Common use of Required Capital Expenditures Clause in Contracts

Required Capital Expenditures. With respect to each License granted hereunder, after the applicable Commencement Date, Licensee shall not be responsible for any capital repairs, replacements or improvements to a Facility that would be considered a “capital expenditure” under generally accepted accounting principles (a “Capital Expenditure”) unless (a) Licensor is required to make such Capital Expenditure as a direct result of or in order to comply with any applicable laws (including, without limitation, compliance with the Americans With Disabilities Act of 1990) and such Capital Expenditure is for capital repairs, replacements or improvements to any portion of the applicable Facility of which a Service Area is a part (in which case Licensee shall be responsible for Licensee’s Share of the costs of such Capital Expenditure) or (b) such Capital Expenditure is required solely as the result of Licensee’s or a Sublicensee’s specific use of the Service Area at the applicable Facility (in which case Licensee shall be wholly responsible for the costs of such Capital Expenditure). In the event Licensee is responsible, in whole or part, for the costs of a Capital Expenditure under this Agreement, Licensor shall provide Licensee with 30 days’ prior written notice that Licensee shall be obligated to pay such costs within 30 days after Licensee’s receipt of an invoice therefor. As used in this Agreement, “Licensee’s Share” shall be determined by multiplying the total costs of the Capital Expenditure by a fraction, the numerator of which is the floor area of the applicable Service Area and the denominator of which is the floor area of the applicable Facility (provided, however, that if such Capital Expenditure relates solely to the Service Area, then Licensee’s Share shall equal 100%). Licensee’s Share of a Capital Expenditure shall be paid without any deductions, set-offs or counterclaims, and failure to pay such sum shall carry the same consequences as Licensee’s failure to pay Monthly License Payments when due.

Required Capital Expenditures. With respect In order to assure the maintenance of each License granted hereunder, after Facility in a condition at least as good as its condition on the applicable Commencement Date, Licensee shall not be responsible each Tenant agrees to expend, during each Lease Year, an amount (the “Required Capital Expenditures Amount”) equal to the product of (i) the Required Per Unit Annual Capital Expenditures Amount times (ii) the aggregate number of units at its Facility (subject to Section 11.3.4 below, prorated for any capital partial Lease Year and adjusted in the event of any change during any Lease Year in the number of units at a Facility) on repairs, replacements or and improvements to such Facility (other than any part of Landlord’s Personal Property or Tenant’s Personal Property) that (x) in accordance with GAAP, constitute capital expenditures, (y) are contemplated by the Annual Capital Expenditure Budget approved by Landlord or have otherwise been reasonably approved by Landlord and (z) have been completed in a Facility that would be considered good, workmanlike and lien free fashion and in compliance with all Legal Requirements and the terms Sections 11.1 and 11.2 applicable to any Alterations (herein, “Capital Expenditures”). Within 45 days following the end of each Lease Year (and within 30 days following the expiration or termination of this Lease, or, if applicable, a “capital expenditure” under generally accepted accounting principles termination of Tenant’s right of possession), Tenant shall deliver to Landlord a report (a “Capital ExpenditureExpenditures Report”), certified as true, correct and complete by Tenant pursuant to an Officer’s Certificate, summarizing and describing in reasonable detail all of the Capital Expenditures made by Tenant during the preceding Lease Year (or partial Lease Year, if applicable), on both an aggregate basis and broken down for each Facility, and such evidence thereof and other information as Landlord may reasonably request relative to the Capital Expenditures made by Tenant during the applicable Lease Year (or partial Lease Year, if applicable). If the amount of the Capital Expenditures so made and reported by any Tenant during a particular Lease Year (or partial Lease Year, if applicable) (the “Actual Capital Expenditures Amount”) unless is less than the Required Capital Expenditures Amount applicable to such Tenant for such period, such Tenant shall, on or prior to the due date of the Capital Expenditures Report for such period, deposit (aherein, a “Capital Expenditures Deposit”) Licensor is required to make such into an interest bearing account (the “Capital Expenditure as a direct result Expenditures Account”) under the sole dominion and control of Landlord (or in order to comply with any applicable laws (including, without limitation, compliance with Facility Mortgagee) an amount equal to the Americans With Disabilities Act of 1990) and amount by which such Tenant’s Required Capital Expenditure is Expenditures Amount for capital repairs, replacements or improvements to any portion of the applicable Facility period exceeds such Tenant’s Actual Capital Expenditures Amount for such period. If the Actual Capital Expenditures Amount so made and reported by a Tenant during a particular Lease Year (or partial Lease Year, if applicable) is greater than such Tenant’s Required Capital Expenditures Amount applicable to such period, then, provided no default or Event of which a Service Area Default by any Tenant exists hereunder, within five Business Days after such Tenant’s presentation of its Capital Expenditures Report reflecting such greater expenditure (if Landlord is a part (in which case Licensee shall be responsible for Licensee’s Share of holding the costs of such Capital ExpenditureExpenditures Account) or (b) such Capital Expenditure is required solely as the result of Licensee’s or a Sublicensee’s specific use of the Service Area at the applicable Facility (in which case Licensee shall be wholly responsible for the costs of such Capital Expenditure). In the event Licensee is responsible, in whole or part, for the costs of a Capital Expenditure under this Agreement, Licensor shall provide Licensee with 30 days’ prior written notice that Licensee shall be obligated to pay such costs within 30 days five Business Days after LicenseeLandlord’s receipt of an invoice therefor. As used in this Agreement, “Licensee’s Share” shall be determined by multiplying the total costs of necessary funds from the Facility Mortgagee that is holding the Capital Expenditure Expenditures Account (if a Facility Mortgagee is holding the Capital Expenditures Account), Landlord shall pay to such Tenant the lesser of (x) the amount by which the Actual Capital Expenditures Amount so made and reported by such Tenant during a fraction, particular period exceeds its Required Capital Expenditures Amount for such period or (y) the numerator amount of which is funds in the floor area of the applicable Service Area and the denominator of which is the floor area of the applicable Facility (provided, however, that if such Capital Expenditure relates solely to the Service Area, then Licensee’s Share shall equal 100%). Licensee’s Share of a Capital Expenditure shall be paid without any deductions, set-offs or counterclaims, and failure to pay such sum shall carry the same consequences as Licensee’s failure to pay Monthly License Payments when dueExpenditures Account.

Required Capital Expenditures. With respect to each License granted hereunder, after the applicable Commencement Date, Licensee LICENSEE shall not be responsible for any capital repairs, replacements or improvements to a Facility that would be considered a “capital expenditure” under generally accepted accounting principles (a “Capital Expenditure”) unless unless: (a) Licensor LICENSOR is required to make such Capital Expenditure as a direct result of or in order to comply with any applicable laws (including, without limitation, compliance with the Americans With Disabilities Act of 1990ADA) and such Capital Expenditure is for capital repairs, replacements or improvements to any portion of the applicable a Facility of which a Service Area Space is a part (in which case Licensee LICENSEE shall be responsible for LicenseeLICENSEE’s Share (as defined below) of the costs of such Capital Expenditure) ); or (b) such Capital Expenditure is required solely as the result of Licensee’s or a SublicenseeLICENSEE’s specific use of the Service Area a Space at the applicable Facility a Facility, or is for capital repairs, replacements or improvements to a Space only (in which case Licensee LICENSEE shall be wholly responsible for the costs of such Capital Expenditure). In For the avoidance of doubt, if the required Capital Expenditure is limited to a Space only, LICENSEE shall be responsible for 100% of the Capital Expenditure. Following LICENSOR’s tender of possession of a Space to LICENSEE, in the event Licensee LICENSEE is responsible, in whole or part, for the costs of a Capital Expenditure under this Agreement, Licensor LICENSOR shall provide Licensee LICENSEE with 30 thirty (30) days’ prior written notice that Licensee LICENSEE shall be obligated to pay such costs within 30 thirty (30) days after LicenseeLICENSEE’s receipt of an invoice therefor. As used in this Agreement, “LicenseeLICENSEE’s Share” shall be determined by multiplying the total costs of the Capital Expenditure by using a fraction, the numerator of which is the floor area of the applicable Service Area Space and the denominator of which is the floor area of the applicable Facility (Facility; provided, however, that if such Capital Expenditure relates solely to the Service AreaSpace, then LicenseeLICENSEE’s Share shall equal one hundred percent (100%). LicenseeLICENSEE’s Share of a Capital Expenditure Expenditures shall be paid without any deductions, set-offs or counterclaims, and failure to pay such sum shall carry the same consequences as LicenseeLICENSEE’s failure to pay Monthly License Payments when due.

Required Capital Expenditures. With (a) During the initial term of the Loan, Borrower shall cause Property Owner to substantially complete the Required Capital Expenditures, subject to delay on account of force majeure; provided that with respect to each License granted hereunderRequired Capital Expenditures that are specified in a Property Improvement Plan, if any Approved Franchisor extends the deadline to complete the applicable Required Capital Expenditures with respect to any Mortgaged Property to a date occurring after the expiration of the initial term of the Loan (notice of which extension shall be promptly provided, or caused to be provided, by Borrower to Lender in writing), such Required Capital Expenditures shall be substantially completed no later than the extended deadline required by the applicable Commencement DateApproved Franchisor, Licensee subject to delay on account of force majeure. Subject to delay on account of force majeure, failure to substantially complete the Required Capital Expenditures and deliver reasonable documentation evidencing the same to Lender prior to the end of the applicable period for substantial completion of such Required Capital Expenditures (i.e., the expiration of the initial term of the Loan, subject to any extension pursuant to the preceding sentence) shall constitute an Event of Default. Borrower shall cause Property Owner to apply the Required Capital Expenditure Amount toward completion of the Required Capital Expenditures up to the respective amounts specified in Schedule J of the Mortgage Loan Agreement. (b) In the event that Property Owner amends any Property Improvement Plan, with the result that the aggregate amount required to be spent thereunder is increased, Borrower shall promptly deliver, or cause to be delivered, to Lender an Officer’s Certificate certifying such amendment and shall cause Mortgage Lender to comply with the requirements of Section 3.8(d) of the Mortgage Loan Agreement. (c) Provided no Event of Default or Mortgage Loan Event of Default is then continuing, it shall not be responsible for any capital repairsa Default or an Event of Default hereunder if Property Owner, replacements or improvements from time to a Facility that would be considered a “capital expenditure” under generally accepted accounting principles (a “Capital Expenditure”) unless (a) Licensor is required time, following prior written notice to make such Lender, reallocates the Allocated Required Capital Expenditure as a direct result of or in order to comply with any applicable laws (includingAmounts among the Mortgaged Properties, without limitationprovided, compliance with the Americans With Disabilities Act of 1990) and such that no Mortgaged Property’s Required Capital Expenditure Amount shall be increased or decreased by more than 15%, and provided, further, that such reallocation is for capital repairsreasonably expected to enhance the value of the Mortgaged Properties to which such amounts are reallocated and Borrower delivers to Lender an Officer’s Certificate certifying the same, replacements or improvements to any portion together with revised versions of the applicable Facility of Property Improvement Plans (which a Service Area is a part (in which case Licensee shall be responsible subject to Lender’s reasonable approval). The Allocated Required Capital Expenditure Amounts as so revised shall thereafter replace and update the Allocated Required Capital Expenditure Amounts theretofore in effect for Licenseeall purposes under the Loan Documents. A schedule specifying Borrower’s Share of the costs calculation of such Capital Expenditure) or (b) such revised Allocated Required Capital Expenditure is required solely as the result of Licensee’s or a Sublicensee’s specific use of the Service Area at the applicable Facility (in which case Licensee Amounts shall be wholly responsible for the costs of such Capital Expenditure). In the event Licensee is responsible, in whole or part, for the costs of a Capital Expenditure under this Agreement, Licensor shall provide Licensee with 30 days’ prior written notice that Licensee shall be obligated to pay such costs within 30 days after Licensee’s receipt of an invoice therefor. As used in this Agreement, “Licensee’s Share” shall be determined by multiplying the total costs of the Capital Expenditure by a fraction, the numerator of which is the floor area of the applicable Service Area and the denominator of which is the floor area of the applicable Facility (provided, however, that if such Capital Expenditure relates solely attached to the Service Area, then LicenseeOfficer’s Share shall equal 100%). Licensee’s Share of a Capital Expenditure shall be paid without any deductions, set-offs or counterclaims, and failure to pay such sum shall carry Certificate required under the same consequences as Licensee’s failure to pay Monthly License Payments when duesecond preceding sentence.

Required Capital Expenditures. With respect Without limiting Tenant's obligations to maintain the Premises under this Lease, within thirty (30) days of the end of each License granted hereunderLease Year starting with the end of the third (3rd) Lease Year during the Initial Term, after Tenant shall provide Landlord with evidence satisfactory to Landlord, in the applicable Commencement Datereasonable exercise of Landlord's discretion, Licensee shall not be responsible for any capital repairsthat the Tenant has spent on Capital Expenditures (as hereinafter defined) an annual, replacements or improvements to a average amount over the preceding three (3) year period in each case of at least $500 per Facility that would be considered a “capital expenditure” under generally accepted accounting principles bed (a “the "Capital Expenditure”) unless (a) Licensor is required Expenditure Target"). If the Tenant fails to make such at least the Capital Expenditure as a direct result of or Target in order any Lease Year, Tenant shall pay to comply with any applicable laws (including, without limitation, compliance with Landlord the Americans With Disabilities Act of 1990) and such difference between the Capital Expenditure is for capital repairs, replacements or improvements to any portion of the applicable Facility of which a Service Area is a part (in which case Licensee shall be responsible for Licensee’s Share of the costs of such Capital Expenditure) or (b) such Capital Expenditure is required solely as the result of Licensee’s or a Sublicensee’s specific use of the Service Area at the applicable Facility (in which case Licensee shall be wholly responsible Expenditures Target for the costs of Lease Year in question and the amount actually spent by the Tenant on Capital Expenditures in such Capital Expenditureyear (the "Shortage"). In the event Licensee a Shortage occurs, Tenant shall pay such Shortage in nine (9) equal monthly installments to Landlord commencing on the first (1St) day of the fourth (4th) month immediately following the Lease Year in question; and the Landlord, or its lender, National Health Investors, Inc., a Maryland corporation ("NHI") shall hold the Shortage in a separate deposit account (the "Capital Improvement Reserve"). Absent the occurrence and continuation of any Event of Default, any earnings on the Capital Improvements Reserve shall be paid quarterly to the Tenant. If the Tenant elects or is responsible, in whole or part, for required to spend more than the costs of a Capital Expenditure under this AgreementTarget in any subsequent Lease Year, Licensor shall provide Licensee with 30 days’ prior written notice that Licensee shall be obligated Tenant may use funds from the Capital Improvement Reserve to pay such costs within 30 days after Licensee’s receipt subject to the terms and conditions specified in that certain Capital Improvement Reserve Agreement by and between Landlord, NHI and Tenant of an invoice thereforeven date herewith. As used Any Capital Expenditures made by Tenant in this Agreement, “Licensee’s Share” shall be determined by multiplying the total costs any Lease Year in excess of the Capital Expenditure by a fractionTarget shall be credited against future obligations of Tenant to make Capital Expenditures, and in no event shall Tenant be required to fund further Shortages at any time that the numerator of which is the floor area balance of the applicable Service Area and Capital Improvement Reserve together with the denominator of which like reserve under the Holyoke Lease (as defined below) is equal or greater than $500,000, all as more particularly set forth in the floor area of the applicable Facility (provided, however, that if such foregoing Capital Expenditure relates solely to the Service Area, then Licensee’s Share shall equal 100%). Licensee’s Share of a Capital Expenditure shall be paid without any deductions, set-offs or counterclaims, and failure to pay such sum shall carry the same consequences as Licensee’s failure to pay Monthly License Payments when dueImprovement Reserve Agreement.

Required Capital Expenditures. With respect In order to assure the maintenance of the Premises in the Required Condition, Tenant agrees to expend, during each License granted hereunderLease Year, after an amount (the applicable Commencement Date“Required Capital Expenditures Amount”) equal to the product of (i) the Required Per Unit Annual Capital Expenditures Amount times (ii) the aggregate number of licensed units at the Facilities (subject to Section 11.3.4 below, Licensee shall not be responsible prorated for any capital partial Lease Year and adjusted in the event of any mid-Lease Year change in the number of licensed units at the Facilities) on repairs, replacements or and improvements to the Premises (other than any part of Landlord’s Personal Property or Tenant’s Personal Property) that (x) in accordance with GAAP, constitute capital expenditures, (y) are contemplated by the Annual Capital Expenditure Budget approved by Landlord or have otherwise been reasonably approved by Landlord and (z) have been completed in a Facility that would be considered good, workmanlike and lien free fashion and in compliance with all Legal Requirements and the terms Sections 11.1 and 11.2 applicable to any Alterations (herein, “Capital Expenditures”). Within forty-five (45) days following the end of each Lease Year (and within forty-five (45) days following the expiration or termination of this Lease), Tenant shall deliver to Landlord a “capital expenditure” under generally accepted accounting principles report (a “Capital ExpenditureExpenditures Report”), certified as true, correct and complete by Tenant pursuant to an Officer’s Certificate, summarizing and describing in reasonable detail all of the Capital Expenditures made by Tenant during the preceding Lease Year (or partial Lease Year, if applicable), on both an aggregate basis and broken down for each Facility, and such receipts and other information as Landlord may reasonably request relative to the Capital Expenditures made by Tenant during the applicable Lease Year (or partial Lease Year, if applicable). If the amount of the Capital Expenditures so made and reported by Tenant during a particular Lease Year (or partial Lease Year, if applicable) (the “Actual Capital Expenditures Amount”) unless (a) Licensor is required less than the Required Capital Expenditures Amount applicable to make such Capital Expenditure as a direct result of period, Tenant shall, on or in order prior to comply with any applicable laws (including, without limitation, compliance with the Americans With Disabilities Act of 1990) and such Capital Expenditure is for capital repairs, replacements or improvements to any portion due date of the Capital Expenditures Report for such period, deposit (herein, a “Capital Expenditures Deposit”) into an interest bearing account (the “Capital Expenditures Account”) under the sole dominion and control of Landlord (or any Facility Mortgagee) an amount equal to the amount by which the Required Capital Expenditures Amount for the applicable Facility period exceeds the Actual Capital Expenditures Amount for such period. If the Actual Capital Expenditures Amount so made and reported by Tenant during a particular Lease Year (or partial Lease Year, if applicable) is greater than the Required Capital Expenditures Amount applicable to such period, then, provided no default or Event of which a Service Area Default has occurred and no Potential Default is a part continuing, within five (in which case Licensee shall be responsible for Licensee5) Business Days after Tenant’s Share presentation of its Capital Expenditures Report reflecting such greater expenditure (if Landlord is holding the costs of such Capital ExpenditureExpenditures Account) or within five (b5) such Capital Expenditure is required solely as the result of Licensee’s or a Sublicensee’s specific use of the Service Area at the applicable Facility (in which case Licensee shall be wholly responsible for the costs of such Capital Expenditure). In the event Licensee is responsible, in whole or part, for the costs of a Capital Expenditure under this Agreement, Licensor shall provide Licensee with 30 days’ prior written notice that Licensee shall be obligated to pay such costs within 30 days Business Days after LicenseeLandlord’s receipt of an invoice therefor. As used in this Agreement, “Licensee’s Share” shall be determined by multiplying the total costs of necessary funds from the Facility Mortgagee that is holding the Capital Expenditure Expenditures Account (if a Facility Mortgagee is holding the Capital Expenditures Account), Landlord shall pay to Tenant the lesser of (x) the amount by which the Actual Capital Expenditures Amount so made and reported by Tenant during a fraction, particular period exceeds the numerator Required Capital Expenditures Amount for such period or (y) the amount of which is funds in the floor area of the applicable Service Area and the denominator of which is the floor area of the applicable Facility (provided, however, that if such Capital Expenditure relates solely to the Service Area, then Licensee’s Share shall equal 100%). Licensee’s Share of a Capital Expenditure shall be paid without any deductions, set-offs or counterclaims, and failure to pay such sum shall carry the same consequences as Licensee’s failure to pay Monthly License Payments when dueExpenditures Account.

Required Capital Expenditures. With respect In order to assure the maintenance of the Premises in the Required Condition, Tenant agrees to expend, during each License granted hereunderLease Year, after an amount (the applicable Commencement Date"Required Capital Expenditures Amount") equal to the product of (i) the Required Per Unit Annual Capital Expenditures Amount times (ii) the aggregate number of licensed units at the Facilities (subject to Section 11.3.4 below, Licensee shall not be responsible prorated for any capital partial Lease Year and adjusted in the event of any mid-Lease Year change in the number of licensed units at the Facilities) on repairs, replacements or and improvements to the Premises (other than any part of Landlord's Personal Property or Tenant's Personal Property) that (x) in accordance with GAAP, constitute capital expenditures, (y) are contemplated by the Annual Capital Expenditure Budget approved by Landlord or have otherwise been reasonably approved by Landlord and (z) have been completed in a Facility that would be considered good, workmanlike and lien free fashion and in compliance with all Legal Requirements and the terms Sections 11.1 and 11.2 applicable to any Alterations (herein, "Capital Expenditures"). Within forty-five (45) days following the end of each Lease Year (and within forty-five (45) days following the expiration or termination of this Lease), Tenant shall deliver to Landlord a “capital expenditure” under generally accepted accounting principles report (a “"Capital Expenditure”) unless (a) Licensor is required Expenditures Report"), certified as true, correct and complete by Tenant pursuant to make such Capital Expenditure as a direct result of or an Officer's Certificate, summarizing and describing in order to comply with any applicable laws (including, without limitation, compliance with the Americans With Disabilities Act of 1990) and such Capital Expenditure is for capital repairs, replacements or improvements to any portion of the applicable Facility of which a Service Area is a part (in which case Licensee shall be responsible for Licensee’s Share of the costs of such Capital Expenditure) or (b) such Capital Expenditure is required solely as the result of Licensee’s or a Sublicensee’s specific use of the Service Area at the applicable Facility (in which case Licensee shall be wholly responsible for the costs of such Capital Expenditure). In the event Licensee is responsible, in whole or part, for the costs of a Capital Expenditure under this Agreement, Licensor shall provide Licensee with 30 days’ prior written notice that Licensee shall be obligated to pay such costs within 30 days after Licensee’s receipt of an invoice therefor. As used in this Agreement, “Licensee’s Share” shall be determined by multiplying the total costs reasonable detail all of the Capital Expenditure Expenditures made by a fractionTenant during the preceding Lease Year (or partial Lease Year, if applicable), on both an aggregate basis and broken down for each Facility, and such receipts and other information as Landlord may reasonably request relative to the numerator of which is Capital Expenditures made by Tenant during the floor area applicable Lease Year (or partial Lease Year, if applicable). If the amount of the Capital Expenditures so made and reported by Tenant during a particular Lease Year (or partial Lease Year, if applicable) (the "Actual Capital Expenditures Amount") is less than the Required Capital Expenditures Amount applicable Service Area and to such period, Tenant shall, on or prior to the denominator of which is the floor area due date of the applicable Capital Expenditures Report for such period, deposit (herein, a "Capital Expenditures Deposit") into an interest bearing Amberleigh account (the "Capital Expenditures Account") under the sole dominion and control of Landlord (or any Facility (provided, however, that if such Capital Expenditure relates solely Mortgagee) an amount equal to the Service Areaamount by which the Required Capital Expenditures Amount for the applicable period exceeds the Actual Capital Expenditures Amount for such period. If the Actual Capital Expenditures Amount so made and reported by Tenant during a particular Lease Year (or partial Lease Year, then Licensee’s Share if applicable) is greater than the Required Capital Expenditures Amount applicable to such period, then, provided no default or Event of Default has occurred and no Potential Default is continuing, within five (5) Business Days after Tenant's presentation of its Capital Expenditures Report reflecting such greater expenditure (if Landlord is holding the Capital Expenditures Account) or within five (5) Business Days after Landlord's receipt of the necessary funds from the Facility Mortgagee that is holding the Capital Expenditures Account (if a Facility Mortgagee is holding the Capital Expenditures Account), Landlord shall equal 100%). Licensee’s Share pay to Tenant the lesser of (x) the amount by which the Actual Capital Expenditures Amount so made and reported by Tenant during a particular period exceeds the Required Capital Expenditure shall be paid without any deductions, set-offs Expenditures Amount for such period or counterclaims, and failure to pay such sum shall carry (y) the same consequences as Licensee’s failure to pay Monthly License Payments when dueamount of funds in the Capital Expenditures Account.