AGREEMENT TO LEASE
Exhibit
10.27.1
AGREEMENT
TO
LEASE
This
agreement ("Agreement") is made between Elkhart Retirement L.L.C., Hobart
Retirement L.L.C., LaPorte Retirement L.L.C., and Niles Retirement L.L.C.,
each
of which is an Indiana limited liability company (collectively referred to
hereafter as "Lessors" or "Landlord"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), and
Summerville Senior Living, Inc., a Delaware corporation
("Summerville").
RECITALS
A. Lessors,
each of which are owned and controlled by Garatoni, are the owners
of
the following assisted living facilities ("ALFs") and independent-living
retirement housing facility ("ILR") (the ALFs and ILR are sometimes referred
to
collectively hereafter as the "Facilities"):
Bldg
|
Facility/Address
|
Type
|
Units
|
1
|
Brentwood
Retirement Community 0000 X. Xxxxxxx Xx.
Xxxxxxx,
XX 00000
|
ILR
|
88
|
2
|
Brentwood
Assisted Living Community 0000 Xx. Xxxx'x Xxxxxx
Xxxxxx,
XX 00000
|
ALF
|
66
|
3
|
Brentwood
Assisted Living Community 0000 Xxxxxx Xxxxxx
XxXxxxx,
XX 00000
|
ALF
|
57
|
4
|
Brentwood
Assisted Living Community 0000 Xxxxx Xxxxx Xxxxxx
Xxxxx,
XX 00000
|
ALF
|
64
|
B. Lessors
and Summerville have agreed on terms for Lessors to lease the Facilities,
for a
period of ten years beginning November 1, 2004 (the "Commencement Date")
with
options for three five-year extensions, to Summerville 2, LLC, a Delaware
limited liability company, or to four subsidiaries or affiliates thereof
(the
"Tenant" or "Lessee"), which Summerville will create, pursuant to leases
in the
form of Exhibits A-D
hereto (the "Leases"),
conditioned on terms as stated below (such
leasing, the "Transaction").
C. Capitalized
terms not otherwise defined herein have the meaning stated in the
Leases.
X. Xxxxxxxxxxx,
or a Subsidiary of Summerville or Affiliate of Xxxxxxx Xxxx, shall enter
into
management agreements with each Tenant to provide management services relating
to the operation of the Facilities (the entity which enters into such agreements
with the Tenant is referred to herein as the "Management Company").
E. The
obligation of Summerville to cause the Tenant to enter into the Leases shall
be
subject to, among other conditions, Summerville's right to terminate this
Agreement during the examination period ("Due Diligence Period") described
below.
1
F. The
obligation of the Lessors to enter into the Leases shall be subject to,
among
other conditions, approval of Lessors' Mortgagees and HUD.
Now,
therefore, in consideration of the foregoing premises and the mutual covenants
of the parties set forth herein, it is hereby agreed as follows:
AGREEMENT
1. Rent,
Security Deposit, and
Replacement Reserve Payments. The Leases shall
provide, among other matters and as more particularly described therein,
as
follows:
(a) Rent.
Tenants shall pay Base Rent for the first Lease Year as follows:
Facility
|
Monthly
|
Annual
|
LaPorte
|
$23,949.33
|
$287,392.00
|
Niles
|
$25,344.00
|
$304,128.00
|
Hobart
|
$40,920.00
|
$491,040.00
|
Elkhart
|
$43,120.00
|
$517,440.00
|
Total
|
$133,333.33
|
$1,600,000.00
|
After
the
first Lease Year, the above Base Rent will be subject to annual adjustment
based
on the Consumer Price Index as described in Section 6.1 of the Leases. After
the
fifth Lease Year, Tenants shall pay, in addition to Base Rent, a Variable
Rent
of one half percent (0.5%) of gross revenues, as described in Section 6.2
of the
Leases.
(b) Replacement
Reserves.
Tenants shall pay Replacement Reserve Installments, in accordance
with
Section 7 of the Leases, as follows:
Facility
|
Monthly
|
Annual
|
LaPorte
|
$
2,137.50
|
$
25,650.00
|
Niles
|
$
2,583.33
|
$
31,000.00
|
Hobart
|
$
2,475.00
|
$
29,700.00
|
Elkhart
|
$
3,300.00
|
$
39,600.00
|
Total
|
$10,495.83
|
$125,950.00
|
(c) Security
Deposits. On
the Commencement Date, Tenant shall pay Security
Deposits, in accordance with Section 8 of the Leases, as follows:
Facility
|
Amount
|
LaPorte
|
$
180,000
|
Niles
|
$
190,000
|
Hobart
|
$
300,000
|
Elkhart
|
$
330,000
|
Total
|
$1,000,000
|
2
(d) Aggregation.
Security
Deposits, but not Replacement Reserves or any
other
amounts under the Leases, shall be held on an aggregated basis, i.e., the
Security Deposit for any Facility may be applied against Tenant defaults
under
the Lease for another Facility; provided, however, that in the event of the
sale
by Landlord of any Facility or Facilities to a party or parties other than
an
Affiliate of Landlord, the Facility or Facilities sold shall be excluded
from
any aggregation under the Leases (or other provisions whereby Tenant's rights
under a Lease may be affected by the Other Leases), and the cross-default
provisions of the Leases shall not apply as to such sold Facility or
Facilities.
2. Procedure.
(a) Due
Diligence
Period/Milestones. Summerville has had and shall continue
to have the opportunity to review all relevant information relating to the
Facilities and inspect the Facilities during a Due Diligence Period extending
until 5 p.m., Central Time, on the 21st day after the Examination Date, as
defined below. Lessor has previously delivered to Summerville certain items
and
information described in Exhibit E attached hereto (collectively, the "Due
Diligence Materials"). The only items listed in Exhibit E (other than those
which marked as not applicable) which have not been provided to Summerville
prior to the date of execution of this Agreement by all parties hereto (the
"Effective Date") are resumes for Facility management staff, which shall
be
delivered to Summerville on the Examination Date as described
below.
(1) Until
the 7th day after the Effective Date (the "Examination Date"), Summerville
shall
not disclose to Facility employees ("Employees") or Residents the existence
of
this Agreement or the pending Transaction. Summerville's agents entering
the
Facilities prior to the Examination Date have done so, and shall continue
to do
so, as shoppers for ALF/ILR accommodations/services.
(2) Beginning
on the Examination Date, Summerville's agents may enter the Facilities for
purposes of detailed examination of the Premises, and may make disclosures
to
and interview Employees in connection with the proposed Transaction. Lessors
shall cause the Employees to provide unlimited access to the Premises to
Summerville's agents beginning as of such time.
(3) Summerville
may terminate this Agreement if dissatisfied with
its
findings as to the following factors, by written notice to Lessors as provided
in Section 25 of the Leases, on or before the following Due Diligence milestone
dates:
Financial
and Market Feasibility
|
completed
|
Board
of Directors/Internal Approvals
|
completed
|
Physical
examination of Premises
|
End
of Due Diligence Period
|
(b) Lender
Approval.
Promptly upon execution of this Agreement, Lessors,
at Lessors' sole cost and expense, shall seek approval from their Mortgagees
of
the lease transaction contemplated by this Agreement (the "Transaction").
Summerville shall reasonably cooperate with Lessors and shall provide Lessors
with all information about Summerville and its Affiliates which may reasonably
be requested by the Mortgagees or HUD in connection with Lessors' requests
for
approval of the Transaction by the Mortgagees and HUD ("Lender Approval").
In
the event that Lender Approval cannot be obtained prior to November 1, 2004,
the
Closing (as defined below) and Commencement Date shall be deferred until
such
time as Lender Approval has been obtained; provided, however, if such Lender
approval is not obtained on or before January 1, 2005, either party may
thereafter terminate this Agreement by giving written notice thereof to the
other party. Lessors agree to use their best efforts to procure execution
of a
subordination, non-disturbance and attornment agreement reasonably satisfactory
to Summerville ("SNDA") by each and every Mortgagee or holder of a deed of
trust
(with the approval of HUD as necessary to make the SNDA legally effective),
existing as of the Effective Date, agreeing, inter alia, that the rights
of the Tenant under a Lease shall not be disturbed, regardless of any default
by
Lessors under the Mortgages, so long as the Tenant is in compliance with
its
duties under such Lease.
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(c) License
Applications.
Prior to the Commencement Date, Summerville shall cause the Tenants
for
the Hobart, LaPorte and Niles Facilities to seek Licenses under the ALF
Licensing Laws applicable to such Facilities. Lessors shall cooperate with
the
Tenant and shall provide the Tenant with all information about the Facilities
which may be requested by the Tenant for such purposes. In the event that
the
Licenses cannot be obtained prior to November 1, 2004, the Closing (as defined
below) and Commencement Date shall be deferred until such time as the Licenses
have been obtained; provided, that if the Licenses are not obtained by January
1, 2005, either Lessor or Summerville may terminate this Agreement.
Alternatively, Landlord and Tenant may elect to enter into an interim management
agreement that would allow Tenant to operate under the existing licenses
until
new licenses are issued.
(d) Closing.
At
such time
as all required Lender Approvals and Licenses have been obtained, the
Transaction shall be consummated by execution and delivery of the Leases
and all
documents described therein) (such execution and delivery is referred to
hereafter as the "Closing") on a date (the "Closing Date") not less than
two
Business Days before the Commencement Date, effective as of the Commencement
Date.
(1) Closing
shall, at the request of any party, be conducted by exchange of documents
by
overnight delivery.
(2) Any
bills issued to Residents of a Facility prior to the Closing Date for
accommodations and services for the month beginning on the Commencement Date
shall be consistent with the procedure used by the Landlord for prior periods,
i.e., Residents will be directed to deliver payments to the Facility business
office. If possible, checks for such payments will be deposited directly
into
Tenant accounts. If such checks cannot be deposited into Tenant accounts,
Lessors will deposit such checks and promptly make payment to the Tenant
of the
amount of payments received for accommodations and services provided during
the
Lease Term. Cash receipts shall be prorated between Landlord and Tenant based
upon the dates of service for which the payments were intended.
4
(3) Operating
costs, expenses and charges, including but not limited
to Taxes, shall be prorated between Tenant and Landlord as of the Commencement
Date,
with Landlord responsible for such amounts prior to the Commencement Date
and
Tenant responsible for such amounts on and after the Commencement Date, and
shall be paid in cash (or, if a net amount is due to Tenant, deducted from
Base
Rent) as of the next due date for Base Rent following the Commencement Date
(the
"Adjustment Date"). To the extent that any unpaid expense arising prior to
the
Commencement Date or paid expense applicable to the period after the
Commencement Date cannot be conclusively determined on the Adjustment Date,
credits and debits shall be used for purposes of such proration based on
amounts
determined as of the Adjustment Date, and further adjustment(s) shall be
made
when such expenses are more accurately determined, with payment to be made
to or
from Tenant, as the case may be, by adjustment of the next installment of
Base
Rent.
3. Evidence
Of Condition Of
Facilities. As soon as possible after the Commencement Date, the parties
shall have a DVD prepared to thoroughly depict the condition of each Facility
as
of the Commencement Date (the "Start Date Condition"). The DVD shall be prepared
by a professional photographer, to be selected by the Landlord. Landlord
shall
be responsible for the cost for the preparation of the DVDs. Each party shall
receive a copy of the DVDs (one for each Facility).
4. Conveyance
of Personal
Property and Service Contracts.
(a) Personal
Property.
Landlord agrees to transfer and convey to Tenant as of the Closing
Date,
all of Landlord's right, title and interest in and to any furniture, fixtures,
equipment, supplies and other personal property located at the Facilities
(the
"Personal Property"). The Personal Property transferred at Closing shall
be
substantially as identified in the Personal Property list provided to
Summerville as part of the Due Diligence Materials, excepting changes in
the
ordinary course of business which do not have a material adverse effect on
Tenant and shall be sufficient to operate the Facilities in the same manner
as
prior to the date of this Agreement.
(b) Service
Contracts.
Landlord has delivered to Summerville copies of all agreements with
third
party vendors that provide, as of the Effective Date, services to the Facilities
(the "Service Contracts"), as part of the Due Diligence Materials. Summerville
shall provide Landlord, on or before the Examination Date, with written notice
identifying any Service Contracts which are not to be assumed. All Service
Contracts not identified in such a notice shall be assumed by Tenants as
to
matters arising on or after the Commencement Date. Those Service Contracts
which
Summerville has identified as not to be assumed shall be terminated by Landlord,
at its sole cost and expense, effect as of a date prior to the beginning
of the
Lease Term. Landlord shall assign to Tenant, at Closing, its rights under
all
other Service Contracts.
5
5.
Resident
Deposits &
Resident Records.
(a) At
Closing, Landlord shall pay to Tenant, in cash, all refundable move-in fees
collected from Residents of the Facilities ("Resident Deposits"). A list
of
Resident Deposits as of the Effective Date is attached as Exhibit F hereto (and
incorporated by reference herein). An updated list
of Resident
Deposits for each Facility as of the Closing Date shall be-provided-to
each–T-enant-atelosing. Landlord hereby represents and warrants to Tenant that
Exhibit F contains a
true, correct and complete list of all Residents that have paid a refundable
move-in fee to Landlord as of the Effective Date.
(b) At
Closing, Landlord shall deliver possession to Tenant at the Facilities of
any
and all records or written documents physically located at the Facilities
and
relating to Residents of the Facilities, including but not limited to, all
contracts, applications, and correspondence relating to such
Residents.
6.
Management
Fee.
(a) Each
Management Agreement shall provide for payment of a fee ("Management Fee")
by
the Tenant to the Management Company on a monthly basis, with the fee for
each
month to be payable during the following month, subject to subsection (b)
and
subsection (c) below.
(b) The
Management Agreements shall provide that during any month, the use of Operating
Cash Flow shall be in the following priorities for payment: (i) the first
priority shall be payment of all charges of parties other than the Management
Company and the Landlord for goods and services provided for the Facility
("Facility Expenses") subject to payment terms arranged by Tenant or Management
Company in their sole discretion; (ii) subject to all Facility Expenses having
been paid, the second priority shall be payment of Base Rent, Tax Escrow,
Insurance Escrow, and Replacement Reserve Installment for each Facility as
described in the Leases ("Lease Expenses"); provided, however, that the priority
of Facility Expenses over Lease Expenses shall not operate as a waiver of
any
Default in payment of Lease Expenses; (iii) payment of any interest or principal
owed by the Tenant to Summerville or an Affiliate of Summerville for repayment
of a loan to the Tenant ("Loan Expenses") shall be subordinated to payment
of
Lease Expenses, i.e., Loan Expenses shall not be paid unless Lease Expenses
have
been paid in full.
(c) Facility
Expenses which are the first priority use of Operating Cash Flow
shall not include any purchase of goods or services from an Affiliate of
Summerville, Apollo, or Xxxxxxx Xxxx for an amount in excess of fair market
value or any payment to such parties other than for a bona fide purchase
of
goods or services. Tenants' use of Net Operating Cash Flow after satisfaction
of
Facility Expenses and Lease Expenses shall not be subject to any
restriction.
6
(d) Management
Fees may be paid from proceeds of loans from Affiliates
or Subsidiaries of Summerville, Apollo, or the Tenants, without regard to
the
sufficiency of Operating Cash Flow for payment of Management Fees; provided,
however, that Management Fees shall not be paid for any month unless all
Facility Expenses and Lease Expenses for such month have been paid.
7. Restriction
Of Tenant
Operations. None of the Tenants shall engage in any business other than
operation of the Facility leased by such Tenant.
8. Monthly
And Annual Reports.
Summerville and the Tenant shall have joint responsibility for providing
Landlord with reports as described below, which reports shall be certified
as
true- and correct in all material respects.
(a) Monthly
Financial
Statements. Landlord shall be provided with reports
("Monthly Reports") for each Facility for each month within thirty days after
the end of the month. Monthly Reports shall include unaudited Financial
Statements (a Financial Statement, for purposes hereof, shall include an
income
statement, balance sheet as of the end of the month, and cash flow statement)
of
each Facility, in accordance with GAAP, together with additional information
as
follows:
Total
Resident Days during month.
|
(ii)
|
Resident
Census as of last day of month.
|
|
(iii)
|
For
any Resident Liability Claim asserted against the Facility for
an amount
in excess of $50,000, the name of the Resident and basis for the
claim.
|
|
(iv)
|
For
any judgment rendered against a Tenant in connection with a Resident
Liability Claim which has not been satisfied, the following: (1)
date of
judgment; (2) amount of judgment; (3) court in which judgment was
entered;
(4) available insurance for satisfaction of judgment; (5) available
liquid
net worth of Tenant which may be applied to satisfaction of judgment;
(6)
status of any appeal from such
judgment.
|
|
(v)
|
Results
of any inspections conducted pursuant to any ALF Licensing Law,
including
copy of any report by an agency having jurisdiction over the Facility
under such law and any response of the Facility to any such
report.
|
(vi)
|
Any
need identified for capital expenditures to keep the condition
of the
Facility consistent with the standard required under the
Lease.
|
(vii)
|
Management
Fee paid for such month, and amount of any Deferred Fees unpaid
for such
month or any preceding month.
|
(viii)
|
Accounts
payable aging as of month-end (identifying the persons
owed, the goods/services for which such amount is owed, and the
number of
days, as of month end, that such debt has been
owed).
|
7
(b) Consolidated
Annual
Financial Statement. Summerville shall cause the Tenants (if more than
one) to operate with the same fiscal year (the fiscal year adopted by each
Tenant is referred to hereafter as the "Fiscal Year"). On an annual basis
during
the Lease Term, Summerville and the Tenant shall deliver to Landlord, for
each
Fiscal Year, an annual consolidated Financial Statement (the "Consolidated
Statement"), certified by the CEO and CFO of Summerville and the Tenant,
including an income statement, balance sheet, and cash flow statement for
each
Facility individually and for the Facilities on a consolidated basis, in
accordance with GAAP. The Consolidated Statement shall be presented within
ninety (90) days after the end of the Fiscal Year, and shall reflect, for
each
Fiscal Year ending after the fifth Lease Year, the Consolidated Revenues
and the
Variable Rent calculated thereon.
(c) Audited
Statement. On
an annual basis during the Lease Term, Summerville shall deliver to Landlord
a
consolidated audited Financial Statement (the "Audited Statement"), with
an
opinion of a certified public accounting firm reasonably acceptable to Landlord
(the "Auditors"), including an income statement, balance sheet, and cash
flow
statement, for Summerville and its subsidiaries. The Audited Statement shall
be
presented within one-hundred-twenty (120) days after the end of Summerville's
fiscal year.
9.
Cooperation
In
Financing.
(a) Hobart.
Summerville
and the Tenant acknowledge that the LaPorte and Niles Facilities are financed
by
a HUD-insured mortgage, and that Landlord intends to refinance the Hobart
Facility by a HUD-insured mortgage under Section 232. Summerville and the
Tenant
agree to reasonably cooperate with Landlord in connection with this process,
at
no cost to Summerville or Tenant, and to sign the FHA certificate (disclosure
of
pending and anticipated Section 232 applications within 18-month period,
per HUD
Notice H 01-03) required for the Section 232 application for the refinancing
of
the Hobart Facility, without regard to any effect which such financing may
have
on other HUD/FHA financing of facilities operated by Summerville, the Tenant,
or
Affiliates thereof; provided, however, that in connection with the refinancing,
Landlord shall cause the prospective Mortgagee of the HUD-insured loan, with
all
required authorization by HUD, to execute and deliver a SNDA to the Tenant
of
the Hobart Facility, prior to the granting of the new Mortgage.
(b) Elkhart.
Summerville
acknowledges that Landlord intends to refinance the Elkhart Facility by a
mortgage to be purchased by the Federal National Mortgage Association ("FNMA"
or
"Xxxxxx Xxx"). Xxxxxxxxxxx, the Management Company, and the Tenant of the
Elkhart Facility shall reasonably cooperate with Landlord in connection with
this process, at no cost to Summerville, the Management Company, or such
Tenant;
provided, however, that in connection with the refinancing, Landlord shall
cause
the prospective Mortgagee, with all required authorization by FNMA, to execute
and deliver a SNDA to the Tenant of the Elkhart Facility, prior to the granting
of the new Mortgage.
8
(c) Other
Refinancing.
Summerville and the Tenant also agree to reasonably
cooperate with Lessors, at no cost to Summerville or Tenants, in connection
with
any other refinancing of any of the Facilities; provided, however, that in
connection with any refinancing or other financing, Landlord shall procure
each
and every Mortgagee or holder of a deed of trust to execute and deliver a
SNDA
to the Tenant of the refinanced Facility, with the approval of HUD, Xxxxxx
Xxx,
or others as legally necessary for the SNDA to be effective to protect such
Tenant's rights, prior to the granting of any new Mortgage.
10. Transfer
Of Employees.
As of the Commencement Date, all Facility Employees
shall cease to be employees of Lessors. Tenant shall offer employment to
all
active Facility Employees (as of the Commencement Date) on an "at-will" basis,
subject to Tenant's policies and procedures (including those relating to
the
"introductory period"). To the extent requested by Tenant, Lessors shall
use
their good faith efforts to encourage Facility Employees to become employees
of
Tenant (Facility Employees who become employees of Tenant are referred to
hereafter as "Transferred Employees"). Lessors hereby agree not to solicit,
directly or indirectly, any Facility Employees to apply for a transfer or
promotion to any Lessor facility or Lessor-affiliated facility for a one-year
period following the Commencement Date. All personnel files of Transferred
Employees of a Facility shall become the property of the Tenant of such Facility
as of the Commencement Date.
(a) Payroll
Administration.
On the Commencement Date, Lessors will cause Facility Employees working
as of 12:01 am to "clock out" on the Facility time clock at that time, or
shall
cause a Facility Employee to run a time card report using the data processing
equipment at the Facilities at such time; such data shall be used by Lessors
to
process payroll for the Facility Employees for the period ending on the
Commencement Date.
(b) Terms
Of Employment of
Transferred Employees. Effective as of the Commencement Date, and subject
to subsection (c) below, Tenants shall offer employment to the Facility
Employees on terms which require each such employee to perform comparable
services, in a comparable position and at substantially the same base salary
as
such employee enjoyed with the Facility prior to the Commencement Date;
provided, however, Tenants shall not be bound by any previously existing
bonus
or commission plans. As to each of the Transferred Employees, Tenant shall
recognize each such Employee's original hire date and shall continue to employ
each such Employee for a period of no less than thirty (30) days following
the
Commencement Date unless the employment of such Employee is terminated in
accordance with Tenant's personnel policies or as a result of such Employee's
resignation.
(c) Employees
on Leave of
Absence or Medical Leave. For any Facility
Employee on a leave of absence as of the Commencement Date ("LOA Employee"),
Tenant shall offer employment, if and when they are able to return to work
from
such leave of absence, in a comparable position and at substantially the
same
base salary as such employee enjoyed with the Facility prior to the leave
of
absence, if such a position is available at such time. Lessors shall be
responsible for any disability or workers' compensation benefits arising
from
events prior to the Commencement Date. A list of LOA Employees as
of
September 27, 2004 is attached as Schedule 10(c); an updated list shall be
provided at Closing.
9
(d) Paid
Time Off.
Lessors shall calculate the accrued liability for paid time off,
including vacation pay and sick pay (the "PTO") for the Transferred Employees.
Lessors shall pay Facility Employees for any amounts in excess of 80 hours
per
employee and shall pay Tenant the remaining PTO amounts for Transferred
Employees on the Commencement Date. Lessors shall, and hereby agree to,
indemnify Tenant against any damages, costs, expenses, liabilities, obligations
and claims arising out of any dispute in connection with Lessor's calculation
of
the PTO.
(e) WARN
Act. The parties
acknowledge and agree that the provisions of this Section are designed solely
to
ensure that Lessors are not required to give notice to the Facility Employees
of
the "closure" of a Facility under the Worker Adjustment and Retraining
Notification Act (the "WARN Act") or under any comparable Indiana or Michigan
law. Accordingly, Tenants agree to indemnify, defend and hold harmless Lessors
from any costs that Lessors may incur under the WARN Act or under comparable
state law in the event of a violation by Tenants of its obligations thereunder,
including a violation that results from allegations that Tenants constructively
terminated the Facility Employees as a result of the terms and conditions
of
employment offered to the Transferred Employees by Tenants.
(f)
Tenant
to Provide Group
Health Plan.
(i) Lessors
to Provide Required
COBRA Coverage. Lessors shall offer and provide, as appropriate, group
health plan continuation coverage pursuant to the requirements of Section
601,
et seq. of ERISA and Section 498B of the Internal Revenue Code ("COBRA")
to all
of the Facility Employees to whom Lessors are required to offer the same
under
applicable law as of the Commencement Date. Lessors acknowledges and agree
that
Tenants are not assuming any of Lessors' obligations to Facility Employees
under
COBRA or otherwise, except as specifically provided in this
Section.
(ii) Tenant
to Provide Health
Plan. As of the Commencement Date, Tenants shall offer participation in
a
group health plan (as defined for purposes of Internal Revenue Code Section
4980B) established and maintained by Tenant (the "New Plan") for the benefit
of
Tenant's employees and their dependents ("Covered Employees") to all Transferred
Employees who: (i) participate as of the Commencement Date in group health
insurance coverage sponsored by Lessors, and (ii) become employees of Tenant.
All such Transferred Employees shall be eligible for coverage under the New
Plan. Those Transferred Employees who accept such coverage shall become Covered
Employees and shall be covered under the New Plan without a waiting period
and
without regard to any pre-existing condition unless (A) they are under a
waiting
period with Lessors at the time of the Commencement Date, in which case they
shall be required to complete their waiting period while under the New Plan
or
(B) they were subject to a pre-existing condition exclusion while under Lessors'
group health plan, in which case they shall be subject to the same exclusion
under the New Plan, which exclusion shall, if applicable, be subject to the
same
time limitation while in Tenant's employ as was applicable thereto while
the
Covered Employees were in Lessors' employ, with the time limit calculated
from
the date the same commenced while in Lessors' employ. The parties acknowledge
and agree that it is the intent of this provision that Lessors shall not
be
required to provide continued health coverage under ERISA or COBRA to any
of the
Transferred Employees who become employees of Tenant or to any qualified
beneficiary thereof (as defined for purposes of COBRA).
10
(g) Third
Party Rights.
Nothing in this Agreement shall create any rights
in
favor of any person not a party hereto, including the Facility Employees,
or
constitute an employment agreement or condition of employment for any employee
of Lessors.
11. Transfer
Upon Expiration Of
Agreement. Upon termination of the Lease Term, (i) Tenant shall transfer
possession of the Facilities to Landlord or Landlord's nominee on equivalent
terms as provided herein and in the Leases; (ii) the prorations shall be
made on
equivalent terms as provided in Section 2(d)2 and 2(d)(3) of this Agreement;
and
(iii) the Employees shall be dealt with on equivalent terms as set forth
in
Section 10 of this Agreement.
12. Trade
Names. Tenant
shall operate the Facilities, during the Lease Term, using trade names retaining
the "Brentwood" name which has been used by Lessors, together with a description
of the type of accommodations/care provided by the Facility (e.g., "assisted
living" for Hobart, LaPorte and Niles, "senior living apartments" for Elkhart),
but may include reference to the association of the Facilities with Summerville,
such as "a Summerville Community" or a variation thereof.
13.
Non-Compete.
(a) Garatoni
agrees not to compete, directly or indirectly, with any Facility during the
Lease Term. For purposes of this Section 13, to "compete" with a Facility
means
participating in the provision of accommodations and care predominantly for
persons age 62 or older within a five-mile radius of such Facility;
"participating" shall mean being involved with a competing establishment
by
ownership, management, control or contract services.
(b) Summerville
agrees, and shall cause the Tenant to agree, not to compete, directly or
indirectly, with any Facility during the Lease Term or for two (2) years
thereafter, without Landlord's consent.
14. Assignment
Of Management
Agreement. The Management Agreements shall
not
be assigned to a party that is not an Authorized Assignee as defined in the
Leases, i.e., an Affiliate of Xxxxxxx Xxxx or a Subsidiary of Summerville,
without Landlord's prior written consent, which consent Landlord may withhold
in
its discretion, nor shall the Tenant enter into an agreement for management
services with any party that is not an Authorized Assignee, without Landlord's
prior written consent, which consent Landlord may withhold in its discretion.
This Agreement and/or the Leases may not be assigned without Landlord's consent
except as provided by Section 22 of the Leases. Notwithstanding the above,
the
Management Agreements may be assigned to a Successor Manager in connection
with
a transfer of ownership resulting from a mortgage of Tenant's leasehold,
pursuant to the terms of Section 22 of the Leases.
11
15. Recovery
In Event Of
Bankruptcy. To the extent permitted by law, in the event of bankruptcy of
any Tenant or Summerville, Landlord shall be entitled to immediate recovery
of
possession of the Facilities. The parties agree that the value of the Facilities
may decline rapidly if any Tenant or Summerville should become insolvent
and
that Landlord shall be entitled to immediate relief from stay in the event
of
such bankruptcy proceedings.
16. Landlord's
Representations
And Warranties. Lessors hereby represent and warrant to Summerville and
Lessee that the statements set forth in this Section 16 are true and correct
as
of the Effective Date, as of the Commencement Date and at all times during
the
term of the Leases.
(a) Organization
and Authority
of Lessors. Each Lessor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Indiana.
Lessors have full power and authority to enter into and perform their
obligations under this Agreement and all other agreements and instruments
to be
executed by it pursuant to this Agreement. All appropriate action has been
taken
to authorize the individual signing this Agreement on behalf of Lessors as
the
lawful and legally binding act of the Lessors. Lessors have the power and
authority to own the Facilities and assets now owned by them and to conduct
the
business presently being conducted by them and as currently proposed to be
conducted. There are no other agreements of Lessor granting any third party
the
right to use or occupy any part of the Facilities (except the rights of the
Residents of the Facilities and licenses for use of portions of the Facilities
used for beauty shops and exercise facilities, which licenses have been provided
to Summerville) and no person, firm or entity other than Lessee has any
ownership interest or option or right of first refusal to acquire any ownership
interest in the Facilities or any building or improvements thereon.
(b) Binding
Effect. This
Agreement, when executed by Lessors' representative designated below, shall
be a
valid and binding obligation of Lessors.
(c) Condition
of Facilities.
To the best of Lessors' knowledge, there are
no
defects on the Facilities, including, without limitation, structural defects,
mold, environmental conditions, or any conditions that might negatively impact
the operations of the Facilities.
12
(d) Absence
of Undisclosed
Liabilities. To the best of their knowledge, Lessors, as of the date of
the most recent financial statements provided to Summerville, had no debts,
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
of any material nature whatsoever arising out of or relating to the acquisition,
development, business or operations of Lessors at the Facilities except as
reflected in such financial statements provided to Summerville by Landlord
or as
listed on Exhibit G
attached hereto.
(e) Absence
of Changes or
Events. Except as specifically set forth in the financial statements or
other documents delivered in the Due Diligence Materials or as disclosed
in this
Agreement, Lessors have not:
(i) incurred
any obligation or liability, absolute, accrued, contingent or otherwise,
whether
due or to become due, except current liabilities for trade or business
obligations incurred in connection with the purchase or sale of goods or
services in the ordinary course of business and consistent with its prior
practice, none of which liabilities, in any case or in the aggregate, has
had or
may have a material adverse impact on the business, liabilities or financial
condition of the Facilities;
(ii) mortgaged,
pledged or subjected to lien, charge, security interest or any other encumbrance
or restriction on the Facilities, its business or assets, tangible or intangible
or amended any similar document currently in effect with respect to such
matters, other than the HUD-insured first mortgages as to the XxXxxxx and
Xxxxx
Facilities and the National City Bank first mortgages as to the Hobart and
Elkhart Facilities;
(iii) sold,
transferred, leased to others or otherwise disposed of any material asset,
or
canceled or compromised any material debt or claim, or waived or released
any
right of substantial value;
(iv) received
any notice of termination of any contract, lease or other agreement or suffered
any damage, destruction or loss (whether or not covered by insurance) which,
in
any case or in the aggregate, has had or may have a material adverse impact
on
the assets, operations or prospects of the Facilities;
(v) encountered
any labor union organizing activity, had any actual or threatened employee
strikes, work stoppages, slowdowns or lockouts, or had any material change
in
its relations with its employees, customers or suppliers;
(vi) instituted,
settled or agreed to settle any litigation, action or proceeding before any
court or governmental body relating to the Facilities;
(vii)
suffered any change, event or condition which, in any case or in the aggregate,
has had or may have a material adverse impact on the Facilities' condition
(financial or otherwise), properties, assets, liabilities, operations or
prospects, including, without limitation, any change in the Facilities'
revenues, costs, or relations with its employees, residents, or suppliers;
or
13
(ix)
entered into any agreement or made any commitment to take any of the types
of
action described in subparagraphs (i) through (vii) above.
(f) Litigation;
Threatened
Claims. There is no claim, legal action, suit,
arbitration, or other legal or administrative proceeding or governmental
investigation, nor any order, decree or judgment in progress, pending or
in
effect, or threatened, against or relating to the Facilities, and Lessors
do not
know or have reason to be aware of any basis for the same. No citations,
fines
or penalties have been asserted against Lessors or the Facilities, under
any
federal, state or local law.
(g) Compliance
with Laws and
Other Instruments. Lessors have complied with all existing laws, rules,
regulations, ordinances, licenses, permits, orders, judgments and decrees
applicable to the Premises. Exhibit H hereto contains
a
complete and correct list of any licenses required under any ALF Licensing
Law
applicable to the Facilities and all other permits, licenses, and other
governmental authorizations and approvals which are material to the operation
of
the Facilities, all of which have been duly made or obtained and are in full
force and effect without pending claims of noncompliance and there are no
proceedings pending or threatened which may result in the denial, revocation,
cancellation or suspension or any adverse modification, of any of the foregoing.
Neither the ownership nor use of the Facilities nor the conduct of Lessors'
business conflicts with the rights of any other person, firm or corporation
or
violates, or with or without the giving of notice or the passage of time,
or
both, will violate, conflict with or result in a default, right to accelerate
or
loss of rights under, any terms or provisions of any lien, lease, agreement,
law, or regulation, or any order, judgment or decree to which Lessors are
a
party or by which they may be bound or affected.
(h) Title
to and Condition of
Facilities; Leases. Lessors have good and marketable
title to the Facilities in fee simple, which title is subject to no leases,
subleases, agreements, encumbrances, liens or defects in title other than
(a)
licenses authorizing use of portions of the Facilities for beauty shops and
exercise facilities, copies of which subleases have been provided to
Summerville; and (b) those encumbrances disclosed in Exhibit I attached hereto,
which consists of the Schedule B to the most recent title policies obtained
by
Landlord with respect to each Facility. The Facilities are in good operating
condition and there are no restrictive covenants which will prevent Lessees
from
conducting their business on the Facilities and there are no known defects
that
could have a material adverse impact on Lessees' businesses. The Personal
Property is in good condition and is sufficient to operate the Facilities
consistent with applicable ALF Licensing Laws and the ordinary course of
Lessors' business as of the date of this Agreement and the Closing Date.
At
Closing, Lessors will provide, at no cost to Lessees or Summerville, a title
report as to each Facility, reflecting a title search with an effective date
of
three (3) Business Days prior to the Closing Date, confirming that the Lessors'
title to the Facilities is in accordance with the covenants made by the Lessors
in this Section 16(h).
14
(i) Environmental
Matters.
To the best of Lessors' knowledge, Lessors
(including their employees and agents) (i) have obtained all applicable permits,
licenses and other authorization which are required under federal, state
or
local laws relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened releases of
"Hazardous Materials" (defined below) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of Hazardous Materials; (ii) are in compliance with all terms and
conditions of such required permits, licenses and authorizations, and also
are
in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in
such laws or contained in any regulation, code, plan, order, decree, judgment,
notice or demand letter issued, entered, promulgated or approved thereunder;
(iii) as the date hereof, are not aware of and have not received notice of
any
event, condition, circumstances, activity, practice, incident, action or
plan
which is reasonably likely to interfere or prevent continued compliance with
the
foregoing by Lessors, or which would give rise to any common law or statutory
liability, or otherwise form the basis of any claim, action, suit or proceeding,
based on or resulting from Lessors' (or any of its employees or agent's)
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge or release into the
environment, of any pollutant, contaminant, or hazardous or toxic material
or
waste; and (iv) have taken all actions necessary under applicable requirements
of federal, state or local laws, rules or regulations to register any products
or materials required to be registered by Lessors (or any of its employees
or
agents) under any such applicable requirements.
(A) To
the best of Lessors' knowledge, the Facilities do not contain, and there
is not
located on or about the Facilities, any "Hazardous Materials." No part of
the
Facilities are currently used, or have previously been used, for the use,
storage, treatment, production, manufacture, generation, transportation,
release
or disposal of Hazardous Materials. Lessors have not received any complaint,
order, summons, citation, notice of violation, directive letter or other
communication from any governmental authority or other person with regard
to air
omissions, water discharges, noise emissions or Hazardous Materials, or any
other environmental, health or safety matters affecting the Facilities, or
any
portion thereof. Lessors have complied with all environmental laws affecting
the
Facilities, including notification requirements relating to the release of
Hazardous Materials. Lessors have furnished to Summerville copies of the
most
recent "phase I" environmental reports as to the Facilities.
(B) To
the best of Lessors' knowledge, there are no claims pending or threatened,
and
Lessors know of no basis for any such claim, against Lessors or the Facilities,
or any portion thereof, by any governmental authority or other person relating
to any Hazardous Material or pursuant to any environmental law, whether for
enforcement, clean-up, removal, remediation, assertion of liability, cost
recovery, compensation, contribution, recovery of damages, injunction or
other
equitable relief or otherwise.
15
(C) Lessors
have not knowingly undertaken, permitted, authorized or suffered the presence
or
suspected presence, use, manufacture, handling, generation, storage, treatment,
discharge, release, burial or disposal on, under or about the Facilities
of any
Hazardous Material, except in compliance with environmental laws, or the
transportation to or from the Facilities, of any Hazardous Material in violation
of any environmental laws.
(D) With
the exception of an emergency generator, there are no oil burners, incinerators,
furnaces, fuel-burning devices or other sources of air pollution at the
Facilities and there is no fuel (other than for an emergency generator) stored
upon the Facilities.
(E) For
purposes
of this Section 16(i), "Hazardous Material" shall mean any flammable, explosive,
radioactive or reactive materials, any asbestos (whether friable or
non-friable), any pollutants, contaminants or other hazardous, dangerous
or
toxic chemicals, materials or substances, any petroleum products or substances
or compounds containing petroleum products, including gasoline, diesel fuel
and
oil, any polychlorinated biphenyls or substances or compounds containing
polychlorinated biphenyls, and any other material or substance defined as
a
"hazardous substance," "Hazardous material," "hazardous waste," "toxic
materials," "contamination," and/or "pollution" within the meaning of any
federal, state or local law, ordinance, rule, regulation, requirement,
guideline, code, resolution, order or decree (including consent decrees and
administrative orders) in effect on the Effective Date, the Commencement
Date
and during the term of the Leases which regulates the use, generation, handling,
storage, treatment, transportation, decontamination, clean-up, removal,
encapsulation, enclosure, abatement or disposal of any Hazardous Material,
including the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901, et seq., the Toxic Substance Control Act, 15
U.S.C. Sections 2601, et seq., the Clean Water Act, 33 U.S.C. Sections 1251
et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1802,
their
state analogues, and any other federal, state or local statute, law, ordinance,
resolution, code, rule, regulation, order or decree regulating, relating
to, or
imposing liability or standards of conduct concerning any Hazardous
Materials.
Due
Diligence Materials.
Each of the Due Diligence Materials are complete and correct. Financial
statements presented to Lessees have been prepared in accordance with GAAP
consistently applied and they fairly present the financial condition of the
Facilities at the respective dates and the results of its operations for
the
periods covered thereby.
(k) Brokers,
Finders, etc.
Other than Xxxxxxx Capital Markets Group ("Xxxxxxx"), all negotiations
relating to this Agreement, the Leases and the transactions contemplated
hereby
have been carried on without the intervention of any person acting on behalf
of
the Lessors in such manner as to give rise to any claim against Lessee for
any
brokerage or finder's commission, fee or similar compensation. Landlord shall
be
responsible for all compensation of Xxxxxxx in connection with the
Transaction.
16
17. Summerville's
Representations And Warranties. Summerville represents and
warrants to Landlord as follows:
(a) Organization
and Standing.
Summerville is a duly existing corporation and is has the legal power
to
enter into this Agreement. Tenant shall as of the Commencement Date be duly
existing and authorized to conduct business in the states of Michigan and
Indiana.
(b) Authority.
Summerville has the authority to make, execute, deliver and perform
this
Agreement, and all actions contemplated by this Agreement have been (or shall
as
of the Commencement Date have been) duly authorized by all necessary action
by
Summerville and Tenant.
(c) Binding
Effect. This
Agreement, when executed by Summerville, shall
constitute the valid and binding obligation of Summerville.
18. Incorporation
Of Lease
Representations And Warranties. Landlord represents
and warrants to Summerville the representations and warranties of Landlord
under
Section 30 of the Leases. The Tenant representations and warranties to Landlord
as stated in Section 31 of the Leases are incorporated herein as part of
this
Agreement.
19.
Interim
Covenants.
(a) Authorizations.
Lessors and Lessee, as promptly as practicable after the Effective
Date,
at no cost to Lessors, shall (i) make, or cause to be made, all such filings
and
submissions under laws, rules and regulations applicable to each of them,
respectively, and their respective Affiliates as may be required to consummate
the transactions contemplated by this Agreement and the Leases, and (ii)
use
commercially reasonable efforts and work cooperatively to obtain, or cause
to be
obtained, all government approvals and other authorizations, approvals, consents
and waivers from all persons, necessary to be obtained by it, or its affiliates,
in order for it to consummate such transactions. Lessors and Lessee will
coordinate and cooperate with one another in exchanging such information
and
supplying such reasonable assistance as may be reasonably requested by each
in
connection with the foregoing.
(b) Operations
Pending
Transaction. Prior to the Closing Date, Lessors shall operate the
Facilities in accordance with its normal and customary business practices,
including the continued marketing and admission of Residents, management
of
Facility Employees, and compliance with governmental regulations. Lessors
shall
use commercially reasonable efforts to transition the Facilities to Tenant
in
substantially the same condition as exists at the Facilities as of the Effective
Date.
17
(c) No
Publicity. Except
as required by applicable law, neither Lessors or Lessee shall make any public
announcements with respect to this Agreement or the Leases or the transactions
contemplated hereby without the express prior written consent of the other
party. Each party shall hold in confidence, and use their best efforts to
have
all of their officers, directors, employees, trustees and agents hold in
confidence, the terms of this Agreement and the Leases and the transactions
contemplated hereby.
(d) Access
to Properties, Books
and Records. Prior to the Commencement Date, Lessors shall afford to
Lessee full access to the Facilities and to the Facilities' books and records
under Lessors' control or custody during regular business hours upon reasonable
notice. Until the Commencement Date, Lessors shall cause their representatives
to furnish to Lessee updated monthly financial statements including a statement
of income, balance sheet, rent roster, and a statement of changes in cash
flow
and such additional financial and operating data and other information
(including accountants work papers) relating to Lessors' business, the
Facilities and financial condition as shall be reasonably requested from
time to
time by Lessee. All such information disclosed in connection with this Section
shall be kept confidential by Lessee unless such disclosure is required by
applicable law, regulation or court order.
(e) Further
Assurances.
After the Commencement Date, and for no further
consideration, Lessors shall (i) perform all acts (including, without
limitation, the use of Lessors' commercially reasonable efforts to enable
Lessee
to accomplish transfer of licenses, registrations, permits, approvals and
the
like as contemplated by this Agreement and the Leases) and execute, acknowledge
and deliver such assignments, transfers, consents and other documents and
instruments as Lessee may reasonably request, in each case, to vest in Lessee
and protect Lessee's interest in, and enjoyment of, the Facilities intended
to
be assigned and transferred to Lessee pursuant to this Agreement and the
Leases,
(ii) provide Lessee with such information as Lessee reasonably requires related
to the business of Lessors and the Facilities, and (iii) file such documents
as
may be necessary so as to permit Lessee to use Lessors' business and/or
Facilities' names for its operation of the Facilities.
20. Conditions
Precedent To
Summerville's Obligations. Unless waived by Summerville,
the obligations of Summerville to consummate the transactions contemplated
by
this Agreement is subject to the satisfaction of each of the following
conditions:
(a) Representations
and
Warranties. The representations and warranties of Lessors contained in
this Agreement shall be true and correct in all material respects at and
as of
the Commencement Date as though such representations and warranties were
made at
and as of the Commencement Date. Lessors shall deliver a certification at
Closing confirming the accuracy of the representations and warranties as
of the
Closing Date.
(b) Licenses.
The
Tenants
for the Hobart, Niles and XxXxxxx Facilities shall have obtained the necessary
Licenses to operate such Facilities, or written notice from the licensing
authority having jurisdiction over such a Facility that such License shall
be
effective upon Tenant's acquisition of control of the Facility or the parties
shall have entered into an interim management agreement.
18
(c) Waiver
Of Right To
Terminate. Summerville
shall not have given notice of termination of this Agreement prior to the
end of
the Due Diligence Period.
(d) Performance
Of
Covenants.
Lessors
shall have performed or complied in all material respects with
their agreements and conditions required by this Agreement to be performed
or
complied with prior to or on the Commencement Date.
(e) Lender
Approvals and SNDA.
Lender Approval shall have been obtained
from each Mortgagee of a Facility as described in Section 2 above, and an
SNDA
shall have been executed and delivered to Tenants for each Mortgage applicable
to a Facility. The approval of HUD as necessary to make the SNDAs as to the
two
Facilities financed by HUD-insured Mortgages (Niles and XxXxxxx) legally
effective, as referenced in Section 2(b) above, shall have been
obtained.
21.
Conditions
Precedent To
Landlord's Obligations.
(a) Representations
and
Warranties. The
representations and warranties of Summerville contained in this Agreement
shall
be true and correct in all material respects at and as of the Commencement
Date
as though such representations and warranties were made at and as of the
Commencement Date.
(b) Performance
of
Covenants. Summerville
shall have performed or complied in all material respects with its agreements
and conditions required by this Agreement to be performed or complied with
prior
to or on the Commencement Date.
(c) Lender
Approvals.
Lender Approval shall have been obtained from each
Mortgagee of a Facility as described in Section 2 above.
22. Termination
(a) Termination
for Cause or By
Mutual Consent. This
Agreement
may be terminated at any time at or prior to the Closing by either party,
other
than by Summerville during the Due Diligence Period as provided in Section
2
above, only upon the following conditions: (i) a material breach by a party
has
not been cured within ten business days of receipt of written notice of default;
(ii) by the mutual consent of Summerville and Landlord.
(b) Effect
of
Termination. If
a
non-breaching party terminates this Agreement pursuant to Section 22(a)(i),
such
termination shall not affect the non-breaching party's right to
damages.
19
23. Indemnification.
(a) Indemnification
by
Summerville. Summerville shall indemnify and
defend Landlord and hold it harmless against and with respect to any and
all
damage, loss, liability, deficiency, cost and expense (including without
limitation, reasonable attorney fees and expenses) ("Loss") resulting
from:
(i) any
inaccuracy in any representation or certification, or breach of any warranty
made by Summerville in this Agreement;
(ii) breach
of any covenant or undertaking made by Summerville in this
Agreement.
(b) Indemnification
by Tenant.
Tenant shall indemnify Landlord for liabilities
arising after the Commencement Date pursuant to Section 32.2 of the Leases.
Except as expressly set forth in this Agreement or the Leases, Tenant shall
not
assume or be responsible to pay, perform or discharge any obligations,
liabilities, contracts or commitments of Landlord of any kind or nature
whatsoever.
(c) Indemnification
by Landlord.
Landlord shall indemnify and defend
Summerville and the Tenants and hold them harmless against and with respect
to
any and all Loss resulting from:
(i) any
inaccuracy in any representation or certification, or breach of any warranty
made by Landlord in this Agreement;
(ii) the
breach of any covenant or undertaking made by Landlord in this
Agreement;
(iii) any
damages, costs, expenses, liabilities, obligations and claims
of
any kind or nature, whether arising in contract or tort, at law or in equity,
or
otherwise, from or arising out of or in connection with the management and
operation of the Facilities prior to the Commencement Date, including, but
not
limited to, (i) bodily injury or property damage occurring within or about
the
Facilities prior to the Commencement Date, (ii) labor disputes, including
unfair
labor practice allegations, from acts or occurrences prior to the Commencement
Date, (iii) accounts payable with respect to goods or services provided to
the
Facilities prior to the Commencement Date and which have not been assumed
by
Summerville or Tenant under this Agreement, and (iv) claims made by Tenant
against Landlord with respect to Landlord's indemnification obligations under
this Agreement, including without limitation claims relating to civil monetary
penalties relating to the period prior to the Commencement Date.
(d) Limitations
on
Indemnification. Each party's liability under this Section
23 shall be limited to actual damages, and no party shall be liable to the
other
party for special, consequential, incidental, punitive, extra-contractual,
bad
faith, exemplary or other damages, fines or penalties, unless such damages,
fines or penalties are asserted or imposed by a government or private third
party, in which event, such damages, fines or penalties shall be deemed actual
damages.
20
24.
General
Provisions.
(a) Further
Assurances. Each
of the
parties hereto agrees to execute and deliver any and all further agreements,
documents or instruments necessary to effectuate this Agreement.
(b) Payment
of Expenses.
Each party hereto shall bear its own legal, accounting and other expenses
incurred in connection with the preparation and negotiation of this Agreement
and the consummation of the transaction contemplated hereby, whether or not
the
transaction is consummated.
(c) Entire
Agreement. This
Agreement,
together with the other agreements referred to herein, constitute the entire
understanding between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions and preliminary
agreements.
(d) Amendment/Waiver.
This Agreement may not be modified or amended except in writing signed
by
the parties hereto. No waiver of any term, provision or condition of this
Agreement in any one or more instances, shall be deemed to be or be construed
as
a further or continuing waiver of any such term, provision or condition of
this
Agreement. No failure to act shall be construed as a waiver of any term,
provision, condition or rights granted hereunder.
21
(e) Notices.
All
notices
to be given by either party to this Agreement to the other party hereto shall
be
in accordance with Section 25 of the Leases.
Joint
Venture; Third Party
Beneficiaries. Nothing
contained herein shall be construed as forming a joint venture or partnership
between the parties hereto with respect to the subject matter hereof. The
parties hereto do not intend that any third party shall have any rights under
this Agreement.
(g) Arbitration. The
provisions
of Section 43 of the Leases as to arbitration and dispute resolution are
incorporated herein as part of this Agreement.
(h) Governing
Law. This
Agreement
shall be governed by the laws of the State of Indiana.
[Remainder
of this page intentionally left blank]
22
In
witness whereof, the parties have executed this Agreement as set forth
below.
Summerville
Senior Living,
Inc.
|
Elkhart
Retirement
L.L.C.
|
|||
By:
|
By:
|
/s/
Xxxxxx X. Xxxxxxxx
|
||
Name:
|
Name:
Xxxxxx X. Xxxxxxxx
|
|||
Title:
|
Title:
Manager/Sole Member
|
|||
Date:
October 1, 2004
|
Date:
October 1, 2004
|
|||
Niles
Retirement
L.L.C.
|
Hobart
Retirement
L.L.C.
|
|||
By:
|
/s/
Xxxxxx X. Xxxxxxxx
|
By:
|
/s/
Xxxxxx X. Xxxxxxxx
|
|
Name:
|
Xxxxxx X.
Xxxxxxxx
|
Name:
Xxxxxx X. Xxxxxxxx
|
||
Title:
|
Manager/Sole
Member
|
Title:
Manager/Sole Member
|
||
Date:
|
October
1, 2004
|
Date:
October 1, 2004
|
||
/s/
Xxxxxx X.
Xxxxxxxx
|
XxXxxxx
Retirement
L.L.C.
|
|||
XXXXXX X.
XXXXXXXX
|
||||
By:
|
/s/
Xxxxxx X. Xxxxxxxx
|
|||
Date:
October 1, 2004
|
Name:
Xxxxxx X. Xxxxxxxx
|
|||
Title:
Manager/Sole Member
|
||||
Date:
October 1, 2004
|
23