Common use of Upgrade Expenditures Clause in Contracts

Upgrade Expenditures. (a) Tenant shall deliver to Landlord, with each payment of Minimum Rent, a deposit to be added to a reserve (the “Upgrade Reserve”) equal to the sum of (a) of one-twelfth (1/12th) of the Applicable Annual Reserve (as hereinafter defined and as adjusted annually after the tenth (10th) Lease Year for increases in the CPI since the commencement of the tenth (10th) Lease Year), multiplied by (b) the aggregate number of assisted living units in the Facility (the “Upgrade Minimum”) minus (c) the Upgrade Overage (as hereinafter defined). As used herein, the “Applicable Annual Reserve” means: One through Four $ 360.00 Five through Seven $ 460.00 Eight through Ten $ 500.00 Each Lease Year thereafter $ 500.001 From time to time, but not more often than twice in any calendar month and provided that no Event of Default is then continuing, Landlord will disburse to Tenant amounts from the Upgrade Reserve for the payment of costs incurred by Tenant with respect to the Premises, subject to the following conditions: (i) the costs incurred by Tenant shall be for the purposes of making capital improvements to the Facility, acquiring furniture and fixtures needed for the operation of the Facility or making Upgrade Expenditures (the “Permitted Expenditures”); provided, however, in no event shall the Permitted Expenditures be deemed or construed to include the costs of the Mandatory Repairs to be made by Tenant pursuant to Section 8.2 above; and (ii) Tenant’s request for disbursement shall be accompanied with such invoices or purchase orders evidencing the expenditure as Landlord may reasonably require. Landlord shall make the reimbursements to Tenant required hereunder within fourteen (14) days after satisfaction of all conditions to such disbursement. Upon reasonable advance request, Landlord may require Tenant to procure

Upgrade Expenditures. (a) Tenant shall deliver to Landlord, include with each payment Minimum Rent payment, starting with the first (1st) full month of Minimum Rentthe Term, a deposit to be added to a reserve (the “Upgrade Reserve”"CAPEX RESERVE") equal to the sum of (a) of one-twelfth (1/12th) of the Applicable Annual Reserve amount equal to (i) TWO HUNDRED FIFTY DOLLARS ($250) (as hereinafter defined and as adjusted annually after at the tenth (10th) end of each Lease Year for increases since the Effective Date in the CPI since CPI, the commencement of the tenth (10th) Lease Year"CAPEX AMOUNT"), multiplied by (bii) the aggregate number of assisted living units beds in all of the Facilities on the date such payment is due. This reserve shall bear interest, which shall be added to and become a part thereof. Landlord shall not be deemed to hold the same in trust or as an agent for Tenant. Tenant acknowledges that the impounding of such funds in the Facility (the “Upgrade Minimum”) minus (c) the Upgrade Overage (as hereinafter defined)CapEx Reserve shall constitute a true escrow, and that Tenant has no, and hereby waives any, interest in or right or title to any funds escrowed pursuant to this Section 8.3, whether legal, equitable, beneficial or otherwise. As used herein, the “Applicable Annual Reserve” means: One through Four $ 360.00 Five through Seven $ 460.00 Eight through Ten $ 500.00 Each Lease Year thereafter $ 500.001 From time to time, but not more often than twice once in any calendar month and provided that no Event of Default is then continuing, Landlord will disburse pay to Tenant amounts from the CapEx Reserve to reimburse Tenant for Upgrade Reserve for the payment of costs incurred Expenditures made by Tenant during the prior rolling thirty-six (36) month period during the Term (or portion thereof), as reasonably determined by Landlord based on evidence of such expenditures submitted by Tenant (which shall be in substantially the same form utilized by Nationwide Health Properties and Tenant (or their respective affiliates) for such purposes); provided that such amount shall not exceed with respect to any individual Facility in any rolling thirty-six (36) month period during the PremisesTerm, subject to three (3) times the following conditions: (i) CapEx Amount multiplied by the costs incurred by Tenant shall be for the purposes average number of making capital improvements to the Facility, acquiring furniture and fixtures needed for the operation of the beds in such Facility or making Upgrade Expenditures (the “Permitted Expenditures”); provided, however, in no event shall the Permitted Expenditures be deemed or construed to include the costs of the Mandatory Repairs to be made by Tenant pursuant to Section 8.2 above; and (ii) Tenant’s request for disbursement shall be accompanied with over such invoices or purchase orders evidencing the expenditure as Landlord may reasonably requireperiod. Landlord shall make the reimbursements to Tenant required hereunder within fourteen twenty-one (1421) days after satisfaction of all conditions to such disbursementreimbursement. Upon reasonable advance request, Landlord may require Tenant to procureprocure mechanic's lien waivers, in form and substance reasonably satisfactory to Landlord, in connection with any Upgrade Expenditures in excess of ONE THOUSAND DOLLARS ($1,000). "UPGRADE EXPENDITURES" means expenditures in commercially reasonable amounts to Persons not affiliated with Tenant for (I) upgrades or improvements to each Facility that have the effect of maintaining or improving its competitive position in its respective marketplace, including new or replacement wallpaper, tiles, window coverings, lighting fixtures, painting, upgraded landscaping, carpeting, architectural adornments, common area amenities and the like, but excluding capital improvements or repairs (including repairs or replacements of the roof, structural elements of the walls, parking area or the electrical, plumbing, HVAC or other mechanical or structural systems), and (II) other improvements to each Facility as reasonably approved by Landlord, which shall include those matters, if any, that Landlord has approved in writing as of the Effective Date based on descriptions and budgets that Tenant has provided prior thereto. Any amount remaining in the CapEx Reserve at the expiration of the Term or earlier termination of this Master Lease shall be retained by Landlord as additional or supplemental Rent hereunder.

Upgrade Expenditures. (a) Tenant shall deliver to Landlord, include with each payment Minimum Rent payment, starting with the first (1st) full month of Minimum Rentthe Term, a deposit to be added to a reserve (in the aggregate, the “Upgrade CapEx Reserve”) equal to, with respect to the sum of (a) of each Facility, one-twelfth (1/12th) 1/12th of the Applicable Annual Reserve amount shown on Schedule 4 based on the age of such Facility (as hereinafter defined and as adjusted annually after at the tenth (10th) end of each Lease Year for increases since the Effective Date in the CPI since CPI, the commencement of the tenth (10th) Lease Year“CapEx Amount”), multiplied by (bii) the aggregate number of assisted living units in such Facility on the Facility (date such payment is due. Landlord shall not be deemed to hold the “Upgrade Minimum”) minus (c) same in trust or as an agent for Tenant. Tenant acknowledges that the Upgrade Overage (as hereinafter defined)impounding of such funds in the CapEx Reserve shall constitute a true escrow, and that Tenant has no, and hereby waives any, interest in or right or title to any funds escrowed pursuant to this Section 8.3, whether legal, equitable, beneficial or otherwise. As used herein, the “Applicable Annual Reserve” means: One through Four $ 360.00 Five through Seven $ 460.00 Eight through Ten $ 500.00 Each Lease Year thereafter $ 500.001 From time to time, but not more often than twice once in any calendar month and provided that no Event of Default is then continuing, Landlord will disburse pay to Tenant amounts from the CapEx Reserve to reimburse Tenant for Upgrade Reserve for the payment of costs incurred Expenditures made by Tenant during the prior rolling twenty-four (24) month period during the Term (or portion thereof), as reasonably determined by Landlord based on evidence of such expenditures submitted by Tenant; provided that such amount shall not exceed with respect to any individual Facility in any rolling twenty-four (24) month period during the PremisesTerm, subject to two (2) times the following conditions: (i) CapEx Amount multiplied by the costs incurred by Tenant shall be for the purposes average number of making capital improvements to the Facility, acquiring furniture and fixtures needed for the operation of the beds in such Facility or making Upgrade Expenditures (the “Permitted Expenditures”); provided, however, in no event shall the Permitted Expenditures be deemed or construed to include the costs of the Mandatory Repairs to be made by Tenant pursuant to Section 8.2 above; and (ii) Tenant’s request for disbursement shall be accompanied with over such invoices or purchase orders evidencing the expenditure as Landlord may reasonably requireperiod. Landlord shall make the reimbursements to Tenant required hereunder within fourteen twenty-one (1421) days after satisfaction satisfaction, in all material respects, of all conditions to such disbursementreimbursement. Upon reasonable advance request, Landlord may require Tenant to procureprocure mechanic’s lien waivers, in form and substance reasonably satisfactory to Landlord, in

Upgrade Expenditures. On or before the date that is thirty (a30) days after the expiration of each Lease Year, Tenant shall deliver provide to Landlord documentation and other evidence demonstrating to Landlord’s reasonable satisfaction that Tenant has, with each payment during the preceding Lease Year, for all the Facilities in total (and not necessarily individually) expended an amount equal to or exceeding the CapEx Amount, multiplied by the aggregate rentable square footage of Minimum Rentthe Facilities on the last day of the preceding Lease Year, a deposit for Upgrade Expenditures relating to be added to a reserve (the Premises. As used herein the “Upgrade Reserve”) CapEx Amount” shall mean an amount equal to the sum of One Dollar (a$1.00) of one-twelfth (1/12th) of the Applicable Annual Reserve (as hereinafter defined and as adjusted annually after at the tenth (10th) end of each Lease Year for increases since the Effective Date in the CPI since the commencement of the tenth (10th) Lease YearCPI), multiplied by (b) the aggregate number of assisted living units in the Facility (the . “Upgrade Minimum”) minus (c) the Upgrade Overage (as hereinafter defined). As used herein, the “Applicable Annual ReserveExpenditures” means: One through Four $ 360.00 Five through Seven $ 460.00 Eight through Ten $ 500.00 Each Lease Year thereafter $ 500.001 From time means expenditures in commercially reasonable amounts to time, but Persons not more often than twice in any calendar month and provided that no Event of Default is then continuing, Landlord will disburse to affiliated with Tenant amounts from the Upgrade Reserve for the payment of costs incurred by Tenant with respect to the Premises, subject to the following conditions: (i) upgrades or improvements to each Facility that have the costs incurred by Tenant shall be for effect of maintaining or improving such Facility, including new or replacement wallpaper, tiles, window coverings, lighting fixtures, painting, upgraded landscaping, carpeting, architectural adornments, common area amenities and the purposes of making like, including, without limitation, capital improvements to the Facility, acquiring furniture and fixtures needed for the operation or repairs (including repairs or replacements of the Facility or making Upgrade Expenditures (the “Permitted Expenditures”); providedroof, however, in no event shall the Permitted Expenditures be deemed or construed to include the costs structural elements of the Mandatory Repairs to be made by Tenant pursuant to Section 8.2 above; walls, parking area or the electrical, plumbing, HVAC or other mechanical or structural systems), and (ii) Tenant’s request other improvements to each Facility as reasonably approved by Landlord, which shall include those matters, if any, that Landlord has approved in writing as of the Effective Date based on descriptions and budgets that Tenant has provided prior thereto. If Tenant expends an amount in any Lease Year that exceeds the CapEx Amount for disbursement shall that Lease Year (the “CapEx Surplus”), the CapEx Amount required for the immediately following Lease Year will be accompanied with such invoices or purchase orders evidencing reduced by the expenditure as Landlord may reasonably require. Landlord shall make CapEx Surplus for the reimbursements to Tenant required hereunder within fourteen (14) days after satisfaction of all conditions to such disbursement. Upon reasonable advance request, Landlord may require Tenant to procurepreceding Lease Year.

Upgrade Expenditures. (a) Tenant shall deliver to Landlord, include with each payment Minimum Rent payment, starting with the first (1st) full month of Minimum Rentthe Term, a deposit to be added to a reserve (the “Upgrade "CapEx Reserve”") equal to the sum of (a) of one-twelfth (1/12th) of the Applicable Annual Reserve amount equal to (i) Two Hundred Fifty Dollars ($250) (as hereinafter defined and as adjusted annually after at the tenth (10th) end of each Lease Year for increases since the Effective Date in the CPI since CPI, the commencement of the tenth (10th) Lease Year"CapEx Amount"), multiplied by (bii) the aggregate number of assisted living units beds in all of the Facilities on the date such payment is due. This reserve shall bear interest, which shall be added to and become a part thereof. Landlord shall not be deemed to hold the same in trust or as an agent for Tenant. Tenant acknowledges that the impounding of such funds in the Facility (the “Upgrade Minimum”) minus (c) the Upgrade Overage (as hereinafter defined)CapEx Reserve shall constitute a true escrow, and that Tenant has no, and hereby waives any, interest in or right or title to any funds escrowed pursuant to this Section 8.3, whether legal, equitable, beneficial or otherwise. As used herein, the “Applicable Annual Reserve” means: One through Four $ 360.00 Five through Seven $ 460.00 Eight through Ten $ 500.00 Each Lease Year thereafter $ 500.001 From time to time, but not more often than twice once in any calendar month and provided that no Event of Default is then continuing, Landlord will disburse pay to Tenant amounts from the CapEx Reserve to reimburse Tenant for Upgrade Reserve for the payment of costs incurred Expenditures made by Tenant during the prior rolling thirty-six (36) month period during the Term (or portion thereof), as reasonably determined by Landlord based on evidence of such expenditures submitted by Tenant (which shall be in substantially the same form utilized by Nationwide Health Properties and Tenant (or their respective affiliates) for such purposes); provided that such amount shall not exceed with respect to any individual Facility in any rolling thirty-six (36) month period during the PremisesTerm, subject to three (3) times the following conditions: (i) CapEx Amount multiplied by the costs incurred by Tenant shall be for the purposes average number of making capital improvements to the Facility, acquiring furniture and fixtures needed for the operation of the beds in such Facility or making Upgrade Expenditures (the “Permitted Expenditures”); provided, however, in no event shall the Permitted Expenditures be deemed or construed to include the costs of the Mandatory Repairs to be made by Tenant pursuant to Section 8.2 above; and (ii) Tenant’s request for disbursement shall be accompanied with over such invoices or purchase orders evidencing the expenditure as Landlord may reasonably requireperiod. Landlord shall make the reimbursements to Tenant required hereunder within fourteen twenty-one (1421) days after satisfaction of all conditions to such disbursementreimbursement. Upon reasonable advance request, Landlord may require Tenant to procureprocure mechanic's lien waivers, in form and substance reasonably satisfactory to Landlord, in connection with any Upgrade Expenditures in excess of One Thousand Dollars ($1,000). "Upgrade Expenditures" means expenditures in commercially reasonable amounts to Persons not affiliated with Tenant for (i) upgrades or improvements to each Facility that have the effect of maintaining or improving its competitive position in its respective marketplace, including new or replacement wallpaper, tiles, window coverings, lighting fixtures, painting, upgraded landscaping, carpeting, architectural adornments, common area amenities and the like, but excluding capital improvements or repairs (including repairs or replacements of the roof, structural elements of the walls, parking area or the electrical, plumbing, HVAC or other mechanical or structural systems), and (ii) other improvements to each Facility as reasonably approved by Landlord, which shall include those matters, if any, that Landlord has approved in writing as of the Effective Date based on descriptions and budgets that Tenant has provided prior thereto. Any amount remaining in the CapEx Reserve at the expiration of the Term or earlier termination of this Master Lease shall be retained by Landlord as additional or supplemental Rent hereunder.