10.1. Maintenance and Repair; Return…………………………………………………………8
\n 10.2. Environmental Inspection………………………………………………………………9<\/p>\n
11.1. Modifications………………………………………………………………………..9<\/p>\n
12.1. Warranty of Title……………………………………………………………………10<\/p>\n
13.1. Permitted Contests Other Than in Respect of Indemnities………………………………….11<\/p>\n
14.1. Public Liability and Workers’ Compensation Insurance…………………………………….11
\n 14.2. Hazard and Other Insurance……………………………………………………………12
\n 14.3. Coverage……………………………………………………………………………12<\/p>\n
15.1. Casualty and Condemnation…………………………………………………………….13
\n 15.2. Environmental Matters………………………………………………………………..15
\n 15.3. Notice of Environmental Matters……………………………………………………….15<\/p>\n
16.1. Termination Upon Certain Events……………………………………………………….16
\n 16.2. Procedures………………………………………………………………………….16<\/p>\n
17.1. Lease Events of Default………………………………………………………………16
\n 17.2. Surrender of Possession………………………………………………………………19
\n 17.3. Reletting…………………………………………………………………………..19
\n 17.4. Damages…………………………………………………………………………….19
\n 17.5. Final Liquidated Damages……………………………………………………………..20
\n 17.6. Waiver of Certain Rights……………………………………………………………..21
\n 17.7. Assignment of Rights Under Contract……………………………………………………21
\n 17.8. Environmental Costs………………………………………………………………….21
\n 17.9. Remedies Cumulative………………………………………………………………….22
\n 17.10. Notice of Default or Event of Default………………………………………………….22<\/p>\n
18.1. Lessor’s Right to Cure Lessee’s Lease Defaults………………………………………….22<\/p>\n
19.1. Provisions Relating to Lessee’s Exercise of its Purchase Option…………………………..22
\n 19.2. No Termination With Respect to Less than all of the Properties……………………………22<\/p>\n
20.1. Early Purchase Option………………………………………………………………..23
\n 20.2. Purchase or Sale Option………………………………………………………………23<\/p>\n
21.1. Intentionally Deleted………………………………………………………………..24<\/p>\n
22.1. Sale Procedure………………………………………………………………………24
\n 22.2. Application of Proceeds of Sale……………………………………………………….26
\n 22.3. Indemnity for Excessive Wear………………………………………………………….26
\n 22.4. Appraisal Procedure………………………………………………………………….26
\n 22.5. Certain Obligations Continue………………………………………………………….27<\/p>\n
23.1. Holding Over………………………………………………………………………..27<\/p>\n
24.1. Risk of Loss………………………………………………………………………..28<\/p>\n
25.1. Assignment………………………………………………………………………….28
\n 25.2. Subleases…………………………………………………………………………..28<\/p>\n
26.1. No Waiver…………………………………………………………………………..29<\/p>\n
27.1. Acceptance of Surrender………………………………………………………………29
\n 27.2. No Merger of Title…………………………………………………………………..29<\/p>\n
\nARTICLE XXVIII………………………………………………………………………………………30<\/p>\n
28.1. Incorporation of Covenants……………………………………………………………30
\n 28.2. Additional Reporting Requirements……………………………………………………..31<\/p>\n
ARTICLE XXIX………………………………………………………………………………………..31<\/p>\n
29.1. Notices…………………………………………………………………………….31<\/p>\n
ARTICLE XXX…………………………………………………………………………………………32<\/p>\n
30.1. Miscellaneous……………………………………………………………………….32
\n 30.2. Amendments and Modifications………………………………………………………….32
\n 30.3. Successors and Assigns……………………………………………………………….33
\n 30.4. Headings and Table of Contents………………………………………………………..33
\n 30.5. Counterparts………………………………………………………………………..33
\n 30.6. GOVERNING LAW……………………………………………………………………….33
\n 30.7. Calculation of Rent………………………………………………………………….33
\n 30.8. Memorandum of Lease………………………………………………………………….33
\n 30.9. Allocations between the Lenders and the Holders…………………………………………33
\n 30.10. Limitations on Recourse………………………………………………………………34
\n 30.11. WAIVERS OF JURY TRIAL………………………………………………………………..34
\n 30.12. Existing Agreements………………………………………………………………….34
\n 30.13. Power of Sale……………………………………………………………………….34
\n 30.14. Exercise of Lessor Right……………………………………………………………..34<\/p>\n<\/caption>\n<\/caption>\n
<\/c><\/s><\/caption>\n<\/table>\n
iv<\/p>\n
LEASE AGREEMENT<\/p>\n
THIS LEASE AGREEMENT (as amended, supplemented or modified from time to time,
\nthis “Lease”), dated as of October 31, 2000, is between FIRST SECURITY BANK,
\nNATIONAL ASSOCIATION, a national banking association, having its principal
\noffice at 79 South Main Street, Salt Lake City, Utah 84111, not individually,
\nbut solely as Owner Trustee under the HEALTHSOUTH Corporation Trust 2000-1, as
\nLessor (the “Lessor”), and HEALTHSOUTH Corporation, a Delaware corporation,
\nhaving its principal place of business at One HealthSouth Parkway, Birmingham,
\nAlabama 35243, as Lessee (the “Lessee”).<\/p>\n
W I T N E S S E T H :
\n – – – – – – – – – –<\/p>\n
WHEREAS, subject to the terms and conditions of the Participation
\nAgreement (defined below), Lessor owns or leases under ground leases certain
\nparcels of real property, the Improvements on such real property and certain
\nEquipment; and<\/p>\n
WHEREAS, the Basic Term shall commence with respect to the Properties
\nas of the date hereof; and<\/p>\n
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee
\ndesires to lease from the Lessor, the Properties;<\/p>\n
NOW, THEREFORE, in consideration of the mutual agreements herein
\ncontained, and of other good and valuable consideration, the receipt and
\nsufficiency of which are hereby acknowledged, the parties hereto agree as
\nfollows:<\/p>\n
ARTICLE I<\/p>\n
1.1. Definitions.<\/p>\n
Capitalized terms used but not otherwise defined in this Lease
\nhave the respective meanings specified in Appendix A to the Participation
\nAgreement of even date herewith (as such may be amended, modified, supplemented,
\nrestated and\/or replaced from time to time in accordance with the terms thereof,
\nthe “Participation Agreement”) among the Lessee, First Security Bank, National
\nAssociation, not individually, except as expressly stated therein, but as Owner
\nTrustee under the HEALTHSOUTH Corporation Trust 2000-1, the Holders party
\nthereto, the Lenders party thereto and the Agent.<\/p>\n
ARTICLE II<\/p>\n
2.1. Properties.<\/p>\n
Lessor hereby leases to Lessee and Lessee hereby leases from
\nLessor, each Property described in Exhibit A and Schedule I-A, Schedule I-B and
\nSchedule I-C attached thereto.<\/p>\n
2.2. Lease Term.<\/p>\n
The term of this Lease with respect to each Property (the
\n“Basic Term”) shall continue from the date hereof (the “Basic Term Commencement
\nDate” or the “Term Commencement Date”) and shall end on June 22, 2003 (the
\n“Basic Term Expiration Date”), unless the Term is earlier terminated in
\naccordance with the provisions of this Lease.<\/p>\n
2.3. Title.<\/p>\n
Each Property is leased to Lessee without any representation
\nor warranty, express or implied, by Lessor and subject to the rights of parties
\nin possession (if any), the existing state of title (including, without
\nlimitation, the Permitted Exceptions) and all applicable Legal Requirements.
\nLessee shall in no event have any recourse against Lessor for any defect in
\ntitle to any Property other than for Lessor Liens.<\/p>\n
ARTICLE III<\/p>\n
3.1. Rent.<\/p>\n
(a) Lessee shall pay Basic Rent on each Payment Date, and on any
\n date on which this Lease shall terminate.<\/p>\n
(b) Basic Rent shall be due and payable in lawful money of the
\n United States and shall be paid in immediately available funds
\n on the due date therefor (or within the applicable grace
\n period) to such account or accounts at such bank or banks as
\n Lessor shall from time to time direct.<\/p>\n
(c) Lessee’s inability or failure to take possession of all or any
\n portion of any Property on the Closing Date, whether or not
\n attributable to any act or omission of the Lessor, the Lessee,
\n or any other Person, or for any other reason whatsoever, shall
\n not delay or otherwise affect Lessee’s obligation to pay Rent
\n for such Property in accordance with the terms of this Lease.<\/p>\n
3.2. Payment of Basic Rent.<\/p>\n
Basic Rent shall be paid absolutely net to Lessor or its
\ndesignee, so that this Lease shall yield to Lessor the full amount of Basic
\nRent, without setoff, deduction or reduction.<\/p>\n
3.3. Supplemental Rent.<\/p>\n
Lessee shall pay to Lessor or its designee or to the Person
\nentitled thereto any and all Supplemental Rent promptly as the same shall become
\ndue and payable, and if Lessee fails to pay any Supplemental Rent, Lessor shall
\nhave all rights, powers and remedies provided for herein or by law or equity or
\notherwise in the case of nonpayment of Basic Rent. Without limiting the
\ngenerality of the definition of “Supplemental Rent,” Lessee shall pay to Lessor
\nas Supplemental Rent, among other things, on demand, to the extent permitted by
\napplicable Legal Requirements, (a) any and all unpaid fees, charges, payments
\nand other obligations (except the obligations of Lessor to pay the principal
\namount of the Loans and the Holder Amount) due and <\/p>\n
2<\/p>\n
owing by Lessor under the Credit Agreement, the Trust Agreement or any other
\nOperative Agreement (including specifically without limitation any amounts owing
\nto the Lenders under Section 2.11 or Section 2.12 of the Credit Agreement and
\nany amounts owing to the Holders under Section 3.9 or Section 3.10 of the Trust
\nAgreement) and (b) interest at the applicable Base Rate on any installment of
\nBasic Rent not paid when due (subject to the applicable grace period) for the
\nperiod for which the same shall be overdue and on any payment of Supplemental
\nRent not paid when due or demanded by the appropriate Person for the period from
\nthe due date or the date of any such demand, as the case may be, until the same
\nshall be paid. The expiration or other termination of Lessee’s obligations to
\npay Basic Rent hereunder shall not limit or modify the obligations of Lessee
\nwith respect to Supplemental Rent. Unless expressly provided otherwise in this
\nLease, in the event of any failure on the part of Lessee to pay and discharge
\nany Supplemental Rent as and when due, Lessee shall also promptly pay and
\ndischarge any fine, penalty, interest or cost which may be assessed or added (a)
\nby any party to an Operative Agreement pursuant to the terms of such agreement
\nor (b) by any Person that is not a party to an Operative Agreement, in each case
\nfor nonpayment or late payment of such Supplemental Rent, all of which shall
\nalso constitute Supplemental Rent.<\/p>\n
3.4. Performance on a Non-Business Day.<\/p>\n
If any Basic Rent is required hereunder on a day that is not a
\nBusiness Day, then such Basic Rent shall be due on the corresponding Scheduled
\nInterest Payment Date. If any Supplemental Rent is required hereunder on a day
\nthat is not a Business Day, then such Supplemental Rent shall be due on the next
\nsucceeding Business Day.<\/p>\n
3.5. Rent Payment Provisions.<\/p>\n
Lessee shall make payment of all Basic Rent and Supplemental
\nRent when due regardless of whether any of the Operative Agreements pursuant to
\nwhich same is calculated and is owing shall have been rejected, avoided or
\ndisavowed in any bankruptcy or insolvency proceeding involving any of the
\nparties to any of the Operative Agreements. Such provisions of such Operative
\nAgreements and their related definitions are incorporated herein by reference
\nand shall survive any termination, amendment or rejection of any such Operative
\nAgreements.<\/p>\n
ARTICLE IV<\/p>\n
4.1. Utility Charges; Taxes.<\/p>\n
Lessee shall pay or cause to be paid all charges for
\nelectricity, power, gas, oil, water, telephone, sanitary sewer service and all
\nother rents and utilities used in or on any Property and related real property
\nduring the Term. Lessee shall be entitled to receive any credit or refund with
\nrespect to any utility charge paid by Lessee. Unless a Lease Default or Lease
\nEvent of Default shall have occurred and be continuing, the amount of any credit
\nor refund received by Lessor on account of any utility charges paid by Lessee,
\nnet of the costs and expenses incurred by Lessor in obtaining such credit or
\nrefund, shall be promptly paid over to Lessee. In addition, Lessee shall pay or
\ncause to be paid all taxes or tax assessments against any Property. All charges
\nfor utilities and all taxes or tax assessments imposed with respect to any
\nProperty for a billing period (or in the cases of tax assessments, a tax period)
\nduring which this Lease expires or terminates shall be adjusted and prorated on
\na daily basis between Lessor and Lessee, and each party shall pay or reimburse
\nthe other for such party’s pro rata share thereof.<\/p>\n
3<\/p>\n
ARTICLE V<\/p>\n
5.1. Quiet Enjoyment.<\/p>\n
Subject to the rights of Lessor contained in Sections 17.2 and
\n17.3 and the other terms of this Lease and the other Operative Agreements and so
\nlong as no Lease Event of Default shall have occurred and be continuing, Lessee
\nshall peaceably and quietly have, hold and enjoy each Property for the
\napplicable Term, free of any claim or other action by Lessor or anyone
\nrightfully claiming by, through or under Lessor (other than Lessee) with respect
\nto any matters arising from and after the Basic Term Commencement Date.<\/p>\n
ARTICLE VI<\/p>\n
6.1. Net Lease.<\/p>\n
This Lease shall constitute a net lease. Any present or future
\nlaw to the contrary notwithstanding, this Lease shall not terminate, nor shall
\nLessee be entitled to any abatement, suspension, deferment, reduction, setoff,
\ncounterclaim, or defense with respect to the Rent, nor shall the obligations of
\nLessee hereunder be affected (except as expressly herein permitted and by
\nperformance of the obligations in connection therewith) by reason of (a) any
\ndamage to or destruction of any Property or any part thereof; (b) any taking of
\nany Property or any part thereof or interest therein by Condemnation or
\notherwise; (c) any prohibition, limitation, restriction or prevention of
\nLessee’s use, occupancy or enjoyment of any Property or any part thereof, or any
\ninterference with such use, occupancy or enjoyment by any Person or for any
\nother reason; (d) any title defect, Lien or any matter affecting title to any
\nProperty; (e) any eviction by paramount title or otherwise; (f) any default by
\nLessor hereunder; (g) any action for bankruptcy, insolvency, reorganization,
\nliquidation, dissolution or other proceeding relating to or affecting the Agent,
\nany Lender, Lessor, Lessee, any Holder or any Governmental Authority; (h) the
\nimpossibility or illegality of performance by Lessor, Lessee or both, (i) any
\naction of any Governmental Authority or any other Person; (j) Lessee’s
\nacquisition of ownership of all or part of any Property; (k) breach of any
\nwarranty or representation with respect to any Property or of any Operative
\nAgreement; (1) any defect in the condition, quality or fitness for use of any
\nProperty or any part thereof; or (m) any other cause or circumstance whether
\nsimilar or dissimilar to the foregoing and whether or not Lessee shall have
\nnotice or knowledge of any of the foregoing. The foregoing clause (j) shall not
\nprevent the termination of the Lease in accordance with the terms hereof if the
\nLessee purchases all of the Properties pursuant to Section 20.1 or 20.2. The
\nparties intend that the obligations of Lessee hereunder shall be covenants,
\nagreements and obligations that are separate and independent from any
\nobligations of Lessor hereunder and shall continue unaffected unless such
\ncovenants, agreements and obligations shall have been modified or terminated in
\naccordance with an express provision of this Lease. Lessor and Lessee
\nacknowledge and agree that the provisions of this Section 6.1 have been
\nspecifically reviewed and agreed to, and that this Lease has been negotiated by
\nthe parties.<\/p>\n
4<\/p>\n
6.2. No Termination or Abatement.<\/p>\n
Lessee shall remain obligated under this Lease in accordance
\nwith its terms and shall not take any action to terminate, rescind or avoid this
\nLease, notwithstanding any action for bankruptcy, insolvency, reorganization,
\nliquidation, dissolution, or other proceeding affecting Lessor or any
\nGovernmental Authority, or any action with respect to this Lease or any
\nOperative Agreement which may be taken by any trustee, receiver or liquidator of
\nLessor or any Governmental Authority or by any court with respect to Lessor,
\nLessee, any Holder, or any Governmental Authority. Lessee hereby waives all
\nright (a) to terminate or surrender this Lease (except as permitted under the
\nterms of the Operative Agreements) or (b) to avail itself of any abatement,
\nsuspension, deferment, reduction, setoff, counterclaim or defense with respect
\nto any Rent. Lessee shall remain obligated under this Lease in accordance with
\nits terms and Lessee hereby waives any and all rights now or hereafter conferred
\nby statute or otherwise to modify or to avoid strict compliance with its
\nobligations under this Lease. Notwithstanding any such statute or otherwise,
\nLessee shall be bound by all of the terms and conditions contained in this
\nLease.<\/p>\n
ARTICLE VII<\/p>\n
7.1. Ownership of the Properties.<\/p>\n
(a) Lessor and Lessee intend that (i) for financial accounting
\n purposes with respect to Lessee (A) this Lease will be treated
\n as an “operating lease” pursuant to Statement of Financial
\n Accounting Standards No. 13, as amended, (B) Lessor will be
\n treated as the owner and lessor of the Properties and (C)
\n Lessee will be treated as the lessee of the Properties, but
\n (ii) for federal and all state and local income tax purposes,
\n for bankruptcy purposes and all other purposes (A) this Lease
\n will be treated as a financing arrangement and (B) Lessee will
\n be treated as the owner of the Properties and will be entitled
\n to all tax benefits ordinarily available to owners of property
\n similar to the Properties for such tax purposes, and (C) all
\n payments of Basic Rent shall be deemed to be interest
\n payments. Consistent with the foregoing, Lessee intends to
\n claim depreciation and cost recovery deductions associated
\n with the Properties, and Lessor agrees not to take any
\n inconsistent position on its income tax returns. Neither
\n Lessor, the Agent, any Lender, any Holder, UBS Warburg LLC,
\n Deutsche Bank Securities, Inc., The Chase Manhattan Bank nor
\n Deutsche Bank AG, New York Branch makes any representation or
\n warranty with respect to the foregoing matters described in
\n this Section 7.1 and will assume no liability for the Lessee’s
\n accounting treatment of this transaction.<\/p>\n
(b) For all purposes other than as set forth in Section 7.1(a)(i),
\n Lessor and Lessee intend this Lease to constitute a finance
\n lease and not a true lease. Lessor and Lessee further intend
\n and agree that, for the purpose of securing Lessee’s
\n obligations hereunder (i) this Lease shall be deemed to be a
\n security agreement and financing statement within the meaning
\n of Article 9 of the Uniform Commercial Code respecting each of
\n the Properties to the extent such is personal property and an
\n irrevocable grant and conveyance of each Property to the
\n Lessor as security for the Lessee’s obligations hereunder to
\n the extent such is real <\/p>\n
5<\/p>\n
property; (ii) the acquisition of title (or to the extent
\n applicable, a leasehold interest) in the Properties referenced
\n in Article II shall be deemed to be (A) a grant by Lessee to
\n Lessor of a lien on and security interest in all of Lessee’s
\n right, title and interest in and to each Property and all
\n proceeds (including without limitation insurance proceeds) of
\n each Property, whether in the form of cash, investments,
\n securities or other property, and (B) an assignment by Lessee
\n to Lessor of all rents, profits and income produced by each
\n Property; and (iii) notifications to Persons holding such
\n Property, and acknowledgments, receipts or confirmations from
\n financial intermediaries, bankers or agents (as applicable) of
\n Lessee shall be deemed to have been given for the purpose of
\n perfecting such security interest under applicable law. Lessor
\n and Lessee shall promptly take such actions as may be
\n necessary or advisable in either party’s opinion (including
\n without limitation the filing of Uniform Commercial Code
\n Financing Statements or Uniform Commercial Code Fixture
\n Filings) to ensure that the lien and security interest in the
\n Properties will be deemed to be a perfected lien and security
\n interest of first priority under applicable law and will be
\n maintained as such throughout the Term.<\/p>\n
ARTICLE VIII<\/p>\n
8.1. Condition of the Properties.<\/p>\n
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE
\nPROPERTIES “AS IS” WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
\nIMPLIED) BY LESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF TITLE,
\n(B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF
\nFACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW, (D) ALL
\nAPPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY
\nEXIST ON THE DATE HEREOF. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY
\nHOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR
\nCOVENANT (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY
\nWHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN,
\nOPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART
\nTHEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS
\nOR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER
\nLESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY
\nLATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY
\nPART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. THE LESSEE HAS BEEN AFFORDED
\nFULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY),
\nIS (INSOFAR AS THE LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE CONCERNED)
\nSATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE
\nSOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS
\nINCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN THE
\nLESSOR, THE AGENT, THE LENDERS AND THE HOLDERS, ON THE ONE HAND, AND THE LESSEE,
\nON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.<\/p>\n
6<\/p>\n
8.2. Possession and Use of the Properties.<\/p>\n
(a) At all times during the Term, the Properties shall be used by
\n Lessee or any sublessee permitted under Section 25.2 for the
\n provision of rehabilitation and other healthcare services and
\n related activities in the ordinary course of its business.
\n Lessee shall pay, or cause to be paid, all charges and costs
\n required in connection with the use of the Properties as
\n contemplated by this Lease. Lessee shall not commit or permit
\n any waste of the Properties or any part thereof.<\/p>\n
(b) Lessee represents and warrants that the address stated in
\n Section 29.1 of this Lease is the chief place of business and
\n chief executive office of Lessee (as such terms are used in
\n Section 9-103 (or other corresponding section) of the Uniform
\n Commercial Code of any applicable jurisdiction), and Lessee
\n will provide Lessor with prior written notice of any change of
\n location of its chief place of business or chief executive
\n office. Regarding the Properties, Lessee represents and
\n warrants that Schedules I-A and I-B hereto correctly identify
\n the initial location of the related Equipment and
\n Improvements, and Schedule I-C hereto contains an accurate
\n legal description for the Land. Lessee has no other places of
\n business where the Equipment or Improvements will be located
\n other than as identified on Schedule I-C.<\/p>\n
(c) Lessee will not attach or incorporate any item of Equipment to
\n or in any other item of equipment or personal property or to
\n or in any real property (except the Land identified in
\n Schedule I-C) in a manner that could give rise to the
\n assertion of any Lien on such item of Equipment by reason of
\n such attachment or the assertion of a claim that such item of
\n Equipment has become a fixture and is subject to a Lien in
\n favor of a third party that is prior to the Liens thereon
\n created by the Operative Agreements.<\/p>\n
(d) At all times during the Term, Lessee will comply with all
\n obligations under, and (to the extent no Event of Default has
\n occurred and is continuing and provided that such exercise
\n will not impair the value of any Property) shall be permitted
\n to exercise all rights and remedies under, all operation and
\n easement agreements and related or similar agreements
\n applicable to each Property.<\/p>\n
ARTICLE IX<\/p>\n
9.1. Compliance with Legal Requirements and Insurance Requirements.<\/p>\n
Subject to the terms of Article XIII relating to permitted
\ncontests, Lessee, at its sole cost and expense, shall (i) comply with all
\nmaterial Legal Requirements (including without limitation all Environmental
\nLaws), and all Insurance Requirements relating to the Properties, including the
\nuse, development, construction, operation, maintenance, repair, refurbishment
\nand restoration thereof, whether or not compliance therewith shall require
\nstructural or extraordinary changes in the Improvements or interfere with the
\nuse and enjoyment of any Property, and (ii) <\/p>\n
7<\/p>\n
procure, maintain and comply with all material licenses, permits, orders,
\napprovals, consents and other authorizations required for the construction, use,
\nmaintenance and operation of any Property and for the use, development,
\nconstruction, operation, maintenance, repair and restoration of the
\nImprovements.<\/p>\n
ARTICLE X<\/p>\n
10.1. Maintenance and Repair; Return.<\/p>\n
(a) Lessee, at its sole cost and expense, shall maintain each
\n Property in good condition, repair and working order (ordinary
\n wear and tear excepted) and make all necessary repairs
\n thereto, of every kind and nature whatsoever, whether interior
\n or exterior, ordinary or extraordinary, structural or
\n nonstructural, or foreseen or unforeseen, in each case as
\n required by all Legal Requirements, Insurance Requirements,
\n and manufacturer’s specifications and standards and on a basis
\n consistent with the operation and maintenance of properties or
\n equipment comparable in type and function to such Property and
\n in compliance with standard industry practice, subject,
\n however, to the provisions of Article XV with respect to
\n Condemnation and Casualty.<\/p>\n
(b) Lessee shall not move, use or relocate any component of any
\n Property beyond the boundaries of the Land without Lessor’s
\n prior written consent, which consent shall not be unreasonably
\n withheld or delayed.<\/p>\n
(c) If any material component of any Property becomes worn out,
\n lost, destroyed, damaged beyond repair or otherwise
\n permanently rendered unfit for use, Lessee, at its own
\n expense, will within a reasonable time replace such component
\n with a replacement component which is free and clear of all
\n Liens (other than Permitted Liens) and has a value, utility
\n and useful life at least equal to the component replaced. All
\n components which are added to any Property shall immediately
\n become the property of, and title thereto shall vest in,
\n Lessor, and shall be deemed incorporated in such Property and
\n subject to the terms of this Lease as if originally leased
\n hereunder.<\/p>\n
(d) Upon reasonable advance notice, Lessor and its agents shall
\n have the right to inspect each Property and the maintenance
\n records with respect thereto at any reasonable time during
\n normal business hours but shall not materially disrupt the
\n business of Lessee.<\/p>\n
(e) In addition to any Appraisal required by Section 5.3 of the
\n Participation Agreement, Lessee shall cause to be delivered to
\n Lessor (at Lessee’s sole expense) any additional Appraisals
\n (or reappraisals) as Lessor or the Agent may deem appropriate
\n (i) if an Event of Default has occurred and is continuing, or
\n (ii) if any one of Lessor, the Agent, any Lender or any Holder
\n is required pursuant to any applicable Legal Requirement to
\n obtain such an Appraisal (or reappraisal).<\/p>\n
(f) Lessor shall under no circumstances be required to build any
\n improvements on any Property, make any repairs, replacements,
\n alterations or renewals of any <\/p>\n
8<\/p>\n
nature or description to such Property, make any expenditure
\n whatsoever in connection with this Lease or maintain any
\n Property in any way. Lessor shall not be required to maintain,
\n repair or rebuild all or any part of any Property, and Lessee
\n waives the right to (i) require Lessor to maintain, repair, or
\n rebuild all or any part of any Property (unless such repairs
\n are needed to cure damage to a Property caused by the gross
\n negligence or willful misconduct of the Lessor), or (ii) make
\n repairs at the expense of Lessor pursuant to any Legal
\n Requirement, Insurance Requirement, contract, agreement,
\n covenants, condition or restriction at any time in effect.<\/p>\n
(g) Lessee shall, upon the expiration or earlier termination of
\n this Lease with respect to the Properties, if Lessee shall not
\n have exercised its Purchase Option with respect to the
\n Properties, surrender the Properties to Lessor, or the third
\n party purchaser, as the case may be, subject to Lessee’s
\n obligations under this Lease (including without limitation
\n Sections 9.1, 10.1(a)-(f), 10.2. 11.1 12.1, 22.1 and 23.1) and
\n the other Operative Agreements.<\/p>\n
10.2. Environmental Inspection.<\/p>\n
If (a) Lessee has not given notice of the exercise of its
\nPurchase Option on the Expiration Date pursuant to Section 20.2, or (b) Lessee
\nhas given notice, pursuant to Section 20.2 of its election to remarket the
\nProperties pursuant to Section 22.1 then, in either case, not more than 120 days
\nnor less than 60 days prior to the Expiration Date, Lessee shall, at its sole
\ncost and expense, provide to Lessor and the Agent a report by a reputable
\nenvironmental consultant selected by Lessee, which report shall be in form and
\nsubstance reasonably satisfactory to Lessor and the Agent and shall include
\nwithout limitation a “Phase I” environmental report (or update of a prior “Phase
\nI” report that was previously delivered to the Lessor and the Agent) on each of
\nthe Properties. If the report delivered pursuant to the preceding sentence
\nrecommends that a “Phase II” report or other supplemental report be obtained,
\nthe Lessee shall, at its own cost and expense, not less than thirty (30) days
\nprior to such Expiration Date or Payment Date, provide to Lessor and the Agent
\nsuch “Phase II” or other report, in form and substance reasonably satisfactory
\nto Lessor and the Agent. If Lessee fails to provide such Phase I, Phase II or
\nother supplemental reports with respect to any Property within the time periods
\nrequired by this Section 10.2, or if such report or reports are not satisfactory
\nin scope or content to the Agent or the Lessor (in their sole discretion), then
\nnotwithstanding any other provision of this Lease, Lessor may require Lessee to
\npurchase all of the Properties on such Expiration Date or Payment Date for the
\nTermination Value thereof, plus all Rent due and payable, and all other amounts
\ndue and owing under any Operative Agreement.<\/p>\n
ARTICLE XI<\/p>\n
11.1. Modifications.<\/p>\n
Lessee at its sole cost and expense, at any time and from time
\nto time without the consent of Lessor may make alterations, renovations,
\nimprovements and additions to any Property or any part thereof and substitutions
\nand replacements therefor (collectively, “Modifications”) and shall make any
\nModifications required by all applicable Legal <\/p>\n
9<\/p>\n
Requirements; provided, that: (i) except for any Modification required to be
\nmade pursuant to a Legal Requirement, no Modification shall materially impair
\nthe value, utility or useful life of any Property from that which existed
\nimmediately prior to such Modification; (ii) the Modification shall be done
\nexpeditiously and in a good and workmanlike manner; (iii) Lessee shall comply
\nwith all material Legal Requirements (including all Environmental Laws) and
\nInsurance Requirements applicable to the Modification, including without
\nlimitation the obtaining of all permits and certificates of occupancy, and the
\nstructural integrity of any Property shall not be adversely affected; (iv) to
\nthe extent required by Section 14.2(a), Lessee shall maintain builders’ risk
\ninsurance at all times when a Modification is in progress; (v) subject to the
\nterms of Article XIII relating to permitted contests, Lessee shall pay all costs
\nand expenses and discharge any Liens arising with respect to the Modification;
\n(vi) such Modification shall comply with the requirements of this Lease
\n(including without limitation Sections 8.2 and 10.1); and (vii) no Improvements
\nshall be demolished. Modifications that (y) are not required for any Property or
\nany part thereof pursuant to any Legal Requirement or otherwise and (z) are
\nseverable from the applicable Property without damage or other loss of value to
\nsuch Property (other than the value added by such Modification) shall become
\nproperty of the Lessee, and title to such Modifications shall rest with the
\nLessee. Except as set forth in the immediately preceding sentence, all
\nModifications shall become property of the Lessor and shall be subject to this
\nLease, and title to any component of any Property comprising any such
\nModifications shall immediately vest in Lessor.<\/p>\n
ARTICLE XII<\/p>\n
12.1. Warranty of Title.<\/p>\n
(a) Lessee agrees that, except as otherwise provided herein and
\n subject to the terms of Article XIII relating to permitted
\n contests, Lessee shall not directly or indirectly create or
\n allow to remain, and shall promptly discharge at its sole cost
\n and expense, (i) any Lien, defect, attachment, levy, title
\n retention agreement or claim upon any Property or any
\n Modifications or (ii) any Lien, attachment, levy or claim with
\n respect to the Rent or with respect to any amounts held by the
\n Agent pursuant to the Credit Agreement, in each case other
\n than Permitted Liens and Lessor Liens. Lessee shall promptly
\n notify Lessor in the event it receives actual knowledge that a
\n Lien other than a Permitted Lien or Lessor Lien has occurred
\n with respect to any Property, and Lessee represents and
\n warrants to, and covenants with, Lessor that the Liens in
\n favor of the Lessor created by the Operative Agreements are
\n first priority perfected Liens subject only to Permitted
\n Liens.<\/p>\n
(b) Nothing contained in this Lease shall be construed as
\n constituting the consent or request of Lessor, expressed or
\n implied, to or for the performance by any contractor,
\n mechanic, laborer, materialman, supplier or vendor of any
\n labor or services or for the furnishing of any materials for
\n any construction, alteration, addition, repair or demolition
\n of or to any Property or any part thereof NOTICE IS HEREBY
\n GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
\n LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
\n LESSEE, OR TO ANYONE HOLDING A PROPERTY OR <\/p>\n
10<\/p>\n
ANY PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO
\n MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
\n MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR IN
\n AND TO SUCH PROPERTY.<\/p>\n
ARTICLE XIII<\/p>\n
13.1. Permitted Contests Other Than in Respect of Indemnities.<\/p>\n
Except to the extent otherwise provided for in Section 13 of
\nthe Participation Agreement, Lessee, on its own or on Lessor’s behalf but at
\nLessee’s sole cost and expense, may contest, by appropriate administrative or
\njudicial proceedings conducted in good faith and with due diligence, the amount,
\nvalidity or application, in whole or in part, of any Legal Requirement, or
\nutility charges payable pursuant to Section 4.1 or any Lien, attachment, levy,
\nencumbrance or encroachment, and Lessor agrees not to pay, settle or otherwise
\ncompromise any such item, provided that (a) the commencement and continuation of
\nsuch proceedings shall suspend the collection of any such contested amount from,
\nand suspend the enforcement thereof against, the subject Property, Lessor, each
\nHolder, the Agent and each Lender; (b) there shall not be imposed a Lien (other
\nthan Permitted Liens) on any Property and no part of any Property nor any Rent
\nshall be in any danger of being sold, forfeited, lost or deferred; (c) at no
\ntime during the permitted contest shall there be a risk of the imposition of
\ncriminal liability or material civil liability on Lessor, any Holder, the Agent
\nor any Lender for failure to comply therewith; and (d) in the event that, at any
\ntime, there shall be a material risk of extending the application of such item
\nbeyond the end of the Term, then Lessee shall deliver to Lessor an Officer’s
\nCertificate certifying as to the matters set forth in clauses (a), (b) and (c)
\nof this Section 13.1. Lessor, at Lessee’s sole cost and expense, shall execute
\nand deliver to Lessee such authorizations and other documents as may reasonably
\nbe required in connection with any such contest and, if reasonably requested by
\nLessee, shall join as a party therein at Lessee’s sole cost and expense.<\/p>\n
ARTICLE XIV<\/p>\n
14.1. Public Liability and Workers’ Compensation Insurance.<\/p>\n
During the Term, Lessee shall procure and carry, at Lessee’s
\nsole cost and expense, commercial general liability insurance for claims for
\ninjuries or death sustained by persons or damage to property while on a Property
\nor the premises where the Equipment is located and such other public liability
\ncoverages as are then customarily carried by similarly situated companies
\nconducting business similar to that conducted by Lessee. Such insurance shall be
\non terms and in amounts that are no less favorable than insurance maintained by
\nLessee with respect to similar properties and equipment that it owns and are
\nthen carried by similarly situated companies conducting business similar to that
\nconducted by Lessee. The policies shall be endorsed to name Lessor, the Holders,
\nthe Agent and the Lenders as additional insureds and, to the extent of their
\ninterest, loss payees. The policies shall also specifically provide that such
\npolicies shall be considered primary insurance which shall apply to any loss or
\nclaim before any contribution by any insurance which Lessor, any Holder, the
\nAgent or any Lender may have in force. Lessee shall, in the operation of each
\nProperty, comply with the applicable workers’ compensation laws and protect
\nLessor, each Holder, the Agent and each Lender against any liability under such
\nlaws.<\/p>\n
11<\/p>\n
14.2. Hazard and Other Insurance.<\/p>\n
(a) During the Term, Lessee shall keep, or cause to be kept, each
\n Property insured against loss or damage by fire and other
\n risks and shall maintain builders’ risk insurance during
\n construction of any Improvements or Modifications in amounts
\n not less than the replacement value from time to time of such
\n Property and on terms that (a) are no less favorable than
\n insurance covering other similar properties owned by Lessee
\n and (b) are then carried by similarly situated companies
\n conducting business similar to that conducted by Lessee. The
\n policies shall be endorsed to name Lessor, the Holders, the
\n Agent and the Lenders, to the extent of their respective
\n interests, as additional loss payees; provided, that so long
\n as no Lease Event of Default has occurred and is continuing,
\n any loss payable under the insurance policies required by this
\n Section will be paid to Lessee.<\/p>\n
(b) If, during the Term, the area in which a Property is located
\n is designated a “flood-prone” area pursuant to the Flood
\n Disaster Protection Act of 1973, or any amendments or
\n supplements thereto, then Lessee shall comply with the
\n National Flood Insurance Program as set forth in the Flood
\n Disaster Protection Act of 1973. In addition, Lessee will
\n fully comply with the requirements of the National Flood
\n Insurance Act of 1968 and the Flood Disaster Protection Act of
\n 1973, as each may be amended from time to time, and with any
\n other Legal Requirement concerning flood insurance to the
\n extent that it may apply to any such Property.<\/p>\n
14.3. Coverage.<\/p>\n
(a) As of the date of this Lease and annually thereafter so long
\n as this Lease remains in effect, Lessee shall furnish Lessor
\n and the Agent with certificates prepared by the insurers or
\n insurance broker of Lessee showing the insurance required
\n under Sections 14.1 and 14.2 to be in effect, naming (except
\n with respect to workers’ compensation insurance) Lessor, the
\n Holders, the Agent and the Lenders as additional insureds and
\n loss payees and evidencing the other requirements of this
\n Article XIV. All such insurance shall be at the cost and
\n expense of Lessee and provided by nationally recognized,
\n financially sound insurance companies. Such certificates shall
\n include a provision for thirty (30) days’ advance written
\n notice by the insurer to Lessor and the Agent in the event of
\n cancellation or material alteration of such insurance. If a
\n Lease Event of Default has occurred and is continuing and
\n Lessor so requests, Lessee shall deliver to Lessor copies of
\n all insurance policies required by Sections 14.1 and 14.2.<\/p>\n
(b) Lessee agrees that any insurance policy required by Sections
\n 14.1, 14.2(a) and 14.2(b) shall include an appropriate
\n provision that such policy will not be invalidated should
\n Lessee waive, at any time, any or all rights of recovery
\n against any party for losses covered by such policy or due to
\n any breach of warranty, <\/p>\n
12<\/p>\n
fraud, action, inaction or misrepresentation by Lessee or any
\n Person acting on behalf of Lessee. Lessee hereby waives any
\n and all such rights against the Lessor, the Holders, the Agent
\n and the Lenders to the extent of payments made to any such
\n Person under any such policy.<\/p>\n
(c) Neither Lessor nor Lessee shall carry separate insurance
\n concurrent in kind or form or contributing in the event of
\n loss with any insurance required under this Article XIV,
\n except that Lessor may carry separate liability insurance at
\n Lessor’s sole cost so long as (i) Lessee’s insurance is
\n designated as primary and in no event excess or contributory
\n to any insurance Lessor may have in force which would apply to
\n a loss covered under Lessee’s policy and (ii) each such
\n insurance policy will not cause Lessee’s insurance required
\n under this Article XIV to be subject to a coinsurance
\n exception of any kind.<\/p>\n
(d) Lessee shall pay as they become due all premiums for the
\n insurance required by Section 14.1 and Section 14.2, shall
\n renew or replace each policy prior to the expiration date
\n thereto and shall otherwise maintain the coverage required by
\n such Sections without any lapse in coverage.<\/p>\n
(e) Notwithstanding anything to the contrary contained in this
\n Section, Lessee’s obligations to carry the insurance provided
\n for herein may be brought within the coverage of a so-called
\n blanket policy or policies of insurance carried or maintained
\n by Lessee; provided, however, that the coverage afforded
\n Lessor will not be reduced or diminished or otherwise be
\n different from that which would exist under separate policies
\n meeting all other requirements of this Lease, and that the
\n requirements of this Article XIV are otherwise satisfied.<\/p>\n
ARTICLE XV<\/p>\n
15.1. Casualty and Condemnation.<\/p>\n
(a) Subject to the provisions of this Article XV and Article XVI
\n (in the event Lessee delivers, or is obligated to deliver, a
\n Termination Notice), and prior to the occurrence and
\n continuation of a Lease Default or Lease Event of Default,
\n Lessee shall be entitled to receive (and Lessor hereby
\n irrevocably assigns to Lessee all of Lessor’s right, title and
\n interest in) any award, compensation or insurance proceeds
\n under Sections 14.2(a) or (b) hereof to which Lessee or Lessor
\n may become entitled by reason of their respective interests in
\n each Property (i) if all or a portion of such Property is
\n damaged or destroyed in whole or in part by a Casualty or (ii)
\n if the use, access, occupancy, easement rights or title to
\n such Property or any part thereof is the subject of a
\n Condemnation; provided, however, that if a Lease Default or
\n Lease Event of Default shall have occurred and be continuing,
\n such award, compensation or insurance proceeds shall be paid
\n directly to Lessor or, if received by Lessee, shall be held in
\n trust for Lessor, and shall be paid over by Lessee to Lessor
\n and held in accordance with the terms of this paragraph (a).
\n All amounts held by Lessor hereunder on account of any award,
\n compensation or insurance proceeds either paid directly to
\n Lessor or turned over to Lessor shall be held as security for
\n the performance of Lessee’s obligations hereunder.<\/p>\n
13<\/p>\n
(b) Lessee may appear in any proceeding or action to negotiate,
\n prosecute, adjust or appeal any claim for any award,
\n compensation or insurance payment on account of any such
\n Casualty or Condemnation and shall pay all expenses thereof.
\n At Lessee’s reasonable request, and at Lessee’s sole cost and
\n expense, Lessor and the Agent shall participate in any such
\n proceeding, action, negotiation, prosecution or adjustment.
\n Lessor and Lessee agree that this Lease shall control the
\n rights of Lessor and Lessee in and to any such award,
\n compensation or insurance payment.<\/p>\n
(c) If Lessee shall receive notice of a Casualty or a possible
\n Condemnation of a Property or any interest therein where
\n damage to such Property is estimated to equal or exceed ten
\n percent (10%) of the Property Cost of such Property, Lessee
\n shall give notice thereof to the Lessor and to the Agent
\n promptly after the receipt of such notice.<\/p>\n
(d) In the event of a Casualty or a Condemnation (regardless of
\n whether notice thereof must be given pursuant to paragraph
\n (c)), this Lease shall terminate with respect to such Property
\n in accordance with Section 16.1 if Lessee, within thirty (30)
\n days after such occurrence, delivers to Lessor and the Agent a
\n Termination Notice to such effect.<\/p>\n
(e) If, pursuant to this Section 15.1, this Lease shall continue
\n in full force and effect following a Casualty or Condemnation
\n with respect to a Property, Lessee shall, at its sole cost and
\n expense and using, if available, the proceeds of any award,
\n compensation or insurance with respect to such Casualty or
\n Condemnation (including, without limitation, any such award,
\n compensation or insurance which has been received by the Agent
\n and which should be turned over to Lessee pursuant to the
\n terms of the Operative Agreements, and if not available or
\n sufficient, using its own funds), promptly and diligently
\n repair any damage to such Property caused by such Casualty or
\n Condemnation in conformity with the requirements of Sections
\n 10.1 and 11.1, using the as-built plans and specifications or
\n manufacturer’s specifications for the applicable Improvements
\n or Equipment (as modified to give effect to any subsequent
\n Modifications, any Condemnation affecting the Property and all
\n applicable Legal Requirements), so as to restore such Property
\n to substantially the same condition, operation, function and
\n value as existed immediately prior to such Casualty or
\n Condemnation. In such event, title to such Property shall
\n remain with Lessor.<\/p>\n
(f) In no event shall a Casualty or Condemnation with respect to
\n which this Lease remains in full force and effect under this
\n Section 15.1 affect Lessee’s obligations to pay Rent pursuant
\n to Section 3.1.<\/p>\n
(g) Notwithstanding anything to the contrary set forth in Section
\n 15.1(a) or Section 15.1 (e), if during the Term, a Casualty
\n occurs with respect to any Property or Lessee receives notice
\n of a Condemnation with respect to any Property, and <\/p>\n
14<\/p>\n
following such Casualty or Condemnation, (i) such Property
\n cannot reasonably be restored, repaired or replaced on or
\n before the 180th day prior to the Expiration Date (if such
\n Casualty or Condemnation occurs during the Term) to
\n substantially the same condition as existed immediately prior
\n to such Casualty or Condemnation, or (ii) on or before such
\n day such Property is not in fact so restored, repaired or
\n replaced, then Lessee shall be required to purchase such
\n Property on the next Payment Date and pay Lessor the
\n Termination Value for such Property, plus any and all Rent
\n then due and owing, plus all other amounts then due and owing
\n (including without limitation amounts described in clause
\n FIRST of Section 22.2).<\/p>\n
15.2. Environmental Matters.<\/p>\n
Promptly upon Lessee’s actual knowledge of the presence of
\nHazardous Substances in any portion of a Property in concentrations and
\nconditions that constitute an Environmental Violation and as to which, in the
\nreasonable opinion of Lessee, the cost to undertake any legally required
\nresponse, clean up, remedial or other action might result in a cost to Lessee of
\nmore than $100,000, Lessee shall notify Lessor in writing of such condition. In
\nthe event of any Environmental Violation (regardless of whether notice thereof
\nmust be given), Lessee shall, not later than thirty (30) days after Lessee has
\nactual knowledge of such Environmental Violation, either deliver to Lessor a
\nTermination Notice pursuant to Section 16.1 if applicable, or, at Lessee’s sole
\ncost and expense, promptly and diligently undertake and complete any response,
\nclean up, remedial or other action necessary to remove, cleanup or remediate the
\nEnvironmental Violation in accordance with all Environmental Laws. If Lessee
\ndoes not deliver a Termination Notice pursuant to Section 16.1, Lessee shall,
\nupon completion of remedial action by Lessee, cause to be prepared by a
\nreputable environmental consultant acceptable to Lessor a report describing the
\nEnvironmental Violation and the actions taken by Lessee (or its agents) in
\nresponse to such Environmental Violation, and a statement by the consultant that
\nthe Environmental Violation has been remedied in full compliance with applicable
\nEnvironmental Law.<\/p>\n
15.3. Notice of Environmental Matters.<\/p>\n
Promptly, but in any event within thirty (30) days from the
\ndate Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
\nnotice of any pending or threatened Environmental Claim involving any
\nEnvironmental Law or any Release on or in connection with any Property. All such
\nnotices shall describe in reasonable detail the nature of the claim, action or
\nproceeding and Lessee’s proposed response thereto. In addition, Lessee shall
\nprovide to Lessor, within five (5) Business Days of receipt, copies of all
\nmaterial written communications with any Governmental Authority relating to any
\nEnvironmental Law in connection with the Property. Lessee shall also promptly
\nprovide such detailed reports of any such material Environmental Claims as may
\nreasonably be requested by Lessor.<\/p>\n
15<\/p>\n
ARTICLE XVI<\/p>\n
16.1. Termination Upon Certain Events.<\/p>\n
If any of the following occur: (i) if the requirements of
\nSection 15.1(c) are satisfied, or (ii) if the requirements of Section 15.1(d)
\nare satisfied and Lessee has determined pursuant to such section that following
\nthe applicable Casualty or Condemnation this Lease shall terminate with respect
\nto the affected Property, or (iii) Lessee has determined pursuant to the second
\nsentence of Section 15.2 that, due to the occurrence of an Environmental
\nViolation, this Lease shall terminate with respect to the affected Property,
\nthen Lessee shall be obligated to deliver, within thirty (30) days of its
\nreceipt of notice of the applicable Condemnation or the occurrence of the
\napplicable Casualty or Environmental Violation, a written notice to the Lessor
\nin the form described in Section 16.2(a) (a “Termination Notice”) of the
\ntermination of this Lease with respect to the affected Property.<\/p>\n
16.2. Procedures.<\/p>\n
(a) A Termination Notice shall contain: (i) notice of termination
\n of this Lease with respect to the affected Property on a
\n Payment Date not more than sixty (60) days after Lessor’s
\n receipt of such Termination Notice (the “Termination Date”);
\n and (ii) a binding and irrevocable agreement of Lessee to pay
\n the Termination Value for the applicable Property, any and all
\n Rent then due and owing and all other amounts then due and
\n owing from Lessee under any of the Operative Agreements
\n (including without limitation amounts described in clause
\n FIRST of Section 22.2) and purchase such Property on such
\n Termination Date.<\/p>\n
(b) On the Termination Date, Lessee shall pay to Lessor the
\n Termination Value for the applicable Property, any and all
\n Rent then due and owing and all other amounts then due and
\n owing from Lessee under any of the Operative Agreements
\n (including without limitation amounts described in clause
\n FIRST of Section 22.2), and Lessor shall convey such Property,
\n or the remaining portion thereof, if any, to Lessee (or
\n Lessee’s designee), all in accordance with Section 19.1.<\/p>\n
ARTICLE XVII<\/p>\n
17.1. Lease Events of Default.<\/p>\n
If any one or more of the following events (each a “Lease
\nEvent of Default”) shall occur:<\/p>\n
(a) Lessee shall fail to make payment of (i) any Basic Rent
\n (except as set forth in clause (ii)) within five (5) Business
\n Days after the same has become due and payable or (ii) any
\n Termination Value, on the date any such payment is due, or any
\n payment of Basic Rent or Supplemental Rent due on the due date
\n of any such payment of Termination Value, or any amount due on
\n the Expiration Date;<\/p>\n
16<\/p>\n
(b) Lessee shall fail to make payment of any Supplemental Rent
\n (other than Supplemental Rent referred to in Section
\n 17.1(a)(ii)) due and payable within three (3) Business Days
\n after receipt of notice that such payment is due;<\/p>\n
(c) Lessee shall fail to maintain insurance as required by Article
\n XIV of this Lease;<\/p>\n
(d) Lessee or any Consolidated Entity, as the case may be, shall
\n fail to observe or perform any term, covenant or provision
\n (including without limitation any term, covenant or provision
\n applying to Lessee and such Consolidated Entity under the
\n Incorporated Covenants) of Lessee or any Consolidated Entity,
\n as the case may be, under this Lease or any other Operative
\n Agreement to which Lessee is a party other than those set
\n forth in Sections 17.1(a), (b) or (c) hereof, and such failure
\n shall remain uncured for a period of thirty (30) days after
\n the earlier of receipt of written notice from Lessor thereof
\n or a Responsible Officer of Lessee becomes aware of such
\n failure;<\/p>\n
(e) Lessee shall default in the performance or observance of any
\n other provision of this Lease or any other Operative Agreement
\n to which Lessee is a party other than those set forth in
\n Sections 17.1(a), (b), (c) or (d) hereof, and shall not cure
\n such default within thirty days after the first to occur of
\n (i) the date the Agent, Lenders or Lessor gives written or
\n telephonic notice of the default to Lessee, or (ii) the date
\n the Lessee otherwise has notice thereof;<\/p>\n
(f) A default shall be made (i) in the payment of any Indebtedness
\n (other than obligations under the Operative Agreements) of the
\n Lessee or any Consolidated Entity when due or (ii) in the
\n performance, observance or fulfillment of any term or covenant
\n contained in any agreement or instrument under or pursuant to
\n which any such Indebtedness may have been issued, created,
\n assumed, guaranteed or secured by the Lessee or any
\n Consolidated Entity, if the effect of such default is to
\n accelerate the maturity of such Indebtedness or to permit the
\n holder thereof to cause such Indebtedness to become due prior
\n to its stated maturity, and such default shall not be cured
\n within 10 days after the occurrence of such default, and the
\n amount of the Indebtedness involved exceeds $5,000,000;<\/p>\n
(g) The liquidation or dissolution of Lessee, or the suspension of
\n the business of Lessee, or the filing by Lessee of a voluntary
\n petition or an answer seeking reorganization, arrangement,
\n readjustment of its debts or for any other relief under the
\n United States Bankruptcy Code, as amended, or under any other
\n insolvency act or law, state or federal, now or hereafter
\n existing, or any other action of Lessee indicating its consent
\n to, approval of or acquiescence in, any such petition or
\n proceeding; the application by Lessee for, or the appointment
\n by consent or acquiescence of Lessee of a receiver, a trustee
\n or a custodian of Lessee for all or a substantial part of its
\n property; the making by Lessee of any assignment for the
\n benefit of creditors; the inability of Lessee or the admission
\n by Lessee in writing of its inability to pay its debts as they
\n mature; or Lessee taking any corporate action to authorize any
\n of the foregoing;<\/p>\n
17<\/p>\n
(h) The filing of an involuntary petition against Lessee in
\n bankruptcy or seeking reorganization, arrangement readjustment
\n of its debts or for any other relief under the United States
\n Bankruptcy Code, as amended, or under any other insolvency act
\n or law, state or federal, now or hereafter existing; or the
\n involuntary appointment of a receiver, a trustee or a
\n custodian of Lessee for all or a substantial part of its
\n property; or the issuance of a warrant of attachment,
\n execution or similar process against any substantial part of
\n the property of Lessee, and the continuance of any of such
\n events for ninety (90) days undismissed or undischarged;<\/p>\n
(i) The adjudication of Lessee as bankrupt or insolvent;<\/p>\n
(j) The entering of any order in any proceedings against Lessee
\n decreeing the dissolution, divestiture or split-up of Lessee,
\n and such order remains in effect for more than sixty (60)
\n days;<\/p>\n
(k) Any material report, certificate, financial statement or other
\n instrument delivered to Lessor by or on behalf of Lessee
\n pursuant to the terms of this Lease or any other Operative
\n Agreement shall be false or misleading in any material respect
\n when made or delivered;<\/p>\n
(l) A final judgment (after all avenues of appeal and all
\n applicable appeal periods have expired), which with other
\n outstanding final judgments against Lessee exceeds an
\n aggregate of $500,000 shall be rendered against Lessee, and if
\n within thirty (30) days after entry thereof such judgment
\n shall not have been discharged, paid or bonded or execution
\n thereon stayed pending appeal, or if within thirty (30) days
\n after the expiration of any such stay such judgment shall not
\n have been discharged;<\/p>\n
(m) Any “Event of Default” (as defined in the Existing HEALTHSOUTH
\n Credit Agreement, as such agreement may be amended,
\n supplemented or restated from time to time, to the extent the
\n Majority Lenders and the Agent agree to any such amendments,
\n otherwise the form of HEALTHSOUTH Credit Agreement existing
\n before such amendment will continue to control with respect to
\n the Operative Agreements) (hereinafter referred to as
\n “Existing HEALTHSOUTH Corporation Credit Agreement Event of
\n Default”) shall have occurred and be continuing (or, in the
\n event the Existing HEALTHSOUTH Credit Agreement has been
\n terminated, would have occurred and be continuing had the
\n HEALTHSOUTH Credit Agreement continued to exist) beyond any
\n applicable notice, grace or cure period (if any) included
\n within the definition of such Existing HEALTHSOUTH Corporation
\n Credit Agreement Event of Default;<\/p>\n
(n) Any material Environmental Violation with respect to which
\n notice to the Lessor is required to be given in accordance
\n with Section 15.2 shall have occurred and be continuing,
\n unless (i) the Lessee shall completely remediate such
\n Environmental Violation to the reasonable satisfaction of the
\n Agent and the Lessor within 90 days following the date the
\n Lessee has actual knowledge of such Environmental <\/p>\n
18<\/p>\n
Violation or (ii) the Lessee shall consummate the purchase of
\n the affected Property in accordance with and at the price
\n required by Section 16.2 by the earlier of (A) 60 days after
\n the Lessor’s receipt of the respective Termination Notice
\n under Section 16.2(a) or (B) 90 days after the Lessee has
\n actual knowledge of such Environmental Violation;<\/p>\n
(o) Any Operative Agreement shall cease to be in full force and
\n effect, other than due to its expiration or termination in
\n accordance with its terms; or<\/p>\n
(p) If the Guarantor shall default in the performance of any
\n obligations under the Guarantee.<\/p>\n
then, in any such event, (i) Lessor may, in addition to the other rights and
\nremedies provided for in this Article XVII and in Section 18.1, terminate this
\nLease by giving Lessee fifteen (15) days notice of such termination, and this
\nLease shall terminate, and all rights of Lessee under this Lease shall cease.
\nLessee shall, to the fullest extent permitted by law, pay as Supplemental Rent
\nall costs and expenses incurred by or on behalf of Lessor, including without
\nlimitation reasonable fees and expenses of counsel, as a result of any Lease
\nEvent of Default hereunder.<\/p>\n
17.2. Surrender of Possession.<\/p>\n
If a Lease Event of Default shall have occurred and be
\ncontinuing, and whether or not this Lease shall have been terminated pursuant to
\nSection 17.1, Lessee shall, upon thirty (30) days written notice, surrender to
\nLessor possession of the Properties. Lessor may enter upon and repossess the
\nProperties by such means as are available at law or in equity, and may remove
\nLessee and all other Persons and any and all personal property and Lessee’s
\nequipment and personalty and severable Modifications from the Properties. Lessor
\nshall have no liability by reason of any such entry, repossession or removal
\nperformed in accordance with applicable law. Upon the written demand of Lessor,
\nLessee shall return the Properties promptly to Lessor, in the manner and
\ncondition required by, and otherwise in accordance with the provisions of,
\nSection 22.1(c) hereof<\/p>\n
17.3. Reletting.<\/p>\n
If a Lease Event of Default shall have occurred and be
\ncontinuing, and whether or not this Lease shall have been terminated pursuant to
\nSection 17.1, Lessor may, but shall be under no obligation to, relet any
\nProperty, for the account of Lessee or otherwise, for such term or terms (which
\nmay be greater or less than the period which would otherwise have constituted
\nthe balance of the Term) and on such conditions (which may include concessions
\nor free rent) and for such purposes as Lessor may determine, and Lessor may
\ncollect, receive and retain the rents resulting from such reletting. Lessor
\nshall not be liable to Lessee for any failure to relet a Property or for any
\nfailure to collect any rent due upon such reletting.<\/p>\n
17.4. Damages.<\/p>\n
Neither (a) the termination of this Lease pursuant to Section
\n17.1; (b) the repossession of any Property; nor (c) the failure of Lessor to
\nrelet any Property, the reletting of all or any portion thereof, nor the failure
\nof Lessor to collect or receive any rentals due upon any <\/p>\n
19<\/p>\n
such reletting, shall relieve Lessee of its liabilities and obligations
\nhereunder, all of which shall survive any such termination, repossession or
\nreletting. If any Lease Event of Default shall have occurred and be continuing
\nand notwithstanding any termination of this Lease pursuant to Section 17.1,
\nLessee shall forthwith pay to Lessor all Rent and other sums due and payable
\nhereunder to and including the date of such termination. Thereafter, on the days
\non which the Basic Rent or Supplemental Rent, as applicable, are payable under
\nthis Lease or would have been payable under this Lease if the same had not been
\nterminated pursuant to Section 17.1 and until the end of the Term hereof or what
\nwould have been the Term in the absence of such termination, Lessee shall pay
\nLessor, as current liquidated damages (it being agreed that it would be
\nimpossible accurately to determine actual damages) an amount equal to the Basic
\nRent and Supplemental Rent that are payable under this Lease or would have been
\npayable by Lessee hereunder if this Lease had not been terminated pursuant to
\nSection 17.1, less the net proceeds, if any, which are actually received by
\nLessor with respect to the period in question of any reletting of any Property
\nor any portion thereof, provided that Lessee’s obligation to make payments of
\nBasic Rent and Supplemental Rent under this Section 17.4 shall continue only so
\nlong as Lessor shall not have received the amounts specified in Section 17.5. In
\ncalculating the amount of such net proceeds from reletting, there shall be
\ndeducted all of Lessor’s, any Holder’s, the Agent’s and any Lender’s reasonable
\nexpenses in connection therewith, including repossession costs, reasonable
\nbrokerage or sales commissions, reasonable fees and expenses for counsel and any
\nnecessary repair or alteration costs and expenses incurred in preparation for
\nsuch reletting. To the extent Lessor receives any damages pursuant to this
\nSection 17.4, such amounts shall be regarded as amounts paid on account of Rent.
\nLessee specifically acknowledges and agrees that its obligations under this
\nSection 17.4 shall be absolute and unconditional under any and all circumstances
\nand shall be paid or performed, as the case may be, without notice or demand and
\nwithout any abatement, reduction, diminution, setoff, defense, counterclaim or
\nrecoupment whatsoever.<\/p>\n
17.5. Final Liquidated Damages.<\/p>\n
If a Lease Event of Default shall have occurred and be
\ncontinuing, whether or not this Lease shall have been terminated pursuant to
\nSection 17.1 and whether or not Lessor shall have collected any current
\nliquidated damages pursuant to Section 17.4, Lessor shall have the right to
\nrecover, by demand to Lessee and at Lessor’s election, and Lessee shall pay to
\nLessor, as and for final liquidated damages, but exclusive of the indemnities
\npayable under Section 13 of the Participation Agreement, and in lieu of all
\ncurrent liquidated damages beyond the date of such demand (it being agreed that
\nit would be impossible accurately to determine actual damages) the sum of (a)
\nthe Termination Value of all Properties plus (b) all other amounts owing in
\nrespect of Rent and Supplemental Rent heretofore accruing under this Lease and
\nall other amounts then due and owing by the Lessee under any Operative
\nAgreement. Upon payment of the amount specified pursuant to the first sentence
\nof this Section 17.5, Lessee shall be entitled to receive from Lessor, either at
\nLessee’s request or upon Lessor’s election, in either case at Lessee’s cost, an
\nassignment of Lessor’s entire right, title and interest in and to the
\nProperties, the Improvements, Fixtures, Modifications and Equipment, in each
\ncase in recordable form and otherwise in conformity with local custom and free
\nand clear of the Lien of this Lease (including the release of any memorandum of
\nLease recorded in connection therewith) and any Lessor Liens. The Properties
\nshall be conveyed to Lessee “AS IS” `WHERE IS” and in their then present
\nphysical condition. If any statute or rule of law shall limit the amount of such
\nfinal <\/p>\n
20<\/p>\n
liquidated damages to less than the amount agreed upon, Lessor shall be entitled
\nto the maximum amount allowable under such statute or rule of law; provided,
\nhowever, Lessee shall not be entitled to receive an assignment of Lessor’s
\ninterest in the Property, the Improvements, Fixtures, Modifications or Equipment
\nor documents unless Lessee shall have paid in full the Termination Value and all
\nother amounts due and owing hereunder and under the other Operative Agreements.
\nLessee specifically acknowledges and agrees that its obligations under this
\nSection 17.5 shall be absolute and unconditional under any and all circumstances
\nand shall be paid or performed, as the case may be, without notice or demand
\n(except as otherwise specifically provided herein) and without any abatement,
\nreduction, diminution, setoff, defense, counterclaim or recoupment whatsoever.<\/p>\n
17.6. Waiver of Certain Rights.<\/p>\n
If this Lease shall be terminated pursuant to Section 17.1,
\nLessee waives, to the fullest extent permitted by law, (a) any notice of
\nre-entry or the institution of legal proceedings to obtain re-entry or
\npossession; provided, however, that the Lessor or the Agent shall make a good
\nfaith effort to provide notice to the Lessee of any such action, but the failure
\nto provide such notice for any reason shall not result in the invalidity of any
\naction so taken and shall not give rise to any rights on the part of the Lessee;
\n(b) any right of redemption, re-entry or possession; (c) the benefit of any laws
\nnow or hereafter in force exempting property from liability for rent or for
\ndebt, and (d) any other rights which might otherwise limit or modify any of
\nLessor’s rights or remedies under this Article XVII.<\/p>\n
17.7. Assignment of Rights Under Contract.<\/p>\n
If a Lease Event of Default shall have occurred and be
\ncontinuing, and whether or not this Lease shall have been terminated pursuant to
\nSection 17.1, Lessee shall upon Lessor’s demand immediately assign, transfer and
\nset over to Lessor all of Lessee’s right, title and interest in and to each
\nagreement executed by Lessee in connection with the purchase, construction,
\ndevelopment, use or operation of all Properties (including, without limitation,
\na right, title and interest of Lessee with respect to all warranty, performance,
\nservice and indemnity provisions), as and to the extent that the same relate to
\nthe purchase, construction, use and operation of any Property.<\/p>\n
17.8. Environmental Costs.<\/p>\n
If a Lease Event of Default shall have occurred and be
\ncontinuing, and whether or not this Lease shall have been terminated pursuant to
\nSection 17.1, Lessee shall pay directly to any third party (or at Lessor’s
\nelection, reimburse Lessor) for the cost of any environmental testing or
\nremediation work undertaken respecting any Property as such testing or work is
\ndeemed appropriate in the reasonable judgment of Lessor, Lessee shall pay all
\namounts referenced in the immediately preceding sentence within ten (10) days of
\nany request by Lessor for such payment.<\/p>\n
21<\/p>\n
17.9. Remedies Cumulative.<\/p>\n
The remedies herein provided shall be cumulative and in
\naddition to (and not in limitation of) any other remedies available at law,
\nequity or otherwise, including, without limitation, any mortgage foreclosure
\nremedies.<\/p>\n
17.10. Notice of Default or Event of Default.<\/p>\n
Lessee shall promptly notify the Lessor and the Agent if any
\nResponsible Officer of Lessee has received notice, or has actual knowledge, of
\nany Default or Event of Default.<\/p>\n
ARTICLE XVIII<\/p>\n
18.1. Lessor’s Right to Cure Lessee’s Lease Defaults.<\/p>\n
Lessor, without waiving or releasing any obligation or Lease
\nEvent of Default, may (but shall be under no obligation to) remedy any Lease
\nEvent of Default for the account and at the sole cost and expense of Lessee,
\nincluding the failure by Lessee to maintain the insurance required by Article
\nXIV, and may, to the fullest extent permitted by law, and notwithstanding any
\nright of quiet enjoyment in favor of Lessee, enter upon any Property, or real
\nproperty owned or leased by Lessee and take all such action thereon as may be
\nnecessary or appropriate therefor. No such entry shall be deemed an eviction of
\nany lessee. All reasonable out-of-pocket costs and expenses so incurred
\n(including without limitation reasonable fees and expenses of counsel), together
\nwith interest thereon at the Base Rate from the date on which such sums or
\nexpenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.<\/p>\n
ARTICLE XIX<\/p>\n
19.1. Provisions Relating to Lessee’s Exercise of its Purchase
\n Option.<\/p>\n
Subject to Section 19.2, in connection with any termination of
\nthis Lease pursuant to the terms of Section 16.2, or in connection with Lessee’s
\nexercise of its Purchase Option or its option to purchase all the Properties
\npursuant to Section 20.1, upon the date on which this Lease is to terminate, and
\nupon tender by Lessee of the amounts set forth in Sections 16.2(b), 20.1 or
\n20.2, as applicable, Lessor shall execute and deliver to Lessee (or to Lessee’s
\ndesignee), at Lessee’s cost and expense a deed and an assignment of Lessor’s
\nentire interest in the Properties, in recordable form and otherwise in
\nconformity with local custom and free and clear of the Lien of this Lease and
\nany Lessor Liens attributable to Lessor but without any other warranties (of
\ntitle or otherwise) from the Lessor. All Property shall be conveyed to Lessee
\n“AS IS” “WHERE IS” and in then present physical condition.<\/p>\n
19.2. No Termination With Respect to Less than all of the
\n Properties.<\/p>\n
Lessee shall not be entitled to exercise its Purchase Option
\nseparately with respect to less than all of the Properties or that portion of
\nany Property consisting of Land, Equipment and Improvements but shall be
\nrequired to exercise its Purchase Option with respect to all Properties.<\/p>\n
22<\/p>\n
ARTICLE XX<\/p>\n
20.1. Early Purchase Option.<\/p>\n
Provided that no Lease Default of the types specified in
\nSections 17.1 (a), (b), (h), (i) or (j) or any Lease Event of Default shall have
\noccurred and be continuing and provided that the Election Notice referred to in
\nSection 20.2 has not been delivered, Lessee shall have the option, exercisable
\nby giving the Agent and Lessor no more than one hundred twenty (120) days and no
\nless than sixty (60) days irrevocable written notice of Lessee’s election to
\nexercise such option, to purchase all (but not less than all) of the Properties
\non a Scheduled Interest Payment Date as identified in such written notice, at a
\nprice equal to the Termination Value for the Properties (which the parties do
\nnot intend to be a “bargain” purchase price), and Lessee at such time shall also
\npay any and all Rent then due and owing and all other amounts then due and owing
\nby Lessee under this Lease and under any other Operative Agreement (including
\nwithout limitation amounts, if any, described in clause FIRST of Section 22.2).
\nIf Lessee exercises its option to purchase the Properties free and clear of the
\nLien of this Lease and any Lessor Liens with respect to the Property pursuant to
\nthis Section 20.1, Lessor shall transfer to Lessee all of Lessor’s right, title
\nand interest in and to each Property as of the Scheduled Interest Payment Date
\non which such purchase occurs.<\/p>\n
20.2. Purchase or Sale Option.<\/p>\n
Not less than 120 days and no more than 180 days prior to the
\nExpiration Date, Lessee may give Lessor and Agent irrevocable written notice
\n(the “Election Notice”) that Lessee is electing to exercise either (a) the
\noption to purchase all, but not less than all, of the Properties on the
\nExpiration Date (the “Purchase Option”) or (b) the option to remarket all of the
\nProperties and cause a sale of all of the Properties pursuant to the terms of
\nSection 22.1 (the “Sale Option”), such sale to occur on the Expiration Date. If
\nLessee does not give an Election Notice indicating the Sale Option at least 120
\ndays and not more than 180 days prior to the then current Expiration Date, then
\nLessee shall be deemed to have elected the Purchase Option for the Expiration
\nDate. Lessor shall have no obligation to sell any Property unless all of the
\nProperties are sold on the Expiration Date. If Lessee shall (i) elect (or be
\ndeemed to elect) to exercise the Purchase Option, or (ii) elect to remarket all
\nof the Properties pursuant to Section 22.1 and fail to deliver the environmental
\nreport required by Section 10.2 at the time specified in such Section, or (iii)
\nelect to remarket all of the Properties pursuant to Section 22.1 and fail to
\ncause all of the Properties to be sold in accordance with the terms of Section
\n22.1 on the Expiration Date on which such a sale of all of the Properties is
\nrequired in connection with such election, then in each case, Lessee shall pay
\nto Lessor on the Expiration Date an amount equal to the Termination Value for
\nall the Properties (which the parties do not intend to be a “bargain” purchase)
\nplus all Rent and other amounts then due and payable under this Lease or under
\nany other Operative Agreement (including without limitation the amounts
\ndescribed in clause FIRST of Section 22.2), and, upon receipt of such amount,
\nLessor shall transfer to Lessee all of Lessor’s right, title and interest in and
\nto the Properties in accordance with Section 19.1. If the Lessee elects the
\nPurchase Option or the Sale Option and fails to perform its obligations under
\nthis Lease with respect to such option, a Lease Event of Default shall be deemed
\nto occur.<\/p>\n
23<\/p>\n
ARTICLE XXI<\/p>\n
21.1. Intentionally Deleted.<\/p>\n
ARTICLE XXII<\/p>\n
22.1. Sale Procedure.<\/p>\n
(a) During the Marketing Period, Lessee, on behalf of the Lessor,
\n shall obtain bids for the cash purchase of all of the
\n Properties in connection with a sale to one or more purchasers
\n to be consummated on the Expiration Date for the highest price
\n available, shall notify Lessor promptly of the name and
\n address of each prospective purchaser and the cash price which
\n each prospective purchaser shall have offered to pay for the
\n Properties and shall provide Lessor with such additional
\n information about the bids and the bid solicitation procedure
\n as Lessor may reasonably request from time to time. Lessor may
\n reject any and all bids and may assume sole responsibility for
\n obtaining bids by giving Lessee written notice to that effect;
\n provided, however, that notwithstanding the foregoing, Lessor
\n may not reject the highest bid for the Properties submitted by
\n the Lessee if such bid is greater than or equal to the sum of
\n the Limited Recourse Amount for the Properties, plus all
\n reasonable costs and expenses referred to in clause FIRST of
\n Section 22.2 and represent bona fide offers from one or more
\n third party purchasers and provided further, that Lessor may
\n not reject a bid from the Houston Purchaser (defined below)
\n with respect to all Property located in Houston, Texas, or a
\n bid from the Topeka Purchaser (defined below) with respect to
\n all Property located in Topeka, Kansas in each case if and
\n only if each of the following conditions in clauses (y) and
\n (z) are met: (y) such bid is at least equal to the Termination
\n Value of such Property (whether or not it is the highest bid
\n for such Property), plus all reasonable costs and expenses
\n referred to in clause FIRST of Section 22.2 related to such
\n Property. If the price which a prospective purchaser or
\n purchasers shall have offered to pay for the Property is less
\n than the sum of the Limited Recourse Amount plus all
\n reasonable costs and expenses referred to in clause FIRST of
\n Section 22.2 and represents a bona fide offer from such
\n purchaser and (z) with respect to all Properties other than
\n such Property (the “Other Properties”), the Lessee has
\n received (and the Lessor has accepted) bids from one or more
\n prospective purchasers, such bids are greater than or equal to
\n the sum of the Limited Recourse Amounts for the Other
\n Properties, plus all reasonable costs and expenses referred to
\n in clause FIRST of Section 22.2, Lessor may elect to retain
\n the Properties by giving Lessee prior written notice of
\n Lessor’s election to retain the Properties, and upon receipt
\n of such notice, Lessee shall surrender the Properties to
\n Lessor pursuant to Section 10.1. Unless Lessor shall have
\n elected to retain the Properties pursuant to the preceding
\n sentence, Lessee shall arrange for Lessor to sell the
\n Properties free and clear of the Lien of this Lease and any
\n Lessor Liens attributable to it, without recourse or warranty
\n (of title or otherwise), for cash on the last day of the
\n Marketing Period (such date being hereafter referred to as the
\n “Sale Date”) to the purchaser or purchasers identified by
\n Lessee or Lessor, as the case may be; provided, however,
\n solely as <\/p>\n
24<\/p>\n
to Lessor or the Trust Company, in its individual capacity,
\n any Lessor Lien shall not constitute a Lessor Lien so long as
\n Lessor or the Trust Company, in its individual capacity, is
\n diligently contesting such Lessor Lien by appropriate
\n proceedings in good faith and Lessor indemnifies such
\n purchaser with respect to such Lessor Lien. Lessee shall
\n surrender the Properties so sold or subject to such documents
\n to the purchaser in the condition specified in Section 10.1.
\n Lessee shall not take or fail to take any action which would
\n have the effect of unreasonably discouraging bona fide third
\n party bids for the Property. Lessor shall have no obligation
\n to sell any Property on the Sale Date unless all of the
\n Properties are sold on the Sale Date. If the Properties are
\n not either (i) sold on the Sale Date in accordance with the
\n terms of this Section 22.1, or (ii) retained by the Lessor
\n pursuant to an affirmative election made by the Lessor
\n pursuant to the third sentence of this Section 22.1(a), then
\n the Lessee shall be obligated to pay the Lessor on the Sale
\n Date an amount equal to the Termination Value for the
\n Properties (plus all Rent and other amounts then due and
\n payable under this Lease and any other Operative Agreements)
\n in accordance with the terms of Section 20.2. For the purposes
\n of this paragraph, “Houston Purchaser” shall mean Houston
\n Rehabilitation Associates, a Delaware general partnership; and
\n “Topeka Purchaser” shall mean Kansas Rehabilitation Hospital,
\n Inc., a Delaware corporation.<\/p>\n
(b) If the Properties are sold on the Sale Date to a third party
\n purchaser or purchasers in accordance with the terms of
\n Section 22.1(a) and the aggregate purchase price paid for the
\n Properties minus the sum of all costs and expenses referred to
\n in clause FIRST of Section 22.2 is less than the sum of the
\n Termination Value for the Properties plus all Rent and other
\n amounts then due and payable under this Lease and under any
\n other Operative Agreements (hereinafter such difference shall
\n be referred to as the “Deficiency Balance”), then the Lessee
\n hereby unconditionally promises to pay to the Lessor on the
\n Sale Date the lesser of (i) the Deficiency Balance, or (ii)
\n the Maximum Residual Guarantee Amount for the Properties. If
\n the Properties are retained by the Lessor pursuant to an
\n affirmative election made by the Lessor pursuant to the third
\n sentence of Section 22.1(a), then the Lessee hereby
\n unconditionally promises to pay to the Lessor on the Sale Date
\n an amount equal to the Maximum Residual Guarantee Amount for
\n the Properties.<\/p>\n
(c) In the event that the Properties are either sold to a third
\n party purchaser or purchasers on the Sale Date or retained by
\n the Lessor in connection with an affirmative election made by
\n the Lessor pursuant to the third sentence of Section 22.1(a),
\n then in either case on the Sale Date the Lessee shall provide
\n Lessor or such third party purchaser or purchasers with (i)
\n all permits, certificates of occupancy, governmental licenses
\n and authorizations necessary to use and operate the Properties
\n for their intended purposes, (ii) such easements, licenses,
\n rights-of-way and other rights and privileges in the nature of
\n an easement as are reasonably necessary or desirable in
\n connection with the use, repair, access to or maintenance of
\n the Properties for its intended purpose or otherwise as the
\n Lessor shall reasonably request, (iii) a services agreement
\n covering such services as Lessor or such third party purchaser
\n may reasonably request and having a reasonable <\/p>\n
25<\/p>\n
duration, in order to use and operate the Properties for their
\n intended purposes at such rates (not in excess of arm’s-length
\n fair market rates) as shall be acceptable to Lessee and Lessor
\n or such third party purchaser or purchasers, and (iv) an
\n assignment to the Lessor or such third party purchaser or
\n purchasers (as the case may be) of any existing service
\n agreements relating to the Properties, to the extent such
\n agreements are assignable. All assignments, licenses,
\n easements, agreements and other deliveries required by clauses
\n (i) and (ii) of this paragraph (c) shall be in form reasonably
\n satisfactory to the Lessor or such third party purchaser or
\n purchasers, as applicable, and shall be fully assignable
\n (including both primary assignments and assignments given in
\n the nature of security) without payment of any fee, cost or
\n other charge.<\/p>\n
22.2. Application of Proceeds of Sale.<\/p>\n
The Lessor shall apply the proceeds of sale of the Properties
\nin the following order of priority:<\/p>\n
(a) FIRST, to pay or to reimburse Lessor for the payment of all
\n reasonable costs and expenses incurred by Lessor in connection
\n with the sale;<\/p>\n
(b) SECOND, so long as the Participation Agreement, the Credit
\n Agreement or the Trust Agreement is in effect and any Loan,
\n Holder Advance or any amount is owing to the Lenders, the
\n Holders or any other Person under any Operative Agreement, to
\n the Agent to be applied pursuant to the terms in the Operative
\n Agreements; and<\/p>\n
(c) THIRD, to the Lessee.<\/p>\n
22.3. Indemnity for Excessive Wear.<\/p>\n
If the proceeds of the sale described in Section 22.1 with
\nrespect to the Properties, less all expenses incurred by Lessor in connection
\nwith such sale, shall be less than the Limited Recourse Amount with respect to
\nthe Properties, and at the time of such sale it shall have been reasonably
\ndetermined (pursuant to the Appraisal Procedure) that the Fair Market Sales
\nValue of the Properties, shall have been impaired by greater than expected wear
\nand tear during the term of the Lease, Lessee shall pay to Lessor within ten
\n(10) days after receipt of Lessor’s written statement (i) the amount of such
\nexcess wear and tear determined by the Appraisal Procedure or (ii) the amount of
\nthe Net Sale Proceeds Shortfall, whichever amount is less.<\/p>\n
22.4. Appraisal Procedure.<\/p>\n
For determining the Fair Market Sales Value of the Properties
\nor any other amount which may, pursuant to any provision of any Operative
\nAgreement, be determined by an appraisal procedure, Lessor and Lessee shall use
\nthe following procedure (the “Appraisal Procedure”). Lessor and Lessee shall
\nendeavor to reach a mutual agreement as to such amount for a period of ten (10)
\ndays from commencement of the Appraisal Procedure under the applicable section
\nof the Lease, and if they cannot agree within ten (10) days, then two qualified
\nappraisers, one chosen by Lessee and one chosen by Lessor, shall mutually agree
\nthereupon, but <\/p>\n
26<\/p>\n
if either party shall fail to choose an appraiser within twenty (20) days after
\nnotice from the other party of the selection of its appraiser, then the
\nappraisal by such appointed appraiser shall be binding on Lessee and Lessor. If
\nthe two appraisers cannot agree within twenty (20) days after both shall have
\nbeen appointed, then a third appraiser shall be selected by the two appraisers
\nor, failing agreement as to such third appraiser within (30) days after both
\nshall have been appointed, by the American Arbitration Association. The
\ndecisions of the three appraisers shall be given within twenty (20) days of the
\nappointment of the third appraiser and the decision of the appraiser most
\ndifferent from the average of the other two shall be discarded and such average
\nshall be binding on Lessor and Lessee; provided that if the highest appraisal
\nand the lowest appraisal are equidistant from the third appraisal, the third
\nappraisal shall be binding on Lessor and Lessee. The fees and expenses of each
\nappraiser shall be paid by Lessee.<\/p>\n
22.5. Certain Obligations Continue.<\/p>\n
During the Marketing Period, the obligation of Lessee to pay
\nRent with respect to the Properties (including the installment of Basic Rent due
\non the Expiration Date) shall continue undiminished until payment in full to
\nLessor of the sale proceeds, if any, the Maximum Residual Guarantee Amount, the
\namount due under Section 22.3, if any, and all other amounts due to Lessor with
\nrespect to the Properties. Lessor shall have the right, but shall be under no
\nduty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or
\notherwise to take action in connection with any such sale, other than as
\nexpressly provided in this Article XXII.<\/p>\n
ARTICLE XXIII<\/p>\n
23.1. Holding Over.<\/p>\n
If Lessee shall for any reason remain in possession of the
\nProperties after the expiration or earlier termination of this Lease (unless
\nProperties are conveyed to Lessee), such possession shall be as a tenancy at
\nsufferance during which time Lessee shall continue to pay Supplemental Rent that
\nwould be payable by Lessee hereunder were the Lease then in full force and
\neffect with respect to the Properties and Lessee shall continue to pay Basic
\nRent at 110% of the Basic Rent that would otherwise be due and payable at such
\ntime. Such Basic Rent shall be payable from time to time upon demand by Lessor
\nand such additional 10% amount shall be applied by the Lessor to the payment of
\nthe Loans pursuant to the Credit Agreement and the Holder Advances pursuant to
\nthe Trust Agreement pro rata between the Loans and the Holder Advances. During
\nany period of tenancy at sufferance, Lessee shall, subject to the first sentence
\nof this paragraph, be obligated to perform and observe all of the terms,
\ncovenants and conditions of this Lease, but shall have no rights hereunder other
\nthan the right, to the extent given by law to tenants at sufferance, to continue
\ntheir occupancy and use of the Properties. Nothing contained in this Article
\nXXIII shall constitute the consent, express or implied, of Lessor to the holding
\nover of Lessee after the expiration or earlier termination of this Lease as to
\nthe Properties (unless the Properties are conveyed to Lessee) and nothing
\ncontained herein shall be read or construed as preventing Lessor from
\nmaintaining a suit for possession of the Properties or exercising any other
\nremedy available to Lessor at law or in equity.<\/p>\n
27<\/p>\n
ARTICLE XXIV<\/p>\n
24.1. Risk of Loss.<\/p>\n
During the Term, unless Lessee shall not be in actual
\npossession of the Properties solely by reason of Lessor’s exercise of its
\nremedies of dispossession under Article XVII, the risk of loss or decrease in
\nthe enjoyment and beneficial use of the Properties as a result of the damage or
\ndestruction thereof by fire, the elements, casualties, thefts, riots, wars or
\notherwise is assumed by Lessee, and Lessor shall in no event be answerable or
\naccountable therefor.<\/p>\n
ARTICLE XXV<\/p>\n
25.1. Assignment.<\/p>\n
(a) Lessee may not assign, mortgage, pledge or encumber this Lease
\n or any of its rights or obligations hereunder in whole or in
\n part to any Person without the prior written consent of the
\n Agent, the Lessor, each Lender and each Holder, with such
\n consent to be given or withheld in the sole discretion of each
\n such party.<\/p>\n
(b) No such assignment or other relinquishment of possession to
\n the Properties shall in any way discharge or diminish any of
\n the obligations of Lessee to Lessor hereunder and Lessee shall
\n remain directly and primarily liable under this Lease.<\/p>\n
25.2. Subleases.<\/p>\n
(a) Except as set forth in this Section 25.2, Lessee may not
\n sublet any Property or portion thereof without first obtaining
\n the prior written consent of the Lessor and the Agent, which
\n consent may be given or withheld in the sole discretion of
\n each such party.<\/p>\n
(b) Lessee may, without the consent of Lessor or the Agent, sublet
\n a Property to a Subsidiary of Lessee, or sublet professional
\n space constituting a portion of a Property to healthcare
\n providers, in each case if and only if:<\/p>\n
(i) Lessee remains fully liable for all obligations
\n (including without limitation all Rent and other
\n obligations with respect to such subleased Properties
\n and any other Properties) under this Lease and the other
\n Operative Agreements;<\/p>\n
(ii) Such sublease is in writing and is expressly subject and
\n subordinate to the rights of the Lessor, the Agent, the
\n Lenders and the Holders under this Lease, the Security
\n Agreement, each Mortgage Instrument and all other
\n Operative Agreements; and<\/p>\n
(iii) Such sublease is on commercially reasonable terms and at
\n market rates, and has a term that does not extend past
\n the Expiration Date, and such Property is at all times
\n used for the purposes set forth in this paragraph and in
\n the definition of “Property”.<\/p>\n
28<\/p>\n
(c) No sublease or other relinquishment of possession to any
\n Property shall in any way discharge or diminish any of
\n Lessee’s obligations to Lessor hereunder and Lessee shall
\n remain directly and primarily liable under this Lease as to
\n the portion of the Property so sublet.<\/p>\n
(d) Each insurance policy carried by Lessee pursuant to Article
\n XIV hereof shall be endorsed to name each sublessee, under any
\n such sublease as an additional insured. Prior to the
\n effectiveness of any such sublease, Lessee shall deliver a
\n copy thereof to the Lessor and the Agent.<\/p>\n
(e) Promptly but in any event at least thirty (30) days prior to
\n the execution and delivery of any sublease permitted by this
\n Article XXV, Lessee shall notify Lessor and the Agent of the
\n execution of such sublease.<\/p>\n
ARTICLE XXVI<\/p>\n
26.1. No Waiver.<\/p>\n
No failure by Lessor or Lessee to insist upon the strict
\nperformance of any term hereof or to exercise any right, power or remedy upon a
\ndefault hereunder, and no acceptance of full or partial payment of Rent during
\nthe continuance of any such default, shall constitute a waiver of any such
\ndefault or of any such term. To the fullest extent permitted by law, no waiver
\nof any default shall affect or alter this Lease, and this Lease shall continue
\nin full force and effect with respect to any other then existing or subsequent
\ndefault.<\/p>\n
ARTICLE XXVII<\/p>\n
27.1. Acceptance of Surrender.<\/p>\n
No surrender to Lessor of this Lease or of all or any portion
\nof the Properties or of any interest therein shall be valid or effective unless
\nagreed to and accepted in writing by Lessor and the Agent and, prior to the
\npayment or performance of all obligations under the Credit Documents, the Agent,
\nand no act by Lessor or the Agent or any representative or agent of Lessor or
\nthe Agent, other than a written acceptance, shall constitute an acceptance of
\nany such surrender.<\/p>\n
27.2. No Merger of Title.<\/p>\n
There shall be no merger of this Lease or of the leasehold
\nestate created hereby by reason of the fact that the same Person may acquire,
\nown or hold, directly or indirectly, in whole or in part, (a) this Lease or the
\nleasehold estate created hereby or any interest in this Lease or such leasehold
\nestate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
\na beneficial interest in Lessor.<\/p>\n
29<\/p>\n
ARTICLE XXVIII<\/p>\n
28.1. Incorporation of Covenants.<\/p>\n
(a) Reference is made to that certain Credit Agreement dated as of
\n October 31, 2000 (the “Existing HEALTHSOUTH Corporation Credit
\n Agreement”) among HEALTHSOUTH Corporation, UBS AG, Stamford
\n Branch, as agent, and the other financial institutions party
\n thereto. Further reference is made to the covenants contained
\n in Articles VII and VIII of the Existing HEALTHSOUTH
\n Corporation Credit Agreement (hereinafter referred to as the
\n “Incorporated Covenants”). The Lessee agrees with the Lessor
\n that, effective as of the date hereof (whether or not the
\n Basic Term has commenced), the Incorporated Covenants (and all
\n other relevant provisions of the Existing HEALTHSOUTH
\n Corporation Credit Agreement related thereto) are hereby
\n incorporated by reference into this Lease to the same extent
\n and with the same effect as if set forth fully herein and
\n shall inure to the benefit of the Lessor, without giving
\n effect to any waiver, amendment, modification or replacement
\n of the Existing HEALTHSOUTH Corporation Credit Agreement or
\n any term or provision of the Incorporated Covenants occurring
\n subsequent to the date of this Lease, except to the extent
\n otherwise specifically provided in the following provisions of
\n this paragraph. In the event a waiver is granted under the
\n Existing HEALTHSOUTH Corporation Credit Agreement or an
\n amendment or modification is executed with respect to the
\n Existing HEALTHSOUTH Corporation Credit Agreement, and such
\n waiver, amendment or modification affects the Incorporated
\n Covenants, then such waiver, amendment or modification shall
\n be effective with respect to the Incorporated Covenants as
\n incorporated by reference into this Lease only if consented to
\n in writing by the Majority Lenders. In the event of any
\n replacement of the Existing HEALTHSOUTH Corporation Credit
\n Agreement with a similar credit facility (the “New Facility”)
\n the covenants contained in the New Facility which correspond
\n to the covenants contained in Articles VII and VIII of the
\n Existing HEALTHSOUTH Corporation Credit Agreement shall become
\n the Incorporated Covenants hereunder only if consented to in
\n writing by the Majority Lenders and, if such consent is not
\n granted, then the covenants contained in Articles VII and VIII
\n of the Existing HEALTHSOUTH Corporation Credit Agreement
\n (together with any modifications or amendments approved in
\n accordance with this paragraph) shall continue to be the
\n Incorporated Covenants hereunder. If the Existing HEALTHSOUTH
\n Corporation Credit Agreement (or any such New Facility, as the
\n case may be) is terminated and not replaced, then the
\n covenants contained in Articles VII and VIII of the Existing
\n HEALTHSOUTH Corporation Credit Agreement (together with any
\n modifications or amendments thereto, or to covenants of the
\n New Facility, in each case approved in accordance with this
\n paragraph) shall continue to be the Incorporated Covenants
\n hereunder.<\/p>\n
(b) Financial Statements, Reports, etc. Without limiting the
\n generality of the foregoing, from and after the date hereof
\n (whether or not the Basic Term has commenced with respect to
\n any Property), to the extent that the Incorporated <\/p>\n
30<\/p>\n
Covenants require the Lessee or any of its Subsidiaries to
\n deliver any financial statement, certificate, notice, report,
\n or other document or information to the Existing Credit Agent
\n (or any other agent or lender under the applicable credit
\n facility), the Lessee shall, and shall cause its Subsidiaries
\n to, simultaneously deliver a copy of such financial statement,
\n certificate, notice, report, document or information to the
\n Agent, each Lender, each Holder and (upon Lessor’s request)
\n the Lessor.<\/p>\n
28.2. Additional Reporting Requirements.<\/p>\n
Without limiting the generality of the foregoing, from and
\nafter the date hereof, the Lessee will deliver, or will cause to be delivered,
\nto the Agent, each Lender, each Holder and (upon the Lessor’s request) the
\nLessor:<\/p>\n
(i) Such other information regarding the financial condition
\n or operations of the Lessee or its Subsidiaries as the
\n Agent shall reasonably request from time to time or at
\n any time;<\/p>\n
(ii) Promptly after the same shall have become known to any
\n officer of the Lessee, a notice describing any action,
\n suit or proceeding at law or in equity or by or before
\n any Governmental Authority that, if adversely
\n determined, might impair the ability of the Lessee to
\n perform its obligations under this Agreement or any
\n other Operating Agreement or which might have a Material
\n Adverse Effect;<\/p>\n
(iii) Prompt notice in writing of the occurrence of any Lease
\n Default or Lease Event of Default.<\/p>\n
ARTICLE XXIX<\/p>\n
29.1. Notices.<\/p>\n
All notices, demands, requests, consents, approvals and other
\ncommunications hereunder shall be in writing and delivered personally or by a
\nnationally recognized overnight courier service or mailed (by registered or
\ncertified mail, return receipt requested, postage prepaid) or telecopied with a
\nconfirming notice, addressed to the respective parties, as follows:<\/p>\n
If to Lessee:<\/p>\n
HEALTHSOUTH Corporation
\n One HealthSouth Parkway
\n Birmingham, Alabama 35243
\n Attention: Malcolm E. McVay
\n Telephone No.: (205) 969-6140
\n Telecopy No.: (205) 969-4620
\n Email: tadd.mcvay@healthsouth.com<\/p>\n
31<\/p>\n
With a copy to:<\/p>\n
HEALTHSOUTH Corporation
\n One HealthSouth Parkway
\n Birmingham, Alabama 35243
\n Attention: William W. Horton
\n Telephone No.: (205) 969-4977
\n Telecopy No.: (205) 969-4730
\n Email: bill.horton@healthsouth.com<\/p>\n
If to Lessor:<\/p>\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) 246-5630
\n Telecopy No.: (801) 246-5053
\n Email:<\/p>\n
with a copy to the Agent:<\/p>\n
UBS AG, Stamford Branch
\n 677 Washington Boulevard
\n Stamford, Connecticut 06901
\n Attention: Jennifer Poccia
\n Telephone No.: (203) 719-3834
\n Telecopy No.: (203) 719-3888
\n Email: jennifer.poccia@ubsw.com<\/p>\n
or such additional parties or other address as such party may hereafter
\ndesignate, and shall be effective upon receipt or refusal thereof.<\/p>\n
ARTICLE XXX<\/p>\n
30.1. Miscellaneous.<\/p>\n
Anything contained in this Lease to the contrary
\nnotwithstanding, all claims against and liabilities of Lessee or Lessor arising
\nfrom events commencing prior to the expiration or earlier termination of this
\nLease shall survive such expiration or earlier termination. If any provision of
\nthis Lease shall be held to be unenforceable in any jurisdiction, such
\nunenforceability shall not affect the enforceability of any other provision of
\nthis Lease in such jurisdiction or of such provision or of any other provision
\nhereof in any other jurisdiction.<\/p>\n
30.2. Amendments and Modifications.<\/p>\n
Neither this Lease nor any provision hereof may be amended,
\nwaived, discharged or terminated except by an instrument in writing in
\nrecordable form signed by Lessor and Lessee.<\/p>\n
32<\/p>\n
30.3. Successors and Assigns.<\/p>\n
All the terms and provisions of this Lease shall inure to the
\nbenefit of the parties hereto and their respective successors and permitted
\nassigns.<\/p>\n
30.4. Headings and Table of Contents.<\/p>\n
The headings and table of contents in this Lease are for
\nconvenience of reference only and shall not limit or otherwise affect the
\nmeaning hereof.<\/p>\n
30.5. Counterparts.<\/p>\n
This Lease may be executed in any number of counterparts, each
\nof which shall be an original, but all of which shall together constitute one
\nand the same instrument.<\/p>\n
30.6. GOVERNING LAW.<\/p>\n
AS TO MATTERS RELATING TO THE CREATION, PERFECTION, AND
\nFORECLOSURE OF LIENS, AND ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST ANY LEASED
\nPROPERTY, THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
\nLAW OF THE STATE IN WHICH THE APPLICABLE LEASED PROPERTY IS LOCATED. THIS LEASE
\nSHALL IN ALL OTHER RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
\nLAWS OF THE STATE OF NEW YORK.<\/p>\n
30.7. Calculation of Rent.<\/p>\n
All calculation of Rent payable hereunder shall be computed
\nbased on the actual number of days elapsed over a year of 360 days.<\/p>\n
30.8. Memorandum of Lease.<\/p>\n
This Lease shall not be recorded, provided Lessor and Lessee
\nshall promptly record a Memorandum of this Lease (in substantially the form of
\nExhibit B attached hereto) in the local filing office at Lessee’s cost and
\nexpense, and as required under applicable law to sufficiently evidence this
\nLease in the applicable real estate filing records.<\/p>\n
30.9. Allocations between the Lenders and the Holders.<\/p>\n
Notwithstanding any other term or provision of this Lease to
\nthe contrary, the allocations of the proceeds of the Properties and any and all
\nother Rent and other amounts received hereunder shall be subject to the
\ninter-creditor provisions between the Lenders and the Holders contained in the
\nOperative Agreements (or as otherwise agreed among the Lenders and the Holders
\nfrom time to time).<\/p>\n
33<\/p>\n
30.10. Limitations on Recourse.<\/p>\n
Notwithstanding anything contained in this Lease to the
\ncontrary, Lessee agrees to look solely to Lessor’s estate and interest in the
\nProperties for the collection of any judgment requiring the payment of money by
\nLessor in the event of liability by Lessor, and no other property or assets of
\nLessor or any shareholder, owner or partner (direct or indirect) in or of
\nLessor, or any director, officer, employee, beneficiary, Affiliate of any of the
\nforegoing shall be subject to levy, execution or other enforcement procedure for
\nthe satisfaction of the remedies of Lessee under or with respect to this Lease,
\nthe relationship of Lessor and Lessee hereunder or Lessee’s use of the
\nProperties or any other liability of Lessor to Lessee. Nothing in this Section
\nshall be interpreted so as to limit the terms of Sections 6.1 or 6.2.<\/p>\n
30.11. WAIVERS OF JURY TRIAL.<\/p>\n
THE LESSOR AND THE LESSEE IRREVOCABLY AND UNCONDITIONALLY
\nWAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE OR
\nANY COUNTERCLAIM THEREIN.<\/p>\n
30.12. Existing Agreements.<\/p>\n
The single executed original of this Lease marked “THIS
\nCOUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART” on the signature page thereof
\nand containing the receipt of the Agent therefor on or following the signature
\npage thereof shall be the original executed counterpart of this Lease (the
\n“Original Executed Counterpart”). To the extent that this Lease constitutes
\nchattel paper, as such term is defined in the Uniform Commercial Code as in
\neffect in any applicable jurisdiction, no security interest in this Lease may be
\ncreated through the transfer or possession of any counterpart other than the
\nOriginal Executed Counterpart.<\/p>\n
30.13. Power of Sale.<\/p>\n
Without limiting any other remedies set forth in this Lease,
\nin the event that a court of competent jurisdiction rules that this Lease
\nconstitutes a mortgage, deed of trust or other secured financing as is the
\nintent of the parties, then the Lessor and the Lessee agree that the Lessee
\nhereby grants, bargains, sells, conveys, mortgages, and grants a security
\ninterest in the Properties (and any additional property described in Exhibit A)
\nWITH POWER OF SALE, and that, upon the occurrence of any Event of Default, the
\nLessor shall have the power and authority, to the extent provided by law or the
\nOperative Agreements, after prior notice and lapse of such time as may be
\nrequired by law, to foreclose its interest (or cause such interest to be
\nforeclosed) in all or any part of any Property, to appoint or obtain the
\nappointment of a receiver for all or any part of the Property, and to exercise
\nany other right or remedy that may be available under applicable law to the
\nholder of a mortgage, deed of trust, security deed or other secured financing.<\/p>\n
30.14. Exercise of Lessor Right.<\/p>\n
The Lessee hereby acknowledges and agrees that the rights and
\npowers of the Lessor under this Lease have been collaterally assigned to the
\nAgent pursuant to the terms of the Security Agreement and the other Operative
\nAgreements, and that the Lessor has encumbered <\/p>\n
34<\/p>\n
the Properties by various Mortgage Instruments made by the Lessor in favor of
\nthe Agent, all as security for certain indebtedness and obligations described
\ntherein of the Lessor to the Agent, the Lenders and the Holders under the
\nOperative Agreements. Lessee hereby consents to said assignment and said
\nMortgage Instruments in favor of the Agent and further acknowledges and agrees
\nas follows:<\/p>\n
(a) In the event that a court of competent jurisdiction rules that
\n this Lease constitutes a mortgage, deed of trust, security
\n deed or other secured financing as is the intent of the
\n parties, then the Lessor and the Lessee agree that the
\n Lessor’s collateral assignment of this Lease to the Agent
\n shall be deemed to be a collateral assignment of such
\n mortgage, deed of trust, security deed or other secured
\n financing, and the Agent as such collateral assignee shall be
\n entitled to exercise any and all rights and remedies of the
\n Lessor set forth herein during the existence of any Event of
\n Default, including without limitation the Lessor’s rights to
\n obtain a receiver, to obtain possession of the Properties and
\n the rents and revenues thereof, to foreclose this Lease, to
\n sell the Lessee’s interest in the Properties, and to exercise
\n any other rights or remedies that may then be available to the
\n Lessor under applicable law on account of such Event of
\n Default.<\/p>\n
(b) Lessee’s interest in the Properties is junior and subordinate
\n to the lien of any Mortgage Instruments made by the Lessor in
\n favor of the Agent against the respective Properties from time
\n to time in connection with the Operative Agreements; provided,
\n however, that for so long as no Event of Default shall have
\n occurred and be continuing, (i) the Agent shall not disturb
\n Lessee’s possession of the Properties through any foreclosure
\n or other remedial action against the Properties under any
\n Mortgage Instrument, and (ii) if Lessor’s interest in any
\n Property shall be transferred to any Person other than the
\n Lessee as the result of the Agent’s foreclosure or other
\n remedial action under any Mortgage Instrument, the Lessee
\n shall (upon request of the Agent) attorn to such transferee
\n and recognize the transferee as the Lessee’s landlord under
\n this Lease.<\/p>\n
(c) During the existence of an Event of Default, the Agent as
\n holder of the Mortgage Instruments and as collateral assignee
\n of this Lease may exercise any and all rights and remedies
\n that may then be available under applicable law to the Agent
\n in either or both capacities, whether exercised singly,
\n successively or concurrently. Without limiting the generality
\n of the foregoing, the Agent as collateral assignee may enforce
\n the Lessee’s payment obligations under this Lease (regardless
\n of whether this Lease shall be deemed a mortgage, deed of
\n trust, security deed or other secured financing) even if
\n Lessee’s interest and estate in any Property under this Lease
\n shall have been extinguished or forfeited under applicable law
\n through the foreclosure or other enforcement of any Mortgage
\n Instrument.<\/p>\n
[Remainder of page intentionally left blank]<\/p>\n
35<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
\nexecuted and delivered as of the date first above written.<\/p>\n
HEALTHSOUTH Corporation, as Lessee<\/p>\n
By: \/s\/ Malcolm E. McVay
\n ——————————————–
\n Name: Malcolm E. McVay
\n Title: Senior Vice President<\/p>\n
FIRST SECURITY BANK, NATIONAL
\n ASSOCIATION, not individually, but solely as
\n Owner Trustee under the HEALTHSOUTH
\n Corporation Trust 2000-1, as Lessor<\/p>\n
By: \/s\/ Arge Pavlos
\n ——————————————-
\n Name: Arge Pavlos
\n Title: Trust Officer<\/p>\n
36<\/p>\n
Receipt of this original counterpart of the foregoing Lease is hereby
\nacknowledged on this 31st day of October, 2000.<\/p>\n
UBS AG, Stamford Branch
\n as Agent<\/p>\n
By: \/s\/ Daniel W. Ladd III
\n —————————————
\n Name: Daniel W. Ladd III
\n Title: Executive Director<\/p>\n
By: \/s\/ Wilfred V. Saint
\n ————————————–
\n Name: Wilfred V. Saint
\n Title: Associate Director<\/p>\n
37<\/p>\n
EXHIBIT A TO THE LEASE<\/p>\n
Description of Properties<\/p>\n
The Properties subject to this Lease includes the Land described on
\nSchedule I-C attached hereto, and all Equipment on and Improvements to such
\nLand, including without limitation the Equipment described on Schedule I-B
\nattached hereto and the Improvements described on Schedule I-C attached hereto.<\/p>\n
In addition, to the extent that a court of competent jurisdiction rules
\nthat this Lease constitute a mortgage, deed of trust or other secured financing,
\nthe Lessee hereby grants, bargains, sells, conveys, mortgage and grants a
\nsecurity interest WITH POWER OF SALE in each of the following:<\/p>\n
1. All buildings, structures, fixtures, and other improvements of every
\nkind existing at any time and from time to time on or under the real property
\ndescribed on Schedule I-C (such real property, together with any and all
\nappurtenances to such buildings, structures or improvements, including
\nsidewalks, utility pipes, conduits and lines, parking areas and roadways, and
\nincluding all Lease Modifications and other additions to or changes in the Lease
\nImprovements at any time (all of the foregoing in this paragraph 1 being
\nreferred to as the “Lease Improvements”);<\/p>\n
2. All easements, rights-of-way, gores of land, streets, ways, alleys,
\npassages, sewer rights, waters, water courses, water rights and passages, sewer
\nrights, waters, water courses, water rights and powers, and all estate, rights,
\ntitle, interests, privileges, liberties, tenements, hereditaments and
\nappurtenances whatsoever, in any way belonging, relating or appertaining to any
\nof the Properties hereinabove described, or which hereafter shall in any way
\nbelong, relate or be appurtenant thereto, whether now owned or hereafter
\nacquired by Lessee, and the reversion and reversions, remainder and remainders,
\nrents, issues and profits thereof, and all the estate, right, title, interest,
\nproperty, possession, claim and demand whatsoever, at law as well as in equity,
\nof Lessee in and to the same, including but not limited to all judgments, awards
\nof damages and settlements hereafter made resulting from condemnation
\nproceedings involving Lessee taking the Properties described in Paragraphs 1 and
\n2 hereof, or any part thereof, under the power of eminent domain, or for any
\ndamage (whether caused by such taking or otherwise) to the Properties
\nhereinabove described or any part thereof or to any rights appurtenant thereto,
\nand all proceeds of any sales or other dispositions of the Properties or any
\npart thereof (all of the foregoing in this paragraph 2 being referred to as the
\n“Lease Easements”);<\/p>\n
3. All right, title and interest of the Lessee in and to all of the
\nfixtures, chattels, business machines, machinery, apparatus, equipment,
\nfurnishings, fittings and articles of personal property of every kind and nature
\nwhatsoever, and all appurtenances and additions thereto and substitutions or
\nreplacements thereof (together with, in each case, attachments, components,
\nparts and accessories) currently owned or subsequently acquired by the Lessee
\nand now or subsequently attached to, or contained in, comprising a portion of or
\nused or usable in any way in connection with the Properties, including but
\nwithout limiting the generality of the foregoing, all equipment referred to in
\nthe Appraisals and the Equipment Schedules pursuant to the Lease or the
\nParticipation Agreement, all computer hardware, and all heating, electrical, and<\/p>\n
mechanical equipment, fighting, switchboards, plumbing, ventilation, air
\nconditioning and air-cooling apparatus, refrigerating, and incinerating
\nequipment, escalators, elevators, loading and unloading equipment and systems,
\ncleaning systems (including without limitation window cleaning apparatus),
\ntelephones, communication systems (including without limitation satellite dishes
\nand antennae), televisions, computers, sprinkler systems and other fire
\nprevention and extinguishing apparatus and materials, security systems, motors,
\nengines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and
\nfixtures of every kind and description, but excluding Tangible Personal Property
\n(all of the foregoing in this Paragraph 3 being referred to as the “Lease
\nEquipment”);<\/p>\n
4. All alterations, renovations, improvements and additions to the
\nLand, any Lease Improvements or any Lease Equipment or any part thereof and
\nsubstitutions and replacements therefor (all of the foregoing in this Paragraph
\n4 being referred to as the “Lease Modifications”);<\/p>\n
5. All right, title and interest of the Lessee in and to all of the
\nfixtures, furnishings and fittings of every kind and nature whatsoever, and all
\nappurtenances and additions thereto and substitutions or replacements thereof
\n(together with, in each case, attachments, components, parts and accessories)
\ncurrently owned or subsequently acquired by the Lessee and now or subsequently
\nattached to, or contained in or used or usable in any way in connection with any
\nof the Properties; together with (i) all property affixed to or located on the
\nProperties which to the fullest extent permitted by law, shall be deemed
\nfixtures and a part of the real property, (ii) all materials delivered to the
\nProperties for use in any construction being conducted thereon, and owned by
\nLessee, (iii) all contract rights, general intangibles, actions and rights in
\naction including all rights to insurance proceeds, arising out of or related to
\nany of the foregoing property described in subparagraphs (i) and (ii) of this
\nParagraph 5 and Paragraphs 1, 2 and 11, and (iv) all products, replacements,
\nadditions, substitutions, renewals and accessions of any of the foregoing (all
\nof the foregoing in this paragraph being referred to as the “Lease Fixtures”;
\nall Land, Lease Fixtures, Lease Equipment, the Lease Improvements, Lease
\nEasements and the Lease Modifications are being collectively referred to herein
\nas the “Property”);<\/p>\n
6. All estate, right, title, claim or demand whatsoever of the Lessee,
\nin possession or expectancy, in and to the Properties or any part thereof;<\/p>\n
7. All right, title and interest of the Lessee in and to all
\nsubstitutes, modifications and replacements of, and all additions, accessions
\nand improvements to the Properties, subsequently acquired by the Lessee or
\nconstructed, assembled or placed by the Lessee on the Land, immediately upon
\nsuch acquisition, release, construction, assembling or placement, and in each
\nsuch case, without any further conveyance, assignment or other act by the
\nLessee;<\/p>\n
8. All right, title and interest of the Lessee in and to all unearned
\npremiums under insurance policies now or subsequently obtained by the Lessee
\nrelating to the Properties and the Lessee’s interest in and to all proceeds of
\nany such insurance policies, including without limitation the right to collect
\nand receive such proceeds; and all awards and other compensation, including
\nwithout limitation the interest payable thereon and the right to collect and
\nreceive the same, made to the present or any subsequent owner of the Properties
\nfor the taking by eminent domain, condemnation or otherwise, of all or any part
\nof the Properties or any easement or other right therein;<\/p>\n
2<\/p>\n
9. All right, title and interest of the Lessee in and to (i) all
\nconsents, licenses, certificates and other governmental approvals relating to
\nconstruction, use or operation of the Properties or any part thereof and (ii)
\nall Plans and Specifications relating to the Properties;<\/p>\n
10. All rents, royalties, issues, profits, revenue, income and other
\nbenefits from the Properties; together with a right, title and interest of
\nLessee in and to any and all leases now or hereafter on or affecting the
\nProperties, together with all security therefor and monies payable thereunder;
\nand<\/p>\n
11. All proceeds, both cash and noncash, of any of the foregoing.<\/p>\n
3<\/p>\n
SCHEDULE I-A<\/p>\n
(Equipment)<\/p>\n
None.<\/p>\n
SCHEDULE I-B<\/p>\n
(Improvements)<\/p>\n
All Improvements now or hereafter located on the Land described in Schedule I-C.<\/p>\n
SCHEDULE I-C<\/p>\n
(Land)<\/p>\n
EXHIBIT B TO THE LEASE<\/p>\n
FORM OF MEMORANDUM OF LEASE<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7751,9312],"corporate_contracts_industries":[9415,9438],"corporate_contracts_types":[9604,9579],"class_list":["post-41927","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-healthsouth-corp","corporate_contracts_companies-wells-fargo---co","corporate_contracts_industries-financial__banks","corporate_contracts_industries-health__misc","corporate_contracts_types-land__other","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41927"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41927"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41927"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}