\n\n--------------------------------------------------------------------------------\n\n PARTICIPATION AGREEMENT\n\n Dated as of December 18, 1998\n among\n\n HEALTHSOUTH CORPORATION, INC.,\n as Lessee,\n\n FIRST SECURITY BANK, NATIONAL ASSOCIATION,\n not individually, except as expressly\n stated herein, but solely as Owner Trustee\n under the HEALTHSOUTH Corporation Trust 1998-1,\n\n THE VARIOUS BANKS AND OTHER\n LENDING INSTITUTIONS WHICH ARE PARTIES\n HERETO FROM TIME TO TIME,\n as the Holders,\n\n THE VARIOUS BANKS AND OTHER\n LENDING INSTITUTIONS WHICH\n ARE PARTIES HERETO FROM TIME TO TIME,\n as the Lenders,\n\n DEUTSCHE BANK AG NEW YORK BRANCH,\n as Documentation Agent\n\n and\n\n NATIONSBANK, N.A.,\n as Administrative Agent for the\n Lenders\n\n\n--------------------------------------------------------------------------------\n\n\n\n\n\n\n\n TABLE OF CONTENTS\n\nSECTION 1. THE LOANS........................................................ 1\n\nSECTION 2. HOLDER ADVANCES.................................................. 1\n\nSECTION 3. SUMMARY OF TRANSACTIONS.......................................... 2\n 3.1. Operative Agreements .............................................. 2\n 3.2. Property Purchase ................................................. 2\n 3.3. Completion of Improvements ........................................ 2\n\nSECTION 4. THE CLOSINGS..................................................... 2\n 4.1. Initial Closing Date .............................................. 2\n 4.2. Initial Closing Date; Property Closing Dates ...................... 2\n 4.3. Appointment of Lessee as Lessor's Agent ........................... 3\n\nSECTION 5. FUNDING OF ADVANCES; REPORTING REQUIREMENTS; LESSEE\n DELIVERY OF NOTICES................................................. 3\n 5.1. General ........................................................... 3\n 5.2. Procedures for Funding ............................................ 3\n 5.3. Conditions to the Holders' and the Lenders' Obligations to\n advance funds on the Initial Closing Date or funds for the\n Acquisition of Property ........................................... 4\n 5.4. Inspection of Documents; Hold Harmless; Removal of\n Properties ........................................................ 8\n\nSECTION 6. CONDITIONS OF THE INITIAL CLOSING................................ 9\n 6.1. Conditions to the Lessor's and the Holders' Obligations ........... 9\n 6.2. Conditions to the Lessee's Obligations ............................ 10\n 6.3. Conditions to the Agent's Obligations ............................. 12\n\nSECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL CLOSING\n DATE................................................................ 13\n 7.1. Representations and Warranties of the Holders ..................... 13\n 7.2. Representations and Warranties of the Owner Trustee ............... 15\n 7.3. Representations and Warranties of the Lessee ...................... 17\n 7.4. Representations and Warranties of the Agent ....................... 21\n\nSECTION 8. REPRESENTATIONS AND WARRANTIES ON ADVANCE DATES.................. 21\n 8.1. Representations and Warranties on Each Property Closing Date ...... 21\n\nSECTION 9. PAYMENT OF CERTAIN EXPENSES...................................... 25\n 9.1. Transaction Expenses .............................................. 25\n 9.2. Certain Fees and Expenses ......................................... 26\n 9.3. Commitment Fee .................................................... 26\n\n\n\n ii\n\n\n\n\nSECTION 10. OTHER COVENANTS AND AGREEMENTS.................................. 27\n 10.1. Cooperation with the Lessee ...................................... 27\n 10.2. Covenants of the Owner Trustee and the Holders ................... 27\n 10.3. Lessee Covenants, Consent and Acknowledgement .................... 29\n 10.4. Sharing of Certain Payments ...................................... 30\n 10.5. Grant of Easements, etc .......................................... 30\n\nSECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT............................ 31\n 11.1. Lessee's Credit Agreement Rights ................................. 31\n 11.2. Lessee's Trust Agreement Rights .................................. 32\n\nSECTION 12. TRANSFER OF INTEREST............................................ 32\n 12.1. Restrictions on Transfer ......................................... 32\n 12.2. Effect of Transfer ............................................... 32\n\nSECTION 13. INDEMNIFICATION................................................. 33\n 13.1. General Indemnity ................................................ 33\n 13.2. General Tax Indemnity ............................................ 36\n 13.3. Environmental Indemnity .......................................... 40\n\nSECTION 14. MISCELLANEOUS................................................... 40\n 14.1. Survival of Agreements ........................................... 40\n 14.2. No Broker, etc ................................................... 40\n 14.3. Notices .......................................................... 41\n 14.4. Counterparts ..................................................... 43\n 14.5. Amendments and Termination ....................................... 43\n 14.6. Headings, etc .................................................... 43\n 14.7. Parties in Interest .............................................. 43\n 14.8. Governing Law; Waivers of Jury Trial ............................. 43\n 14.9. Submission to Jurisdiction; Waivers .............................. 43\n 14.10. Severability .................................................... 44\n 14.11. Liability Limited ............................................... 44\n 14.12. Rights of Lessee ................................................ 45\n 14.13. Further Assurances .............................................. 46\n 14.14. Calculations under Operative Agreements ......................... 46\n 14.15. Confidentiality ................................................. 46\n 14.16. Calculation of Rent, Interest, Holder Yield and Fees ............ 47\n\nEXHIBIT A REQUISITION FORM ................................................. A-1\n Schedule 1 Legal Description of Land .................................. A-3\n Schedule 2 Description of Improvements ................................ A-4\n Schedule 3 Description of Equipment ................................... A-5\n Schedule 4 Work ....................................................... A-6\n\n\n\n iii\n\n\n\n\n\n\nEXHIBIT B HEALTHSOUTH CORPORATION OFFICER'S CERTIFICATE.................B-1\n EXHIBIT A TO OFFICER'S CERTIFICATE............................B-2\nEXHIBIT C FORM OF OPINION OF COUNSEL TO LESSEE..........................C-1\nEXHIBIT D HEALTHSOUTH CORPORATION OFFICER'S CERTIFICATE.................D-1\nEXHIBIT E HEALTHSOUTH CORPORATION SECRETARY'S CERTIFICATE...............E-1\nEXHIBIT F FIRST SECURITY BANK, NATIONAL ASSOCIATION.....................F-1\nEXHIBIT G FIRST SECURITY BANK, NATIONAL ASSOCIATION CERTIFICATE\n OF ASSISTANT SECRETARY........................................G-1\nEXHIBIT H FORM OF OPINION OF COUNSEL TO FIRST SECURITY\n BANK, NATIONAL ASSOCIATION ...................................H-1\n\nAppendix A Rules of Usage and Definitions................................A-1\n\n\n\n\n\n\n\n iv\n\n\n\n\n\n PARTICIPATION AGREEMENT\n\n THIS PARTICIPATION AGREEMENT, dated as of December 15, 1998 (as amended or\nsupplemented from time to time, this \"Agreement\"), is by and among HEALTHSOUTH\nCORPORATION, as Lessee (the \"Lessee\"); FIRST SECURITY BANK, NATIONAL\nASSOCIATION, a national banking association, not individually (in its individual\ncapacity, the \"Trust Company\"), except as expressly stated herein, but solely as\nOwner Trustee under the HEALTHSOUTH Corporation Trust 1998-1 (the \"Owner\nTrustee\" or the \"Lessor\"); DEUTSCHE BANK AG NEW YORK BRANCH, as Documentation\nAgent; NATIONSBANK, N.A., a national banking association, as Administrative\nAgent (in such capacity, the \"Agent\") for the Lenders and the Holders;\nNATIONSBANK, N.A., a national banking association, and the various other banks\nand lending institutions which are parties hereto from time to time as Holders;\nand NATIONSBANK, N.A. and the various other banks and lending institutions which\nare parties hereto from time to time as Lenders. Capitalized terms used but not\notherwise defined in this Agreement shall have the meanings set forth in\nAppendix A hereto.\n\n In consideration of the mutual agreements herein contained and other good\nand valuable consideration, receipt of which is hereby acknowledged, the parties\nhereto hereby agree as follows:\n\n SECTION 1. THE LOANS.\n\n The Lenders have agreed to make Loans to the Lessor from time to time in an\naggregate principal amount of up to the aggregate amount of the Commitments of\nthe Lenders in order for the Lessor to acquire the Properties and certain\nImprovements, and in consideration of the receipt of such Loan proceeds, the\nLessor will issue the Notes (together with any note or notes issued in exchange\nor substitution therefor in accordance with the Credit Agreement, the \"Notes\").\nThe Loans shall be made and the Notes shall be issued pursuant to the Credit\nAgreement. Pursuant to Section 5 of this Agreement and Section 2 of the Credit\nAgreement, the Loans will be made to the Lessor from time to time upon the\nappropriate submission by the Lessee of a Requisition therefor and in accordance\nwith this Agreement and the other Operative Agreements. The Loans and the\nobligations of the Lessor under the Credit Agreement shall be secured by the\nCollateral.\n\n SECTION 2. HOLDER ADVANCES.\n\n Subject to the terms and conditions of this Agreement and in reliance on\nthe representations and warranties of each of the parties hereto contained\nherein or made pursuant hereto on each date Advances are made in accordance with\nSection 5 hereof, each Holder shall make a Holder Advance on a pro rata basis to\nthe Owner Trustee with respect to the HEALTHSOUTH Corporation Trust 1998-1 based\non its Holder Commitment in an amount in immediately available funds such that\nthe aggregate of all Holder Advances shall be three percent (3%) of the amount\nof the Advance being funded on such date; provided, no Holder shall be obligated\nfor any Holder Advance in excess of its pro rata share of the Available Holder\nCommitment. The aggregate amount of Holder Advances shall be up to the aggregate\namount of\n\n\n\n\n\n\n\nthe Holder Commitments. No prepayment or any other payment with respect to any\nAdvance shall be permitted such that the Holder Advance with respect to such\nAdvance is less than 3% of the outstanding amount of such Advance, except in\nconnection with termination or expiration of the Term or in connection with the\nexercise of remedies relating to the occurrence of a Lease Event of Default. The\nrepresentations, warranties, covenants and agreements of the Holders herein and\nin the other Operative Agreements are several, and not joint or joint and\nseveral.\n\n SECTION 3. SUMMARY OF TRANSACTIONS.\n\n 3.1. Operative Agreements. On the date hereof (the \"Initial Closing Date\"),\neach of the respective parties hereto and thereto shall execute and deliver this\nAgreement, the Lease, the Credit Agreement, the Notes, the Certificates, the\nTrust Agreement, the Security Agreement and such other documents, instruments,\ncertificates and opinions of counsel as agreed to by the parties hereto.\n\n 3.2. Property Purchase. On the Property Closing Date and subject to the\nterms and conditions of this Agreement (a) the Holders will each make a Holder\nAdvance in accordance with Sections 2 and 5 of this Agreement and the terms and\nprovisions of the Trust Agreement, (b) the Lenders will make Loans in accordance\nwith Sections 1 and 5 of this Agreement and the terms and provisions of the\nCredit Agreement, and (c) the Lessor will purchase pursuant to a Deed or lease\npursuant to a Ground Lease each Property, as the case may be, and grant the\nAgent a Lien on each Property by execution of the required Security Documents.\n\n 3.3. Completion of Improvements. Each Property shall be a Completed\nProperty on the applicable Property Closing Date for such Property.\n\n\n SECTION 4. THE CLOSINGS.\n\n 4.1. Initial Closing Date. All documents and instruments required to be\ndelivered on the Initial Closing Date shall be delivered at the offices of Smith\nHelms Mulliss & Moore, L.L.P., Charlotte, North Carolina, or at such other\nlocation as may be determined by the Lessor, the Agent and the Lessee.\n\n 4.2. Initial Closing Date; Property Closing Dates. The Lessee shall deliver\nto the Lessor and the Agent a requisition (a \"Requisition\"), in the form\nattached hereto as Exhibit A or in such other form as is reasonably satisfactory\nto the Lessor, the Lessee and the Agent (together with such additional\nschedules, affidavits, releases, waivers, statements, invoices, bills, and other\ndocuments, certificates and information reasonably required by the Agent, in\nconnection with (a) the Initial Closing Date relating to the Transaction\nExpenses and other fees, expenses and disbursements payable by the Lessor\npursuant to Section 9.1(a) with invoices (in form and substance reasonably\nacceptable to the Agent and the Lessor) for such Transaction Expenses and other\nfees, expenses and disbursements attached to such Requisition and (b) the\nProperty Closing Date relating to each Acquisition Advance pursuant to Section\n5.3.\n\n\n 2\n\n\n\n\n\n\n\n 4.3. Appointment of Lessee as Lessor's Agent. The Lessor hereby irrevocably\ndesignates and appoints the Lessee as its exclusive agent, and the Lessee\naccepts such appointment, to take all action necessary or desirable for the\nacquisition of the Properties (provided title to each Property shall be held in\nthe name of the Lessor) in accordance with the terms of this Agreement and the\nother Operative Agreements. Notwithstanding any provisions hereof or in any\nother Operative Agreement to the contrary, the Lessee acknowledges and agrees\nthat the Lessor shall advance no more than the sum of the aggregate Commitment\nof the Lenders plus the aggregate amount of the Holder Commitments in regard to\nthe Properties (including without limitation for any and all Advances in the\naggregate from the Lenders under the Credit Agreement and from the Holders under\nthe Trust Agreement). This agency created hereunder shall commence on the date\nhereof and shall terminate on the Commitment Period Termination Date.\n\n SECTION 5. FUNDING OF ADVANCES; REPORTING REQUIREMENTS; LESSEE DELIVERY OF\nNOTICES.\n\n 5.1. General. To the extent funds have been made available to the Lessor as\nLoans by the Lenders and Holder Advances by the Holders, the Lessor will use\nsuch funds from time to time in accordance with the terms and conditions of this\nAgreement and the other Operative Agreements (i) at the direction of the Lessee\nto acquire the Properties in accordance with the terms of this Agreement, the\nLease and the other Operative Agreements, (ii) to make advances to the Lessee to\npermit the testing, engineering, installation, development, construction,\nmodification, design and renovation, as applicable, of Improvements in\naccordance with the terms of the Lease and the other Operative Agreements, and\n(iii) to pay Transaction Expenses, fees, expenses and other disbursements\npayable by the Lessor under Sections 9.1(a) and (b).\n\n 5.2. Procedures for Funding.\n\n (a) The Lessee shall designate the date for Advances hereunder in\n accordance with the terms and provisions hereof; provided, however, it is\n understood and agreed that (i) no more than two (2) Advances may be\n requested during any calendar month and (ii) Advances with respect to a\n Property (other than Advances with respect to Transaction Expenses, fees,\n taxes, expenses and other disbursements funded pursuant to Sections 5.3,\n 9.1(a) or 9.1(b)) may only be made on the Property Closing Date for such\n Property. Not less than three (3) Business Days prior to the date of any\n requested Advance, the Lessee shall deliver to the Lessor and the Agent,\n with respect to the Initial Closing Date and each Property Closing Date, a\n Requisition as described in Section 4.2 hereof (including without\n limitation a legal description of the Land, a schedule of the Improvements\n and a schedule of the Equipment, if any, acquired on such date, each of the\n foregoing in a form reasonably acceptable to the Lessor, and the Agent).\n\n\n 3\n\n\n\n\n\n (b) Each Requisition shall: (i) be irrevocable, (ii) request funds in\n an amount that is not in excess of the total aggregate of the Available\n Commitments plus the Available Holder Commitments at such time, and (iii)\n request that the Holders make Advances and that the Lenders make Loans to\n the Lessor for the payment of the Property Acquisition Costs or other\n Property Costs that have previously been incurred and were not subject to a\n prior Requisition, in each case as specified in the Requisition.\n\n (c) Subject to the terms and conditions of the Credit Agreement and\n the Trust Agreement and subject to the satisfaction of the conditions\n precedent set forth in Section 5.3 on each Property Closing Date,\n\n (i) the Lenders shall make Loans to the Lessor in an aggregate amount\n equal to 97% of the Requested Funds specified in any Requisition up to an\n aggregate principal amount equal to the Available Commitments (such loans\n to be apportioned 87% to Series A Loans and 10% to Series B Loans);\n\n (ii) each Holder shall make a pro rata Holder Advance based on its\n Holder Commitment in an amount such that the aggregate of all Holder\n Advances at such time shall be 3% of the Requested Funds specified in any\n Requisition, provided no such Holder Advance shall exceed such Holder's pro\n rata share of the Available Holder Commitments; and\n\n (iii) the total amount of such Loans and Holder Advances made on such\n date shall (w) be used by the Lessor to pay the Property Acquisition Costs\n within three (3) Business Days of the receipt by the Lessor of such Advance\n (in the case of a Property Closing Date), (x) be used by the Lessor to pay\n Transaction Expenses, fees, taxes, expenses and other disbursements to the\n extent permitted under Sections 5.3, 9.1(a) or 9.1(b) (as applicable), or\n (y) be disbursed by the Lessor, on the date of such Advance, to the Lessee\n to pay Property Costs, as applicable. Any such amounts held by the Lessor\n (or the Agent on behalf of the Lessor) shall be subject to the lien of the\n Security Agreement.\n\n 5.3. Conditions to the Holders' and the Lenders' Obligations to advance\nfunds on the Initial Closing Date or funds for the Acquisition of Property.\n\n (a) The obligations of each Holders to make Holder Advances, and each\n Lender to make Loans, to the Lessor on the Initial Closing Date for the\n purpose of providing funds to the Lessor necessary to pay Transaction\n Expenses, fees, expenses and other disbursements payable by the Lessor\n under Section 9.1 of this Agreement, are subject to the prior or\n contemporaneous satisfaction or waiver of the following conditions\n precedent:\n\n (i) the correctness in all material respects on such date of the\n representations and warranties of the Owner Trustee, the Lessee and\n the Holders contained herein and in each of the other Operative\n Agreements;\n\n\n 4\n\n\n\n\n\n (ii) the performance in all material respects by the Lessee of\n its agreements contained herein and in the other Operative Agreements\n which covenants are to be performed by it on or prior to such date;\n\n (iii) the satisfaction of all conditions to any such Holder\n Advance or Loan set forth in any Operative Agreement;\n\n (iv) the Agent and the Owner Trustee shall have received a fully\n executed copy of a counterpart of the respective Requisition,\n appropriately completed; and\n\n (v) no Default or Event of Default under any of the Operative\n Agreements shall have occurred after giving effect to the Advance\n requested by such Requisition.\n\n (b) The obligations of each Holder to make Holder Advances, and each\n Lender to make Loans, to the Lessor on a Property Closing Date for the\n purpose of providing funds to the Lessor necessary to pay the Transaction\n Expenses, fees, expenses and other disbursements payable by Lessor under\n Section 9.1 (b) of this Agreement and to acquire a Property, are subject to\n the prior or contemporaneous satisfaction or waiver of the following\n conditions precedent:\n\n (i) the correctness in all material respects on such Property\n Closing Date of the representations and warranties of the Owner\n Trustee, the Lessee and the Holders contained herein and in each of\n the other Operative Agreements;\n\n (ii) the performance in all material respects by the Lessee of\n its agreements contained herein and in the other Operative Agreements\n which covenants are to be performed by it on or prior to each such\n Property Closing Date;\n\n (iii) the satisfaction of all conditions to any such Holder\n Advance or Loan set forth in any Operative Agreement;\n\n (iv) the Agent and the Owner Trustee shall have received a fully\n executed copy of a counterpart of the respective Requisition,\n appropriately completed, together with copies of all Bills of Sale\n with respect to any Equipment;\n\n (v) title to each Property being acquired on such Property\n Closing Date shall conform to the representations and warranties set\n forth in Section 8.1(c) hereof;\n\n\n 5\n\n\n\n\n\n (vi) the Lessee shall have delivered to the Lessor a copy of the\n Deed with respect to the Land and existing Improvements and a copy of\n the Bill of Sale with respect to the Equipment, respecting such of the\n foregoing as are being acquired on such Property Closing Date; and\n such Land and existing Improvements shall be located in an Approved\n State;\n\n (vii) there shall not have occurred and be continuing any Default\n or Event of Default under any of the Operative Agreements and no\n Default or Event of Default under any of the Operative Agreements\n shall have occurred after giving effect to the Advance requested by\n such Requisition;\n\n (viii) the Lessee shall have delivered to the Agent and the Owner\n Trustee, title insurance commitments to issue policies in favor of the\n Owner Trustee and the Agent with respect to each Property being\n acquired on such Property Closing Date, such policies being in form\n and substance reasonably acceptable to the Owner Trustee and the\n Agent, with such title exceptions thereto as are reasonably acceptable\n to the Owner Trustee and the Agent; and the Lessee shall deliver to\n the Owner Trustee and the Agent, as soon as possible (and in any event\n by the latter of (A) the respective Property Closing Date or (B) 60\n days after the Initial Closing Date), the final title insurance\n policies for each such Property taking no specific exception for any\n Lien filed on account of materials furnished or labor performed in\n connection with such Property, and otherwise showing no additional\n exceptions to coverage;\n\n (ix) the Lessee shall have delivered to the Agent and the Owner\n Trustee a \"Phase I\" environmental site assessment with respect to each\n such Property, prepared by an independent recognized professional\n reasonably acceptable to the Agent and the Owner Trustee and in a form\n and substance that is reasonably acceptable to the Agent and the Owner\n Trustee;\n\n (x) the Lessee shall have delivered to the Agent and the Owner\n Trustee an as-built survey of each such Property, prepared by an\n independent recognized professional meeting the then current minimum\n standard detail requirements for American Land Title\n Association\/American Congress of Surveying and Mapping (ALTA\/ACSM)\n Land Title Surveys certified to the Agent and otherwise reasonably\n acceptable to the Agent;\n\n (xi) the Lessee shall have caused to be delivered to the Agent\n and the Owner Trustee a legal opinion (in form and substance\n reasonably satisfactory to the Agent and the Owner Trustee) from\n counsel located in the state where each such Property is located or,\n if the Agent and the Owner Trustee have previously received an opinion\n from counsel in such state, the Agent and the Owner Trustee (in their\n discretion) may accept an update or a reaffirmation of the previous\n opinion, in each case addressed to each Lender;\n\n\n 6\n\n\n\n\n\n (xii) the Owner Trustee and the Agent shall be satisfied, in\n their discretion, that the acquisition of each Property and the\n execution of the Mortgage Instruments and the other Security Documents\n will not adversely affect in any material respect the rights of the\n Owner Trustee, the Holders, the Agent or the Lenders under or with\n respect to the Operative Agreements in effect as of the Property\n Closing Date (it being understood and acknowledged that the Agent and\n the Owner Trustee may require that the Lessee deliver an acceptable\n legal opinion in connection with this condition);\n\n (xiii) the Lessee shall have delivered to the Agent and the Owner\n Trustee, respecting each such Property, invoices for the various\n Transaction Expenses and other fees, expenses and disbursements\n referenced in Section 9.1(a) or (b) of this Agreement and an Officer's\n Certificate in the form attached hereto as Exhibit B specifying the\n aggregate Property Cost for such Property;\n\n (xiv) the Lessee shall have delivered to the Agent and the Owner\n Trustee, respecting each Property, certificates of insurance meeting\n the requirements of Section 14.3 of the Lease;\n\n (xv) the Lessor shall have delivered to the Agent a Mortgage\n Instrument and Lender Financing Statements with respect to each such\n Property in a form reasonably acceptable to the Agent and Lessee and\n all necessary recording fees, documentary stamp taxes or similar\n amounts will be paid in connection with the related Mortgage\n Instrument in an amount sufficient to cover such maximum total\n Property Cost, or (in the case of the recording tax with respect to\n the Mortgage Instrument) in an amount required to be paid at the time\n of recording of such instrument (provided that the Lessee shall\n promptly pay or reimburse any Indemnified Person for payment of, any\n additional recording tax that may be due at any time with respect to\n such instrument);\n\n (xvi) the Lessee shall have delivered to the Lessor with respect\n to each such Property, a Lease Supplement and a memorandum regarding\n the Lease and such Lease Supplement (such memorandum to be\n substantially in the forms attached to the Lease as Exhibit B and in\n each case in form suitable for recording);\n\n (xvii) the Lessee shall have delivered to the Lessor with respect\n to each such Property Lessor Financing Statements executed by the\n Lessee and the Lessor;\n\n (xviii) all necessary (or in the reasonable opinion of the Owner\n Trustee, the Agent, or their respective counsel, advisable)\n Governmental Actions, in each case required by any law or regulation\n enacted, imposed or adopted on or prior to\n\n\n 7\n\n\n\n\n\n each such date or by any change in facts or circumstances on or prior\n to each such date, shall have been obtained or made and be in full\n force and effect;\n\n (xix) if any such Property is subject to a Ground Lease, the\n Lessee shall have caused a lease memorandum (in form and substance\n satisfactory to the Agent) to be delivered to the Agent for such\n Ground Lease;\n\n (xx) counsel for the ground lessor of each such Property subject\n to a Ground Lease shall have issued to the Lessor, the Agent and the\n Holders, an opinion satisfactory to the Agent;\n\n (xxi) the Lessee shall cause (i) Uniform Commercial Code lien\n searches, tax lien searches and judgment lien searches regarding each\n of the Lessee and the Lessor to be conducted (and copies thereof to be\n delivered to the Agent and the Owner Trustee) in the state and county\n (or other jurisdiction) in which such Property is located, by a\n nationally recognized search company acceptable to the Owner Trustee\n and the Agent, and (ii) the liens referenced in such lien searches\n which are objectionable to the Owner Trustee or the Agent to be either\n removed or otherwise handled in a manner reasonably satisfactory to\n the Owner Trustee and the Agent;\n\n (xxii) the Agent shall have received on the later of (A) the\n respective Property Closing Date or (B) 60 days following the Initial\n Closing Date, an Appraisal for such Property showing that such\n Property has an enterprise value, when taken together with the\n enterprise value of all other Properties for which an Appraisal has\n been obtained, equal to at least fifty percent (50%) of the total\n Property Cost of all Properties and all Improvements constructed or\n expected to be constructed thereon; and\n\n (xxiii) the Lessee shall have determined (as set forth in the\n related Requisition) that such Improvements are appropriate to its\n business; and the Agent shall have consented to such Improvements,\n which consent shall not be unreasonably withheld or delayed.\n\n 5.4. Inspection of Documents; Hold Harmless; Removal of Properties. Any\ndocument or item (including without limitation any environmental report)\ndelivered to the Agent shall be available for inspection at any time during\nordinary business hours upon reasonable notice by any Lender or Holder. The\nAgent shall not incur any liability to any Lender, any Holder, the Owner Trustee\nor any other Person (and each Lender, each Holder, the Owner Trustee and the\nLessee hereby holds the Agent harmless from any such liability) as a result of\nany such document or item, any information contained therein, the failure to\nreceive any such document, or the Agent's approval of any Property. In the event\nthe Majority Lenders determine that any environmental site assessment reveals an\nEnvironmental Violation and they or the Agent so\n\n\n 8\n\n\n\n\n\nnotify the Lessee, then the Lessee shall remedy or purchase such Property in\naccordance with Sections 15.2, 16.1 and 16.2 of the Lease.\n\n SECTION 6. CONDITIONS OF THE INITIAL CLOSING.\n\n 6.1. Conditions to the Lessor's and the Holders' Obligations. The\nobligations of the Lessor and the Holders to consummate the transactions\ncontemplated by this Agreement, including the obligation to execute and deliver\nthe applicable Operative Agreements to which each is a party on the Initial\nClosing Date, are subject to (i) the accuracy and correctness on the Initial\nClosing Date of the representations and warranties of the other parties hereto\ncontained herein, (ii) the accuracy and correctness on the Initial Closing Date\nof the representations and warranties of the other parties hereto contained in\nany other Operative Agreement or certificate delivered pursuant hereto or\nthereto, (iii) the performance by the other parties hereto of their respective\nagreements contained herein and in the other Operative Agreements and to be\nperformed by them on or prior to the Initial Closing Date and (iv) the\nsatisfaction, or waiver by the Lessor and the Holders, of all of the following\nconditions on or prior to the Initial Closing Date:\n\n (a) Each of the Operative Agreements to be entered into on the Initial\n Closing Date shall have been duly authorized, executed and delivered by the\n parties thereto, other than the Lessor, and shall be in full force and\n effect, and no Default or Event of Default shall exist thereunder (both\n before and after giving effect to the transactions contemplated by the\n Operative Agreements), and the Lessor shall have received a fully executed\n copy of each of the Operative Agreements (other than the Notes of which it\n shall have received specimens). The Operative Agreements (or memoranda\n thereof), any supplements thereto and any financing statements and fixture\n filings in connection therewith required under the Uniform Commercial Code\n shall have been filed or shall be promptly filed, if necessary, in such\n manner as to enable the Lessee's counsel to render its opinion referred to\n in Section 6.1(g) hereof;\n\n (b) All taxes, fees and other charges in connection with the\n execution, delivery, recording, filing and registration of the Operative\n Agreements shall have been paid or provision for such payment shall have\n been made to the reasonable satisfaction of the Lessor and the Agent;\n\n (c) No action or proceeding shall have been instituted, nor shall any\n action or proceeding be threatened, before any Governmental Authority, nor\n shall any order, judgment or decree have been issued or proposed to be\n issued by any Governmental Authority (i) to set aside, restrain, enjoin or\n prevent the full performance of this Agreement, any other Operative\n Agreement or any transaction contemplated hereby or thereby or (ii) which\n is reasonably likely to have a Material Adverse Effect;\n\n\n 9\n\n\n\n\n\n (d) In the reasonable opinion of the Lessor and the Holders and their\n counsel, the transactions contemplated by the Operative Agreements do not\n and will not violate any material Legal Requirements and do not and will\n not subject the Lessor or the Holders to any materially adverse regulatory\n prohibitions or constraints, in each case enacted, imposed, adopted or\n proposed since the date hereof;\n\n (e) The Lessor and the Agent shall each have received an Officer's\n Certificate of the Lessee, dated as of the Initial Closing Date, in the\n form attached hereto as Exhibit D or in such other form as is reasonably\n acceptable to such parties stating that (i) each and every representation\n and warranty of the Lessee contained in the Operative Agreements to which\n it is a party is true and correct in all material respects on and as of the\n Initial Closing Date; (ii) no Default or Event of Default has occurred and\n is continuing under any Operative Agreement; (iii) each Operative Agreement\n to which Lessee is a party is in full force and effect with respect to it;\n and (iv) the Lessee has performed and complied with all covenants,\n agreements and conditions contained herein or in any Operative Agreement\n required to be performed or complied with by it on or prior to the Initial\n Closing Date;\n\n (f) The Lessor and the Agent shall each have received (i) a\n certificate of the Secretary or an Assistant Secretary of the Lessee in the\n form attached hereto as Exhibit E or in such other form as is reasonably\n acceptable to such parties attaching and certifying as to (A) the\n resolutions of the Board of Directors of Lessee duly authorizing the\n execution, delivery and performance by Lessee of each of the Operative\n Agreements to which it is or will be a party, (B) its certificate of\n incorporation and by-laws, in each case certified as of a recent date by\n the Secretary of State of the State of its incorporation, and (C) the\n incumbency and signature of persons authorized to execute and deliver on\n its behalf the Operative Agreements to which it is a party and (ii) a good\n standing certificate from the appropriate officer of the State of Alabama\n and each state in which any Property is located as to its good standing in\n such state;\n\n (g) Counsel for the Lessee reasonably acceptable to the other parties\n hereto shall have issued to the Lessor, the Agent, the Lenders and the\n Holders an opinion in the form attached hereto as Exhibit C or in such\n other form as is reasonably acceptable to such parties; and\n\n (h) As of the Initial Closing Date, there shall not have occurred any\n material adverse change in the consolidated assets, liabilities,\n operations, business or financial condition of the Lessee from that set\n forth in the audited financial statements of the Lessee dated December 31,\n 1997.\n\n 6.2. Conditions to the Lessee's Obligations. The obligation of the Lessee\nto consummate the transactions contemplated by this Agreement, including the\nobligation to execute and deliver the Operative Agreements to which it is a\nparty on the Initial Closing Date, is subject to (i) the accuracy and\ncorrectness on the Initial Closing Date of the representations and\n\n\n 10\n\n\n\n\n\nwarranties of the other parties hereto contained herein, (ii) the accuracy and\ncorrectness on the Initial Closing Date of the representations and warranties of\nthe other parties hereto contained in any other Operative Agreement or\ncertificate delivered pursuant hereto or thereto, (iii) the performance by the\nother parties hereto of their respective agreements contained herein and in the\nother Operative Agreements, in each case to be performed by them on or prior to\nthe Initial Closing Date, and (iv) the satisfaction or waiver by the Lessee of\nall of the following conditions on or prior to the Initial Closing Date:\n\n (a) Each of the Operative Agreements to be entered into on the Initial\n Closing Date shall have been duly authorized, executed and delivered by the\n parties thereto, other than the Lessee, and shall be in full force and\n effect, and no Default, other than Defaults of the Lessee, shall exist\n thereunder, and the Lessee shall have received a fully executed copy of\n each of the Operative Agreements (other than Notes of which it shall have\n received a specimen);\n\n (b) In the reasonable opinion of the Lessee and its counsel, the\n transactions contemplated by the Operative Agreements do not violate any\n material Legal Requirements and will not subject Lessee to any materially\n adverse regulatory prohibitions or constraints, in each case enacted,\n imposed, adopted or proposed since the date hereof;\n\n (c) No action or proceeding shall have been instituted nor shall any\n action or proceeding be threatened, before any Governmental Authority, nor\n shall any order, judgment or decree have been issued or proposed to be\n issued by any Governmental Authority (i) to set aside, restrain, enjoin or\n prevent the full performance of this Agreement, any other Operative\n Agreement or any transaction contemplated hereby or thereby or (ii) which\n is reasonably likely to have a Material Adverse Effect;\n\n (d) The Lessee and the Agent shall each have received an Officer's\n Certificate of the Lessor dated as of such Closing Date in the form\n attached hereto as Exhibit F or in such other form as is reasonably\n acceptable to Lessee and the Agent, stating that (i) each and every\n representation and warranty of the Lessor contained in the Operative\n Agreements to which it is a party is true and correct on and as of the\n Initial Closing Date; (ii) each Operative Agreement to which the Lessor is\n a party is in full force and effect with respect to it, and (iii) the\n Lessor has duly performed and complied with all covenants, agreements and\n conditions contained herein or in any Operative Agreement required to be\n performed or complied with by it on or prior to the Initial Closing Date;\n\n (e) The Lessee and the Agent shall each have received (i) a\n certificate of the Secretary, an Assistant Secretary, Trust Officer or Vice\n President of the Trust Company in the form attached hereto as Exhibit G or\n in such other form as is reasonably acceptable to Lessee and the Agent,\n attaching and certifying as to (A) the signing resolutions, (B) its\n articles of incorporation or other equivalent charter documents, as the\n case may be, certified as of a recent date by an appropriate officer of the\n Trust Company, (C) its by-\n\n\n 11\n\n\n\n\n\n laws and (D) the incumbency and signature of persons authorized to execute\n and deliver on its behalf the Operative Agreements to which it is a party\n and (ii) a good standing certificate from the state of incorporation of the\n Trust Company; and\n\n (f) Counsel for the Lessor acceptable to the other parties hereto\n shall have issued to the Lessee, the Holders, the Lenders and the Agent an\n opinion in the form attached hereto as Exhibit H or in such other form as\n is reasonably acceptable to such parties.\n\n 6.3. Conditions to the Agent's Obligations. The obligation of the Agent to\nconsummate the transactions contemplated by this Agreement on the Initial\nClosing Date, including the obligation to execute and deliver each of the\nOperative Agreements to which it is a party on the Initial Closing Date, is\nsubject to (i) the accuracy and correctness on the Initial Closing Date of the\nrepresentations and warranties of the other parties hereto contained herein,\n(ii) the accuracy and correctness on the Initial Closing Date of the\nrepresentations and warranties of the other parties hereto contained in any\nother Operative Agreement or certificate delivered pursuant hereto or thereto,\n(iii) the performance by the other parties hereto of their respective agreements\ncontained herein and in the other Operative Agreements, in each case to be\nperformed by them on or prior to the Initial Closing Date, and (iv) the\nsatisfaction, or waiver by the Agent, of all of the following conditions on or\nprior to the Initial Closing Date:\n\n (a) Each of the Operative Agreements to be entered into on the Initial\n Closing Date shall have been duly authorized, executed and delivered by the\n parties thereto, other than the Agent, and shall be in full force and\n effect, and no Default or Event of Default shall exist thereunder (both\n before and after giving effect to the transactions contemplated by the\n Operative Agreements), and the Agent shall have received a fully executed\n copy of each of the Operative Agreements (including the Notes). The\n Operative Agreements (or memoranda thereof), any supplements thereto and\n any financing statements and fixture filings in connection therewith\n required under the Uniform Commercial Code shall have been filed or shall\n be promptly filed, if necessary, in such manner as to enable the Lessor's\n counsel to render its opinion referred to in Section 6.2(f) hereof;\n\n (b) The satisfaction of each of the conditions set forth in Sections\n 6.1(b), (c), (e), (f) and (h) and Sections 6.2(d), (e) and (f) hereof; and\n\n (c) In the reasonable opinion of the Agent and its counsel, the\n transactions contemplated by the Operative Agreements do not and will not\n violate any material Legal Requirements and do not and will not subject the\n Agent or the Lenders to any materially adverse regulatory prohibitions or\n constraints, in each case enacted, imposed, adopted or proposed since the\n date hereof.\n\n\n 12\n\n\n\n\n\n SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL CLOSING DATE.\n\n 7.1. Representations and Warranties of the Holders. Effective as of the\nInitial Closing Date, each of the Holders represents and warrants to each of the\nother parties hereto that:\n\n (a) It is a banking corporation or banking association, or branch or\n agency thereof (the entity of which such Holder is a branch or agency being\n referred to in this Section 7.1 as the \"Primary Institution\"), as the case\n may be, duly organized, validly existing and in good standing under the\n laws of the jurisdiction of its formation, and has the power and authority\n to carry on its business as now conducted and to enter into and perform its\n obligations under each Operative Agreement to which it is or will be a\n party and each other agreement, instrument and document to be executed and\n delivered by it on or before each Closing Date in connection with or as\n contemplated by each such Operative Agreement to which it is or will be a\n party;\n\n (b) The execution, delivery and performance of each Operative\n Agreement to which it is or will be a party have been duly authorized by\n all necessary action on its part (and on the part of any applicable Primary\n Institution) and neither the execution and delivery thereof, nor the\n consummation of the transactions contemplated thereby, nor compliance by it\n with any of the terms and provisions thereof (i) requires or will require\n any approval of the stockholders of, or approval or consent of any trustee\n or holder of any indebtedness or obligations of, such Holder (or any\n applicable Primary Institution) which have not been obtained and in full\n force and effect, (ii) violates or will violate any Legal Requirement\n applicable to or binding on it (or any applicable Primary\n Institution)(except no representation or warranty is made as to any Legal\n Requirement to which it may be subject solely as a result of the activities\n of the Lessee) as of the date hereof, (iii) violates or will violate or\n result in any breach of or constitute any default under, or result in the\n creation of any Lien upon any Property or any of the Improvements (other\n than Liens created by the Operative Agreements) under its certificate of\n incorporation or other equivalent charter documents, or any indenture,\n mortgage, chattel mortgage, deed of trust, conditional sales contract, bank\n loan or credit agreement or other agreement or instrument to which it (or\n any applicable Primary Institution) is a party or by which it (or any\n applicable Primary Institution) or its properties is bound or affected or\n (iv) requires or will require any Governmental Action by any Governmental\n Authority (other than arising solely by reason of the business, condition\n or activities of the Lessee or any Affiliate thereof or the construction or\n use of the Properties or the Improvements);\n\n (c) This Agreement and each other Operative Agreement to which it is\n or will be a party have been, or will be, duly executed and delivered by it\n and constitutes, or upon execution and delivery will constitute, a legal,\n valid and binding obligation enforceable against it (including any\n applicable Primary Institution) in accordance with the terms thereof,\n subject to the effect of any applicable bankruptcy, moratorium, insolvency,\n reorganization or other similar laws affecting the enforceability of\n creditors'\n\n\n 13\n\n\n\n\n\n rights generally and to the effect of general principles of equity (whether\n considered in a proceeding at law or in equity);\n\n (d) There is no action or proceeding pending or, to its knowledge,\n threatened against it (or any applicable Primary Institution) before any\n Governmental Authority that questions the validity or enforceability of any\n Operative Agreement to which it is or will become a party or that, if\n adversely determined, would materially and adversely affect its ability (or\n that of any applicable Primary Institution) to perform its obligations\n under the Operative Agreements to which it is a party;\n\n (e) It has not assigned or transferred any of its right, title or\n interest in or under the Lease except in accordance with the Operative\n Agreements;\n\n (f) No Default or Event of Default under the Operative Agreements\n attributable to it has occurred and is continuing;\n\n (g) It is not a \"holding company\" or a \"subsidiary company\" of a\n \"holding company\" or an \"affiliate\" of a \"holding company\" or a \"public\n utility\" within the meaning of the Public Utility Holding Company Act of\n 1935, as amended, or a \"public utility\" within the meaning of the Federal\n Power Act, as amended. It is not an \"investment company\" or a company\n \"controlled\" by an \"investment company\" within the meaning of the\n Investment Company Act or an \"investment adviser\" within the meaning of the\n Investment Advisers Act of 1940, as amended;\n\n (h) Except as otherwise contemplated by the Operative Agreements, it\n shall not, nor shall it direct the Owner Trustee to, use the proceeds of\n any Loan or Holder Advance for any purpose other than the payment of\n Transaction Expenses and the fees, expenses and other disbursements\n referenced in Sections 9.1(a) and (b) of this Agreement, the purchase or\n lease of the Property, the acquisition of Equipment and the construction of\n Improvements; and\n\n (i) It is acquiring its interest in the Trust Estate for its own\n account (including that of any applicable Primary Institution) for\n investment and not with a view to any distribution (as such term is used in\n Section 2(11) of the Securities Act) thereof, and if in the future it\n should decide to dispose of its interest in the Trust Estate, it\n understands that it may do so only in compliance with the Securities Act\n and the rules and regulations of the Securities and Exchange Commission\n thereunder and any applicable state securities laws. Neither it nor anyone\n authorized to act on its behalf has taken or will take any action which\n would subject, as a direct result of such action alone, the issuance or\n sale of any interest in any Property, the Trust Estate or the Lease to the\n registration requirements of Section 5 of the Securities Act. No\n representation or warranty contained in this Section 7.1(i) shall include\n or cover any action or inaction of the Lessee or any Affiliate thereof\n whether or not purportedly on behalf of the Holders, the Owner Trustee or\n any of their Affiliates.\n\n\n 14\n\n\n\n\n\n 7.2. Representations and Warranties of the Owner Trustee. Effective as of\nthe Initial Closing Date, Trust Company in its individual capacity and as the\nOwner Trustee, as indicated, represents and warrants to each of the other\nparties hereto as follows, provided, that the representations in paragraphs (h),\n(i), (j) and (k) below are made solely in its capacity as the Owner Trustee:\n\n (a) It is a national banking association duly organized, validly\n existing and in good standing under the laws of the United States of\n America and has the power and authority to enter into and perform its\n obligations under the Trust Agreement and (assuming due authorization,\n execution and delivery of the Trust Agreement by the Holders) has the\n corporate and trust power and authority to act as the Owner Trustee and to\n enter into and perform the obligations under each of the other Operative\n Agreements to which Trust Company or the Owner Trustee, as the case may be,\n is or will be a party and each other agreement, instrument and document to\n be executed and delivered by it on or before each Closing Date in\n connection with or as contemplated by each such Operative Agreement to\n which Trust Company or the Owner Trustee, as the case may be, is or will be\n a party;\n\n (b) The execution, delivery and performance of each Operative\n Agreement to which it is or will be a party, either in its individual\n capacity or (assuming due authorization, execution and delivery of the\n Trust Agreement by the Holders) as the Owner Trustee, as the case may be,\n has been duly authorized by all necessary action on its part and neither\n the execution and delivery thereof, nor the consummation of the\n transactions contemplated thereby, nor compliance by it with any of the\n terms and provisions thereof (i) requires or will require any approval of\n its stockholders, or any approval or consent of any trustee or holders of\n any of its indebtedness or obligations, (ii) violates or will violate any\n current law, governmental rule or regulation relating to its banking or\n trust powers, (iii) violates or will violate or result in any breach of or\n constitute any default under, or result in the creation of any Lien upon\n any of its property under, (A) its charter or by-laws, or (B) any\n indenture, mortgage, chattel mortgage, deed of trust, conditional sales\n contract, bank loan or credit agreement or other agreement or instrument to\n which it is a party or by which it or its properties may be bound or\n affected, which violation, breach, default or Lien under clause (B) would\n materially and adversely affect its ability, in its individual capacity or\n as Owner Trustee, to perform its obligations under the Operative Agreements\n to which it is a party or (iv) requires or will require any Governmental\n Action by any Governmental Authority regulating its banking or trust\n powers;\n\n (c) The Trust Agreement and, assuming the Trust Agreement is the\n legal, valid and binding obligation of the Holders, each other Operative\n Agreement to which the Trust Company or the Owner Trustee, as the case may\n be, is or will be a party have been, or will be, duly executed and\n delivered by Trust Company or the Owner Trustee, as the case may be, and\n the Trust Agreement and each such other Operative Agreement to which Trust\n Company or the Owner Trustee, as the case may be, is a party constitutes,\n or\n\n\n 15\n\n\n\n\n\n upon execution and delivery will constitute, a legal, valid and binding\n obligation enforceable against Trust Company or the Owner Trustee, as the\n case may be, in accordance with the terms thereof;\n\n (d) There is no action or proceeding pending or, to its knowledge,\n threatened to which it is or will be a party, either in its individual\n capacity or as the Owner Trustee, before any Governmental Authority that,\n if adversely determined, would materially and adversely affect its ability,\n in its individual capacity or as Owner Trustee, to perform its obligations\n under the Operative Agreements to which it is a party or would question the\n validity or enforceability of any of the Operative Agreements to which it\n is or will become a party;\n\n (e) It has not assigned or transferred any of its right, title or\n interest in or under the Lease except in accordance with the Operative\n Agreements;\n\n (f) No Default or Event of Default under the Operative Agreements\n attributable to it has occurred and is continuing;\n\n (g) Except as otherwise contemplated in the Operative Agreements, the\n Owner Trustee shall not use the proceeds of the Loans and Holder Advances\n for any purpose other than the payment of Transaction Expenses and the\n fees, expenses and other disbursements referenced in Sections 9.1(a) and\n (b) of this Agreement, the purchase or lease of the Properties, the\n acquisition of Equipment and the acquisition of Improvements;\n\n (h) Neither the Owner Trustee nor any Person authorized by the Owner\n Trustee to act on its behalf has offered or sold any interest in the Trust\n Estate or the Notes, or in any similar security relating to any Property,\n or in any security the offering of which for the purposes of the Securities\n Act would be deemed to be part of the same offering as the offering of the\n aforementioned securities to, or solicited any offer to acquire any of the\n same from, any Person other than, in the case of the Notes, the Lenders,\n and neither the Owner Trustee nor any Person authorized by the Owner\n Trustee to act on its behalf will take any action which would subject, as a\n direct result of such action alone, the issuance or sale of any interest in\n the Trust Estate or the Notes to the provisions of Section 5 of the\n Securities Act, or require the qualification of any Operative Agreement\n under the Trust Indenture Act of 1939, as amended;\n\n (i) The Owner Trustee's chief place of business, chief executive\n office and office where the documents, accounts and records relating to the\n transactions contemplated by this Agreement and each other Operative\n Agreement are kept are located at 79 South Main Street, Salt Lake City,\n Utah 84111;\n\n (j) The Owner Trustee is not engaged principally in, and does not have\n as one of its important activities, the business of extending credit for\n the purpose of purchasing\n\n\n 16\n\n\n\n\n\n or carrying any margin stock (within the meaning of Regulation U of the\n Board of Governors of the Federal Reserve System of the United States), and\n no part of the proceeds of the Loans or the Holder Advances will be used by\n it to purchase or carry any margin stock or to extend credit to others for\n the purpose of purchasing or carrying any such margin stock or for any\n purpose that violates, or is inconsistent with, the provisions of\n Regulations T, U, or X of the Federal Reserve Board; and\n\n (k) The Owner Trustee is not a \"holding company\" or a \"subsidiary\n company\" of a \"holding company\" or an \"affiliate\" of a \"holding company\" or\n a \"public utility\" within the meaning of the Public Utility Holding Company\n Act of 1935, as amended, or a \"public utility\" within the meaning of the\n Federal Power Act, as amended. The Owner Trustee is not an \"investment\n company\" or a company \"controlled\" by an \"investment company\" within the\n meaning of the Investment Company Act or an \"investment adviser\" within the\n meaning of the Investment Advisers Act of 1940, as amended.\n\n 7.3. Representations and Warranties of the Lessee. Effective as of the\nInitial Closing Date, the Lessee represents and warrants to each of the other\nparties hereto that:\n\n (a) It is a corporation duly organized, validly existing and in good\n standing under the laws of the State of Delaware; each of its Subsidiaries\n is duly organized and validly existing under the laws of the jurisdiction\n of its organization and is duly qualified to do business in each other\n jurisdiction where the nature of its business makes such qualification\n necessary, except where such failure to so qualify would not have a\n Material Adverse Effect. The Lessee and each of its Subsidiaries has the\n power and authority to carry on its business as now conducted and to enter\n into and perform its obligations under each Operative Agreement to which it\n is or will be a party and each other agreement, instrument and document to\n be executed and delivered by it on or before each Closing Date in\n connection with or as contemplated by each such Operative Agreement to\n which it is or will be a party;\n\n (b) The execution, delivery and performance by the Lessee and each of\n its relevant Subsidiaries of this Agreement and the other Operative\n Agreements to which each is or will be a party have been duly authorized by\n all necessary corporate action on the part of the Lessee and each such\n Subsidiary (including any necessary shareholder action), have received all\n necessary governmental approval, and do not and will not (i) violate any\n Legal Requirement, decree, judgment or award which is applicable to or\n binding on the Lessee or any of its Subsidiaries, (ii) violate or conflict\n with, or result in a breach of, any provision of the Certificate of\n Incorporation, By-Laws or other organizational documents of the Lessee or\n any of its Subsidiaries, or any indenture, mortgage, chattel mortgage, deed\n of trust, conditional sales contract, bank loan, credit agreement or other\n agreement, instrument or document to which the Lessee or any of its\n Subsidiaries is a party or which is binding on the Lessee or any of its\n Subsidiaries or any of their respective properties, or (iii) result in, or\n require, the creation or imposition of any\n\n\n 17\n\n\n\n\n\n Lien (other than pursuant to the terms of the Operative Agreements) on any\n asset of the Lessee or any of its Subsidiaries;\n\n (c) Each of this Agreement and each other Operative Agreement to which\n the Lessee or any of its Subsidiaries is or will be a party has been, or\n will be, duly executed and delivered by it and constitutes, or upon\n execution and delivery will constitute, the legal, valid and binding\n obligation of the Lessee or such Subsidiary, as the case may be,\n enforceable against it in accordance with the terms thereof. The Lessee and\n each of its relevant Subsidiaries have each executed the various Operative\n Agreements required to be executed as of the Initial Closing Date;\n\n (d) Except as disclosed in the Lessee's annual report on Form 10-K for\n the year ended December 31, 1997, or the Lessee's quarterly report on Form\n 10-Q for the three months ended September 30, 1998, there are no actions,\n suits or proceedings (including, without limitation, any derivative action)\n pending or, to the knowledge of the Lessee, threatened with respect to the\n Lessee or any of its Subsidiaries which, if adversely decided, are\n reasonably likely to result, either individually or collectively, in a\n Material Adverse Effect. None of the Lessee or any of its Subsidiaries has\n any material contingent liabilities not provided for or disclosed in the\n financial statements referred to in Section 7.3(f), which are required in\n accordance with GAAP to be reported in such financial statements;\n\n (e) No Governmental Action by any Governmental Authority or\n authorization, registration, consent, approval, waiver, notice or other\n action by, to or of any other Person is required to authorize or is\n required in connection with (i) the execution, delivery or performance of\n any Operative Agreement or (ii) the legality, validity, binding effect or\n enforceability of any Operative Agreement, in each case, except those which\n have been obtained and are in full force and effect;\n\n (f) (i) The audited consolidated financial statements of the\n Consolidated Entities as at December 31, 1997, copies of which have been\n furnished to the Agent and the Owner Trustee, were prepared in accordance\n with GAAP and fairly present the financial condition of the Lessee and the\n other Consolidated Entities on a consolidated basis as of such date and\n their consolidated results of operations for the fiscal year then ended and\n (ii) the unaudited consolidated financial statements as at September 30,\n 1998, copies of which have been furnished to the Agent and the Owner\n Trustee, were prepared in accordance with GAAP (subject to normal year-end\n adjustments) and fairly present in all material respects the financial\n condition of the Lessee and its Consolidated Entities on a consolidated\n basis as of such date and its consolidated results of operations for the\n fiscal period then ended and such three-quarter period, respectively;\n\n (g) Since the date of the audited financial statements described in\n Section 7.3(f), there has been no event or occurrence which has had or is\n reasonably likely to have a Material Adverse Effect;\n\n\n 18\n\n\n\n\n\n (h) The Lessee knows of no proposed material tax assessments against\n it or any of its Subsidiaries. No extension of time for assessment or\n payment of any material federal, state or local tax by the Lessee or any of\n its Subsidiaries is in effect;\n\n (i) The execution and delivery of the Operative Agreements will not\n involve any prohibited transaction within the meaning of ERISA, the Lessee\n and each ERISA Affiliate has fulfilled its obligations under the minimum\n funding standards imposed by ERISA and each is in compliance in all\n material respects with the applicable provisions of ERISA, and no\n \"Reportable Event,\" as defined in Section 4043(b) of Title IV of ERISA, has\n occurred with respect to any plan maintained by the Lessee or any of its\n ERISA Affiliates.\n\n (j) Upon the execution and delivery of each Lease Supplement to the\n Lease, (i) the Lessee will have unconditionally accepted the Property\n subject to the Lease Supplement and will have a valid and subsisting\n leasehold interest in the Property, subject only to the Permitted\n Exceptions, and (ii) no offset will exist with respect to any Rent or other\n sums payable under the Lease;\n\n (k) Neither the Lessee nor any of its Subsidiaries has filed a\n voluntary petition in bankruptcy or been adjudicated a bankrupt or\n insolvent, or filed any petition or answer seeking any reorganization,\n liquidation, receivership, dissolution or similar relief under any\n bankruptcy, receivership, insolvency, or other law relating to relief for\n debtors, or sought or consented to or acquiesced in the appointment of any\n trustee, receiver, conservator or liquidator of all or any part of its\n properties or its interest in any Property. No court of competent\n jurisdiction has entered an order, judgment, or decree approving a petition\n filed against the Lessee or any of its Subsidiaries seeking any\n reorganization, arrangement, composition, readjustment, liquidation,\n dissolution or similar relief under any federal or state bankruptcy,\n receivership, insolvency or other law relating to relief for debtors, and\n no other liquidator has been appointed for the Lessee or any of its\n Subsidiaries or all or any part of its properties or its interest in any\n Property, and no such action is pending. Neither the Lessee nor any of its\n Subsidiaries has given notice to any Governmental Authority or any Person\n of insolvency or pending insolvency, or suspension or pending suspension of\n operations;\n\n (l) Each of the Lessee and its Subsidiaries owns marketable title to,\n or a subsisting leasehold interest in, all of its Properties free and clear\n of all Liens, except Permitted Liens;\n\n (m) Neither the Lessee nor any of its Subsidiaries is (a) an\n \"investment company\" or a company \"controlled\" by an \"investment company\",\n within the meaning of the Investment Company Act or an \"investment adviser\"\n within the meaning of the Investment Advisers Act of 1940, as amended, or\n (b) a \"holding company\", or a \"subsidiary company\" of a \"holding company\",\n or an \"affiliate\" of a \"holding company\" or of a \"subsidiary company\" of a\n \"holding company\", or a \"public utility\", within the\n\n\n 19\n\n\n\n\n\n meaning of the Public Utility Holding Company Act of 1935, as amended, or a\n \"public utility\" within the meaning of the Federal Power Act, as amended;\n\n (n) Neither the Lessee nor any of its Subsidiaries is engaged\n principally in, or has as one of its important activities, the business of\n extending credit for the purpose of purchasing or carrying any margin stock\n (within the meaning of Regulation U of the Federal Reserve Board), and no\n part of the proceeds of the Loans or the Holder Advances will be used for\n the purpose, whether immediate, incidental or ultimate, of purchasing or\n carrying any margin stock or maintaining or extending credit to others for\n such purpose, or for any purpose that violates, or is inconsistent with\n Regulations T, U, or X of the Federal Reserve Board;\n\n (o) The Lessee and each of its Subsidiaries has filed all material tax\n returns and reports required by Law to have been filed by it and has paid\n all Taxes and governmental charges thereby shown to be owing, except any\n such Taxes or charges which are being diligently contested in good faith by\n appropriate proceedings and for which adequate reserves shall in accordance\n with GAAP have been set aside on its books;\n\n (p) To the best of the knowledge of the Lessee, after inquiry it has\n deemed appropriate, the Lessee and each Subsidiary is in material\n compliance with all Environmental Laws and Occupational Safety and Health\n Laws where failure to comply could have a Material Adverse Effect. Neither\n the Lessee nor any of its Subsidiaries has received notice of any claims\n that any of them is not in compliance in all material respects with any\n Environmental Law where failure to comply could have a Material Adverse\n Effect;\n\n (q) The Lessee and each of its Subsidiaries is in compliance with all\n statutes, judicial and administrative orders, permits and governmental\n rules and regulations which are material to its business or the\n non-compliance with which could result in any material fine, penalty or\n liability;\n\n (r) No financial statement, document, certificate or other written\n communication furnished to the Agent, the Owner Trustee, any Lender or any\n Holder by or on behalf of the Lessee or any Consolidated Entity, or to the\n extent not a Consolidated Entity any Subsidiary, in connection with any\n Operative Agreement contains any untrue statement of a material fact or\n omits to state a material fact necessary to make the statements contained\n herein or therein not misleading. There is no fact known to the Lessee that\n materially adversely affects the business or condition of the Lessee or any\n Material Group that has not been disclosed herein or in such financial\n statements; and\n\n (s) Each of the Arizona Ground Lease Documents to which TMC or\n Meditrust is or will be a party has been, or will be, duly executed and\n delivered by it and constitutes, or upon execution and delivery will\n constitute, the legal, valid and binding\n\n\n 20\n\n\n\n\n\n obligation of TMC or Meditrust, as the case may be, enforceable against it\n in accordance with the terms thereof.\n\n 7.4. Representations and Warranties of the Agent. Effective as of the\nInitial Closing Date, the Agent represents and warrants to each of the other\nparties hereto that:\n\n (a) It is a national banking association duly organized and validly\n existing under the laws of the United States of America and has the full\n power and authority to enter into and perform its obligations under this\n Agreement and each other Operative Agreement to which it is or will be a\n party;\n\n (b) The execution, delivery and performance by the Agent of this\n Agreement and each other Operative Agreement to which it is or will be a\n party are not, and will not be, inconsistent with the articles of\n incorporation or by-laws or other charter documents of the Agent, do not\n and will not contravene any applicable Law of the State of North Carolina\n or of the United States of America governing its activities and will not\n contravene any provision of, or constitute a default under any indenture,\n mortgage, contract or other instrument to which it is a party or by which\n it or its properties are bound, or require any consent or approval of any\n Governmental Authority under any applicable law, rule or regulation of the\n State of North Carolina or any federal law, rule or regulation of the\n United States of America governing its activities; and\n\n (c) Each of this Agreement and each other Operative Agreement to which\n it is a party has been, or when executed and delivered will be, duly\n authorized by all necessary corporate action on the part of the Agent and\n has been, or on such Closing Date will be, duly executed and delivered by\n the Agent and, assuming the due authorization, execution and delivery\n hereof and thereof by the other parties hereto and thereto, will constitute\n a legal, valid and binding obligation enforceable against the Agent in\n accordance with the terms thereof;\n\n (d) Except as otherwise contemplated by the Operative Agreements, the\n Agent shall not, nor shall it direct the Owner Trustee to, use the proceeds\n of any Loan for any purpose other than the payment of Transaction Expenses\n and the fees, expenses and other disbursements referenced in Section 9.1(a)\n and (b) of this Agreement, the purchase or lease of the Properties, the\n acquisition of Equipment and the acquisition of Improvements.\n\n SECTION 8. REPRESENTATIONS AND WARRANTIES ON ADVANCE DATES.\n\n 8.1. Representations and Warranties on Each Property Closing Date. The\nLessee hereby represents and warrants as of each Property Closing Date as\nfollows:\n\n (a) The representations and warranties of the Lessee set forth in the\n Operative Agreements are true and correct in all material respects on and\n as of the Property Closing\n\n\n 21\n\n\n\n\n\n Date as if made on and as of such date. The Lessee and its Subsidiaries are\n in all material respects in compliance with their respective obligations\n under the Operative Agreements and there exists no Default or Event of\n Default under any of the Operative Agreements. No Default or Event of\n Default will occur under any of the Operative Agreements as a result of, or\n after giving effect to, the Advance requested by the Requisition on such\n Property Closing Date;\n\n (b) The Properties are being acquired at a price that is not in excess\n of fair market value, and such Properties consist of (i) Land and existing\n Improvements thereon which Improvements are either suitable for occupancy\n at the time or acquisition or will be renovated or modified in accordance\n with the terms of this Agreement, or (ii) Equipment. Each of the Properties\n is located at the site set forth on the applicable Requisition, which is in\n one of the Approved States;\n\n (c) Upon the acquisition of each Property on such Property Closing\n Date, and at all times thereafter, the Lessor will have marketable title to\n such Property, as evidenced with respect to the Land by the issuance of an\n ALTA form owner's policy showing title in the name of the Lessor, subject\n only to Permitted Liens, or such Property is subject to a valid and\n enforceable Ground Lease;\n\n (d) The execution and delivery of each Operative Agreement delivered\n by the Lessee or any of its Subsidiaries on such Property Closing Date and\n the performance of the obligations of the Lessee and each of its\n Subsidiaries under each Operative Agreement have been duly authorized by\n all requisite corporate action on the part of the Lessee or such\n Subsidiary, as applicable;\n\n (e) Each Operative Agreement delivered on such Property Closing Date\n by the Lessee or any of its Subsidiaries has been duly executed and\n delivered by the Lessee or such Subsidiary;\n\n (f) Each Operative Agreement delivered by the Lessee or any of its\n Subsidiaries on such Property Closing Date is a legal, valid and binding\n obligation of the Lessee or such Subsidiary, as applicable, enforceable\n against the Lessee or such Subsidiary, as applicable, in accordance with\n its respective terms;\n\n (g) Upon filing of each of the UCC Financing Statements (with respect\n to the Property being acquired) in the filing offices designated by the\n Lessee, such UCC Financing Statements will have been filed with the\n appropriate Governmental Authorities in order to perfect a security\n interest in the Property described therein (to the extent perfection can be\n obtained by filing under the UCC);\n\n (h) Upon filing in the filing offices designated by the Lessee, the\n Lender Financing Statements, together with an assignment to the Agent of\n the filed Lessor Financing Statements, will perfect a valid first priority\n security interest (in favor of the\n\n\n 22\n\n\n\n\n\n Agent, for the benefit of itself, the Lenders and the Holders) in all the\n Properties and other collateral described therein in which a security\n interest or mortgage can be perfected by filing under the UCC, and upon\n filing, the Lessor Financing Statements will protect Lessor's interest\n under the Lease to the extent the Lease is a security agreement and\n mortgage;\n\n (i) No portion of any Property being acquired by the Lessor on such\n Property Closing Date is located in an area identified as a special flood\n hazard area by the Federal Emergency Management Agency or other applicable\n agency, or if any such Property is located in an area identified as a\n special flood hazard area by any such agency, then flood insurance has been\n obtained for such Property in accordance with Section 14.2(b) of the Lease\n and in accordance with the National Flood Insurance Act of 1968, as\n amended.\n\n (j) None of the Property consists of Tangible Personal Property; and,\n without limitation the generality of the first clause of this paragraph\n (j), the aggregate Property Cost of any \"Personal Property\" (as defined in\n the Arizona Ground Lease) located at, or included in, the Arizona Property\n does not exceed $3,000,000;\n\n (k) The Lessee has obtained insurance coverage for each Property being\n acquired by the Lessor on such Property Closing Date which meet the\n requirements of Article XIV of the Lease and all of such coverage is in\n full force and effect;\n\n (l) Each Property being acquired by the Lessor on such Property\n Closing Date complies with all Legal Requirements (including, without\n limitation, all zoning and land use laws and Environmental Laws), except to\n the extent that failure to comply therewith would not, individually or in\n the aggregate, have a Material Adverse Effect;\n\n (m) All consents, licenses, permits, authorizations, assignments and\n building permits required as of the date on which such Advance is made by\n all Legal Requirements or pursuant to the terms of any contract, indenture,\n instrument or agreement for construction, completion, occupancy, operation,\n leasing or subleasing of each Property with respect to which an Advance is\n being made have been obtained and are in full force and effect, except to\n the extent that the failure to so obtain would not, individually or in the\n aggregate, have a Material Adverse Effect;\n\n (n) All Improvements comply with all applicable Legal Requirements and\n Insurance Requirements (including, without limitation, all zoning and land\n use laws and Environmental Laws), except to the extent the failure to\n comply therewith would not, individually or in the aggregate, have a\n Material Adverse Effect. Such Improvements do not encroach in any manner\n onto any adjoining land (except as permitted by express written easements)\n and such Improvements and the use thereof by the Lessee and its agents,\n assignees, employees, invitees, lessees, licensees and tenants comply in\n all respects with all applicable Legal Requirements (including, without\n limitation, all applicable Environmental Laws and building, planning,\n zoning and fire codes), except to\n\n\n 23\n\n\n\n\n\n the extent the failure to comply therewith would not, individually or in\n the aggregate, have a Material Adverse Effect. There are no material\n defects to such Improvements including, without limitation, the plumbing,\n heating, air conditioning and electrical systems thereof and all water,\n sewer, electric, gas, telephone and drainage facilities and all other\n utilities required to adequately service such Improvements for their\n intended use will be available pursuant to adequate permits (including any\n that may be required under applicable Environmental Laws), except to the\n extent that failure to obtain any such permit would not, individually or in\n the aggregate, have a Material Adverse Effect. There is no action, suit or\n proceeding (including any proceeding in condemnation or eminent domain or\n under any Environmental Law) pending or, to the best knowledge of the\n Lessee, threatened which adversely affects the title to, or the use,\n operation or value of, such Properties. No fire or other casualty with\n respect to such Properties has occurred which has had a Material Adverse\n Effect. All utilities serving the related Properties, or proposed to serve\n the related Properties in accordance with the Plans and Specifications, are\n located in (or will be located in) and vehicular access to such\n Improvements is provided by (or will be provided by), either public\n rights-of-way abutting each related Property or Appurtenant Rights. All\n licenses, approvals, authorizations, consents, permits (including, without\n limitation, building, demolition and environmental permits, licenses,\n approvals, authorizations and consents), easements and rights-of-way,\n including proof of dedication, required for (i) the use, treatment,\n storage, transport, disposal or disposition of any Hazardous Substance on,\n at, under or from the real property underlying such Improvements during the\n construction of such Improvements and the use and operation of such\n Improvements following such construction, (ii) the construction of such\n Improvements in accordance with the Plans and Specifications and (iii) the\n use and operation of such Improvements following such construction with the\n applicable Equipment which such Improvements support for the purposes for\n which they were intended have either been obtained from the appropriate\n Governmental Authorities or from private parties, as the case may be, or\n will be obtained from the appropriate Governmental Authorities or from\n private parties, as the case may be, prior to commencing any such\n construction or use and operation, as applicable;\n\n (o) Construction of Improvements, if any, to date has been performed\n in a good and workmanlike manner in compliance with all Insurance\n Requirements and Legal Requirements, except to the extent noncompliance\n with any Legal Requirements would not, individually or in the aggregate,\n have a Material Adverse Effect;\n\n (p) When completed, the Improvements shall be wholly within any\n building restriction lines (unless consented to by applicable Government\n Authorities), however established; and\n\n (q) The Advance is secured by the Lien of the Security Documents, and\n the Lessee has not received any notice of, or taken any action to incur,\n any Lien against the applicable Improvements other than Permitted Liens;\n\n\n 24\n\n\n\n\n\n (r) All conditions precedent contained in this Agreement and in the\n other Operative Agreements relating to the Initial Closing Date have been\n substantially satisfied.\n\n SECTION 9. PAYMENT OF CERTAIN EXPENSES.\n\n 9.1. Transaction Expenses.\n\n (a) Lessor agrees on the Initial Closing Date, to pay, or cause to be\n paid, all reasonable fees, expenses and disbursements of the various legal\n counsels for the Lessor and the Agent in connection with the transactions\n contemplated by the Operative Agreements and incurred in connection with\n the Initial Closing Date, including all Transaction Expenses (arising in\n connection with the Initial Closing Date), and all other reasonable fees,\n expenses and disbursements in connection with the Initial Closing Date, and\n including, without limitation, all fees, taxes and expenses for the\n recording, registration and filing of documents; provided, however, that\n the Lessor shall pay such amounts described in this Section 9.1(a) only if\n (i) such amounts are properly described in a Requisition delivered on or\n before such date (or, in the absence of such a Requisition, if requested by\n the Agent), subject to Section 5.2(c), and (ii) funds are made available by\n the Lenders and the Holders in connection with such Requisition in an\n amount sufficient to allow such payment. On the Initial Closing Date, after\n delivery and receipt of the Requisition referenced in Section 4.2(a) hereof\n and satisfaction of the other conditions precedent for such date, the\n Holders shall make Holder Advances and the Lenders shall make Loans to the\n Lessor to pay for the Transaction Expenses, fees, expenses and other\n disbursements referenced in this Section 9.1(a). The Lessee agrees to pay\n all amounts referred to in this Section 9.1(a) to the extent not paid by\n Lessor.\n\n (b) Lessor agrees on each Property Closing Date to pay, or cause to be\n paid, all reasonable fees, expenses and disbursements of the various legal\n counsels for the Lessor and the Agent in connection with the transactions\n contemplated by the Operative Agreements and billed in connection with such\n Property Closing Date, including all Transaction Expenses arising with\n respect to such Property Closing Date, all fees, expenses and disbursements\n incurred with respect to the various items referenced in Sections 5.3\n (including without limitation the cost of any Appraisals or environmental\n site assessments, any developer's fees, any premiums for title insurance\n policies and charges for any updates to such policies) and all other\n reasonable fees, expenses and disbursements in connection with such\n Property Closing Date, including, without limitation, all expenses relating\n to and all fees (including brokers' fees), taxes (including any and all\n stamp, transfer or similar taxes) and expenses for the recording,\n registration and filing of documents; provided, however, the Lessor shall\n pay such amounts described in this Section 9.1(b) only if (i) such amounts\n are properly described in a Requisition delivered on the applicable date\n (or, in the absence of such a Requisition, if requested by the Agent,\n subject to Section 5.2(c), and (ii) funds are made available by the Lenders\n and\n\n\n 25\n\n\n\n\n\n the Holders in connection with such Requisition in an amount sufficient to\n allow such payment. On each Property Closing Date after delivery of the\n applicable Requisition in satisfaction of the other conditions precedent\n for such date, the Holders shall make a Holder Advance and the Lenders\n shall make Loans to the Lessor to pay for the Transaction Expenses, fees,\n expenses and other disbursements referenced in this Section 9.1(b). The\n Lessee agrees to pay all amounts referred to in this Section 9.1(b) to the\n extent not paid by the Lessor.\n\n 9.2. Certain Fees and Expenses. Lessee agrees to pay or cause to be paid\n(i) the initial and annual Owner Trustee's fee and all reasonable expenses of\nthe Owner Trustee and any necessary co-trustees (including without limitation\nreasonable counsel fees and expenses) or any successor owner trustee, for acting\nas owner trustee under the Trust Agreement, (ii) all reasonable costs and\nexpenses incurred by the Lessee, the Agent, the Lenders, the Holders or the\nLessor in entering into any future amendments or supplements requested by the\nLessee with respect to any of the Operative Agreements, whether or not such\namendments or supplements are ultimately entered into, or giving or withholding\nof waivers of consents hereto or thereto which have been requested by the\nLessee, and (iii) all reasonable costs and expenses incurred by the Lessor, the\nLessee, the Holders, the Lenders or the Agent in connection with the enforcement\nof any Operative Agreement or any exercise of remedies under any Operative\nAgreement or any purchase of any Property by the Lessee pursuant to Article XX\nof the Lease.\n\n 9.3. Commitment Fee. The Lessee agrees to pay (a) to the Agent for the\naccount of each Lender a commitment fee (the \"Lender Commitment Fee\"), and (b)\nto the Owner Trustee for the account of each Holder a commitment fee (the\n\"Holder Commitment Fee\"), in each case during the Commitment Period, computed at\na rate per annum equal to the Applicable Commitment Fee Rate on the average\ndaily amount, with respect to each Lender, of the Available Commitment of such\nLender and, with respect to each Holder, of the Available Holder Commitment of\nsuch Holder during the period for which payment is made, payable quarterly in\narrears on each Commitment Fee Payment Date, commencing on the first such date\nto occur after the Initial Closing Date. Lender Commitment Fees and Holder\nCommitment Fees shall be calculated on the basis of a 360-day year for the\nactual days elapsed. Notwithstanding the foregoing, so long as any Lender or\nHolder fails (in violation of the Operative Agreements) to make available any\nportion of its Commitment or Holder Commitment when requested, such Person shall\nnot be entitled to receive payment of its pro rata share of its Commitment Fee\nor Holder Commitment Fee (as the case may be) until such Person shall make\navailable such portion. Each such fee shall be calculated on the basis of a year\nof 360 days for the actual number of days elapsed. If all or a portion of any\nCommitment Fee or Holder Commitment Fee shall not be paid when due, such overdue\namount shall bear interest, payable by the Lessee on demand, at a rate per annum\nequal to the Base Rate plus 2%, from the date of such non-payment until such\namount is paid in full (as well as before judgment).\n\n\n 26\n\n\n\n\n\n SECTION 10. OTHER COVENANTS AND AGREEMENTS.\n\n 10.1. Cooperation with the Lessee. The Holders, the Owner Trustee (at the\ndirection of the Holders) and the Agent shall, to the extent reasonably\nrequested by the Lessee (but without assuming additional liabilities on account\nthereof), at the Lessee's expense, cooperate with the Lessee in connection with\nits covenants contained herein including, without limitation, at any time and\nfrom time to time, upon the request of the Lessee, promptly and duly executing\nand delivering any and all such further instruments, documents and financing\nstatements (and continuation statements related thereto) as the Lessee may\nreasonably request in order to perform such covenants.\n\n 10.2. Covenants of the Owner Trustee and the Holders. Each of the Owner\nTrustee and the Holders hereby agree that so long as this Agreement is in\neffect:\n\n (a) None of the Holders and the Owner Trustee (both in its trust\n capacity and in its individual capacity) will create or permit to exist at\n any time, and each of the Holders and the Owner Trustee will, at its own\n cost and expense, promptly take such action (and notify Lessee of such\n action) as may be necessary duly to discharge, or to cause to be\n discharged, all Lessor Liens attributable to it on the Properties;\n provided, however, that the Holders and the Owner Trustee shall not be\n required to discharge any such Lessor Lien while the same is being\n contested in good faith by appropriate proceedings diligently prosecuted so\n long as (a) such proceedings shall not involve any material danger of\n impairment of the Liens of the Security Documents or of the sale,\n forfeiture or loss of, any Property or title thereto or any interest\n therein or the payment of Rent, and (b) such proceedings shall not\n materially interfere with the disposition of any Property or title thereto\n or interest therein or the payment of Rent.\n\n (b) Without prejudice to any right of the Owner Trustee under the\n Trust Agreement to resign (subject to the requirement set forth in the\n Trust Agreement that such resignation shall not be effective until a\n successor shall have agreed to accept such appointment), or the Holders'\n rights under the Trust Agreement to remove the institution acting as Owner\n Trustee (after consent to such removal by the Agent as provided in the\n Trust Agreement), each of the Holders and the Owner Trustee hereby agrees\n with the Lessee and the Agent (i) not to terminate or revoke the trust\n created by the Trust Agreement except as permitted by Article VIII of the\n Trust Agreement, (ii) not to amend, supplement, terminate or revoke or\n otherwise modify any provision of the Trust Agreement in such a manner as\n to adversely affect the rights of the Lessee or the Agent without the prior\n written consent of such party and (iii) to comply with all of the terms of\n the Trust Agreement, the nonperformance of which would adversely affect any\n such party;\n\n (c) The Owner Trustee or any successor may resign or be removed by the\n Holders as Owner Trustee, a successor Owner Trustee may be appointed and a\n corporation may become the Owner Trustee under the Trust Agreement, only in\n\n\n 27\n\n\n\n\n\n accordance with the provisions of Article IX of the Trust Agreement and,\n with respect to such appointment, with the consent of the Lessee, which\n consent shall not be unreasonably withheld, conditioned or delayed;\n\n (d) The Owner Trustee, in its capacity as Owner Trustee under the\n Trust Agreement, and not in its individual capacity, shall not contract\n for, create, incur or assume any indebtedness, or enter into any business\n or other activity, other than pursuant to or under the Operative\n Agreements;\n\n (e) The Holders will not instruct the Owner Trustee to take any action\n in violation of the terms of any Operative Agreement;\n\n (f) Neither any Holder nor the Owner Trustee shall (i) commence any\n case, proceeding or other action with respect to the Owner Trustee under\n any existing or future law of any jurisdiction, domestic or foreign,\n relating to bankruptcy, insolvency, reorganization, arrangement,\n winding-up, liquidation, dissolution, composition or other relief with\n respect to it or its debts, or (ii) seek appointment of a receiver,\n trustee, custodian or other similar official with respect to the Owner\n Trustee or for all or any substantial benefit of the creditors of the Owner\n Trustee; and neither any Holder nor the Owner Trustee shall take any action\n in furtherance of, or indicating its consent to, approval of, or\n acquiescence in, any of the acts set forth in this paragraph;\n\n (g) The Owner Trustee shall give prompt notice to the Lessee and the\n Agent if the Owner Trustee's chief place of business or chief executive\n office, or the office where the records concerning the accounts or contract\n rights relating to any Property are kept, shall cease to be located at 79\n South Main Street, Salt Lake City, Utah 84111, or if it shall change its\n name;\n\n (h) Provided that no Lease Default or Lease Event of Default has\n occurred and is continuing, neither the Owner Trustee nor any Holder shall,\n without the prior written consent of the Lessee, consent to or permit any\n amendment, supplement or other modification of the terms and provisions of\n the Credit Agreement or the Notes;\n\n (i) Neither the Owner Trustee nor any Holder shall consent to or\n permit any amendment, supplement or other modification of the terms and\n provisions of any Operative Agreement, in each case without the prior\n written consent of the Agent except as described in Section 10.5 of this\n Agreement; and\n\n (j) The Owner Trustee (i) shall take such actions and shall refrain\n from taking such actions with respect to the Operative Agreements or the\n Properties and shall grant such approvals and otherwise act or refrain from\n acting with respect to the Operative Agreements or the Properties in each\n case as directed in writing by the Agent or, to the extent required by\n Section 10.5 hereof, the Lessee, notwithstanding any contrary instruction\n or absence of instruction by any Holder or Holders; and (ii) shall not take\n any\n\n\n 28\n\n\n\n\n\n action, grant any approvals or otherwise act under or with respect to the\n Operative Agreements or any matters relating to the Properties without\n first obtaining the prior written consent of the Agent (and without regard\n to any contrary instruction or absence of instruction by any Holder);\n provided, however, that notwithstanding the foregoing provisions of this\n subparagraph (j) the Owner Trustee, the Agent and the Holders each\n acknowledge, covenant and agree that, with respect to all matters under the\n Operative Agreements that require the consent or concurrence of all of the\n Lenders pursuant to the terms of Section 9.1 of the Credit Agreement (the\n \"Unanimous Vote Matters\"), neither the Owner Trustee nor the Agent shall\n act or refrain from acting with respect to any Unanimous Vote Matter until\n such party has received the approval of each Lender and each Holder with\n respect thereto.\n\n 10.3. Lessee Covenants, Consent and Acknowledgement.\n\n (a) Lessee acknowledges and agrees that the Owner Trustee, pursuant to\n the terms and conditions of the Security Agreement and the Mortgage\n Instruments, shall create Liens respecting the various personal property,\n fixtures and real property described therein in favor of the Agent. Lessee\n hereby irrevocably consents to the creation, perfection and maintenance of\n such Liens.\n\n (b) Lessor hereby instructs Lessee, and Lessee hereby acknowledges and\n agrees, that until such time as the Loans are paid in full and the Liens\n evidenced by the Security Agreement and the Mortgage Instruments have been\n released, (i) any and all Rent and any and all other amounts of any kind or\n type under any of the Operative Agreements due and owing or payable to the\n Lessor or the Owner Trustee shall instead be paid directly to the Agent or\n as the Agent may direct from time to time and (ii) Lessee shall cause all\n notices, certificates, financial statements, communications and other\n information which is delivered, or is required to be delivered, to the\n Lessor, the Owner Trustee or any Holder also to be delivered at the same\n time to the Agent.\n\n (c) Lessee shall not consent to or permit any amendment, supplement or\n other modification of the terms or provisions of any Operative Agreement\n without, in each case, obtaining the prior written consent of the Agent\n and, to the extent required by the proviso at the end of Section 10.2(j)\n hereof, each of the Holders.\n\n (d) Except as otherwise contemplated by the Operative Agreements,\n neither the Owner Trustee nor the Lessee shall use the proceeds of any\n Holder Advance for any purpose other than the payment of Transaction\n Expenses and the fees, expenses and other disbursements referenced in\n Section 9.1(a) and (b) of this Agreement, the purchase or lease of the\n Properties, the acquisition of Equipment and the acquisition of\n Improvements;\n\n (e) The Lessee shall not permit any of the Property to consist of\n Tangible Personal Property; and, without limiting the generality of the\n first clause of this paragraph\n\n\n 29\n\n\n\n\n\n (e), the Lessee shall not permit the aggregate Property Cost of any\n \"Personal Property\" (as defined in the Arizona Ground Lease) located at, or\n included in, the Arizona Property to exceed $3,000,000;\n\n (f) The Lessee agrees that aggregate appraised enterprise value of all\n Properties as shown in the most recent Appraisals of each Property received\n by the Agent pursuant to Section 5.3(b) or otherwise shall at all times be\n greater than or equal to 50% of the aggregate Property Cost of all\n Properties; and any Appraisal obtained to comply with this provision shall\n be at the Lessee's sole cost and expense.\n\n (g) The Lessee agrees to perform each of the Incorporated Covenants\n and any other covenants set forth in (or incorporated by reference into)\n Article XXVIII of the Lease, in accordance with their respective terms.\n\n (h) The Lessee shall not create or permit to exist at any time (and\n the Lessee shall, at its own expense, take such action as may be necessary\n to duly discharge, or cause to be discharged) any Lien against any Property\n other than Permitted Liens.\n\n (i) The Lessee shall perform or shall cause to be performed, within\n sixty (60) days after the Initial Closing Date, all actions recommended or\n required by the Existing Environmental Reports, such performance to be\n satisfactory to the Agent in its reasonable discretion.\n\n (j) The Lessee shall pay (when and as due) any fees pursuant to the\n Fee Letter.\n\n 10.4. Sharing of Certain Payments. The parties hereto acknowledge and agree\nthat all payments due and owing by the Lessee to the Lessor under the Lease or\nany of the other Operative Agreements shall be made by the Lessee directly to\nthe Agent as more particularly provided in Section 10.3 hereof. The Holders and\nthe Agent, on behalf of the Lenders, acknowledge the terms of Section 8 of the\nCredit Agreement regarding the allocation of payments and other amounts made or\nreceived from time to time under the Operative Agreements and agree all such\npayments and amounts are to be allocated as provided in Section 8 of the Credit\nAgreement. In connection therewith the Holders hereby (a) appoint the Agent to\nact as collateral agent for the Holders in connection with the Lien granted by\nthe Mortgage Instruments and other Security Documents to secure the Holder\nAmount and (b) acknowledge and agree and direct that the rights and remedies of\nthe beneficiaries of the Lien of the Mortgage Instruments and other Security\nDocuments shall be exercised by the Agent on behalf of the Lenders and the\nHolders as directed from time to time by the Lenders without notice to or\nconsent from the Holders.\n\n 10.5. Grant of Easements, etc. The Agent and the Holders hereby agree that,\nso long as no Event of Default shall have occurred and be continuing, and until\nsuch time as the Agent gives instructions to the contrary to the Owner Trustee,\nthe Owner Trustee shall, from time to\n\n\n 30\n\n\n\n\n\ntime at the request of the Lessee, in connection with the transactions\ncontemplated by the Lease or the other Operative Agreements, (i) grant easements\nand other rights in the nature of easements with respect to any Property, (ii)\nrelease existing easements or other rights in the nature of easements which are\nfor the benefit of any Property, (iii) execute and deliver to any Person any\ninstrument appropriate to confirm or effect such grants or releases, and (iv)\nexecute and deliver to any Person such other documents or materials in\nconnection with the acquisition, development or operation of any Property,\nincluding, without limitation, reciprocal easement agreements, operating\nagreements, development agreements, plats, replats or subdivision documents;\nprovided, that each of the agreements and documents referred to in this Section\n10.5 shall be of the type normally executed by the Lessee in the ordinary course\nof the Lessee's business, or consistent with local practice or as required by\nlocal governmental authorities, and shall be on commercially reasonable terms so\nas not to diminish the value of any Property in any material respect.\n\n SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT.\n\n 11.1. Lessee's Credit Agreement Rights. Notwithstanding anything to the\ncontrary contained in the Credit Agreement, the Agent, the Lessee and the Owner\nTrustee hereby agree that, prior to the occurrence and continuation of any Lease\nDefault or Lease Event of Default the Lessee (as designated below) shall have\nthe following rights:\n\n (a) the Lessee shall have the right to give the notice referred to in\n Section 2.3 of the Credit Agreement, to designate the account to which a\n borrowing under the Credit Agreement is to be credited pursuant to Section\n 2.3 of the Credit Agreement;\n\n (b) the Lessee shall have the right to terminate or reduce the\n Commitments pursuant to Section 2.5(a) of the Credit Agreement and to make\n an Extension Request pursuant to Section 2.5(c) of the Credit Agreement;\n\n (c) the Lessee shall have the right to exercise the conversion and\n continuation options pursuant to Section 2.7 of the Credit Agreement;\n\n (d) the Lessee shall have the right to approve any successor agent\n pursuant to Section 7.8 of the Credit Agreement;\n\n (e) the Lessee shall have the right to consent to any assignment by a\n Lender to which the Lessor has the right to consent pursuant to Section 9.8\n of the Credit Agreement; and\n\n (f) without limiting the foregoing clauses (a) through (e), and in\n addition thereto, provided that no Event of Default then exists, the Lessee\n shall have the right to exercise any other right of the Owner Trustee under\n the Credit Agreement upon not less than five (5) Business Days' prior\n written notice from the Lessee to the Owner Trustee and the Agent.\n\n\n 31\n\n\n\n\n\n 11.2. Lessee's Trust Agreement Rights. Notwithstanding anything to the\ncontrary contained in the Trust Agreement, the Lessee, the Owner Trustee and the\nHolders hereby agree that, prior to the occurrence and continuation of any Lease\nDefault or Lease Event of Default the Lessee (as designated below) shall have\nthe following rights:\n\n (a) the Lessee shall have the right to exercise the conversion and\n continuation options pursuant to Section 3.8 of the Trust Agreement;\n\n (b) no removal of the Owner Trustee and appointment of a successor\n Owner Trustee pursuant to Section 9.1 of the Trust Agreement shall be made\n without the prior written consent (not to be unreasonably withheld or\n delayed) of the Lessee; and\n\n (c) the Holders and the Owner Trustee shall not amend, supplement or\n otherwise modify any provision of the Trust Agreement in such a manner as\n to adversely affect the rights of the Lessee without the prior written\n consent (not to be unreasonably withheld or delayed) of the Lessee.\n\n SECTION 12. TRANSFER OF INTEREST.\n\n 12.1. Restrictions on Transfer. The Holders may, directly or indirectly,\nassign, convey or otherwise transfer any of their right, title or interest in or\nto the Trust Estate or the Trust Agreement with the prior written consent of the\nAgent, and (provided no Default or Event of Default has occurred and is\ncontinuing) the Lessee and (only if such assignee is not a Lender) the Majority\nLenders (which consent in each case shall not be unreasonably withheld or\ndelayed); provided that such consents shall not be required for an assignment to\na Lender or an affiliate of a Lender. The Owner Trustee may, subject to the Lien\nof the applicable Security Documents, but only with the prior written consent of\nthe Agent, the Holders (which consent may be withheld by the Agent or the\nHolders in their sole discretion) and (provided no Default or Event of Default\nhas occurred and is continuing) the Lessee, directly or indirectly, assign,\nconvey, appoint an agent with respect to enforcement of, or otherwise transfer\nany of the Owner Trustee's right, title or interest in or to any Property, the\nLease, the Trust Agreement, this Agreement (including, without limitation, any\nright to indemnification thereunder), or any other document relating to a\nProperty or any interest in a Property as provided in the Trust Agreement and\nthe Lease. The provisions of the immediately preceding sentence shall not apply\nto the obligations of the Owner Trustee to transfer the Properties to the Lessee\nor a third party purchaser pursuant to Article XXII of the Lease upon payment\nfor such Properties in accordance with each of the terms and conditions of the\nLease.\n\n 12.2. Effect of Transfer. From and after any transfer effected in\naccordance with this Section 12, the transferor shall be released, to the extent\nof such transfer, from its liability hereunder and under the other documents to\nwhich it is a party in respect of obligations to be performed on or after the\ndate of such transfer; provided, however, that any transferor Holder shall\nremain liable under Article XI of the Trust Agreement to the extent that the\ntransferee Holder shall not have assumed the obligations of the transferor\nHolder thereunder. Upon any\n\n\n 32\n\n\n\n\n\ntransfer by the Owner Trustee or a Holder as above provided, any such transferee\nshall assume the obligations of the Owner Trustee and Lessor or the obligations\nof a Holder, as the case may be, and shall be deemed an \"Owner Trustee\",\n\"Lessor\" or \"Holder\", as the case may be, for all purposes of such documents and\neach reference herein to the transferor shall thereafter be deemed a reference\nto such transferee for all purposes, except as provided in the preceding\nsentence. Notwithstanding any transfer of all or a portion of the transferor's\ninterest as provided in this Section 12, the transferor shall be entitled to all\nbenefits accrued and all rights vested prior to such transfer including, without\nlimitation, rights to indemnification under any such document.\n\n SECTION 13. INDEMNIFICATION.\n\n 13.1. General Indemnity.\n\n (a) Whether or not any of the transactions contemplated hereby shall\n be consummated, the Indemnity Provider hereby assumes liability for and\n agrees to defend, indemnify and hold harmless each Indemnified Person on an\n After Tax Basis from and against any Claims which may be imposed on,\n incurred by or asserted against an Indemnified Person by any other Person\n in any way relating to or arising or alleged to arise out of the execution,\n delivery, performance or enforcement of this Agreement, the Lease or any\n other Operative Agreement or on or with respect to any Property or any part\n thereof, including, without limitation, Claims in any way relating to or\n arising or alleged to arise out of (i) the financing, refinancing,\n purchase, acceptance, rejection, ownership, design, construction,\n refurbishment, development, delivery, acceptance, nondelivery, leasing,\n subleasing, possession, use, operation, maintenance, repair, modification,\n transportation, condition, sale, return, repossession (whether by summary\n proceedings or otherwise), or any other disposition of a Property, or any\n part thereof, including the acquisition, holding or disposition of any\n interest in any Property, lease or agreement comprising a portion of any\n thereof; (ii) any latent or other defect in any property whether or not\n discoverable by an Indemnified Person or the Indemnity Provider; (iii) any\n Environmental Claim, any violation of Environmental Laws, or any other loss\n of or damage to any property or the environment relating to any Property,\n the Lease or the Indemnity Provider; (iv) the Operative Agreements, or any\n transaction contemplated thereby; (v) any breach by the Lessee of any of\n its representations or warranties under the Operative Agreements to which\n it is a party or failure by the Lessee to perform or observe any covenant\n or agreement to be performed by it under any of the Operative Agreements;\n (vi) the transactions contemplated hereby or by any other Operative\n Agreement, in respect of the application of Parts 4 and 5 of Subtitle B of\n Title I of ERISA; (vii) any personal injury, death or property damage,\n including without limitation Claims based on strict or absolute liability\n in tort; (viii) any easement, right, agreement or document referred to in\n Section 10.5 of this Agreement; or (ix) any Lien on any Property (other\n than Liens created by the Operative Agreements). The foregoing indemnity\n shall not apply to a Claim imposed on, incurred by or asserted against an\n Indemnified Person to the extent such Claim arises from (A) the gross\n negligence, willful misconduct or willful\n\n\n 33\n\n\n\n\n\n breach of such Indemnified Person, or (B) the negligence of such\n Indemnified Person unless such Indemnified Person is (1) the Owner Trustee\n or the Trust Company, (2) a Holder and the claim is brought against such\n Holder in its capacity as such or arises from its role as a Holder or (3)\n any successor, director, shareholder, officer, employee or agent of any of\n the foregoing.\n\n (b) If a written Claim is made against any Indemnified Person or if\n any proceeding shall be commenced against such Indemnified Person\n (including a written notice of such proceeding) for any Claim, such\n Indemnified Person shall promptly notify the Indemnity Provider in writing\n and shall not take action with respect to such Claim without the consent of\n the Indemnity Provider for thirty (30) days after the receipt of such\n notice by the Indemnity Provider; provided, however, that, in the case of\n any such Claim, if action shall be required by law or regulation to be\n taken prior to the end of such 30-day period, such Indemnified Person shall\n endeavor, in such notice to the Indemnity Provider, to inform the Indemnity\n Provider of such shorter period, and no action shall be taken with respect\n to such Claim without the consent of the Indemnity Provider before seven\n (7) days before the end of such shorter period; provided, further, that the\n failure of such Indemnified Person to give the notices referred to in this\n sentence shall not diminish the Indemnity Provider's obligation hereunder\n except to the extent such failure materially precludes the Indemnity\n Provider from contesting such Claim.\n\n (c) If, within thirty (30) days of receipt of such notice from the\n Indemnified Person (or such shorter period as the Indemnified Person has\n notified the Indemnity Provider is required by law or regulation for the\n Indemnified Person to respond to such Claim), the Indemnity Provider shall\n request in writing that such Indemnified Person respond to such Claim, the\n Indemnified Person shall, at the expense of the Indemnity Provider, in good\n faith conduct and control such action (including, without limitation by\n pursuit of appeals) (provided, however, that (A) if such Claim can be\n pursued by the Indemnity Provider on behalf of or in the name of such\n Indemnified Person, the Indemnified Person, at the Indemnity Provider's\n request, shall allow the Indemnity Provider to conduct and control the\n response to such Claim and (B) in the case of any Claim, the Indemnified\n Person may request the Indemnity Provider to conduct and control the\n response to such Claim (with counsel to be selected by the Indemnity\n Provider and consented to by such Indemnified Person, such consent not to\n be unreasonably withheld, conditioned or delayed; provided, however, that\n any Indemnified Person may retain separate counsel at the expense of the\n Indemnity Provider in the event of a conflict)) by, in the sole discretion\n of the Person conducting and controlling the response to such Claim, (1)\n resisting payment thereof, (2) not paying the same except under protest, if\n protest is necessary and proper, (3) if the payment be made, using\n reasonable efforts to obtain a refund thereof in appropriate administrative\n and judicial proceedings, or (4) taking such other action as is reasonably\n requested by the Indemnity Provider from time to time.\n\n\n 34\n\n\n\n\n\n (d) The party controlling the response to any Claim shall consult in\n good faith with the non-controlling party and shall keep the\n non-controlling party reasonably informed as to the conduct of the response\n to such Claim; provided, that all decisions ultimately shall be made in the\n discretion of the controlling party, except that the Indemnity Provider may\n not agree to any dismissal or settlement of, or other agreement in\n connection with, any claim without the prior written consent of such\n Indemnified Person, if such dismissal, settlement or agreement would\n require any admission or acknowledgment of any culpability or wrongdoing by\n such Indemnified Person or provide for any nonmonetary relief to be\n performed by such Indemnified Person. The parties agree that an Indemnified\n Person may at any time decline to take further action with respect to the\n response to such Claim and may settle such Claim if such Indemnified Person\n shall waive its rights to any indemnity from the Indemnity Provider that\n otherwise would be payable in respect of such Claim (and any future Claim,\n the pursuit of which is precluded by reason of such resolution of such\n Claim) and shall pay to the Indemnity Provider any amount previously paid\n or advanced by the Indemnity Provider pursuant to this Section 13.1 by way\n of indemnification or advance for the payment of any amount regarding such\n Claim other than expenses of the action relating to such Claim.\n\n (e) Notwithstanding the foregoing provisions of this Section 13.1, an\n Indemnified Person shall not be required to take any action and no\n Indemnity Provider shall be permitted to respond to any Claim in its own\n name or that of the Indemnified Person unless (i) the Indemnity Provider\n shall have agreed to pay and shall pay to such Indemnified Person on demand\n and on an After Tax Basis all reasonable costs, losses and expenses that\n such Indemnified Person actually incurs in connection with such Claim,\n including, without limitation, all reasonable legal, accounting and\n investigatory fees and disbursements, (ii) the Indemnified Person shall\n have reasonably determined that the action to be taken will not result in\n any material danger of sale, forfeiture or loss of any Property, or any\n part thereof or interest therein, will not interfere with the payment of\n Rent, and will not result in risk of criminal liability, (iii) if such\n Claim shall involve the payment of any amount prior to the resolution of\n such Claim, the Indemnity Provider shall provide to the Indemnified Person\n an interest-free advance in an amount equal to the amount that the\n Indemnified Person is required to pay (with no additional net after-tax\n cost to such Indemnified Person), (iv) in the case of a Claim that must be\n pursued in the name of an Indemnified Person (or an Affiliate thereof), the\n Indemnity Provider shall have provided to such Indemnified Person an\n opinion of independent counsel selected by the Indemnified Person and\n reasonably satisfactory to the Indemnity Provider stating that a reasonable\n basis exists to contest such Claim, and (v) such claim is covered by\n insurance and no Event of Default shall have occurred and be continuing. In\n addition, an Indemnified Person shall not be required to contest any Claim\n in its name (or that of an Affiliate) if the subject matter thereof shall\n be of a continuing nature and shall have previously been decided adversely\n by a court of competent jurisdiction pursuant to the contest provisions of\n this Section 13.1, unless there shall have been a change in law (or\n interpretation thereof) and the Indemnified Person shall have received, at\n the Indemnity Provider's expense, an opinion of independent counsel\n selected by the Indemnified\n\n\n 35\n\n\n\n\n\n Person and reasonably acceptable to the Indemnity Provider stating that as\n a result of such change in law (or interpretation thereof), it is more\n likely than not that the Indemnified Person will prevail in such contest.\n\n 13.2. General Tax Indemnity.\n\n (a) The Indemnity Provider shall pay and assume liability for, and\n does hereby agree to indemnify, protect and defend each Property and all\n Indemnified Persons, and hold them harmless against, all Impositions on an\n After Tax Basis.\n\n (b) (i) Subject to the terms of Section 13.2(f), the Indemnity\n Provider shall pay or cause to be paid all Impositions directly to the\n taxing authorities where feasible and otherwise to the Indemnified\n Person, as appropriate, and the Indemnity Provider shall at its own\n expense, upon such Indemnified Person's reasonable request, furnish to\n such Indemnified Person copies of official receipts or other\n satisfactory proof evidencing such payment.\n\n (ii) In the case of Impositions for which no contest is conducted\n pursuant to Section 13.2(f) and which the Indemnity Provider pays\n directly to the taxing authorities, the Indemnity Provider shall pay\n such Impositions prior to the latest time permitted by the relevant\n taxing authority for timely payment. In the case of Impositions for\n which the Indemnity Provider reimburses an Indemnified Person, the\n Indemnity Provider shall do so within thirty (30) days after receipt\n by the Indemnity Provider of demand by such Indemnified Person\n describing in reasonable detail the nature of the Imposition and the\n basis for the demand (including the computation of the amount\n payable). In the case of Impositions for which a contest is conducted\n pursuant to Section 13.2(f), the Indemnity Provider shall pay such\n Impositions or reimburse such Indemnified Person for such Impositions,\n to the extent not previously paid or reimbursed pursuant to subsection\n (a), prior to the latest time permitted by the relevant taxing\n authority for timely payment after conclusion of all contests under\n Section 13.2(f).\n\n (iii) Impositions imposed with respect to a Property for a\n billing period during which the Lease expires or terminates with\n respect to such Property (unless the Lessee has exercised the Purchase\n Option with respect to such Property or the Lessee has otherwise\n purchased such Property) shall be adjusted and prorated on a daily\n basis between the Indemnity Provider and the Lessor, whether or not\n such Imposition is imposed before or after such expiration or\n termination and each party shall pay its pro rata share thereof.\n\n (iv) At the Indemnity Provider's request, the amount of any\n indemnification payment by the Indemnity Provider pursuant to\n subsection (a) shall be verified and certified by an independent\n public accounting firm mutually acceptable to the Indemnity Provider\n and the Indemnified Person. The fees and\n\n\n 36\n\n\n\n\n\n expenses of such independent public accounting firm shall be paid by\n the Indemnity Provider unless such verification shall result in an\n adjustment in the Indemnity Provider's favor of 15% or more of the\n payment as computed by the Indemnified Person, in which case such fee\n shall be paid by the Indemnified Person.\n\n (c) The Indemnity Provider shall be responsible for preparing and\n filing any real and personal property or ad valorem tax returns with\n respect to each Property. In case any other report or tax return shall be\n required to be made with respect to any obligations of the Indemnity\n Provider under or arising out of subsection (a) and of which the Indemnity\n Provider has knowledge or should have knowledge, the Indemnity Provider, at\n its sole cost and expense, shall notify the relevant Indemnified Person of\n such requirement and (except if such Indemnified Person notifies the\n Indemnity Provider that such Indemnified Person intends to file such report\n or return) (A) to the extent required or permitted by and consistent with\n Legal Requirements, make and file in Indemnity Provider's name such return,\n statement or report; and (B) in the case of any other such return,\n statement or report required to be made in the name of such Indemnified\n Person, advise such Indemnified Person of such fact and prepare such\n return, statement or report for filing by such Indemnified Person or, where\n such return, statement or report shall be required to reflect items in\n addition to any obligations of the Indemnity Provider under or arising out\n of subsection (a), provide such Indemnified Person at the Indemnity\n Provider's expense with information sufficient to permit such return,\n statement or report to be properly made with respect to any obligations of\n the Indemnity Provider under or arising out of subsection (a). Such\n Indemnified Person shall, upon the Indemnity Provider's request and at the\n Indemnity Provider's expense, provide any data maintained by such\n Indemnified Person (and not otherwise available to or within the control of\n the Indemnity Provider) with respect to any Property which the Indemnity\n Provider may reasonably require to prepare any required tax returns or\n reports.\n\n (d) If as a result of the payment or reimbursement by the Indemnity\n Provider of any Imposition or other reasonable expenses of the Lessor or\n the payment of any Transaction Expenses incurred in connection with the\n transactions contemplated by the Operative Agreements, the Lessor, the\n Holders, partners of any Holder, or shareholders of such partners of a\n partnership which is a partner of such Holder, shall suffer a net increase\n in any federal, state or local income tax liability, the Indemnity Provider\n shall indemnify such Persons (without duplication of any indemnification\n required by subsection (a)) on an After Tax Basis for the amount of such\n increase. The calculation of any such net increase shall take into account\n any current or future tax savings (including any net operating loss\n carry-forward) realized or reasonably expected to be realized by such\n Person in respect thereof, as well as any interest, penalties and additions\n to tax payable by such Lessor, or such Holder, or such Affiliate, in\n respect thereof.\n\n (e) As between the Indemnity Provider on one hand, and the Lessor or\n the Agent, any Lender or any Holder on the other hand, the Indemnity\n Provider shall be\n\n\n 37\n\n\n\n\n\n responsible for, and the Indemnity Provider shall indemnify and hold\n harmless the Lessor, the Agent, the Lenders and each Holder (without\n duplication of any indemnification required by subsection (a)) on an After\n Tax Basis against, any obligation for United States or foreign withholding\n taxes imposed in respect of payments on the Notes or Certificates or with\n respect to Rent payments under the Lease (and, if the Lessor, the Agent,\n any Lender or any Holder receives a demand for such payment from any taxing\n authority, the Indemnity Provider shall discharge such demand on behalf of\n the Lessor, the Agent, such Lender or such Holder); provided, however, that\n the right of any Lender to make a claim for indemnification under this\n Section 13.2(e) is subject to the compliance by such Lender with the\n requirements of Section 2.13 of the Credit Agreement.\n\n (f) (i) If a written Claim is made against any Indemnified Person, or\n if any proceeding shall be commenced against such Indemnified Person\n (including a written notice of such proceeding), for any Impositions,\n such Indemnified Person shall promptly notify the Indemnity Provider\n in writing and shall not take action with respect to such Claim or\n proceeding without the consent of the Indemnity Provider for thirty\n (30) days after the receipt of such notice by the Indemnity Provider;\n provided, however, that, in the case of any such Claim or proceeding,\n if action shall be required by law or regulation to be taken prior to\n the end of such 30- day period, such Indemnified Person shall, in such\n notice to the Indemnity Provider, inform the Indemnity Provider of\n such shorter period, and no action shall be taken with respect to such\n Claim or proceeding without the consent of the Indemnity Provider\n before seven (7) days before the end of such shorter period; provided,\n further, that the failure of such Indemnified Person to give the\n notices referred to this sentence shall not diminish the Indemnity\n Provider's obligation hereunder except to the extent such failure\n materially precludes the Indemnity Provider from contesting such\n Claim.\n\n (ii) If, within thirty (30) days of receipt of such notice from\n the Indemnified Person (or such shorter period as the Indemnified\n Person has notified the Indemnity Provider is required by law or\n regulation for the Indemnified Person to commence such contest), the\n Indemnity Provider shall request in writing that such Indemnified\n Person contest such Imposition, the Indemnified Person shall, at the\n expense of the Indemnity Provider, in good faith conduct and control\n such contest (including, without limitation, by pursuit of appeals)\n relating to the validity, applicability or amount of such Imposition\n (provided, however, that (A) if such contest can be pursued\n independently from any other proceeding involving a tax liability of\n such Indemnified Person, the Indemnified Person, at the Indemnity\n Provider's request, shall allow the Indemnity Provider to conduct and\n control such contest and (B) in the case of any contest, the\n Indemnified Person may request the Indemnity Provider to conduct and\n control such contest (with counsel to be selected by the Indemnity\n Provider and consented to by such Indemnified Person, such consent not\n to be unreasonably withheld, conditioned or\n\n\n 38\n\n\n\n\n\n delayed; provided, however, that any Indemnified Person may retain\n separate counsel at the expense of the Indemnity Provider in the event\n of a conflict)) by, in the sole discretion of the Person conducting\n and controlling such contest, (1) resisting payment thereof, (2) not\n paying the same except under protest, if protest is necessary and\n proper, (3) if the payment be made, using reasonable efforts to obtain\n a refund thereof in appropriate administrative and judicial\n proceedings, or (4) taking such other action as is reasonably\n requested by the Indemnity Provider from time to time.\n\n (iii) The party controlling any contest shall consult in good\n faith with the non-controlling party and shall keep the\n non-controlling party reasonably informed as to the conduct of such\n contest; provided, that all decisions ultimately shall be made in the\n sole discretion of the controlling party. The parties agree that an\n Indemnified Person may at any time decline to take further action with\n respect to the contest of any Imposition and may settle such contest\n if such Indemnified Person shall waive its rights to any indemnity\n from the Indemnity Provider that otherwise would be payable in respect\n of such Imposition (and any future Claim by any taxing authority, the\n contest of which is precluded by reason of such resolution of such\n contest) and shall pay to the Indemnity Provider any amount previously\n paid or advanced by the Indemnity Provider pursuant to this Section\n 13.2 by way of indemnification or advance for the payment of any\n amount regarding such Imposition other than expenses of such contest.\n\n (iv) Notwithstanding the foregoing provisions of this Section\n 13.2, an Indemnified Person shall not be required to take any action\n and no Indemnity Provider shall be permitted to contest any Imposition\n in its own name or that of the Indemnified Person unless (A) the\n Indemnity Provider shall have agreed to pay and shall pay to such\n Indemnified Person on demand and on an After Tax Basis all reasonable\n costs, losses and expenses that such Indemnified Person actually\n incurs in connection with contesting such Imposition, including,\n without limitation, all reasonable legal, accounting and investigatory\n fees and disbursements, (B) the Indemnified Person shall have\n reasonably determined that the action to be taken will not result in\n any material danger of sale, forfeiture or loss of any Property, or\n any part thereof or interest therein, will not interfere with the\n payment of Rent, and will not result in risk of criminal liability,\n (C) if such contest shall involve the payment of the Imposition prior\n to or during the contest, the Indemnity Provider shall provide to the\n Indemnified Person an interest-free advance in an amount equal to the\n Imposition that the Indemnified Person is required to pay (with no\n additional net after-tax cost to such Indemnified Person), (D) in the\n case of a Claim that must be pursued in the name of an Indemnified\n Person (or an Affiliate thereof), the Indemnity Provider shall have\n provided to such Indemnified Person an opinion of independent tax\n counsel selected by the Indemnified Person and reasonably satisfactory\n to the Indemnity Provider stating that a reasonable basis exists to\n contest such Claim, and (E) no Event of Default\n\n\n 39\n\n\n\n\n\n shall have occurred and be continuing. In addition, an Indemnified\n Person shall not be required to contest any claim in its name (or that\n of an Affiliate) if the subject matter thereof shall be of a\n continuing nature and shall have previously been decided adversely by\n a court of competent jurisdiction pursuant to the contest provisions\n of this Section 13.2, unless there shall have been a change in law (or\n interpretation thereof) and the Indemnified Person shall have\n received, at the Indemnity Provider's expense, an opinion of\n independent tax counsel selected by the Indemnified Person and\n reasonably acceptable to the Indemnity Provider stating that as a\n result of such change in law (or interpretation thereof), it is more\n likely than not that the Indemnified Person will prevail in such\n contest.\n\n 13.3. Environmental Indemnity. Without limiting the generality of the\nforegoing, whether or not the transactions contemplated hereby shall be\nconsummated, the Indemnity Provider hereby assumes liability for and agrees to\ndefend, indemnify and hold harmless each Indemnified Person on an After Tax\nBasis from and against any Claims which may be imposed on, incurred by or\nasserted against an Indemnified Person by any other Person (but not to the\nextent such Claims arise from the gross negligence or willful misconduct of such\nIndemnified Person) in any way relating to or arising, or alleged (by any Person\nasserting such a Claim against an Indemnified Person) to arise, out of any\nEnvironmental Claim, any violation of Environmental Laws, or any other loss of\nor damage to any Property or the environment (including without limitation the\npresence on any Property of wetlands, tidelands or swamp or overflow lands, or\nany condition arising from or affecting any Property or arising from or\naffecting any lands nearby or adjacent to any Property that has or threatens to\nhave any adverse effect upon human health or the environment at such Property or\nupon the use or value of such Property), in each case relating to any Property,\nthe Lease or the Indemnity Provider.\n\n SECTION 14. MISCELLANEOUS.\n\n 14.1. Survival of Agreements. The representations, warranties, covenants,\nindemnities and agreements of the parties provided for in the Operative\nAgreements, and the parties' obligations under any and all thereof, shall\nsurvive the execution and delivery of this Agreement, the transfer of any\nProperty to the Owner Trustee, the acquisition of any Equipment, the\nconstruction of any Improvements, any disposition of any interest of the Owner\nTrustee in any Property or any interest of the Holders in the Owner Trust, the\npayment of the Notes and any disposition thereof, and shall be and continue in\neffect notwithstanding any investigation made by any party and the fact that any\nparty may waive compliance with any of the other terms, provisions or conditions\nof any of the Operative Agreements. Except as otherwise expressly set forth\nherein or in other Operative Agreements, the indemnities of the parties provided\nfor in the Operative Agreements shall survive the expiration or termination of\nany thereof.\n\n 14.2. No Broker, etc. Each of the parties hereto represents to the others\nthat it has not retained or employed any broker, finder or financial adviser to\nact on its behalf in connection with this Agreement, nor has it authorized any\nbroker, finder or financial adviser retained or employed by any other Person so\nto act. Any party who is in breach of this representation shall\n\n\n 40\n\n\n\n\n\nindemnify and hold the other parties harmless from and against any liability\narising out of such breach of this representation.\n\n 14.3. Notices. Unless otherwise specifically provided herein, all notices,\nconsents, directions, approvals, instructions, requests and other communications\nrequired or permitted by the terms hereof to be given to any Person shall be\ngiven in writing by United States certified or registered mail (postage\nprepaid), by nationally recognized courier service, by hand or by telecopy with\nconfirming notice and any such notice shall become effective upon receipt and\nshall be directed to the address of such Person as indicated:\n\nIf to the Lessee, to it at the following address:\n\n HEALTHSOUTH CORPORATION\n One HealthSouth Parkway\n Birmingham, Alabama 35243\n Attention: Michael D. Martin\n Telephone No.: (205) 969-4712\n Telecopy No.: (205) 969-4629\n\nWith a copy to:\n\n HEALTHSOUTH CORPORATION\n One HealthSouth Parkway\n Birmingham, Alabama 35243\n Attention: Leif Murphy\n Telephone No.: (205) 969-6056\n Telecopy No.: (205) 969-6837\n\nIf to the Owner Trustee, to it at the following address:\n\n First Security Bank, National Association\n 79 South Main Street\n Salt Lake City, Utah 84111\n Attention: Val T. Orton\n Telephone No.: (801) 246-5208\n Telecopy No.: (801) 246-5053\n\n\n 41\n\n\n\n\n\nIf to NationsBank, National Association, as a Holder or a Lender, to it at the\nfollowing address:\n\n NationsBank, N.A.\n NationsBank Corporate Center\n 100 North Tryon Street, 8th Floor\n Charlotte, North Carolina 28255\n Attn: Philip S. Durand\n Telephone No.: (704) 386-4955\n Telecopy No.: (704) 388-0960\n\nwith all notices of requests for Holder Advances, or conversion, continuation or\nprepayment of any Holder Advance, to be sent to:\n\n NationsBank, N.A.\n Independence Center, 15th Floor\n Charlotte, North Carolina 28255\n Attn: Cindy Harmon\n Telephone No.: (704) 388-3918\n Telecopy No.: (704) 409-0016\n\nIf to any other Holder, to it at the address set forth for such Holder on\nSchedule 1 hereto or in the applicable Assignment and Assumption;\n\nIf to any other Lender, to it at the address for notice set forth on Schedule\n1.2 to the Credit Agreement or in the applicable Assignment and Assumption;\n\nIf to the Agent, to it at the following address:\n\n NationsBank, N.A.\n Independence Center, 15th Floor\n Charlotte, North Carolina 28255\n Attn: Cindy Harmon\n Telephone No.: (704) 388-3918\n Telecopy No.: (704) 409-0016\n\nwith all notices of borrowing, conversion, continuation or prepayment of any\nLoan to be delivered to the address set forth in Section 9.2 of the Credit\nAgreement.\n\nFrom time to time any party may designate a new address for purposes of notice\nhereunder by notice to each of the other parties hereto.\n\n\n 42\n\n\n\n\n\n 14.4. Counterparts. This Agreement may be executed by the parties hereto in\nseparate counterparts, each of which when so executed and delivered shall be an\noriginal, but all such counterparts shall together constitute but one and the\nsame instrument.\n\n 14.5. Amendments and Termination. Neither this Agreement nor any of the\nterms hereof may be terminated, amended, supplemented, waived or modified except\nby an instrument in writing signed by the Lessor, the Lessee and (subject to\nSection 9.1 of the Credit Agreement) the Agent. This Agreement may be terminated\nby an agreement signed in writing by the Owner Trustee, the Holders, the\nLenders, the Lessee and the Agent.\n\n 14.6. Headings, etc. The Table of Contents and headings of the various\nArticles and Sections of this Agreement are for convenience of reference only\nand shall not modify, define, expand or limit any of the terms or provisions\nhereof.\n\n 14.7. Parties in Interest. Except as expressly provided herein, none of the\nprovisions of this Agreement are intended for the benefit of any Person except\nthe parties hereto; provided, that the Lenders are intended to be third-party\nbeneficiaries of this Agreement.\n\n 14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL.\n\n (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED\n IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD\n TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.\n\n (b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE\n PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY\n LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER\n OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.\n\n 14.9. Submission to Jurisdiction; Waivers. Each of the parties hereto\nirrevocably and unconditionally:\n\n (a) submits for itself and its property in any legal action or\n proceeding relating to this Agreement and the other Operative Agreements to\n which it is a party, or for recognition and enforcement of any judgement in\n respect thereof, to the non-exclusive general jurisdiction of the courts of\n the State of North Carolina and the courts of the United States of America,\n in each case located in Mecklenburg County, North Carolina, and appellate\n courts from any thereof;\n\n (b) consents that any such action or proceeding may be brought in such\n courts and waives any objection that it may now or hereafter have to the\n venue of any such\n\n\n 43\n\n\n\n\n\n action or proceeding in any such court or that such action or proceeding\n was brought in an inconvenient court and agrees not to plead or claim the\n same;\n\n (c) agrees that service of process in any such action or proceeding\n may be effected by mailing a copy thereof by registered or certified mail\n (or any substantially similar form of mail) postage prepaid, to the\n respective party at its address set forth in Section 14.3 hereof or at such\n other address of which the Administrative Agent shall have been notified\n pursuant thereto;\n\n (d) agrees that nothing herein shall affect the right to effect\n service of process in any other manner permitted by law or shall limit the\n right to sue in any other jurisdiction; and\n\n (e) waives, to the maximum extent not prohibited by law, any right it\n may have to claim or recover in any legal action or proceeding referred to\n in this Section 14.9 any special, exemplary, punitive or consequential\n damages.\n\n 14.10. Severability. Any provision of this Agreement that is prohibited or\nunenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective\nto the extent of such prohibition or unenforceability without invalidating the\nremaining provisions hereof, and any such prohibition or unenforceability in any\njurisdiction shall not invalidate or render such provision unenforceable in any\nother jurisdiction.\n\n 14.11. Liability Limited.\n\n (a) The Agent, the Lessee and the Holders each acknowledge and agree\n that the Owner Trustee is (except as otherwise expressly provided herein or\n therein) entering into this Agreement and the other Operative Agreements to\n which it is a party (other than the Trust Agreement and other than as set\n forth in Section 7.2 of this Agreement), solely in its capacity as trustee\n under the Trust Agreement and not in its individual capacity and that Trust\n Company shall not be liable or accountable under any circumstances\n whatsoever in its individual capacity for or on account of any statements,\n representations, warranties, covenants or obligations stated to be those of\n the Owner Trustee, except for its own gross negligence or willful\n misconduct and except as otherwise expressly provided herein or in the\n other Operative Agreements.\n\n (b) Anything to the contrary contained in this Agreement, the Credit\n Agreement, the Notes or in any other Operative Agreement notwithstanding,\n neither the Lessor nor any Holder (in its capacity as a Holder) nor any\n officer, director, shareholder, or partner thereof, nor any of the\n successors or assigns of the foregoing (all such Persons being hereinafter\n referred to collectively as the \"Exculpated Persons\"), shall be personally\n liable in any respect for any liability or obligation hereunder or under\n any other Operative Agreement including the payment of the principal of, or\n interest on, the Notes, or for monetary damages for the breach of\n performance of any of the covenants contained in the\n\n\n 44\n\n\n\n\n\n Credit Agreement, the Notes, this Agreement, the Security Agreement or any\n of the other Operative Agreements. The Agent (for itself and on behalf of\n the Lenders) agrees that, in the event the Agent or any Lender pursues any\n remedies available to them under the Credit Agreement, the Notes, this\n Agreement, the Security Agreement, the Mortgage Instruments or under any\n other Operative Agreement, neither the Lenders nor the Agent shall have any\n recourse against any Exculpated Person, for any deficiency, loss or Claim\n for monetary damages or otherwise resulting therefrom, and recourse shall\n be had solely and exclusively against the Trust Estate and the Lessee (with\n respect to the Lessee's obligations under the Lease, the Participation\n Agreement and any other Operative Agreement); but nothing contained herein\n shall be taken to prevent recourse against or the enforcement of remedies\n against the Trust Estate in respect of any and all liabilities, obligations\n and undertakings contained herein, in the Credit Agreement, in the Notes,\n in the Security Agreement, the Mortgage Instruments or in any other\n Operative Agreement. Notwithstanding the provisions of this Section,\n nothing in this Agreement, the Credit Agreement, the Notes, the Security\n Agreement, the Mortgage Instruments or any other Operative Agreement shall:\n (i) constitute a waiver, release or discharge of any indebtedness or\n obligation evidenced by the Notes or arising under this Agreement, the\n Security Agreement, the Mortgage Instruments or the Credit Agreement or\n secured by the Security Agreement, the Mortgage Instruments or any other\n Operative Agreement, but the same shall continue until paid or discharged;\n (ii) relieve the Lessor or any Exculpated Person from liability and\n responsibility for (but only to the extent of the damages arising by reason\n of): (a) active waste knowingly committed by such Lessor or such Exculpated\n Person with respect to the Properties or (b) any fraud, gross negligence,\n willful misconduct or willful breach on the part of such Lessor or such\n Exculpated Person; (iii) relieve such Lessor or such Exculpated Person from\n liability and responsibility for (but only to the extent of the moneys\n misappropriated, misapplied or not turned over) (a) misappropriation or\n misapplication by such Lessor (i.e., application in a manner contrary to\n any Operative Agreement) of any insurance proceeds or condemnation award\n paid or delivered to such Lessor by any Person other than the Agent or (b)\n any rents or other income received by such Lessor from the Lessee that are\n not turned over to the Agent; or (iv) affect or in any way limit the\n Agent's rights and remedies under any Operative Agreement with respect to\n the Rents and its rights thereunder or its right to obtain a judgment\n against the Lessor's interest in the Properties.\n\n 14.12. Rights of Lessee. Notwithstanding any provision of the Operative\nAgreements, if at any time all obligations (i) of the Owner Trustee under the\nCredit Agreement, the Security Documents, the Trust Agreement and the other\nOperative Agreements and (ii) of the Lessee under the Operative Agreements have\nin each case been satisfied or discharged in full, then the Lessee shall be\nentitled to (a) terminate the Lease and (b) receive all amounts then held under\nthe Operative Agreements and all proceeds with respect to any of the Properties.\nUpon the termination of the Lease pursuant to the foregoing clause (a), the\nLessor shall transfer to the Lessee all of its right, title and interest free\nand clear of the Lien of the Lease and all Lessor Liens in and to any Properties\nthen subject to the Lease and any amounts or proceeds referred to in the\nforegoing clause (b) shall be paid over to the Lessee.\n\n\n 45\n\n\n\n\n\n 14.13. Further Assurances. The parties hereto shall promptly cause to be\ntaken, executed, acknowledged or delivered, at the sole expense of the Lessee,\nall such further acts, conveyances, documents and assurances as the other\nparties may from time to time reasonably request in order to carry out and\neffectuate the intent and purposes of this Participation Agreement, the other\nOperative Agreements and the transactions contemplated hereby and thereby\n(including, without limitation, the preparation, execution and filing of any and\nall Uniform Commercial Code financing statements and other filings or\nregistrations which the parties hereto may from time to time request to be filed\nor effected). The Lessee, at its own expense and without need of any prior\nrequest from any other party, shall take such action as may be necessary\n(including any action specified in the preceding sentence), or (if Owner Trustee\nshall so request) as so requested, in order to maintain and protect all security\ninterests provided for hereunder or under any other Operative Agreement.\n\n 14.14. Calculations under Operative Agreements. The parties hereto agree\nthat all calculations and numerical determinations to be made under the\nOperative Agreements by the Owner Trustee shall be made by the Agent and that\nsuch calculations and determinations shall be conclusive and binding on the\nparties hereto in the absence of manifest error.\n\n 14.15. Confidentiality. Each of the Owner Trustee, the Holders, the Agent\nand the Lenders severally agrees to use reasonable efforts to keep confidential\nall non-public information pertaining to the Lessee or its Subsidiaries which is\nprovided to it by the Lessee or its Subsidiaries and shall not intentionally\ndisclose such information to any Person except:\n\n (a) to the extent such information is public when received by such\n Person or becomes public thereafter due to the act or omission of any party\n other than such Person;\n\n (b) to the extent such information is independently obtained from a\n source other than the Lessee or any of its Subsidiaries and such\n information from such source is not, to such Person's knowledge, subject to\n an obligation of confidentiality or, if such information is subject to an\n obligation of confidentiality, that disclosure of such information is\n permitted;\n\n (c) to counsel, auditors or accountants retained by any such Person or\n any Affiliates of any such Person provided they agree to keep such\n information confidential as if such Person or Affiliate were party to this\n Agreement and to financial institution regulators, including examiners of\n any Lender, the Agent or the Owner Trustee, any Holder or any Affiliate in\n the course of examinations of such Persons;\n\n (d) in connection with any litigation or the enforcement or\n preservation of the rights of the Agent, the Owner Trustee, the Lessor, any\n Lender or any Holder under the Operative Agreements;\n\n (e) to the extent required by any applicable statute, rule or\n regulation or court order (including, without limitation, by way of\n subpoena) or pursuant to the request of\n\n\n 46\n\n\n\n\n\n any regulatory or Governmental Authority having jurisdiction over any such\n Person; provided, however, that such Person shall endeavor (if not\n otherwise prohibited by Law) to notify the Lessee prior to any disclosure\n made pursuant to this clause (e), except that no such Person shall be\n subject to any liability whatsoever for any failure to so notify the\n Lessee;\n\n (f) the Agent may disclose such information to the Owner Trustee, any\n Lender or any Holder; or\n\n (g) to the extent disclosure to any other financial institution or\n other Person is appropriate in connection with any proposed or actual (i)\n assignment or grant of a participation by any of the Lenders of interests\n in the Credit Agreement or any Note to such other financial institution\n (who will in turn be required by the Agent to agree in writing to maintain\n confidentiality as if it were a Lender originally party to the Credit\n Agreement) or (ii) assignment by any Holder of interests in the Trust\n Agreement to another Person (who will in turn be required by the\n transferring Holder to agree in writing to maintain confidentiality as if\n it were a Holder originally party to this Participation Agreement).\n\n 14.16. Calculation of Rent, Interest, Holder Yield and Fees. Except as\notherwise expressly set forth in the Operative Agreements, all calculation of\nRent, interest, Holder Yield, Overdue Rate, Holder Overdue Rate, Commitment\nFees, or Holder Commitment Fees payable hereunder shall be computed based on the\nactual number of days elapsed over a year of 360 days.\n\n\n\n\n 47\n\n\n\n\n\n IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be\nduly executed by their respective officers thereunto duly authorized as of the\nday and year first above written.\n\n HEALTHSOUTH CORPORATION,\n as Lessee\n\n By: \/s\/ William W. Horton\n -------------------------------------\n Name: William W. Horton\n -----------------------------------\n Title: Vice President\n\n\n FIRST SECURITY BANK, NATIONAL\n ASSOCIATION, not individually, except as\n expressly stated herein, but solely as\n Owner Trustee under the HEALTHSOUTH\n Corporation Trust 1995-1\n\n By: \/s\/ Janeen R. Higgs\n -------------------------------------\n Name: Janeen R. Higgs\n Title: Trust Officer\n\n\n NATIONSBANK, N.A., as Agent\n\n By: \/s\/ Philip S. Durand\n -------------------------------------\n Name: Philip S. Durand\n Title: Vice President\n\n\n DEUTSCHE BANK AG NEW YORK BRANCH,\n as Documentation Agent\n\n By:\n -------------------------------------\n Name:\n -----------------------------------\n Title:\n ----------------------------------\n\n\n 48\n\n\n\n\n\n\n NATIONSBANK, N.A.,\n as a Holder\n\n By: \/s\/ Philip S. Durand\n -------------------------------------\n Name: Philip S. Durand\n Title: Vice President\n\n\n NATIONSBANK, N.A.,\n as a Lender\n\n By: \/s\/ Philip S. Durand\n -------------------------------------\n Name: Philip S. Durand\n Title: Vice President\n\n\n Applicable Funding Office:\n\n NationsBank, N.A.\n NationsBank Corporate Center\n 100 North Tryon Street, 8th Floor\n Charlotte, North Carolina 28255\n Attn: Philip S. Durand\n Telephone No.: (704) 386-4955\n Telecopy No.: (704) 388-0960\n\n\n 49\n\n\n\n\n\n\n DEUTSCHE BANK AG NEW YORK BRANCH,\n as a Holder\n\n By:\n -------------------------------------\n Name:\n -----------------------------------\n Title:\n ----------------------------------\n\n\n DEUTSCHE BANK AG NEW YORK BRANCH,\n as a Lender\n\n By:\n -------------------------------------\n Name:\n -----------------------------------\n Title:\n ----------------------------------\n\n\n Applicable Funding Office:\n\n ----------------------------------\n\n ----------------------------------\n Attn:\n -----------------------------\n Telephone No.:\n --------------------\n Telecopy No.:\n ---------------------\n\n\n 50\n\n\n\n\n\n ---------------------------------------,\n as a Holder\n\n By:\n -------------------------------------\n Name:\n -----------------------------------\n Title:\n ----------------------------------\n\n \n ----------------------------------------\n as a Lender\n\n By:\n -------------------------------------\n Name:\n -----------------------------------\n Title:\n ----------------------------------\n\n\n Applicable Funding Office:\n\n ----------------------------------------\n\n ----------------------------------------\n\n ----------------------------------------\n\n\n 51\n\n\n\n\n\n SCHEDULE 1\n\n Holders at the Initial Closing Date\n -----------------------------------\n\n<\/pre>\n