded by Lessor pursuant to Section
2.5 of the Participation Agreement; provided, however, that upon the occurrence
and during the continuance of a Loan Event of Default under Sections 6.1(a)(ii),
6.1(a)(iii) and 6.1(a)(iv) of the Loan Agreement while no Lease Event of Default
shall have occurred and be continuing, Basic Rent shall be determined on the
basis of calculations made as if the Loan Event of Default shall not have
occurred and the Loans shall not have been accelerated, whether or not in fact
the Loans shall have been accelerated or any other remedies shall have been
taken under the Loan Agreement or with respect to the Collateral.
"Basic Term", means (a) the period commencing upon the Document Closing
Date and ending on the date which is five years after the Document Closing Date
or (b) such shorter period as may result from earlier termination of the Lease
as provided therein.
"Basis Term Expiration Date" has the meaning set forth in
Section 2.3 of the Lease.
"Bill of Sale" means each Bill of Sale from the seller of any Site to
Lessor conveying any portion of the Facility located thereon which under
applicable law does not or may not constitute real estate.
"Board of Directors" means, with respect to a corporation, either the
board of directors or any duly authorized committee of that board of directors
which, pursuant to the by-laws of such corporation, has the same authority as
that board of directors as to the matter at issue.
"Borrower" means Lessor, as the borrower under the Loan Agreement.
A1-6
Definitions Appendix
--------------------
"Business Day" means (a) any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania or other day on which
banking institutions are authorized or obligated to close in Philadelphia,
Pennsylvania or in the city in which the Agent's office is located; and
(b) solely with respect to determinations of Interest Periods and
Payment Dates, dealings in United States Dollars are carried on in the London
interbank market.
"Casualty" means an event of damage or casualty relating to any
Facility which does not constitute an Event of Loss.
"Claims" mean liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, settlements, utility
charges, costs, fees, expenses and disbursements (including legal fees and
expenses and costs of investigation which, in the case of counsel or
investigators retained by an Indemnitee, shall be reasonable) of any kind and
nature whatsoever, that may at any time be imposed on, asserted against or
incurred by an Indemnitee as a result of, or arising out of, or in any way
related to or by reason of any of the Operative Documents, as well as the Credit
Agreement or any "Loan Document" referred to therein and without in any way
limiting the generality of the foregoing, including any violation of any
Environmental Laws or any other law by any Borrower or Subsidiary of Borrower or
any Environmental Affiliate of any of them.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each case as
in effect from time to time. References to sections of the Code shall be
construed also to refer to any successor sections.
"Collateral" means the property from time to time subject to or
purported to be subject to the Liens of the subsisting Mortgage, the Assignment
of Lease, the Assignment of Licenses and the Joint Stock Collateral subject to
the Security Agreement, as limited by the terms and provisions of the Collateral
Agency Agreement and, collectively, all of the foregoing.
"Collateral Agency Agreement" means the Amended and Restated Collateral
Agency Agreement dated as of September 29, 1995 between Genesis, the Subsidiary
Grantors, RCA Agent, Agent and the Collateral Agent, all as defined therein, as
amended (including, without limitation, by the Amendment to Collateral Agency
Agreement).
A1-7
Definitions Appendix
--------------------
"Commitment" means as to Lessor or any Lender, its obligation to make
amounts available to Lessor or Loans to the Borrower, as the case may be, in an
aggregate amount not to exceed at any one time outstanding the amount set forth
opposite Lessor's or such Lender's name on Schedule I to the Participation
Agreement.
"Commitment Letter" means that certain letter dated July 16, 1996 from
Mellon Bank, N.A. to, and accepted by, Genesis.
"Commitment Percentage" means as to any Participant, at a particular
time, the percentage of the aggregate Commitments in effect at such time
represented by such Participant's Commitment, as such percentage is shown on
Schedule I to the Participation Agreement.
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, occupancy or title to any Site or
any part thereof in, by or on account of any actual or threatened eminent domain
proceeding or other action by any Authority or other Person under the power of
eminent domain or otherwise or any transfer in lieu of or in anticipation
thereof, which in any case does not constitute an Event of Taking. A
Condemnation shall be deemed to have "occurred" on the earliest of the dates
that use, occupancy or title is taken.
"Consolidated Cash Flow" has the meaning specified in the Credit
Agreement.
"Consolidated Funded Indebtedness" at any time for a specified group of
Persons shall mean all Indebtedness (including the current portion thereof) of
such Persons which would at such time be classified in whole or part under GAAP
as a long-term liability of such Persons and shall also and in any event include
(i) any Indebtedness of any such Person having a final maturity more than one
year from the date of creation of such Indebtedness and (ii) any Indebtedness of
any Person, regardless of its term, which is renewable or extendable by such
Person (pursuant to the terms thereof or pursuant to a revolving credit or
similar agreement or otherwise) to a date more than one year from such date or
more than one year from the date of creation of such Indebtedness, all as
determined on a consolidated basis.
"Consolidated Subsidiary" means, as to any Person at any date, any
Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in such Person's consolidated financial statements as of
such date.
A1-8
Definitions Appendix
--------------------
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person directly or indirectly guarantees, becomes surety for,
endorses, assumes, agrees to indemnify another Person (the "Deemed Obligor")
against, or otherwise remains liable (contingently or otherwise) for the
Indebtedness, obligation or liability (the "Assured Obligation") of the Deemed
Obligor. Contingent Liability shall be deemed to exist if a Person agrees,
becomes or remains liable (contingently or otherwise), directly or indirectly
(a) to purchase or assume, or to supply funds for the payment, purchase or
satisfaction of, an Assured Obligation, (b) to make any loan, advance, capital
contribution or other investment in, or to purchase or lease any property or
services from, a Deemed Obligor (i) to maintain the solvency of the Deemed
Obligor, (ii) to enable the Deemed Obligor to meet any other financial
condition, (iii) to enable the Deemed Obligor to satisfy any payment of
dividends or other distributions upon the shares of any other Person, or (iv) to
assure the holder of such Assured Obligation against loss, (c) to purchase or
lease property or services from the Deemed Obligor regardless of the
non-delivery of or failure to furnish of such property or services, or (d) in
respect of any other transaction the effect of which is to assure the payment or
performance (or payment of damages or other remedy in the event of nonpayment or
nonperformance) of any Assured Obligation.
"Controlled Group Member" means each trade or business (whether or not
incorporated) which, at any time, together with Lessee, Genesis, National
Health, any Property Seller or any Subsidiary of any thereof is treated as a
single employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections
414(b), (c), (m) or (o) of the Code.
"Corresponding Source of Funds" means, in the case of any portion of a
LIBO Rate Loan or Equity Amount (to the extent that the Yield is determined by
reference to the LIBO Rate), the proceeds of hypothetical receipts by a LIBOR
Office or by a Lender or Lessor through a LIBOR Office of one or more Dollar
deposits in the interbank eurodollar market at the beginning of the Interest
Period corresponding to such portion of the LIBO Rate Loan having maturities
approximately equal to such portion of the LIBO Rate Loan or Equity Amount and
in an aggregate amount approximately equal to such portion (in the case of
Lessor) or such Lender's pro rata share of such portion (in the case of a
Lender).
"Credit Agreement" means both of the following: (i) that certain
Amended and Restated Credit Agreement dated as of September 29, 1995 by and
among Genesis Health Ventures, Inc. and certain of its subsidiaries, as
borrowers, the institutions identified therein as lenders, Mellon Bank, N.A.,
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Definitions Appendix
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as issuer of letters of credit, Mellon Bank, N.A., as agent and Citibank, N.A.
as co-agent, and (ii) that certain Acquisition Credit Agreement dated as of
September 29, 1995 by and among Genesis Health Ventures, Inc., certain of its
Subsidiaries, the Lenders named therein, Mellon and Citibank, N.A. as co-agent,
as each of the foregoing may be amended, modified, increased (including any
increase in amounts or the commitment thereunder), supplemented, refunded or
replaced from time to time, and if so amended, modified, increased, refunded or
replaced, the amended, modified, increased, supplemented, refunded or replaced
credit agreement. For purposes of the Operative Documents, if the Credit
Agreement (or the Amended and Restated Credit Agreement referred to in clause
(i), as it may be so amended, modified, supplemented, refunded or replaced from
time to time as described above) shall terminate without a replacement agreement
having become effective, references to the financial covenants set forth in the
Credit Agreement shall mean the financial covenants as set forth in the Credit
Agreement immediately prior to its termination, exclusive of any modification to
the terms of such agreement or arrangement that were made in contemplation of
the termination thereof.
"Debt/Equity Fraction" means at any time a fraction the numerator of
which is the aggregate outstanding principal balance of the Notes and the
denominator of which is the sum of (i) the aggregate outstanding principal
balance of the Notes plus (ii) the outstanding Equity Amount.
"Deed" means each Deed from the seller of any Land Interest to Lessor,
conveying the Land Interest and the Facility, if any, or other improvements, if
any, located on the related Site in a form acceptable to the Lenders.
"Designated Owner" has the meaning set forth in Section 12.1(b) of
the Lease.
"Document Closing Date" has the meaning set forth in Section 2.1 of
the Participation Agreement.
"Dollar" and the symbol "$" shall mean lawful money of the United
States of America.
"Early Termination Date" means a Payment Date on which Lessee purchases
all (but not less than all) of the Sites from Lessor pursuant to Section 6.5 of
the Lease.
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Definitions Appendix
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"End of Term Report" has the meaning set forth in Section 6.4(c) of
the Lease.
"Environmental Audit" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds ASTM Standard Practice
E1527-93 Standard Practice for Environmental Site Assessments: Phase One
Environmental Site Assessment Process) of each Site to be acquired by Lessor on
a Site Acquisition Date or of a Site to be sold pursuant to the Sale Option
under the Lease and any additional environmental assessments (including, without
limitation, a Phase Two environmental site assessment) requested by the Agent.
"Environmental Concern Materials" means (a) any flammable substance,
explosive, radioactive material, hazardous material, hazardous waste, toxic
substance, solid waste, pollutant, contaminant or any related material, raw
material, substance, product or by-product of any substance specified in or
regulated or otherwise affected by any Environmental Law (including but not
limited to any "hazardous substance" as defined in CERCLA or any similar state
law), (b) any toxic chemical or other substance form or related to industrial,
commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel,
motor oil, waste and used oil, heating oil and other petroleum products or
compounds, polychlorinated biphenyls, radon and urea formaldehyde.
"Environmental Indemnity" means the Environmental Indemnity Agreement
dated as of July 24, 1996 by Lessee.
"Environmental Laws" means any law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection of the
environment, including natural resources, (b) exposure of Persons, including but
not limited to employees, to Environmental Concern Materials, (c) protection of
the public health or welfare from the effects of products, by-products, wastes,
emissions, discharges or releases of Environmental Concern Materials or (c)
regulation of the manufacture, use or introduction into commerce of
Environmental Concern Materials including their manufacture, formulation,
packaging, labeling, distribution, transportation, handling, storage or
disposal. Environmental Laws shall include, without limitation, the Resource
Conservation and Recovery Act of 1976, (RCRA) 42 U.S.C. sections 6901-6987, as
amended by the Hazardous and Solid Waste Amendments of 1984, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections
9601-9657, (CERCLA), the Hazardous Materials Transportation Act of 1975, 49
U.S.C. Sections 1801-1812, the Toxic Substances Control Act, 15 U.S.C.
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Definitions Appendix
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Sections 2601-2671, the Clean Air Act, 42 U.S.C. Sections 7401 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et
seq. and all similar federal, state and local environmental laws, ordinances,
rules, orders, statutes, decrees, judgments, injunctions, codes and regulations.
"Environmental Permits" means all permits, licenses, authorizations,
registrations, certificates and approvals of Authorities required by
Environmental Laws.
"Equity Amount" means, with respect to Lessor as of any date of
determination, the aggregate outstanding amount invested by Lessor for the
purchase of the Sites or for Transaction Costs, excluding any portion thereof
funded by the Lenders.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"Event of Loss" means (x) the actual or constructive total loss of the
Facility on a Site or damage to the Facility on a Site to an extent rendering
repair impractical or uneconomical, in any case as reasonably determined in good
faith by the Board of Directors of Lessee, such determination to be made
promptly after the occurrence of such event and to be evidenced by an Officer's
Certificate of Lessee delivered to Lessor, each Lender and Agent, (y) damage to
the Facility on a Site which results in an insurance settlement on the basis of
a total loss or a constructive total loss (including title insurance proceeds)
in respect of a total loss of the Facility on a Site, or (z) an Event of Taking.
"Event of Taking" means (A) taking of title to a Site or the Land
Interest or (B) any condemnation (other than a requisition of temporary use) or
requisition of use for a period scheduled to last beyond the end of the Lease
Term, in either case resulting in (i) the loss of use or possession of
substantially all of a Site or (ii) the loss of use or possession of a material
portion of a Site, in either of clause (i) or clause (ii), as reasonably
determined in good faith by a Senior Officer of Lessee, such determination to be
made promptly after the occurrence of such event and to be evidenced by an
Officer's Certificate of such Senior Officer delivered to Lessor and Agent.
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Definitions Appendix
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"Excluded Amounts" mean:
(a) all indemnity payments and expenses to which Lessor (or
the respective successors, assigns, agents, officers, directors or employees of
Lessor) is entitled pursuant to the Operative Documents;
(b) any amounts payable under any Operative Documents to
reimburse Lessor (including the reasonable expenses of Lessor incurred in
connection with any such payment) for performing any of the obligations of
Lessee under and as permitted by any Operative Document;
(c) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies payable to Lessor
(or the respective successors, assigns, agents, officers, directors or employees
of Lessor);
(d) any insurance proceeds under policies maintained by
Lessor and not required to be maintained by Lessee under the Lease;
(e) any amount payable to Lessor pursuant to Section 9.9 of
the Participation Agreement;
(f) prior to completion of any foreclosure of the Mortgage
or deed in lieu thereof, any expense reimbursements to Lessor or Agent; and
(g) any payments of interest on payments referred to in
clauses (a) through (f) above.
"Facilities" mean all buildings, structures and fixtures located on the
Land Interest, but excluding the Land Interest.
"Facility" has the meaning set forth in the Recitals to the
Participation Agreement.
"Fair Market Sales Value" with respect to any Site or any portion
thereof means, as of the date of the determination, the fair market sales value
as determined by an independent appraiser chosen by Agent (at the direction of
the Required Participants) that would be obtained in an arm's-length transaction
between an informed and willing buyer (other than a buyer currently in
possession) and an informed and willing seller, under no compulsion to buy or
sell, and neither of which is related to Lessee, for the purchase of such Site.
Such fair market sales value shall be calculated as the value for the use of the
Site, assuming, in the determination of such fair market sales value,
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Definitions Appendix
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that the Site is in the condition and repair required to be maintained by the
terms of the Lease (unless such fair market sales value is being determined for
purposes of Section 9.2(b) of the Lease, in which case this assumption shall not
be made).
"Final Maturity Date" means July 24, 2001, subject to extension through
the end of the Renewal Term if the Renewal Term is entered into pursuant to
Section 2.10 of the Participation Agreement and Section 2.4 of the Lease.
"Final Rent Payment Date" has the meaning set forth in Section
18.1(iii)(B)(1) of the Lease.
"Financial Covenants" means any covenant set forth in the Credit
Agreement from time to time which applies a test for determining net worth, or
which sets forth financial ratios, net income, debt or value levels or
limitations, and as of the Document Closing Date, includes Sections 7.01 through
7.18 of the Credit Agreement.
"Financing" has the meaning set forth in the Recitals to the
Participation Agreement.
"Force Majeure" means acts of God, fire, windstorm, flood, explosion,
collapse of structures, riot, war, labor disputes, delays or restrictions by
governmental bodies (other than delays or restrictions resulting from Lessee's
actions or failures to take reasonably foreseeable actions), inability to obtain
or use necessary materials or reasonable substitutes, or any other cause beyond
the reasonable control of Lessee, other than lack of funds; provided, that in no
event shall an event of Force Majeure be deemed to exist for more than thirty
(30) days.
"Funded Debt/Cash Flow Ratio" means, as of a specified Rolling Period
Ending Date, the ratio of (i) Consolidated Funded Indebtedness of Genesis and
its Consolidated Subsidiaries as of such Rolling Period Ending Date divided by
(ii) Consolidated Cash Flow for the Rolling Period ending on such Rolling Period
Ending Date.
"Funding Breakage Date" has the meaning set forth in Section 2.12 of
the Loan Agreement.
"Funding Breakage Indemnity" has the meaning set forth in Section 2.12
of the Loan Agreement.
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Definitions Appendix
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"Future Value Amount" has the meaning set forth in Section 2.12 of
the Loan Agreement.
"GAAP" means generally accepted accounting principles in the United
States, applied on a basis consistent with the principles used in preparing the
financial statements of Genesis and its Consolidated Subsidiaries as of March
31, 1996 and for the fiscal year then ended.
"Genesis" means Genesis Health Ventures, Inc., a Pennsylvania
corporation.
"Governmental Action" means all applicable permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, decrees, licenses, exemptions, publications, filings, notices to and
declarations of or with, or required by, any Authority, or required by any
Applicable Laws and Regulations, and shall include, without limitation, all
citings, Environmental Permits and operating permits and licenses that are
required for the use, occupancy, zoning and operation of the Facilities.
"Ground Lease" means, with respect to any Non-Acquired Land Interest, a
ground lease agreement leasing such Non-Acquired Land Interest, executed by
Lessee, as lessor under such ground lease, and Lessor, as lessee under such
ground lease, and dated as of the applicable Site Acquisition Date,
substantially in the form of Exhibit M to the Participation Agreement, with such
modifications as may be necessary or desirable in the opinion of Lessor or
Lessor's counsel to comply with all Applicable Laws and Regulations and,
consistent with the provisions thereof, to set forth the provisions customarily
used with respect to the applicable jurisdiction.
"Group" means a group of Sites designated as a group by Lessee
for accounting purposes.
"Guaranties" has the meaning set forth in the Recitals to the
Participation Agreement.
"Guarantors" mean, as of the Document Closing Date, Genesis and all
Affiliates of Genesis who are parties to the Credit Agreement as of the Document
Closing Date, and thereafter from time to time, Genesis and all Affiliates of
Genesis who at such time are or become parties to the Credit Agreement.
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Definitions Appendix
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"Hazardous Material" means any substance, waste or material which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous by listing characteristic or definition under
any Environmental Law, including petroleum, crude oil or any fraction thereof,
petroleum derivatives, by-products and other hydrocarbons and is or becomes
regulated by any Authority, including any agency, department, commission, board
or instrumentality of the United States, the States in which any Site is located
or any political subdivision thereof and also including asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs") and radon gas.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"Holdover Period" shall mean any period after the Lease Termination
Date until the earliest of (i) the sale of the Sites pursuant to Section 6.9 of
the Lease, (ii) the reduction of the Lease Balance to zero and the payment by
Lessee of all Basic Rent, Supplemental Rent and all other amounts then due and
payable under the Operative Documents, and (iii) written notice by the Agent, as
agent for the Participants, terminating the Holdover Period pursuant to Section
6.9 of the Lease.
"Highest Lawful Rate" has the meaning set forth in Section 2.11 of the
Participation Agreement.
"Indebtedness" has the meaning specified in the Credit Agreement.
"Indemnitee" means each Lessor, Lender, Agent (in its individual
capacity and as agent) and Lessor and the respective Affiliates, successors,
permitted assigns, permitted transferees, invitees, contractors, servants,
employees, officers, directors, shareholders, partners, participants,
representatives, attorneys and agents of each of the foregoing Persons;
provided, however, that in no event shall Lessee be an Indemnitee.
"Indenture" has the same meaning as "1995 Subordinated Note Indenture"
set forth in the Credit Agreement.
"Insolvency Event" means (a) a proceeding shall have been instituted
with respect to any Person (i) seeking to have an order for relief entered in
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Definitions Appendix
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respect of such Person, or seeking a declaration or entailing a finding that
such Person is insolvent or a similar declaration or finding, or seeking
dissolution, winding-up, charter revocation or forfeiture, liquidation,
reorganization, arrangement, adjustment, composition or other similar relief
with respect to such Person, its assets or its debts under any law, relating to
bankruptcy, insolvency, relief of debtors or protection of creditors,
termination of legal entities or any other similar law now or hereafter in
effect, or (ii) seeking appointment of a receiver, trustee, liquidator,
assignee, sequestrator or other custodian for such Person or for all or any
substantial part of its property and such proceeding shall result in the entry,
making or grant of any such order for relief declaration, finding, relief or
appointment, or such proceeding shall remain undismissed and unstayed for a
period of 30 consecutive days; or
(b) Any Person shall become insolvent; shall fail to pay, become unable
to pay, or state that it is or will be unable to pay, its debts as they become
due; shall voluntarily suspend transaction of its business; shall make a general
assignment for the benefit of creditors; shall institute (or fail to controvert
in a timely and appropriate manner) a proceeding described in (a)(i) of this
Definition, or (whether or not any such proceeding has been instituted) shall
consent to or acquiesce in any such order for relief, declaration, finding or
relief described therein; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in (a)(ii) of this Definition, or
(whether or not any such proceeding has been instituted) shall consent to or
acquiesce in any such appointment or to the taking of possession by any such
custodian of all or any substantial part of its property; shall dissolve,
wind-up, revoke or forfeit its charter (or other constituent documents) or
liquidate itself or any substantial part of its property; or shall take any
action in furtherance of any of the foregoing.
"Inspecting Parties" have the meaning specified in Section 15.1 of the
Lease.
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by the Lease to be maintained by Lessee and all
requirements of the issuer of any such policy.
"Interest Period" means (i) the successive periods commencing on (and
including) a Payment Date (or in the case of the first Interest Period, July 24,
1996) and ending on (but excluding) the next succeeding Payment Date (if for any
Payment Date on or prior to October 24, 1996 or Lessee elects an Interest Period
of three months or the Prime Rate is applicable) or, (ii) for any Payment Date
A1-17
Definitions Appendix
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after October 24, 1996, the second succeeding Payment Date (if Lessee elects an
Interest Period of six months and the LIBO Rate is applicable), with the
Interest Period being determined by reference to clause (i) if Lessee fails to
elect an Interest Period of six months not later than three Business Days prior
to the commencement of the applicable Interest Period; provided, however, that
no Interest Period during the Basic Term may extend beyond the last Payment Date
during the Basic Term (unless the Renewal Term shall be applicable) and no
Interest Period during the Renewal Term may extend beyond the last Payment Date
of the Renewal Term; and provided, further that for the initial Advance on the
Document Closing Date, which occurs on a date other than a Monthly Anniversary
Date, the first Interest Period for such portion of the Lease Balance shall be
the period commencing on (and including) the date of such Advance and ending on
(but excluding) the next succeeding Payment Date and interest on the Notes and
Yield for such Advance for such initial period occurring prior to the first
Monthly Anniversary Date shall be determined by reference to, at Agent's option,
either (x) the Prime Rate, or (y) the LIBO Rate with one or more successive LIBO
Periods of one month each; and provided, finally, that for any Advance, other
than the initial Advance on the Document Closing Date, which occurs on a date
other than a Payment Date, the first Interest Period for such portion of the
Lease Balance shall be the period commencing on (and including) the date of such
Advance and ending on (but excluding) the next succeeding Payment Date and
interest on the Notes and Yield for such Advance for such initial period shall
be determined by reference to the Prime Rate.
"Joint Stock Collateral" has the meaning specified in the Security
Agreement.
"Land Interest" has the meaning set forth in the Recitals to the
Participation Agreement.
"Lease" means the Lease and Agreement dated as of July 24, 1996 between
Lessor and Lessee, in the form of Exhibit A to the Participation Agreement.
"Lease Balance" means, as of any date of determination, the sum of the
aggregate outstanding principal amount of the Notes plus the Equity Amount, less
any amounts applied pursuant to the Operative Documents in reduction thereof.
A1-18
Definitions Appendix
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"Lease Default" means any event, condition or failure which, with
notice or lapse of time or both, would become a Lease Event of Default.
"Lease Event of Default" means any event condition or failure
designated as a "Lease Event of Default" in Article XVII of the Lease.
"Lease Payment/Bankruptcy Default" means the occurrence of an event
specified in Section 17(a), (b), (f) or (g) of the Lease, without regard to any
grace or cure periods set forth therein.
"Lease Supplement" means each Lease Supplement and Memorandum of Lease
and Agreement, in the form of Exhibit A to the Lease, executed and delivered by
Lessee to Lessor for each Site.
"Lease Term" has the meaning set forth in Section 2.3 of the Lease.
"Lease Termination Date" means (i) the expiration of the Lease Term, or
(ii) if earlier, the termination of Lessee's right to possession pursuant to
Section 18.1 of the Lease, or (iii) with respect to all of the Sites, a
termination of the Lease pursuant to Section 6.5 of the Lease.
"Leasehold Estate" means Lessee's interest in the Sites (including the
Facilities located thereon) subject to the Lease.
"Lenders" mean the holders of the Notes.
"Lessee" means Genesis Eldercare Properties, Inc. a Pennsylvania
corporation and wholly-owned, single purpose subsidiary of Genesis.
"Lessor" means Mellon Financial Services Corporation #4, its successors
and permitted assigns.
"Lessor Liens" mean Liens on or against any Site or the Lease, or any
payment of Rent (a) which result from any act of, or any Claim against, Lessor
or any Lender in either case unrelated to the transactions contemplated by the
Operative Documents or (b) which result from any tax owed by Lessor or any
Lender, except any Tax for which Lessee is obligated to indemnify.
"Lessor's Cost" means (a) for all Sites, the aggregate amount paid or
advanced by Lessor with respect to all Sites, and (b) for any particular Site,
the aggregate amount paid or advanced by Lessor with respect to such Site
A1-19
Definitions Appendix
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(determined by a fair allocation by Agent of amounts paid or advanced by Lessor
with respect to such Site).
"LIBO Period" means for any Interest Period either three months or six
months, as specified by Lessee by irrevocable written notice to Agent received
by Agent not later than two (2) Business Days prior to the commencement of such
Interest Period, and in the absence of such specification by Lessee, three
months; provided that if Lessee duly and timely selects a six month LIBO Period
for any Interest Period, such LIBO Period shall extend through the end of the
next succeeding Interest Period as well; and provided, further, that no LIBO
Period during the Basic Term may extend beyond the last Payment Date during the
Basic Term (unless the Renewal Term shall be applicable) and no LIBO Period
during the Renewal Term may extend beyond the last Payment Date of the Renewal
Term; and provided finally, that the LIBO Period for any Interest Period ending
on or prior to October 24, 1996 shall be a one-month period; subject to the
second proviso of the definition of "Interest Period" for Advances described in
such proviso.
"LIBO Rate" means, with respect to any Interest Period, the rate per
annum determined by Agent by dividing (the resultant quotient to be rounded
upward to the nearest 1/100 of 1%) (i) the rate of interest (which shall be the
same for each day in such Interest Period) determined in good faith by Agent in
accordance with its usual procedures (which determination shall be conclusive)
to be the average of the rates per annum for deposits in United States dollars
offered by Agent to major money center banks in the London interbank market at
approximately 11:00 a.m. (London time) two London Business Days before the first
day of the applicable Interest Period for delivery on the first day of such
Interest Period for deposits of a duration equal to the applicable LIBO Period
in an amount substantially equal to the aggregate Lease Balance (or the
applicable tranche thereof designated by Lessee) and having maturities
comparable to such Interest Period by (ii) a number equal to 1.00 minus the LIBO
Reserve Percentage.
"LIBO Rate Loans" mean Loans bearing interest by reference to a LIBO
Rate.
" LIBO Rate Reserve Percentage" shall have the meaning set forth in the
Credit Agreement for "Euro-Rate Reserve Percentage," with the reference to the
Agent therein being a reference to the Agent hereunder.
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Definitions Appendix
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"LIBOR Office" means initially, the funding office of Lessor or any
Lender designated as such in Schedule II to the Participation Agreement; and
thereafter, such other office, branch, subsidiary or affiliate of such Lender,
if any, which such Participant from time to time, prospectively or
retrospectively, without notice to the Lessor, Lessee or Agent, deems to have
made, maintained or funded all or any portion of such Participant's investment
in Notes or the Equity Amount, as applicable.
"Lien" means any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Loans" has the meaning set forth in Section 2.1 of the Loan
Agreement.
"Loan Agreement" means the Loan Agreement, dated as of July 24,, 1996,
among Lessor, Agent and the Lenders, in the form of Exhibit C to the
Participation Agreement.
"Loan Default" means any event, condition or failure which, with
notice, passage of time or a determination by the Required Participants, or any
combination of the foregoing, would become a Loan Event of Default.
"Loan Documents" mean the Loan Agreement, the Notes, the Mortgages and
all documents and instruments executed and delivered in connection with each of
the foregoing.
"Loan Event of Default" means any event, condition or failure
designated as a "Loan Event of Default" in Section 6.1 of the Loan Agreement.
"Loan Participant" has the meaning specified in Section 6.4(a) of the
Participation Agreement.
"Loan Policy" has the meaning set forth in Appendix 2 of the
Participation Agreement.
"Material Adverse Effect" means (a) a material adverse effect on the
business, operations, condition (financial or otherwise) or prospects of Genesis
or Lessee taken as a whole or Genesis and its Subsidiaries taken as a whole or
(b) an adverse effect on the legality, validity, binding effect, enforceability
A1-21
Definitions Appendix
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or admissibility into evidence of any Operative Document, or the ability of
Agent or any Participant to enforce any rights or remedies under or in
connection with the Operative Documents.
"Mellon" means Mellon Bank, N.A., a national banking association, and
any successor.
"Monthly Anniversary Date" means for each calendar month, the 24th day
of such month, provided, however, that in the event that the 24th day of such
month shall occur on a date which is not a Business Day, such Monthly
Anniversary Date shall be the next following Business Day (unless such next
following Business Day is the first Business Day of another calendar month, in
which case such Monthly Anniversary Date shall be the immediately preceding
Business Day).
"Mortgage" means each (i) Mortgage, Assignment of Rents and Leases,
Security Agreement and Fixture Filing Statement from Lessor and Lessee to Agent,
substantially in the form of Exhibit D-1 to the Participation Agreement and (ii)
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
Statement from Lessor and Lessee in favor of Agent, substantially in the form of
Exhibit D-2 to the Participation Agreement. The decision to use the "Mortgage"
form or the "Deed of Trust" form shall be made by Agent with respect to each
Site, and each such form shall be modified as necessary or desirable in Agent's
opinion to comply with all Applicable Laws and Regulations and to set forth the
provisions and remedies customarily used by secured lenders with respect to the
applicable jurisdiction in which such instrument is to be recorded.
"Mortgaged Property" has the meaning for Mortgaged Property, Collateral
or similar term set forth in the Mortgage.
"Multiemployer Plan" has the meaning specified in the Credit
Agreement.
"Net Cash Proceeds" shall have the meaning specified in the Credit
Agreement.
"Net Condemnation Proceeds" mean all payments received from any
Authority relating to an Event of Taking after deducting the costs incurred by
Lessee, Lessor, Agent or any Lender in respect of the receipt thereof.
"NHCA" means National Health Care Affiliates, Inc., a Florida
corporation.
A1-22
Definitions Appendix
--------------------
"NHCA Environmental Indemnity" means the NHCA Environmental Indemnity
Agreement dated as of July 24, 1996 by NHCA and the Property Sellers.
"Non-Acquired Land Interest" means the Land Interests relating to the
Site or Sites, if any, identified on Schedule III, for which Lessor is not
acquiring fee title to the Land Interest relating thereto, but rather is
becoming the ground lessee of such Land Interest pursuant to a Ground Lease.
"Non-Renewing Participant" has the meaning set forth in Section 2.10
of the Participation Agreement.
"Nonseverable" shall describe an Alteration or part of an Alteration
which cannot be readily removed from a Site without causing material damage to
or materially impairing the value or utility of such Site.
"Notes" mean the notes issued by the Borrower under the Loan Agreement
and denominated as such, substantially in the form of Exhibit A to the Loan
Agreement, and any and all Notes issued in replacement or exchange therefor in
accordance with the provisions thereof.
"Obligations" has the meaning set forth in Section 11 of the Lease
Supplements
"OCC" means the Office of the Comptroller of the Currency or any
successor thereto.
"Officer's Certificate" of a Person means a certificate signed by the
Chairman of the Board of Directors or the President or any Executive Vice
President or any Senior Vice President or any other Vice President of such
Person signing with the Treasurer or any Assistant Treasurer or the Controller
or any Assistant Controller, Cashier, Assistant Cashier or the Secretary or any
Assistant Secretary of such Person, or by any Vice President who is also
Controller, Treasurer or Cashier signing alone.
"Operative Documents" means the Participation Agreement, the Lease, the
Lease Supplements, the Guaranties, the Loan Agreement, the Notes, the Mortgages,
the Environmental Indemnity, the NHCA Environmental Indemnity, the Security
Agreement, the Amendment to Security Agreement, the Collateral Agency Agreement,
the Amendment to Collateral Agency Agreement, the Assignment of Licenses, the
Assignment of Lease, the Deeds and the Bills of Sale.
A1-23
Definitions Appendix
--------------------
"Overall Transaction" means all the transactions and activities
referred to in or contemplated by the Operative Documents.
"Overdue Rate" means the lesser of (a) the highest interest rate
permitted by Applicable Laws and Regulations and (b) an interest rate per annum
equal to, (i) in the case of the LIBO Rate Loans, (A) until the end of the
applicable Interest Period at a rate per annum 2.00% above the rate otherwise
applicable to such part, and (B) thereafter in accordance with the following
clause (iii); (ii) in the case of the Equity Amount, until the end of the
applicable Interest Period at a rate per annum 2.00% above the Yield; and (iii)
in the case of any other amount due from Lessee hereunder or under any of the
Operative Documents, 2.00% above the then-current Prime Rate.
"Participants" mean Lessor and the Lenders, collectively.
"Participation Agreement" means the Participation Agreement, dated as
of July 24, 1996, among Lessee, Lessor, the Lenders and Agent.
"Payment Dates" mean (i) the 24th day of any January, April, July and
October in each year, and (ii) the 24th day of August, 1996 and the 24th day of
September, 1996 commencing August 24, 1996, and shall include, in any event, the
expiration date of the Basic Term (unless the Renewal Term shall be applicable),
the expiration date of the Renewal Term, if applicable, and the Lease
Termination Date; provided, however, that in the event that any Payment Date
shall occur on a date which is not a Business Day, such Payment Date shall be
the next following Business Day (unless such next following Business Day is the
first Business Day of another calendar month, in which case such Payment Date
shall be the immediately preceding Business Day).
"PBGC" means the Pension Benefit Guaranty Corporation established under
Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to the functions of said corporation.
"Pension-Related Event" shall mean any of the following events or
conditions:
(a) Any action is taken by any Person (i) to terminate, or would result
in the termination of, a Plan, either pursuant to its terms or by operation of
law (including, without limitation, any amendment of a Plan which would result
in a termination under Section 4041(e) of ERISA), or (ii) to have a trustee
appointed for a Plan pursuant to Section 4042 of ERISA;
A1-24
Definitions Appendix
--------------------
(b) PBGC notifies any Person of its determination that an event
described in Section 4042 of ERISA has occurred with respect to a Plan, that a
Plan should be terminated, or that a trustee should be appointed for a Plan;
(c) Any Reportable Event occurs with respect to a Plan;
(d) Any action occurs or is taken which could result in Lessee, Genesis
or any Subsidiary thereof or any Controlled Group Member becoming subject to
liability for a complete or partial withdrawal by any Person from a
Multiemployer Plan (including, without limitation, seller liability incurred
under Section 4204(a)(2) of ERISA), or Lessee, Genesis or any Subsidiary thereof
or any other Controlled Group Member receives from any Person a notice or demand
for payment on account of any such alleged or asserted liability; or
(e) (i) There occurs any failure to meet the minimum funding standard
under Section 302 of ERISA or Section 412 of the Code with respect to a Plan, or
any tax return is filed showing any tax payable under Section 4971(a) of the
Code with respect to any such failure, or Lessee, Genesis or any Subsidiary
thereof or any other Controlled Group Member receives a notice of deficiency
from the Internal Revenue Service with respect to any alleged or asserted such
failure, or (ii) any request is made by any Person for a variance from the
minimum funding standard, or an extension of the period for amortizing unfunded
liabilities, with respect to a Plan.
"Permits" has the meaning set forth in Section 4.1(l) of the
Participation Agreement.
"Permitted Contest" means actions taken by a Person to contest in good
faith, by appropriate proceedings initiated timely and diligently prosecuted,
the legality, validity or applicability to any Site or any interest therein of
any Person of: (a) any law, regulation, rule, judgment, order, or other legal
provision or judicial or administrative requirements; (b) any term or condition
of, or any revocation or amendment of, or other proceeding relating to, any
authorization or other consent, approval or other action by any Authority; or
(c) any Lien or Tax; provided that the initiation and prosecution of such
contest would not: (i) result in, or materially increase the risk of, the
imposition of any criminal liability on any Indemnitee; (ii) materially and
adversely affect the security interests created by the Operative Documents or
the right, title or interest of Agent or Lessor in or to any of the Sites or the
A1-25
Definitions Appendix
--------------------
right of Lessor, Agent or any Lender to receive payment of the principal of or
interest on any Note, Equity Amount of or Yield on the Equity Amount, Rent or
the Lease Balance or any interest therein; or (iii) materially and adversely
affect the fair market value, utility or remaining useful life of any Site or
any interest therein or the continued economic operation thereof; and provided
further that in any event adequate reserves in accordance with GAAP are
maintained against any adverse determination of such contest (with the
determination of the adequacy of reserves taking into account the availability
of insurance from reputable insurers).
"Permitted Exceptions" mean the exceptions set forth in the Title
Policies.
"Permitted Investments" means (i) full faith and credit obligations of
the United States of America, or fully guaranteed as to interest and principal
by the full faith and credit of the United States of America, maturing in not
more than one year from the date such investment is made; (ii) certificates of
deposit having a final maturity of not more than one year after the date of
issuance thereof of a of any commercial bank incorporated under the laws of the
United States of America or any state thereof or the District of Columbia, which
bank is a member of the Federal Reserve System and has a combined capital and
surplus of not less than $500,000,000 and with a senior unsecured debt credit
rating of at least "A" by Moody's Investors Service, Inc. and "A" by Standard &
Poor's Ratings Group; (iii) commercial paper of companies, banks, trust
companies or national banking associations (in each case excluding Lessee and
its Affiliates) incorporated or doing business under the laws of the United
States or one of the States thereof, in each case having a remaining term until
maturity of not more than 180 days from the date such investment is made and
rated at least P-1 by Moody's Investors Service, Inc. or at least A-1 by
Standard & Poor's Ratings Group; and (iv) repurchase agreements maturing within
one year with any financial institution having combined capital and surplus of
not less than $500,000,000 with any of the obligations described in clauses (i)
through (iii) as collateral so long as title to the underlying obligations pass
to Lessor and such underlying securities shall be segregated in a custodial or
trust account for the benefit of Lessor.
"Permitted Liens" shall have the meaning set forth in the Credit
Agreement, but shall include (i) Lessor Liens and (ii) Permitted Exceptions.
A1-26
Definitions Appendix
--------------------
"Person" means an individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or Authority.
"Plan" means any employee pension benefit plan within the meaning of
Section 3(2) of ERISA (other than a Multiemployer Plan) covered by Title IV of
ERISA by reason of Section 4021 of ERISA, of which Lessee, Genesis or any
Subsidiary thereof or any other Controlled Group Member is or has been within
the preceding five years a "contributing sponsor" within the meaning of Section
4001(a)(13) of ERISA, or which is or has been within the preceding five years
maintained for employees of Lessee, Genesis or any Subsidiary thereof or any
other Controlled Group Member.
"Postretirement Benefits" has the same meaning specified in the Credit
Agreement.
"Present Value Amount" has the meaning set forth in Section 2.12 of
the Loan Agreement.
"Prime Rate" means the interest rate per annum announced from time to
time by Mellon as its prime rate. The prime rate may be greater or less than
other interest rates charged by Mellon to other borrowers and is not solely
based or dependent upon the interest rate which Mellon may charge any particular
borrower or class of borrower. If the aforesaid rate changes from time to time
after the Document Closing Date, the Prime Rate shall be automatically increased
or decreased, as the case may be, without notice to Lessee, Lessor or any
Lender, as of the effective time of each change.
"Proceeds" has the meaning specified in Section 6.4 of the Lease.
"Prohibited Transaction" means a transaction that is prohibited under
Code Section 4975 or ERISA Section 406 and not exempt under Code Section 4975 or
ERISA Section 408.
"Purchase Option" has the meaning specified in Section 6.2 of the
Lease.
"Purchase Option Exercise Amount" means, as of any date of
determination, the sum of (a) the Lease Balance as of the date of purchase, plus
(b) all accrued but unpaid Rent, plus (c) all other sums then due and payable
under the Operative Documents by Lessee and any of its Affiliates.
A1-27
Definitions Appendix
--------------------
"Redeployment Rate" has the meaning set forth in Section 2.12 of the
Loan Agreement.
"Redeployment Period" has the meaning set forth in Section 2.12 of the
Loan Agreement.
"Regulated Activity" means the use, Release, generation, treatment,
storage, recycling, transportation or disposal of Hazardous Material to the
extent such activities are regulated by any Authority.
"Regulations" mean the income tax regulations promulgated from time to
time under and pursuant to the Code.
"Release" means the release, deposit, disposal or leak of any Hazardous
Material into or upon or under any land or water or air, or otherwise into the
environment, including by means of burial, disposal, discharge, emission,
injection, spillage, leakage, seepage, leaching, dumping, pumping, pouring,
escaping, emptying, placement and the like.
"Renewal Request" has the meaning set forth in Section 2.10 of the
Participation Agreement.
"Renewal Term" has the meaning set forth in Section 2.4 of the Lease.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Rent Installment Period" means (i) with respect to any Lease
Supplement, the period commencing on (and including) the date of such Lease
Supplement and ending on (but excluding) the next succeeding Payment Date, and
thereafter, successive periods commencing on (and including) a Payment Date and
ending on (but excluding) the next succeeding Payment Date, and (ii) with
respect to the Lease, the period commencing on (and including) the date of the
initial Lease Supplement and ending on (but excluding) the next succeeding
Payment Date, and thereafter, successive periods commencing on (and including) a
Payment Date and ending on (but excluding) the next succeeding Payment Date.
"Replacement Participant" has the meaning specified in Section 2.10 of
the Participation Agreement.
"Reportable Event" has the same meaning specified in the Credit
Agreement.
A1-28
Definitions Appendix
--------------------
"Required Lenders" mean, as of the date of the determination, Lenders
having aggregate investments in the Overall Transaction (as measured by the
outstanding principal amount of the Loans then outstanding) equal to 51% or more
of all such investments.
"Required Participants" mean, as of the date of the determination,
Participants having aggregate investments in the Overall Transaction (as
measured by the outstanding principal amount of the Loans then outstanding and
the outstanding Equity Amount) equal to 51% or more of all such investments.
"Responsible Officer" of a Person means the President, the Chief
Executive Officer, any Vice President, the Controller, the Treasurer or the
Chief Financial Officer of such Person.
"Rolling Period" shall mean the period of twelve consecutive fiscal
months, taken as one fiscal period, which ends on the last day of March, June,
September or December (the "Rolling Period Ending Date").
"Sale Option" has the meaning specified in Section 6.3 of the Lease.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
"Security Agreement" has the meaning specified in the Credit Agreement,
and shall include, without limitation, the Amendment to Security Agreement.
"Sellers" mean the sellers of the Sites to Lessor, identified
on Schedule III.
"Senior Officer" means the Chairman or Vice Chairman of the Board of
Directors, the Chairman or Vice Chairman of the Executive Committee of the Board
of Directors, the President, any Senior Vice President, the Chief Executive
Officer, the Chief Financial Officer or the Treasurer of Lessee.
"Shortfall Amount" has the meaning set forth in Section 6.4(c)
of the Lease.
A1-29
Definitions Appendix
--------------------
"Site" has the meaning set forth in the Recitals to the Participation
Agreement, and shall include, without limitation, all of the right, title and
interest of the seller of the Site (or upon the acquisition of title to the Site
by Lessor, all right, title and interest of Lessor) in and to the following:
(A) the real property described in Schedule III attached to
the Participation Agreement (the "Land"); all buildings, structures and
other improvements now or in the future located on the Land (the
"Improvements"; the Improvements and the Land are sometimes
collectively referred to herein as the "Property");
(B) all the estate, right, title, claim or demand whatsoever
of such Person, in possession or expectancy, in and to the Property or
any part thereof;
(C) all right, title and interest of such Person in and to all
of the fixtures, furnishings and fittings of every kind and nature
whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or
subsequently acquired by the Mortgagor and now or subsequently attached
to, or contained in or used or usable in any way in connection with any
operation or letting of the Property (all of the foregoing in this
paragraph (C) being referred to as the "Fixtures");
(D) all right, title and interest of such Person in and to all
of the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Property, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, refrigerators, elevators, loading and unloading
equipment and systems, stoves, ranges, laundry equipment, cleaning
systems (including window cleaning apparatus), telephones,
A1-30
Definitions Appendix
--------------------
communication systems (including satellite dishes and antennae),
televisions, computers (excluding software), sprinkler systems and
other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks,
conduits, appliances, fittings and fixtures of every kind and
description (all of the foregoing in this paragraph (D) being referred
to as the "Equipment");
(E) all right, title and interest of such Person in and to all
substitutes and replacements of, and all additions and improvements to,
the Improvements and the Fixtures and Equipment, subsequently acquired
by such Person or constructed, assembled or placed by such Person on
the Land, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials whether stored at the Property or offsite, and, in
each such case, without any further mortgage, conveyance, assignment or
other act by such Person;
(F) all right, title and interest of such Person in, to and
under all books and records relating to or used in connection with the
operation of the Property or the Fixtures or any part thereof; and all
general intangibles related to the operation of the Improvements now
existing or hereafter arising;
(G) all right, title and interest of such Person in and to all
insurance policies (including title insurance policies) required to be
maintained by Lessee pursuant to Article XI of the Lease, including the
right to collect and receive such proceeds; and all awards and other
compensation, including the interest payable thereon and the right to
collect and receive the same, made to the present or any subsequent
owner of the Property for the taking by eminent domain, condemnation or
otherwise, of all or any part of the Property or any easement or other
right therein; and
(H) all right, title and interest of such Person in and to (to
the extent assignable) (i) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Property
or any part thereof and (ii) all plans and specifications relating to
the Property.
A1-31
Definitions Appendix
--------------------
"Standard Notice" means a notice of the Lessee for the conversion to or
renewal of any portion of the Loans or the Equity Amount to LIBO Rate Loans or
to Equity Amount which bears Yield based upon the LIBO Rate or for the making of
any Advance which shall bear interest or Yield based upon the LIBO Rate or for
the selection of an Interest Period for LIBO Rate Loans or for Equity Amount
which bears Yield based upon the LIBO Rate.
"Stock Purchase Agreement" means that certain Stock Purchase Agreement
dated as of May 3, 1996 among Stock Sellers and Genesis, as amended.
"Stock Sellers" means those Persons described on Schedule IV attached
hereto.
"Structuring/Underwriting Fee" has the meaning specified in Section 2.6
of the Participation Agreement.
"Sublease" has the meaning specified in Section 12.1 of the Lease.
"Subsidiary" has the meaning specified in the Credit Agreement.
"Subtenant" has the meaning set forth in Section 12.1(a) of the Lease.
"Supplemental Lease Balance" means the product of the Allocated Share
of the Lease Supplement in question and the Lease Balance.
"Supplemental Rent" means any and all amounts, liabilities and
obligations other than Basic Rent which Lessee assumes or agrees or is otherwise
obligated or designated to pay under the Lease or any other Operative Document
(whether or not designated as Supplemental Rent) to Lessor, Agent, the Lenders
or any other Person, including amounts under Section 9.1 of the Lease,
Additional Costs and indemnities and damages for breach of any covenants,
representations, warranties or agreements.
"Surviving Company" has the meaning set forth in Section 5.2 of the
Participation Agreement.
"Taxes" and "Tax" mean any and all fees (including documentation,
recording, license and registration fees), taxes (including income (whether net,
gross or adjusted gross), financial institutions, franchise, gross receipts,
sales, rental, use, turnover, value-added, property, excise and stamp taxes),
A1-32
Definitions Appendix
--------------------
levies, imposts, duties, charges, assessments or withholdings of any nature
whatsoever, together with any penalties, fines or interest thereon or additions
thereto.
"Title Insurance Company" means Chicago Title Insurance Company and
its successors and assigns.
"Title Policies" have the meaning specified in Section 3.2(d) of the
Participation Agreement.
"Total Costs" means the sum of the Lessor's Costs plus Transaction
Costs funded by Lessor; provided, however, that Transaction Costs shall not
exceed $2,000,000 in the aggregate.
"Transaction Costs" shall mean all transaction costs and expenses
incurred by Mellon as Agent for the Lessor and the Lenders, Lessee and Lessor in
connection with the preparation, negotiation, execution, delivery, performance
and administration of the Operative Documents and Agent's syndication of the
Notes pursuant to Section 6.7, in each case including without limitation (a) the
reasonable legal fees and expenses of special counsel to Mellon, as Agent for
Lessor and the Lenders (including, without limitation, reasonable fees and
expenses of counsel to Mellon, as Agent, in connection with the transfer by
Lessor of its interest in the Sites or the transfer by any of the Lenders of any
Notes from time to time), special Credit Agreement counsel to Mellon and special
counsel to Lessee, (b) reasonable legal fees and expenses of local counsel to
the Lessee, (c) the reasonable expenses of Lessor (including, without
limitation, residual value insurance premiums if any), (d) all appraisal fees
and expenses, including the cost of an appraisal obtained by Lessor with respect
to the Facilities upon a Lease Default or Lease Event of Default, (e) all costs
and expenses of the preparation of the Environmental Audits, (f) the
Structuring/Underwriting Fee, and (g) all recording, filing fees and expenses,
including fees and expenses of the Title Insurance Company. Certain Transaction
Costs (not to exceed $2,000,000 in the aggregate) incurred in connection with
the closing of this lease arrangement will be paid by Lessor pursuant to Section
9.9 of the Participation Agreement.
"Treasury Rate" shall have the meaning set forth in the Credit
Agreement.
"Turnover Date" has the meaning set forth in Section 12.1(b) of the
Lease.
A1-33
Definitions Appendix
--------------------
"UCC" means the Uniform Commercial Code of New York or any other
applicable jurisdiction.
"Yield" means during the Basic Term, (a) the applicable interest rate
payable from time to time pursuant to the Loan Agreement plus 300 basis points;
provided, that the Yield Rate for the Equity Amount for the Renewal Term, if
any, shall be determined by the mutual agreement of Lessor and Lessee; and
provided, further, that during any Holdover Period, the Applicable Margin (and
thus, the Yield) shall be increased by 50 basis points. During any period that
the applicable interest rate payable with respect to the portion of any Advance
allocable to the Notes pursuant to the Loan Agreement is determined by reference
to a LIBO Rate, Yield on the portion of such Advance constituting a portion of
the Equity Amount shall be calculated on the basis of actual number of days
elapsed in a 360-day year. During any period that the applicable interest rate
payable with respect to the portion of any Advance allocable to the Notes
pursuant to the Loan Agreement is determined by reference to the Prime Rate,
Yield on the portion of such Advance constituting a portion of the Equity Amount
shall be calculated on the basis of actual number of days elapsed in a 365 or
366-day year, as applicable.
A1-34
Appendix 2 to
-------------
Participation Agreement
-----------------------
APPENDIX 2
to
Participation Agreement
CONDITIONS PRECEDENT TO DOCUMENT CLOSING DATE
(a) Authorization, Execution and Delivery of Documents; No
Default. The Operative Documents shall have been duly authorized, executed and
delivered by each of the other parties thereto, shall (to the extent the form
and substance thereof shall not be prescribed hereby) be in form and substance
satisfactory to the Agent and an executed counterpart of each thereof shall have
been delivered to the Agent. Each Lender shall have received an original, duly
executed Note registered in such Lender's name. Each of the Participation
Agreement, the Lease, the Guaranty, the Loan Agreement, the Notes, the
Assignment of Lease and the other Operative Documents shall be in full force and
effect as to all other parties and no Lease Default or Lease Event of Default
shall have occurred or be continuing.
(b) Litigation. No action or proceeding shall have been
instituted or threatened nor shall any governmental action be instituted or
threatened before any Authority, nor shall any order, judgment or decree have
been issued or proposed to be issued by any Authority, to set aside, restrain,
enjoin or prevent the performance of this Agreement or any transaction
contemplated hereby or by any other Operative Document or which is reasonably
likely, in the sole opinion of the Agent, to have a Material Adverse Effect.
(c) Legality, etc. In the opinion of such Lender or its
counsel, the transactions contemplated by the Operative Documents shall not
violate any Applicable Laws and Regulations and no change shall have occurred or
been proposed in Applicable Laws and Regulations that would make it uneconomic
or illegal for any party to any Operative Document to participate in any of the
transactions contemplated by the Operative Documents or otherwise would prohibit
the consummation of any transaction contemplated by the Operative Documents or
expand the duties, obligations and risks of such Lender.
(d) Governmental Approvals. All necessary (or, in the
reasonable opinion of Lessor, Agent or either of their respective counsel,
advisable) Governmental Actions, in each case required by any Applicable Laws
A2-1
Appendix 2 to
-------------
Participation Agreement
-----------------------
and Regulations, shall have been obtained or made and be in full force and
effect.
(e) Requirements of Law. In the reasonable opinion of Lessor,
Agent and their respective counsel, the transactions contemplated by the
Operative Documents do not and will not violate in any Applicable Laws and
Regulations and do not and will not subject Lessor, Agent or any Lender to any
adverse regulatory prohibitions or constraints.
(f) Opinions; Local Counsel Questionnaires. The following
opinions, each dated the Document Closing Date, substantially in the form set
forth in the Exhibit noted below, and containing such other matters as the
parties to whom they are addressed shall reasonably request, shall have been
addressed to each of Lessor, Agent and the Lenders, and delivered to Lessor and
Agent:
(i) the opinion of Ira Gubernick, Esq., in-house
counsel for Lessee (Exhibit E-1).
(ii) the opinion of Blank Rome Comisky & McCauley,
special counsel for Lessee (Exhibit E-2);
(iii) the opinion of Holland & Knight ("Special Florida
Counsel"), special Florida counsel for Genesis (Exhibit E-3);
(iv) the opinion of Ober, Kaler, Grimes & Shriver
("Special Virginia Counsel"), special Virginia counsel for Genesis
(Exhibit E-3); and
(v) the opinion of Blank, Rome, Comisky & McCauley,
special counsel for Genesis (Exhibit E-4).
In addition, not less than five (5) days prior to the Document Closing Date,
local counsel questionnaires (responding to the matters set forth in Exhibit E-5
and such other matters as Agent shall request) for Florida and Virginia,
prepared by Special Florida Counsel and Special Virginia Counsel, respectively,
and addressed to Lessor, Agent and the Lenders, shall have been delivered to
Agent and shall be in form and substance acceptable to Agent.
(g) Corporate Status and Proceedings. On or prior to the
Document Closing Date, each of the Lenders, Lessor and Agent shall have
received:
A2-2
Appendix 2 to
-------------
Participation Agreement
-----------------------
(i) certificates of existence and good standing with
respect to Lessee from (A) the Secretaries of State of the State of its
incorporation and (B) the Secretary of State of the State of its
principal place of business, each dated no earlier than the 10th day
prior to the Document Closing Date;
(ii) copies of Lessee's certificate of incorporation,
certified by the Secretary of State of the State of its incorporation
no earlier than the 10th day prior to the Document Closing Date; and
(ii) with respect to Lessee, an Officer's Certificate
substantially in the form of Exhibit F, dated the Document Closing
Date, with respect to such Person's governing documents, resolutions
and incumbent officers, representations and warranties and absence of
defaults.
(h) Lessor Officer's Certificate. Each Lender and Agent shall
have received (x) a certificate of the Secretary or Assistant Secretary of
Lessor attaching and certifying as to (i) the corporate authority for the
execution, delivery and performance by Lessor of each Operative Document to
which it is or will be a party, (ii) its organizational documents, (iii) its
by-laws, and (iv) the incumbency and signature of persons authorized to execute
and deliver such documents on behalf of Lessor and (y) a good standing
certificate from the appropriate Authority as to Lessor's good standing.
All documents and instruments required to be delivered on the Document Closing
Date shall be delivered at the offices of Mayer, Brown & Platt in New York, New
York, or at such other location as may be determined by the Lessor, Agent and
Lessee.
(i) Filings and Recordings. All filings or recordings
enumerated and described in Schedule 4.1B hereof, as well as all other filings
and recordings necessary or advisable, including precautionary financing
statements, in the opinion of Agent or counsel to Agent, to perfect the rights,
titles and interests of Lessor, the Lenders, the Guarantors and Agent intended
to be created by the Operative Documents shall have been made, or shall have
been arranged to be made promptly thereafter, in the appropriate places or
offices, including any recordings and filings necessary to create, perfect,
preserve and protect (i) Lessor's interest in the Land Interests and the
Facilities and (ii) a first mortgage lien on all Land Interests and Facilities
included in the Collateral, subject in both cases, to Permitted Exceptions and
the rights of Lessee under the Lease. All recording and filing fees and taxes
A2-3
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Participation Agreement
-----------------------
with respect to any recordings or filings made pursuant to this Agreement shall
have been paid in full, and satisfactory evidence thereof shall have been
delivered to Agent, or arrangements for such payment shall have been made to
the satisfaction of Agent.
(j) Survey. Lessee shall have delivered, or shall have caused
to be delivered, to Agent, with sufficient counterpart originals for Agent to
distribute to Lessor and each Lender, and counsel to the Lenders an ALTA survey
of the Site in a form satisfactory to the Title Insurance Company and showing no
state of facts unsatisfactory to Agent and counsel to the Lenders, which survey
shall be certified to Lessor and Agent.
(k) Title Insurance. Lessor shall have received from the Title
Insurance Company its ALTA 1992 owner's policy of title insurance, acceptable in
form and substance to Agent and counsel to the Lenders (the "Lessor's Policy")
(or a final hand-marked original thereof signed by the Title Insurance Company)
containing all of the provisions to be included in such policy by the Title
Insurance Company, in which case Lessor shall receive a clean, final original of
such policy within thirty (30) days), insuring that Lessor has good and
marketable title to the Site being purchased by Lessor on the Document Closing
Date, subject to the Lease and such other exceptions to title as are reasonably
acceptable to Agent and counsel for the Lenders, together with complete, legible
copies of all encumbrances, maps and surveys of record. Agent, for the benefit
of the Lenders shall have received from the Title Insurance Company its ALTA
1992 form of loan policy of title insurance (the "Loan Policy"; together with
the Lessor's Policy, the "Title Policies"), reasonably acceptable in form and
substance to Agent and counsel for the Lenders, insuring the creation under the
Mortgage in favor of Agent and the Lease in favor of Lessor of a valid first
priority mortgage lien against the Land Interest, subject to such exceptions to
title as are reasonably acceptable to Agent and counsel for the Lenders,
together with to the extent available complete, legible copies of all
encumbrances, maps and surveys of record. The Title Policies shall be dated as
of the Document Closing Date, shall be in an amount equal to the Fair Market
Sales Value of such Site as of such date and, to the extent permitted under
Applicable Laws and Regulations and to the extent applicable to each type of
policy, and to the extent available within the applicable jurisdiction at
reasonable prices, shall (x) contain affirmative endorsements as to mechanics'
liens, usury, doing business, zoning (with express parking coverage), easements
and rights-of-way, comprehensive coverage, encroachments, rights of access and
survey matters, (y) delete the creditors' rights exclusion and the general
A2-4
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-------------
Participation Agreement
-----------------------
exceptions to coverage, and (z) contain such other endorsements as reasonably
requested by Agent.
(l) Environmental Audit. Not less than five (5) Business Days
prior to the Document Closing Date, Agent shall have received an Environmental
Audit for each Site, which shall be in form and substance acceptable to Agent in
its sole and absolute discretion.
(m) Zoning. In the event that, with respect to a Site, an ALTA
3.1 Zoning Endorsement (with express parking coverage) was not obtained in
connection with the Title Policies for such Site, Agent on behalf of the Lenders
shall receive a copy of the applicable zoning ordinance, special use permit or
other Governmental Action covering the Site, and such evidence as Agent may
require (including without limitation the written certification of Lessee's
certified professional engineer or registered architect or any other person
satisfactory to Agent) that the zoning of the Site is satisfactory and
compatible with the Facility located thereon.
(n) Deed and Bill of Sale; Ground Lease. As to any Site,
Agent shall have received (i) a Deed conveying to Lessor such Site, if any, or
other improvements, if any, located on such Site, and (ii) a Bill of Sale
conveying any portion of any such Facility or improvements which do not or may
not constitute real estate under Applicable Law (provided that no Bill of Sale
shall be required if the form of Deed used purports to convey title to the
items which would otherwise be conveyed in the Bill of Sale and if such Deed is
in fact sufficient under applicable law to convey title to such items);
provided, however, that for any Non-Acquired Land Interest, the Deed described
in clause (i) shall convey only the related Facility and, in addition, Agent
shall have received a Ground Lease of the Non-Acquired Land Interest from Lessee
or one of its affiliates (whichever shall acquire such Land Interest), as ground
lessor, to Lessor, as ground lessee.
(o) Lease Supplement. Agent shall have received, with
sufficient counterpart originals for Agent to distribute to Lessor and each
Lender, original counterparts of the Lease Supplement executed by Lessee and
Lessor with respect to such Site or Group; provided that only Agent shall
receive and retain the one original thereof marked as the sole original
counterpart for UCC purposes.
(p) Mortgage. Agent shall have received a Mortgage duly
executed by Lessor with respect to each Site.
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Participation Agreement
-----------------------
(q) Assignment of Lease; Consent of Lessee. Agent shall have
received an Assignment of Lease duly executed by Lessor, with the consent
thereto duly executed by Lessee, with respect to the Lease.
(r) Filings and Recordations. Agent shall have received
evidence reasonably satisfactory to it that each of the Deeds, the Florida Lease
Supplement, the Mortgages and the Assignment of Lease delivered shall have been
or are being recorded with the appropriate Authorities in the order in which
such documents are listed in this clause, and the UCC Financing Statements with
respect to the Facilities acquired shall have been or are being filed with the
appropriate Authorities.
(s) Insurance. Insurance complying with the provisions of
Article XI of the Lease shall be in full force and effect as evidenced by
certificates of insurance, broker's reports or insurance binders delivered to
Lessor in form and substance reasonably satisfactory to Agent.
(t) Appraisal. Not less than ten (10) Business Days prior to
the Document Closing Date, Agent shall have received and will deliver to Lessor
and each Lender an appraisal (the "Appraisal") which will establish (by the use
of appraisal methods satisfactory to the Lenders) that, as of the date such Site
becomes subject to the Lease, the Site will have a Fair Market Sales Value of
not less than the amount allocated to such Site on Schedule III. The Appraisal
will also establish the Fair Market Sales Value of such Site as of the end of
the Base Term and the Renewal Term. The Appraisal will be prepared in accordance
with the Financial Institutions Reform Recovery and Enforcement Act of 1989 and
will be performed by an independent appraisal company chosen by Agent.
(u) FIRPTA Affidavit. Lessee shall have caused the seller of
the Land Interest to be acquired on the Document Closing Date to deliver to
Agent either (i) a FIRPTA Affidavit in customary form or (ii) if such seller is
a "foreign person" as defined in Section 1445 of the Code, evidence that a
portion of the sales price to be paid to such seller has been withheld, if so
required, in accordance with the provisions of the Code and the Regulations.
(v) No Event of Loss. No Casualty and no Event of Loss shall
have occurred in respect of any Site to be acquired on the Document Closing
Date. No action shall be pending or threatened by an Authority to initiate a
Condemnation or an Event of Taking in respect of any Site to be acquired on such
date.
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(w) Appraised Value Limitation; 25% Test. The appraised value
of the Land Interest of any Site or Group shall not exceed twenty-five percent
(25%) of the forecasted Fair Market Sales Value of such Site or Group (on an
"as-built" basis).
(x) Good Standing. Lessee shall have delivered to Agent a
certificate issued by the office of the secretary of state of the jurisdiction
in which any Land Interest to be acquired or is located indicating that Lessee
is a foreign corporation in good standing under the laws of such jurisdiction.
(y) Stock Purchase Agreement; Assignment. Lessee shall have
caused Genesis to execute and deliver to Agent a certified copy of the Stock
Purchase Agreement, together with the Assignment of Rights under Stock Purchase
Agreement.
(z) Credit Agreement. Lessee shall have caused Genesis to
execute and deliver to Agent a certified copy of the Credit Agreement.
(aa) Number of Counterparts. Whenever Agent is to have
received any document, agreement or opinion pursuant to the Participation
Agreement, such condition shall require that Agent has received sufficient
counterpart originals for Agent to distribute to Lessor and each Lender unless
otherwise specifically approved by Agent.
A2-7
Assignment of Lease Supplement
------------------------------
EXHIBIT H TO PARTICIPATION AGREEMENT
FORM OF ASSIGNMENT OF LEASE AND AGREEMENT AND
LEASE SUPPLEMENTS AND MEMORANDA OF LEASE AND AGREEMENT
This instrument was prepared by
and upon recordation should be
returned to:
Robert E. Gordon, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
- --------------------------------------------------------------------------------
ASSIGNMENT OF LEASE AND AGREEMENT AND
LEASE SUPPLEMENTS AND MEMORANDA OF LEASE
AND AGREEMENT
Dated as of July 24, 1996
between
MELLON FINANCIAL SERVICES
CORPORATION #4,
as Lessor
and
MELLON BANK, N.A.,
as Agent and Assignee
- --------------------------------------------------------------------------------
Assignment of Lease Supplement
------------------------------
TABLE OF CONTENTS
Section 1. COLLATERAL ASSIGNMENT OF LEASE...................................1
Section 2. ASSIGNMENT AS COLLATERAL SECURITY................................3
Section 3. PAYMENTS UNDER THE LEASE.........................................4
Section 4. POWER OF ATTORNEY IN RESPECT OF THE LEASE........................4
Section 5. ASSIGNEE DESIGNATED RECIPIENT....................................5
Section 6. ALLOCATION PURSUANT TO LOAN AGREEMENT............................5
Section 7. IRREVOCABILITY; SUPPLEMENTAL INSTRUMENTS.........................5
Section 8. AMENDMENTS OR TERMINATION OF THE LEASE...........................5
Section 9. LESSEE'S CONSENT AND AGREEMENT...................................6
Section 10. REMEDIES CUMULATIVE.............................................6
Section 11. MISCELLANEOUS...................................................6
ATTACHMENTS TO ASSIGNMENT OF LEASE:
Exhibit A - Legal Description
Consent and Agreement of Lessee
A2-2
THIS ASSIGNMENT OF LEASE AND AGREEMENT AND LEASE SUPPLEMENT AND
MEMORANDUM OF LEASE AND AGREEMENT dated as of July 24, 1996 (herein, as the same
may be amended or supplemented from time to time, called this "Assignment
Agreement"), is between MELLON FINANCIAL SERVICES CORPORATION #4, a Pennsylvania
corporation, as Lessor ("Lessor") and MELLON BANK, N.A., as Agent and assignee
(the "Assignee").
Capitalized terms not otherwise defined in this Assignment Agreement
shall have the respective meanings assigned thereto in the Appendix 1 to that
certain Participation Agreement, dated as of July 24, 1996 (the "Participation
Agreement"), by and among Genesis Eldercare Properties, Inc. ("Lessee"), a
Pennsylvania corporation, Lessor, Assignee and the Lenders set forth therein
(the "Lenders").
RECITALS:
WHEREAS, the Sites legally described on Exhibit A attached hereto, have
been leased by Lessor to Lessee pursuant to a Lease and Agreement, dated as of
July 24, 1996, together with, for each Site, a Lease Supplement and Memorandum
of Lease and Agreement (herein, said Lease and Agreement, together with all
Lease Supplements and Memoranda of Lease and Agreement, as the same may be
amended or supplemented from time to time as permitted thereby and by the
Operative Documents, are collectively called the "Lease");
WHEREAS, Lessor has entered into the Participation Agreement with
Assignee, Lessee and the Lenders party thereto providing, among other things,
for the commitment of the Lenders to assist in financing Lessor's acquisition of
the Sites by making Loans to be evidenced by the respective Notes. Such Loans as
evidenced by the Notes (i) mature on July 24, 2001 and (ii) bear interest on the
unpaid principal amount thereof from time to time outstanding at the interest
rate per annum determined as provided in and payable as specified in the Loan
Agreement; and
WHEREAS, Lessor is entering into this Assignment Agreement in order to
induce the Lenders to make Loans to Lessor and as additional security for the
purchase of the Notes.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Lessor hereby agrees for the benefit of Assignee as follows:
Section 1. COLLATERAL ASSIGNMENT OF LEASE. Lessor, in consideration
of the premises and for other good and valuable consideration, the receipt
whereof is hereby acknowledged, and as security for the payment of the principal
of, and all interest and all other sums payable on, the Notes and all other
H-1
Assignment of Lease
-------------------
sums payable by Lessor to Assignee under the Loan Agreement or under any of the
other Operative Documents and the performance and observance by Lessor for the
benefit of Assignee or the Lenders of the provisions of each thereof, whether
contained therein or incorporated therein by reference, has assigned,
transferred, conveyed and set over, and by these presents does assign, transfer,
convey and set over, to Assignee, for the benefit of Assignee and the Lenders,
all of Lessor's interest in, to and under the Lease and all of Lessor's estate,
right, title, interest, claim and demand as Lessor under the Lease, and all
existing or future amendments, supplements or modifications of the Lease;
TOGETHER WITH all rights, powers, privileges, options and other
benefits of Lessor under the Lease, including, without limitation (a) the right
to receive and collect all Rent, income, revenues, issues, profits, Loss
Proceeds, bankruptcy claims, liquidated damages, purchase price proceeds
(pursuant to Article VI of the Lease, or otherwise), the Applicable Percentage
Amount, and other payments, tenders and security payable to or receivable by
Lessor under the Lease, to be applied in accordance with Section 3.3 of the Loan
Agreement; (b) the right, subject to the provisions of Section 9.5 of the
Participation Agreement and not to the exclusion of Lessor, to give and withhold
all waivers, consents, modifications, amendments and agreements under or with
respect to the Lease; (c) the right, not to the exclusion of Lessor, to give and
receive copies of all notices and other instruments or communications under or
pursuant to the Lease; (d) the right to take such action upon the occurrence and
during the continuance of a Lease Event of Default as shall be permitted by the
Lease or by Applicable Laws and Regulations; and (e) the right to do any and all
other things whatsoever which Lessor or any lessor under the Lease, as the case
may be, is or may be entitled to do thereunder;
TOGETHER WITH the right and power to execute and deliver as agent and
attorney-in-fact of Lessor under the Lease an appropriate deed, bill of sale or
other instruments of transfer necessary or appropriate for the conveyance and
transfer to Lessee of Lessor's interest in the Sites pursuant to Article VI of
the Lease, and all interests of Lessor therein and to perform in the name and
for and on behalf of Lessor, as such agent and attorney-in-fact, any and all
other necessary or appropriate acts with respect to any such purchase,
conveyance and transfer;
TOGETHER WITH the right, not to the exclusion of Lessor, to inspect the
Sites and all records relating thereto and to enforce performance or observance
by the Lessee of any of such rights by the exercise of the right to proceed by
H-2
Assignment of Lease
-------------------
appropriate court action or actions, either at law or in equity, to enforce
performance by Lessee of the applicable covenants and terms or to recover
damages for the breach thereof;
EXCLUDING FROM all of the foregoing the Excluded Amounts.
TO HAVE AND TO HOLD the same unto Assignee and its successors and
assigns forever.
Section 2. ASSIGNMENT AS COLLATERAL SECURITY. The assignment made
hereby is executed as collateral security, and the execution and delivery hereof
shall not in any way impair or diminish any obligations of Lessor as lessor
under the Lease or of Lessor, Assignee, the Guarantor or any Lender under any of
the other Operative Documents, nor impair, affect or modify any of the terms and
conditions of the Notes or the Loan Agreement or any of the other Operative
Documents securing the Notes, nor shall any of the obligations of Lessor or of
any other Person under any of the Operative Documents (other than the express
obligations of Assignee) be imposed upon Assignee, including, but not limited
to, collecting Rent or enforcing performance by Lessee or the Guarantor.
Without limiting the generality of the foregoing, Assignee shall not be
obligated to perform or discharge, nor does Assignee hereby undertake to perform
or discharge, any obligation, duty or liability of Lessor under the Lease, or of
Lessor under any of the other Operative Documents, or under or by reason of this
Assignment Agreement and the Lessor does hereby waive any and all liability,
loss or damage which may or might be asserted against Assignee by reason of any
alleged obligations or undertakings on its or their part to perform or discharge
any of the terms, covenants or agreements contained in the Lease to be performed
or discharged by Lessor thereunder, provided, however, if Assignee does
undertake any such action pursuant to the terms, conditions and restrictions
contained in this Assignment Agreement and the other Operative Documents, Lessor
shall retain any rights it may have with respect thereto under the Operative
Documents or by law or in equity, and Assignee shall be liable for its gross
negligence or willful misconduct. It is further understood and agreed that this
Assignment Agreement shall not operate to (i) place responsibility for the
control, care, management or repair of the Sites upon Assignee, nor for the
carrying out of any of the terms and conditions of the Lease or of any of the
other Operative Documents (except to the extent expressly provided therein), in
any such case binding upon or applicable to Lessor, or (ii) make Assignee
responsible or liable for any waste with respect to the Sites by Lessee or any
Person other than by Assignee, or for any dangerous or defective condition
H-3
Assignment of Lease
-------------------
of the Sites, or for any negligence of the management, upkeep, or repair or
control of the Sites resulting in loss or injury or death to Lessee, any
sublessee, sublessor, licensee, employee or stranger other than by Assignee.
Section 3. PAYMENTS UNDER THE LEASE. Lessor hereby directs Lessee to
pay to Assignee, as and when due pursuant to the Lease, the Applicable
Percentage Amount, all Basic Rent, all Supplemental Rent and all payments
pursuant to Articles IV and VI of the Lease, purchase proceeds or avails,
income, Loss Proceeds, and other sums paid or payable to Lessor pursuant to the
Lease (but excluding any indemnity payments or reimbursements to Lessor from
Lessee pursuant to the Lease or otherwise).
Assignee may, at its option, although it shall not be obligated to do
so, and without waiving or releasing any obligation or Loan Event of Default, at
any time perform any Lease covenant required to be performed by Lessor for and
on behalf of Lessor and may recover any money advanced for any such purpose from
Lessor on demand, with interest at the Overdue Rate from the date of
advancement; and (b) Assignee is authorized to endorse, in the name of Lessor,
any item, howsoever received by it, representing any payment on or other
proceeds (including Loss Proceeds) of the Lease (including, without limitation,
all Basic Rent, Supplemental Rent, payments pursuant to Articles IV and VI of
the Lease, purchase proceeds or avails, income, Loss Proceeds and other sums
paid or payable to Lessor pursuant to the Lease) and to endorse and deliver, in
the name of Lessor, any instrument or other item of the Rent held by Assignee
hereunder, in connection with the sale or collection of the Rent.
Section 4. POWER OF ATTORNEY IN RESPECT OF THE LEASE. Lessor does
hereby irrevocably constitute and appoint Assignee its true and lawful attorney
with an interest and full power of substitution, for it and in its name, place
and stead to do any or all of the following (a) ask, demand, collect, receive,
receipt for, sue for, compound and give acquittance for the Recourse Deficiency
Amount, all Basic Rent, Supplemental Rent, payments pursuant to Articles IV and
VI of the Lease, purchase proceeds or avails, income, Loss Proceeds and other
sums paid or payable to Lessor pursuant to the Lease and other sums which are
assigned under Section 1 hereof, and (b) without limiting the provisions of the
foregoing clause (a) hereof, during the continuance of any Lease Event of
Default under the Lease, sue for, compound and give acquittance for, or settle,
adjust or compromise any claim for any and all such Rent, purchase proceeds or
avails, income, Loss Proceeds and other sums which are assigned under Section 1
hereof as fully as Lessor could itself do, and in its discretion to file any
H-4
Assignment of Lease
-------------------
claim or take any other action or proceedings, either in its own name or in the
name of Lessor or otherwise, which Assignee may deem necessary or appropriate to
protect and preserve the right, title and interest of Assignee in and to such
Rent and other sums and security intended to be afforded hereby.
Section 5. ASSIGNEE DESIGNATED RECIPIENT. Lessor hereby directs Lessee
to deliver or remit directly to Assignee at its address set forth in the
Participation Agreement the Applicable Percentage Amount, all Basic Rent, all
Supplemental Rent, payments pursuant to Articles IV and VI of the Lease,
purchase proceeds or avails, income, Loss Proceeds and other sums paid or
payable to Lessor pursuant to the Lease by wire transfer of Federal or other
funds current and immediately available to Assignee on the due date thereof.
Section 6. ALLOCATION PURSUANT TO LOAN AGREEMENT. Notwithstanding
anything contained herein to the contrary, the Applicable Percentage Amount, any
and all Basic Rent, Supplemental Rent, payments pursuant to Articles IV and VI
of the Lease, purchase proceeds or avails, income, Loss Proceeds and other sums
paid to or received or collected by or on behalf of Assignee shall be paid,
allocated and distributed pursuant to the terms of, and in the order of priority
provided for in, Section 3.3 of the Loan Agreement.
Section 7. IRREVOCABILITY; SUPPLEMENTAL INSTRUMENTS. Lessor agrees that
the collateral assignment made hereby and the designation and direction to
Lessee hereinabove set forth are irrevocable, and that Lessor will not, while
said collateral assignment is in effect or thereafter until Lessee has received
from Assignee written notice of the termination of said collateral assignment,
make any other assignment, designation or direction inconsistent therewith, and
that any assignment, designation or direction inconsistent therewith shall be
void. Lessor will from time to time, upon request of Assignee, execute all
instruments of further assurance and all such supplemental instruments as
Assignee may reasonably specify.
Section 8. AMENDMENTS OR TERMINATION OF THE LEASE. Except as otherwise
permitted under Section 9.5 of the Participation Agreement, Lessor agrees that
it will not enter into any agreement amending, supplementing, hypothecating,
waiving, discharging or terminating the Lease.
H-5
Assignment of Lease
-------------------
Section 9. LESSEE'S CONSENT AND AGREEMENT. The consent and agreement
by Lessee to the provisions of this Assignment Agreement is attached hereto.
Section 10. REMEDIES CUMULATIVE. Each right, power and remedy of
Assignee provided for in this instrument or now or hereafter existing at law or
in equity or by statute or otherwise shall be cumulative and concurrent and
shall be in addition to every other right, power or remedy provided for in this
Assignment Agreement or in any other Operative Document or now or hereafter
existing at law or in equity or by statute or otherwise and the exercise or
beginning of the exercise by Assignee of any one or more of such rights, powers
or remedies shall not preclude the further exercise thereof or the simultaneous
or later exercise by Assignee of any or all such other rights, powers or
remedies. No failure or delay on the part of Assignee to exercise any such
right, power or remedy (including, without limitation, the granting by Assignee
of consent to any action by Lessor) shall operate as a waiver thereof. Lessor
stipulates that the remedies at law in respect of any default or threatened
default by Lessor in the performance of or compliance with any of the terms of
this Assignment Agreement are not and will not be adequate, and that any of such
terms may be specifically enforced by a decree for specific performance or by an
injunction against the violation of any terms or otherwise.
Section 11. MISCELLANEOUS.
(a) All notices, requests, offers, consents and other
instruments given pursuant to this Assignment Agreement shall be delivered in
accordance with Section 9.3 of the Participation Agreement.
(b) This Assignment Agreement shall be binding upon, inure to
the benefit of and be enforceable by, the respective successors and assigns of
the parties hereto. The headings to the various paragraphs of this Assignment
Agreement have been inserted for convenience reference only and shall not
modify, define, limit or expand the express provisions of this Assignment
Agreement. Neither this Assignment Agreement nor any provision hereof may be
amended, modified, waived, discharged or terminated orally, but only by an
instrument signed by the parties hereto. If any provision of this Assignment
Agreement or any application thereof shall be invalid or unenforceable, the
remainder of this Assignment Agreement and any other application of such
provision shall not be affected thereby.
(c) This Assignment Agreement may be executed in counterparts,
each of which shall be deemed an original, and such counterparts shall together
H-6
Assignment of Lease
-------------------
constitute but one and the same Assignment Agreement. It shall not be necessary
in making proof of this Assignment Agreement to produce or account for more than
one such counterpart signed by the party against which enforcement of this
Assignment Agreement is sought.
(d) THIS ASSIGNMENT AGREEMENT HAS BEEN DELIVERED IN, AND SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH COMMONWEALTH, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, EXCEPT THAT, TO THE EXTENT REQUIRED BY
APPLICABLE LAW, FORECLOSURE HEREUNDER WITH RESPECT TO ANY SITE SHALL BE GOVERNED
BY THE LAWS OF THE STATE IN WHICH SUCH SITE IS LOCATED.
(e) Upon payment in full of all indebtedness secured by this
Assignment Agreement and the Loan Agreement and performance of all other
obligations secured hereby and thereby, Assignee shall, at Lessee's expense, do,
execute, acknowledge and deliver each and every deed, conveyance, transfer and
release necessary or proper to evidence the release of this Assignment Agreement
whereupon this Assignment Agreement and the Lien created hereby shall terminate
and be of no further force or effect.
(f) Notwithstanding anything to the contrary set forth herein,
in the event of any conflict between any provision of this Assignment Agreement
and the Loan Agreement, the terms and provisions of the Loan Agreement shall
control.
H-7
Assignment of Lease
-------------------
IN WITNESS WHEREOF, the undersigned have caused this Assignment
Agreement to be duly executed and delivered as of the date and year first above
written.
MELLON FINANCIAL SERVICES
CORPORATION #4, a
Pennsylvania corporation, as Lessor
By:______________________________________
Name:____________________________________
Its:_____________________________________
Address: One Mellon Bank Center
Room 151-4444
Pittsburgh, PA 15258-0001
Attention: Leasing Group
Telephone: (412) 234-0934
Facsimile: (412) 234-3948
ACCEPTED:
MELLON BANK, N.A., as Agent and
Assignee
By:______________________________
Name:____________________________
Its:_____________________________
Address: Plymouth Meeting Executive Campus
610 West Germantown Parkway
Suite 200
Attention: Carol Paige
Telephone: (610) 941-8409
Facsimile: (610) 941-4136
H-8
Assignment of Lease
-------------------
STATE OF _______________
COUNTY OF ______________
The foregoing instrument was acknowledged before me this ______ day of
__________________, 1996, by ____________________, the ________________________
of MELLON FINANCIAL SERVICES CORPORATION #4, a Pennsylvania corporation.
______________________________________
Signature of Notary
(Notary Seal must be affixed)
- ------------------------------ Name of Notary Printed
My Commission Expires: _________
Commission Number: _____________
Assignment of Lease
-------------------
STATE OF ___________
COUNTY OF __________
The foregoing instrument was acknowledged before me this ______ day of
__________________, 1996, by _____________________, the ____________________,
of MELLON BANK, N.A., a national banking association.
______________________________________
Signature of Notary
(Notary Seal must be affixed)
- ----------------------------- Name of Notary Printed
My Commission Expires: ________
Commission Number: ____________
Assignment of Lease
-------------------
Exhibit A
Legal Description of the Land
Assignment of Lease
-------------------
CONSENT AND AGREEMENT
OF LESSEE
THIS CONSENT AND AGREEMENT dated as of July 24, 1996, by GENESIS
ELDERCARE PROPERTIES, INC., A Pennsylvania corporation (the "Lessee") for the
benefit of MELLON BANK, N.A., as Agent ("Assignee"), to the assignments made
under the Assignment of Lease and Rents, dated as of the date hereof (the
"Assignment Agreement"), between MELLON FINANCIAL SERVICES CORPORATION #4, a
Pennsylvania corporation as assignor ("Lessor") and Assignee. Capitalized terms
not otherwise defined herein shall have the meanings set forth in the Assignment
Agreement.
1. Lessee hereby consents to the terms and provisions of the Assignment
Agreement and agrees it will deliver or remit, as and when payable pursuant to
the Operative Documents directly to Assignee, the Applicable Percentage Amount,
all Basic Rent, all Supplemental Rent, and all payments pursuant to Articles IV
and VI of the Lease, purchase proceeds or avails, income, Loss Proceeds and
other sums paid or payable to Lessor pursuant to the Lease (but excluding any
indemnity payments or reimbursements to Lessor from Lessee pursuant to the
Lease, any other Operative Document or otherwise), in each case, without any
offset, deduction, defense, abatement, suspension, deferment, diminution or
reduction for any reason so that said funds shall at all times be available for
payment of interest and principal due on the Notes, except in each case as
expressly provided in the Lease.
2. Notwithstanding (i) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding up or other
proceeding affecting Lessor under the Lease, (ii) any action with respect to the
Lease which may be taken by any trustee or receiver of Lessor, or by any court
in such proceeding, and (iii) the exercise by the Lender of any rights and
remedies under the Assignment Agreement, Lessee agrees that it will remain
obligated under the Lease in accordance with their respective terms and that it
will not take any action to terminate (other than pursuant to its rights under
the Lease and the Participation Agreement to do so), rescind or avoid the Lease.
3. To the extent that Lessee may acquire any indebtedness of Lessor or
any other party to the Participation Agreement, or any claim against Lessor or
any other party to the Participation Agreement, by way of subrogation or
otherwise, all such indebtedness and claims are hereby subordinated and made
fully subject in right of payment thereof to the prior payment in full of the
Notes.
Assignment of Lease
-------------------
4. In addition to (and not in limitation of) all of Lessee's
reimbursement and indemnity obligations set forth in the Operative Documents,
Lessee agrees to pay promptly all reasonable and documented costs and expenses
incurred by Lessor, pursuant to the Assignment Agreement, for the release of the
Assignment Agreement.
Assignment of Lease
-------------------
IN WITNESS WHEREOF, Lessee has caused this Consent and Agreement to be
duly executed and delivered as of the date and year first above written.
GENESIS ELDERCARE PROPERTIES,
INC., a Pennsylvania
corporation, as Lessee
By:___________________________________
Name:_________________________________
Title:________________________________
Assignment of Lease
------------------
STATE OF _________
COUNTY OF ________
The foregoing instrument was acknowledged before me this ______ day of
__________________, 1996, by ____________________, the _______________________
of GENESIS ELDERCARE PROPERTIES, INC., a Pennsylvania corporation, on behalf of
the ____________________.
______________________________________
Signature of Notar
(Notary Seal must be affixed) ______________________________________
Name of Notary Printed
My Commission Expires: ________
Commission Number: ____________
Participation Agreement
-----------------------
EXHIBIT K TO PARTICIPATION AGREEMENT
INTENTIONALLY OMITTED
Participation Agreement
-----------------------
EXHIBIT L TO PARTICIPATION AGREEMENT
INTENTIONALLY OMITTED
Participation Agreement
-----------------------
EXHIBIT M TO PARTICIPATION AGREEMENT
Form of Ground Lease
[To be agreed upon by Lessee, Lessor and Agent, if needed]