SIXTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED MASTER LEASE
EXHIBIT 10.1
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
AMENDED AND RESTATED MASTER LEASE
This Sixth Amendment to Consolidated Amended and Restated Master Lease (this
“Amendment”) is executed and delivered as of March 14, 2008 by and between STERLING
ACQUISITION CORP., a Kentucky corporation (“Lessor”), the address of which is 0000 Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000, and DIVERSICARE LEASING CORP., a Tennessee corporation, the
address of which is 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000.
RECITALS:
A. Lessee has executed and delivered to Lessor a Consolidated Amended and Restated Master
Lease dated as of November 8, 2000, but effective as of October 1, 2000, as amended by a First
Amendment to Consolidated Amended and Restated Master Lease dated as of September 30, 2001, a
Second Amendment to Consolidated Amended and Restated Master Lease dated as of June 15, 2005 (the
“Second Amendment”), a Third Amendment to Consolidated Amended and Restated Master Lease
dated as of October 20, 2006 (the “Third Amendment”), a Fourth Amendment to Consolidated
Amended and Restated Master Lease dated as of April 1, 2007, and a Fifth Amendment to Consolidated
Amended and Restated Master Lease dated as of August 10, 2007 (the “Existing Master Lease”)
pursuant to which Lessee leased from Lessor certain healthcare facilities.
B. Pursuant to that certain Unimproved Property Contract (the “Paris Purchase
Agreement”) dated as of September 4, 2007 between Xxxxxx, Xxxxxx and Xxxxx, a general
partnership, and Omega Healthcare Investors, Inc., a Maryland corporation (“Omega”), Omega
has the right to acquire that certain parcel of unimproved land described on attached Exhibit A and
located in Paris, Texas (the “Paris Land”).
C. Omega is the parent corporation of Lessor and intends to assign its right to purchase the
Paris Land to Lessor.
X. Xxxxxx and Lessee desire to have a skilled nursing facility constructed on the Paris Land
(the “Paris Facility”) and for Lessee to lease the Paris Facility from Lessor pursuant to
the Existing Master Lease.
E. Lessee and Lessor desire to amend the Existing Master Lease to add the Paris Facility to
the Existing Master Lease on the terms and conditions of this Amendment.
NOW THEREFORE, the parties agree as follows:
1. Definitions.
(a) Any capitalized term used but not defined in this Amendment will have the meaning assigned
to such term in the Master Lease. From and after the date of this Amendment, each reference in the
Existing Master Leases or the other Transaction Documents to the “Lease” or “Master Lease” means,
as applicable, the Existing Master Lease or Existing Master Leases as modified by this Amendment.
(b) In addition to the other definitions contained herein, when used in this Amendment the
following terms shall have the following meanings:
“Acquisition Date” means the date that the Land described in Exhibit A
to this Amendment is acquired by Lessor or its Affiliates.
“Actual Funded Amount” means (i) the amount actually expended for the
acquisition of the Paris Land by Lessor and the amount actually advanced and disbursed by
Lessor for completion of the Paris Facility in accordance with this Amendment, as of a given
date, plus (ii) the allocated bed costs set forth in the Construction Budget.
“Closing Date” means the date that Lessor acquires the Paris Facility.
“Construction Budgets” means the detailed budget for the construction of the
Paris Facility attached as Schedule 1, which sets forth Lessee’s good faith estimate
of the Project Costs on an itemized basis and designates each item by amount, whether such
item constitutes an item of Hard Costs or Soft Costs and the amount of proceeds, if any, of
the Maximum Funded Amount allocable to each item of Hard Costs and Soft Costs.
“Developer’s Fees” means the fees and commissions, including Developer’s
Overhead, payable to Lessee or any Affiliate of Lessee for services rendered in connection
with the development, construction management or leasing of the Paris Facility, as set forth
on the Construction Budget.
“Developer’s Overhead” means costs incurred by Lessee and set forth on the
Construction Budget for developer’s overhead and profit.
“Event of Force Majeure” is any event or condition of Force Majeure, not
existing as of the Closing Date, not reasonably foreseeable as of such date and not
reasonably within the control of Lessee, that prevents in whole or in material part the
performance by Lessee of its obligations under this Amendment or that renders the
performance of such obligations so difficult as to make such performance commercially
unreasonable.
“Funded Amount” means (i) the amount actually expended for the acquisition of
the Paris Land and completion of the Paris Facility as of a given date, plus (ii) the
allocated bed costs set forth in the Construction Budget.
“Hard Costs” means costs paid to renovate and complete the Paris Facility,
including without limitation, demolition costs, site preparation costs, contractor’s fees,
and costs of labor and material paid or necessarily incurred by Lessee in connection with
the construction of the Paris Facility, but excluding Developer’s Fees, Developer’s Overhead
and Contractor’s Overhead, and the contingency reserve, if any, set forth on the
Construction Budget.
“Initial Paris Base Rent” means an annual amount equal to (i) the Actual Funded
Amount as of the first day of the applicable month during the applicable Lease Year
multiplied by (ii) ten and one quarter percent (10.25%).
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“In Service Date” shall be the date of completion of construction and licensing
of the Paris Facility for its intended use as a skilled nursing facility.
“Joinder Agreement” means the Joinder Agreement and Amendment to Texas
Collateral Documents from the Paris Sublessee, the Texas Sublessees, and Lessor dated as of
the date of this Amendment.
“Maximum Funded Amount” means Seven Million Dollars ($7,000,000).
“Plans and Specifications” means the written plans and specification for the
construction of the Paris Facility submitted by Lessee and approved by Lessor, as such plans
and specifications may be amended as set forth in this Amendment.
“Paris Base Rent Commencement Date” shall be the earlier of (i) the
15th day of the calendar month following the In Service Date or (ii) August 15,
2009.
“Paris Base Rent” shall be:
(a) During the first Renewal Term, the Paris Base Rent shall be:
(1) Prior to the Paris Base Rent Commencement Date, no Paris Base Rent shall be
due and owing;
(2) During the twelve month period commencing on the Paris Base Rent
Commencement Date, the Initial Paris Base Rent;
(3) Subject to sub-sections (a)(4) of this defined term, during each subsequent
twelve month period commencing on the anniversary of the Paris Base Rent
Commencement Date (the “Adjustment Date”), until the end of the Term
(including any Renewal Terms), the Paris Base Rent for the previous Lease Year,
increased by the product of (i) the Paris Base Rent during the immediately preceding
Lease Year and (ii) the lesser of one (1) times the increase, if any, in the CPI
(expressed as a percentage) from the Paris Base Rent Commencement Date to the
applicable Adjustment Date and two and one-half percent (2.5%).
Under no circumstances will the Paris Base Rent in any twelve month period be
less than the Paris Base Rent during the preceding twelve month.
(4) If, after the Paris Rent Reset Date, the Paris Formula Rent is greater than
the Paris Scheduled Rent, then
(A) for the twelve month period after the Paris Rent Reset Date, the
Paris Base Rent shall be equal to the Paris Formula Rent; and
(B) during each subsequent twelve month period commencing on the
anniversary of the Paris Rent Reset Date (the “Adjustment Date”), until the
end of the Term (including any Renewal Terms), Paris Base Rent for the
previous Lease Year, increased by the product of (i) the Paris Base Rent
during the immediately preceding Lease Year and (ii) the lesser of
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one (1) times the increase, if any, in the CPI (expressed as a
percentage) from the Paris Rent Reset Date to the applicable Adjustment Date
and two and one-half percent (2.5%).
Under no circumstances will the Paris Base Rent in any Lease Year be
less than the Paris Base Rent during the preceding Lease Year.
Under no circumstances will the Paris Base Rent in any Lease Year during the
Renewal Term be less than the Paris Base Rent during the preceding Lease Year.
Paris Cash Flow: For any period, the sum of (a) Net Income of Lessee arising
solely from the operation of the Paris Facility for the applicable period, and (b) the
amounts deducted in computing Lessee’s Net Income for the period for (i) the provision for
self-insured, professional and general liability, (ii) depreciation, (iii) amortization,
(iv) Paris Base Rent, (v) interest (including payments in the nature of interest under
Capitalized Leases and interest on any Purchase Money Financing for personal property used
in connection with the Paris Facility), (vi) income taxes (or, if greater, income tax
actually paid during the period attributable to the Paris Facility), and (vii) management
fees payable in connection with the Paris Facility, and less (c) an imputed management fee
equal to six percent (6%) of Gross Revenues for the Paris Facility, and less (d) the Cash
Cost of Self-Insured Professional and General Liability attributable to the Paris Facility.
The Cash Cost of Self-Insured Professional and General Liability shall mean: For any
period, the average total per bed cash expenditure associated with professional and general
liability related settlements, judgments, legal fees or administration for skilled nursing
facilities in the State of Texas as from time to time estimated and published by Aon Risk
Consultants, or its successors, for the American Health Care Association, multiplied by the
average number of occupied beds in the Paris Facility.
“Paris Formula Rent” means the sum of:
(a) the Paris Scheduled Rent; plus
(b) one half of (i) the average annual Paris Cash Flow for the twenty four
month period ending prior to the Paris Rent Reset Date, less (ii) the Paris
Scheduled Rent multiplied by 1.2.
“Paris Rent Reset Date” means the first day of the sixth full Lease Year after
the Paris Base Rent Commencement Date.
“Paris Scheduled Rent” means the Paris Base Rent as of the Paris Rent Reset
Date as calculated pursuant to subsection (a)(3) of the definition of Paris Base Rent.
“Paris Sublessee” means Diversicare Paris, LLC, a Delaware limited liability
company.
“Project Costs” means all Hard Costs, Soft Costs, Developer’s Fees,
Contractor’s Overhead and other costs and fees associated with the construction of the
Construction Facilities.
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“Soft Costs” means premiums for title, casualty and other insurance required by
Lessor under the Paris Purchase Agreement or this Lease; the cost of recording and filing
the closing documents under the Paris Purchase Agreement and any tax levied upon such
filing; real estate taxes and other assessments that Lessee is obligated to pay; fees and
disbursements of the Lessor’s attorneys, architects and engineers, appraisers, environmental
engineers and surveyors; architectural design and monitoring fees; permit fees; all fees and
expenses payable under that certain Development Agreement dated as of October 31, 2007
between OHI Asset (TX) Paris, LLC, a Delaware limited liability company, and LMG
Development, LLC, a Texas limited liability company; allocated best costs as set forth in
the Construction Budget; and interest (including any reserve for interest set forth on the
Construction Budgets), fees and miscellaneous transaction closing costs and charges payable
by Lessee to Lessor as they become due and payable.
“Survey Requirements” means the survey requirements set forth in Exhibit B to
this Amendment.
“Target Completion Date” means July 1, 2009.
“Title Company” means a title company selected by Lessor and reasonably
acceptable to Lessee.
(c) The following definitions defined in §2.1 of the Existing Master Lease and §1 of the Fifth
Amendment are hereby amended in their entirety as follows:
(1) §2.1 of the Existing Master Lease:
Base Rent: means the sum of (i) the Non-Texas Base Rent, (ii) the Texas Base
Rent, and (iii) subject to Section 1(c) of this Amendment, the Paris Base Rent.
Commencement Date: October 1, 2000 for the Non-Texas Facilities (other than
the Paris Facility), August 11, 2007 for the Texas Facilities, and the Closing Date for the
Paris Facility.
Expiration Date: means the First Renewal Term Expiration Date, the Second
Renewal Term Expiration Date, the First Texas Renewal Term Expiration Date, or the Second
Texas Renewal Term Expiration Date, as applicable.
Facilit(y)(ies): Each health care facility on the Land, including the Leased
Property associated with such Facility, and together, all such facilities on the Leased
Properties; all of which Facilities are collectively listed on Exhibit C to this
Amendment.
Land: The real property described in listed on attached Exhibit A to
the Existing Master Lease, Exhibit A to the Fifth Amendment and Exhibit A to
this Amendment.
Lease Year: October 1, 2000 through September 30, 2001, and each twelve month
period thereafter, except that for purposes of determining the Texas Base Rent and the Paris
Base Rent, “Lease Year” shall mean (i) with respect to the Texas Base Rent, the twelve month
period commencing on February 1 and ending January 31, and each twelve month period
thereafter, and (ii) with respect to the Paris Base Rent, the twelve month
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period commencing on the Paris Base Rent Commencement Date, and each twelve month
period thereafter commencing on the anniversary of the Paris Base Rent Commencement Date.
Leased Property: The portion of the Land on which a Facility is located, the
legal description of which is set forth beneath the Facility’s name on Exhibits A-1
through A-28 to the Existing Master Lease, Exhibit A-1 through A-7 to the Fifth
Amendment, and Exhibit A to this Amendment, the Leased Improvements on such portion of the
Land, the Related Rights with respect to such portion of the land, and Lessor’s Personal
Property with respect to such Facility.
Permitted Encumbrances: Encumbrances listed on attached Exhibit B to
the Existing Master Lease, Exhibit C to the Fifth Amendment, and Exhibit D
to this Amendment.
(2) §1 of the Fifth Amendment:
Pre-Existing Hazardous Substances: means Hazardous Substances located on,
under, about or with respect to the Treemont Facility prior to February 1, 2003, or the Katy
Facility prior to July 1, 2003, or the Humble Facility prior to July 1, 2003, or the Paris
Facility prior to the Acquisition Date for the Paris Facility.
Pre-Existing Environmental Conditions: means any Contamination or other
environmental condition on, under, about or with respect to the Treemont Facility prior to
February 1, 2003, or the Katy Facility prior to July 1, 2003, or the Humble Facility prior
to July 1, 2003, or the Paris Facility prior to the Acquisition Date for the Paris Facility.
Texas Facilities: means, except as otherwise expressly provided herein with
respect to the Paris Facility, the Facilities located on the real property described in
Exhibits A-1 through A-7 to the Fifth Amendment and Exhibit A to
this Amendment.
Texas Pledge Agreements: means the Pledge Agreements dated as of the same date
as the Fifth Amendment, as amended by the Joinder Agreement, from the equity owners of the
Texas Sublessees in favor of Lessor.
Texas Sublessees: means (i) the Master Texas Sublessee, (ii) Diversicare
Ballinger, LLC, Diversicare Doctors, LLC, Diversicare Estates, LLC, Diversicare Humble, LLC,
Diversicare Katy, LLC, Diversicare Normandy Terrace, LLC, and Diversicare Treemont, LLC,
each a Delaware limited liability company, and (iii) the Paris Sublessee.
Texas Sublessees Guaranty: means the Guaranty dated as of the same date as the
Fifth Amendment, as joined in by Paris Sublessee pursuant to the Joinder Agreement, in favor
of Lessor.
Texas Sublessee Security Agreement: means the Security Agreement dated as of
the same date as the Fifth Amendment, as joined in by Paris Sublessee pursuant to the
Joinder Agreement, in favor of Lessor.
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(d) For purposes of the adjustments to Texas Base Rent provided for in subparagraphs (3) and
(4) of the definition of Texas Base Rent set forth in Section 1 of the Fifth Amendment, the
“change” or “increase” in CPI referred to therein shall be deemed to mean the “change” or increase”
in CPI from the Commencement Date to the commencement of the twelve month period (being February 1
through January 31) for which the adjustment in Texas Base Rent, if any, is to be made.
2. Paris Base Rent; Rent Reset; Termination Option; a “Texas Facility”; Delay.
(a) Paris Base Rent Commencement Date. Commencing as of the Paris Base Rent
Commencement Date, Lessee shall pay the Paris Base Rent pursuant to the terms and conditions of
Article III of the Master Lease. Notwithstanding anything in this Amendment to the contrary,
Lessor shall have no obligation to make further advances of the Funded Amount on or after the Paris
Base Rent Commencement Date.
(b) Paris Base Rent Reset. As soon as reasonably possible after the fifth anniversary
of the Paris Base Rent Commencement Date, Lessor and Lessee shall calculate the Paris Formula Rent.
If the Paris Formula Rent is greater than the Paris Scheduled Rent, then the Paris Base Rent shall
be reset to the Paris Formula Rent effective as of the Paris Rent Reset Date.
(c) Paris Termination Option. Pursuant to written notice delivered to Lessor not more
than thirty (30) days prior to, nor later than, the fifth anniversary of the Paris Base Rent
Commencement Date (“Paris Termination Notice”), Lessee may elect to terminate the Master
Lease as to the Paris Facility only. After delivery of the Paris Termination Notice, this Lease
shall be terminated as to the Paris Facility only effective on the earlier of (i) a date set by
written notice given by Lessor at least thirty (30) days prior to the effective date, and (ii) the
first day of the sixth month after fifth anniversary of the Paris Base Rent Commencement Date (the
“Paris Termination Date”). If the Paris Termination Notice is delivered, then Lessee shall
have no further obligation to pay Paris Base Rent for periods from and after the Paris Termination
Date.
(d) For all purposes under this Lease other than the calculation of Base Rent, the Paris
Facility shall constitute a Texas Facility.
(e) In the event that Lessee is unable to obtain completion of the Paris Facility as described
in Section 6(a) below by the Target Completion Date due to an Event of Force Majeure or Lessor
Delay, then the Target Completion Date and the Paris Base Rent Commencement Date shall each be
extended by one (1) day for each one (1) day of delay in the completion of the Paris Facility
caused by such Event of Force Majeure or Lessor Delay. For purposes of this Amendment, the term
“Lessor Delay” shall mean any delay in achieving completion of the Paris Facility as described in
Section 6(a) below arising solely and directly as a result of:
(i) Lessor’s failure to furnish any information or documents in accordance with this Amendment
and the continuation of such failure after the receipt of written notice from Lessee to Lessor, to
the extent such failure causes a delay in completion;
(ii) Lessor’s failure or delay in giving approval or consent (or comments or corrections)
where Lessor’s approval or consent (or comments or corrections), as
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applicable, is required herein and has been requested in writing by Lessee, to the extent such
failure or delay causes a delay in completion; and
(iii) Lessor’s failure to perform or comply with its obligations under this Amendment and the
continuation of such failure after the receipt of written notice from Lessee to Lessor, to the
extent such failure causes a delay.
3. Accrual of Financing Costs. During the period from the Closing Date until the Base
Rent Commencement Date, financing costs on the Actual Funded Amount shall accrue monthly at the
rate of ten and one-quarter percent (10.25%) per annum. In the month such financing costs accrues,
such financing costs shall be deemed to have been advanced as part of the Actual Funded Amount for
all purposes under this Amendment.
4. Sublease; Management. Lessee may sublease the Paris Facility to the Master Texas
Sublessee and the Master Texas Sublessee may sublease the Facility to the Paris Sublessee. The
Paris Sublessee shall guaranty this Lease and provide the same collateral to secure this Lease as
are provided by all other Sublessees under this Lease. The form of sublease between Lessee and the
Paris Sublessee (the “Paris Sublease”) shall be subject to Lessor’s reasonable approval.
All equity owners of the Paris Sublessee shall (i) pledge their interests in the Sublessee to
secure the Lease and the other Transaction Documents, and (ii) subordinate any management,
consulting or other agreements between the Paris Sublessee and such equity owners (or any of their
affiliates) to the Paris Sublease, this Lease and the other Transaction Documents. Pursuant to
Section 8.4 of the Existing Master Lease, Lessor hereby consents to the management of the Paris
Facility by Diversicare Management Services Co., an Affiliate of Lessee, under its current form of
Management Agreement with the Lessee or Sublessee, as the case may be, of the other Facilities
covered by the Existing Master Lease.
5. Regulatory Approvals. Lessee will be required to, or to cause Paris Sublessee to,
apply for, and to diligently pursue at its own expense, all licenses and regulatory approvals to
operate the Paris Facility as a skilled nursing facility (the “Licenses”). Lessee represents and
warrants that it knows of no facts or circumstances that would make it unlikely that the Licenses
will be issued. Lessor covenants and agrees that it will cooperate in good faith with Lessee and
use commercially reasonable efforts, where necessary or required from Lessor as owner of the Paris
Land, to enable and assist Lessee to obtain the Licenses.
6. Construction of the Paris Facility.
(a) Commencement and Completion of Construction. Lessee shall commence substantial
on-site construction of the Paris Facility within sixty (60) days of the Closing Date and, subject
to a temporary suspension of performance pursuant to Section 16 below, or Lessor Delay, will
continue diligently to complete the Paris Facility on or before the Target Completion Date (or as
soon thereafter as reasonably possible) and will supply such moneys and perform such duties as may
be necessary in connection therewith. The Paris Facility will be complete for purposes of this
Section only at such time as (i) all improvements to the Paris Facility called for in the Plans and
Specifications have been installed or completed in a manner satisfactory to Lessor and (ii) the
local public authority has issued a final certificate of occupancy for the Paris Facility subject
only to such conditions as may be acceptable to Lessor.
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(b) Lessor’s Architect; Approval of Plans. Lessor may retain the services of
architects and engineers, including architects and engineers employed by Lessor (the “Lessor’s
Architect”), to act as Lessor’s agent in reviewing the Plans and Specifications and the progress of
construction and in making such certifications and performing such other tasks and duties as Lessor
deems appropriate. Lessee will pay all reasonable fees, costs and expenses of the Lessor’s
Architect within ten (10) days after demand by Lessor, accompanied by a reasonably detailed invoice
or statement of the amount due from Lessor’s Architect. Lessee, at Lessee’s option, may utilize
and retain the services of Lessor’s Architect or may retain the services of its own architects and
engineers (the “Lessee’s Architect”) to develop and prepare the Plans and Specifications
for construction of the Paris Facility. Whether Lessee utilizes Lessor’s Architect or Lessee’s
Architect as the “Project Architect” to develop and prepare the Plans and Specifications, Lessee
shall be responsible for payment of the fees, costs and expenses of the Project Architect in
developing and preparing the Plans and Specifications. Lessor and Lessee shall cooperate with each
other in developing the Plans and Specifications. Lessee shall cause the Project Architect to
deliver to Lessor the Plans and Specifications for review and approval by Lessor. The Plans and
Specifications shall be subject to Lessor’s approval within ten (10) Business Days of receipt by
Lessor of a complete set of the Plans and Specifications. Lessor’s approval shall not be
unreasonably withheld, delayed or conditioned. If Lessor does not approve the same, Lessor shall
advise Lessee in writing specifically of the changes required in the Plans and Specifications so
that they will meet with Lessor’s approval. If Lessor provides Lessee comments as to the Plans and
Specifications, Lessee shall provide revised Plans and Specifications to Lessor within ten (10)
Business Days and Lessor shall review such revised Plans and Specifications and within ten (10)
Business Days of receipt give its approval or provide the changes required for approval to be
given. This process shall continue in accordance with these time frames until such time as Lessor
and Lessee have finally approved the Plans and Specifications. The review by Lessor of the Plans
and Specifications is for Lessor’s benefit only, and Lessor’s approval of any such Plans and
Specifications shall impose no liability on Lessor, express or implied, including without
limitation any representation or warranty that such Plans and Specifications are complete or
accurate, or that such Plans and Specifications comply with zoning or other land use laws, local
building department requirements, or any applicable public or private covenants, conditions or
restrictions, and shall not in any way relieve Lessee of its obligation to perform its work in
accordance with this Amendment and all applicable laws and requirements.
(c) Plans and Specifications. Lessee will deliver to Lessor accurate and complete
copies of the approved Plans and Specifications and all other contract documents requested by
Lessor, including all modifications thereof. Lessee represents and warrants that the Plans and
Specifications and construction of the Paris Facility pursuant to thereto comply and will comply
with all applicable governmental laws and regulations and requirements, zoning and subdivision
ordinances, and standards and regulations of all governmental bodies exercising jurisdiction over
the Paris Facility, including health care licensing. Lessee agrees to provide to Lessor a
certification of the Project Architect to such effect as well as the approvals of any governmental
body or agency exercising jurisdiction of the Paris Facility. Except as provided below, Lessee
will not make, or cause or permit to be made, any change to the Plans and Specifications unless a
request for the change has been submitted in writing to Lessor and approved in writing by the
construction manager or general contractor, as the case may be, any tenants whose approval is
required, Lessor and such other parties as Lessor may require. Lessor’s approval may be subject to
such terms and conditions as Lessor reasonably may
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prescribe. Under no circumstances will any failure by Lessor to respond to a request for
approval of a change in the Plans and Specifications be deemed to constitute approval of the
request. Lessee will deliver promptly to Lessor copies of all bulletins, addenda, change orders
and modifications to the Plans and Specifications. Lessor has the right at all times to require
strict compliance with the original Plans and Specifications, but Lessee may effect changes in the
Plans and Specifications from time to time, without first obtaining Lessor’s approval, if (i) the
changes do not impair the structural integrity, design concept or architectural appearance of the
Paris Facility or change the useable area of the Paris Facility in any way, (ii) the changes will
not result in a default in any other obligation to any other party or authority and (iii) the
changes will not result in a net increase or decrease in the total Project Costs of TWO HUNDRED
FIFTY THOUSAND DOLLARS ($250,000.00) or more in the aggregate for all changes. Notwithstanding the
foregoing, to the extent that the cost to complete the Paris Facility exceeds the Maximum Funded
Amount (whether or not as a result of any such changes in the Plans and Specifications), Lessee
will be responsible for payment of the excess.
(d) Character of Construction. All construction will be in accordance with the Plans
and Specifications, of sound materials, in good and workmanlike manner, free and clear of all
liens, claims and encumbrances (other than the liens and security interests securing the
obligations of the Lessee under this Lease), and in compliance with all laws, ordinances,
regulations and restrictions affecting the Paris Facility and all requirements of all governmental
authorities having jurisdiction over the Paris Facility and of the appropriate board of fire
underwriters or other similar body, if any, and any applicable health care authority related to the
Licenses. Lessee will furnish Lessor with evidence of such compliance as Lessor requires from time
to time.
(e) Construction Contract and Architectural/Engineering Agreement.
(i) The identity of the construction manager(s) or general contractor(s), as the case may be,
and the Project Architect, and the contracts under which each is retained in connection with the
Paris Facility must be approved by Lessor in writing prior to the commencement of construction,
which approval shall not be unreasonably withheld. Any change to the construction manager(s) or
general contractor(s), as the case may be, and the Project Architect in connection with the Paris
Facility must be approved by Lessor in writing. Lessee will execute the construction management
agreement or general contract(s) between Lessee and the construction manager or general
contractor(s) covering all work to be done in connection with the Paris Facility. Upon request of
Lessor, Lessee will promptly furnish to Lessor executed copies of the construction management,
general contracts, and all subcontracts between the construction manager or general contractor(s)
and all of their subcontractors and suppliers. Upon request of Lessor, Lessee will promptly
furnish to Lessor any amendments or modifications (including change orders) to any of the
foregoing. Lessee will not modify or amend or permit to be modified or amended (including by way
of change order) any construction management agreement, construction contract or construction
subcontract without Lessor’s prior written approval; provided, however, that Lessor’s prior
approval need not be obtained with respect to any change order that results from a change in the
Plans and Specifications with respect to which Lessor’s consent is not required pursuant to Section
1(g) above. Upon request of Lessor, Lessee will also furnish to Lessor an executed copy of the
architectural and/or engineering agreement between Lessee and the Project Architect with respect to
the Paris Facility.
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(ii) Lessee will perform its obligations under the contracts described in subparagraph (i)
above, and will use reasonable best efforts to cause each other party to such contracts to perform
its obligations under such contracts.
(iii) Lessee will enforce or cause to be enforced the prompt performance of the contracts
described in subparagraph (i) above and will allow Lessor to take advantage of all rights and
benefits of such contracts. In addition, effective upon the expiration or termination of this
Lease as to the Paris Facility, Lessee hereby assigns to Lessor all warranties given to Lessee
under the contracts described in subparagraph (i) above. Lessee shall deliver such further
documents and agreements as may be reasonably requested by Lessor in connection with the assignment
of warranties provided for in this Section.
(f) Records and Reports. Lessee will keep accurate and complete books and records
relating to the construction of the Paris Facility, and Lessor will have access thereto during
usual business hours upon 24 hours advance notice. Lessee will furnish or cause to be furnished to
Lessor from time to time, promptly upon request, (i) copies and lists of all paid and unpaid bills
for labor and materials with respect to the Paris Facility, (ii) Construction Budgets and revisions
thereof showing the estimated cost of the Paris Facility and the source of the funds required at
any given time to complete and pay for the same, (iii) receipted bills or other evidence of payment
with respect to the cost of the Paris Facility, and (iv) such reports as to other matters relating
to the Paris Facility as Lessor may request. This paragraph will supplement any similar provision
in this Lease.
(g) Access. Notwithstanding anything to the contrary contained in this Lease, Lessee
will, and will cause the Paris Sublessee to, permit Lessor’s representatives to have access to the
Paris Facility at all reasonable times and to conduct such investigations and inspections thereof
as Lessor shall determine necessary, including without limitation in connection with inspecting the
Paris Facility and all work done, labor performed and materials furnished in connection with the
construction thereof. Lessee will, and will cause the Paris Sublessee to, cooperate and cause the
construction manager or general contractor, as the case may be, to cooperate with Lessor and its
representatives and agents during such inspections. Notwithstanding the foregoing, Lessee will,
and will cause the Paris Sublessee to, be responsible for making inspections as to the Paris
Facility during the course of construction and will determine to their own satisfaction that the
work done or materials supplied by the contractors and subcontractors has been properly supplied or
done in accordance with applicable contracts. All inspections that may be performed by Lessor and
its agents will be exclusively for the benefit of Lessor and will impose no obligation whatever
upon Lessor for the benefit of any person. Lessee will, and will cause the Paris Sublessee to,
hold Lessor harmless from, and Lessor will have no liability or obligation of any kind to Lessee,
the Paris Sublessee or creditors of any of them in connection with, any defective, improper or
inadequate workmanship or materials brought in or related to the Paris Facility, or any
construction lien arising as a result of such workmanship or materials. No inspection by Lessor
will create any obligation on Lessor or relieve Lessee or the Paris Sublessee of any obligation.
(h) Damage by Fire or Other Casualty. If the Paris Facility is partially or totally
damaged or destroyed by fire or other casualty or taken under the power of eminent domain, proceeds
of such event will be applied as provided in this Lease.
11
(i) Payment of Costs. Lessee will pay when due all obligations incurred by Lessee, or
the Paris Sublessee for the Paris Facility, including any cost for restoration.
7. Disbursements of Funded Amount. Upon satisfaction of the conditions set forth in
subparagraphs (a) and (b) below, Lessor will disburse from time to time (but no more frequently
than once per month) to Lessee advances of the Funded Amount, subject to the limitations set forth
in Section 7 below.
(a) Lessor has received:
(i) a request for disbursement, in the form of AIA 706 (the “Request”), executed by an
executive officer of Lessee and setting forth, among other things, the portion of the Funded Amount
that Lessee then is requesting be disbursed, the amount that Lessee in good faith believes to be
the cost to complete construction (after disbursement of the portion of the Funded Amount then
being requested), a detailed breakdown of the costs and expenses incurred in the construction of
the Paris Facility to the date of Request, a detailed cost breakdown of the percentage of
completion of the construction of the Paris Facility (including both Hard Costs and Soft Costs) to
the date of the Request, the amounts then due and unpaid with respect to such construction, such
other information or documentation as may be required by the Title Company and the date upon which
the disbursement is desired, provided that the date of the payment must not be less than seven (7)
Business Days after the date upon which the Lessor receives the Request and the other items set
forth in clauses (ii) through (vi) below;
(ii) A certification from Lessee that, as of the date of the Request, no Event of Default
exists under this Amendment or any of the Transaction Documents, all representations and warranties
set forth in this Amendment and all of the other Transaction Documents are accurate and complete,
and there are no actions, suits or proceedings pending, or to the knowledge of the person making
the certification, threatened or involving (or that could involve) Lessee, the Paris Sublessee or
all or any part of the Facilities and that could impair the Facilities or the ability of Lessee and
the Paris Sublessee to perform under this Amendment or any of the other Transaction Documents;
(iii) Certificates of the Project Architect, Lessor’s Architect (if not the Project Architect)
and Lessee, certified to Lessor and Lessee and certifying that (a) the Request is correct and, to
the best of its knowledge, all work on the Paris Facility up to the date thereof has been done in
substantial compliance with the Plans and Specifications therefor; (b) to the date thereof, there
has been no material deviation from the budgeted cost of the Paris Facility or construction
progress schedule, except as authorized by Lessee and approved by Lessor; and (c) the undisbursed
portion of the Funded Amount will be sufficient to meet all known costs to complete the work
covered by the Plans and Specifications, after giving effect to all amounts previously disbursed,
plus the amount then requested; and
(iv) Evidence that Lessee have delivered the items described in (i) – (iii) above to Lessor.
(b) Upon the request of Lessor, the Title Company is prepared, without condition, to issue to
Lessor a date-down endorsement, dated as of the date of the disbursement, insuring Lessor’s title
to the Paris Facility subject to no other exceptions than are set forth on the Title Policies
delivered to Lessor at closing.
12
8. Limitation on Disbursements. In no event will Lessor pay amounts in excess of the
lesser of: (i) the amounts actually paid in acquiring the Paris Land and for labor, services or
materials incorporated into the Paris Facility; and (ii) the Maximum Funded Amount.
9. Sufficiency of Funded Amount. Lessor shall be entitled to not make a disbursement,
or to make a disbursement in an amount less than the amount requested, if Lessor is not satisfied
in its sole discretion that following the requested disbursement the undisbursed proceeds of the
Funded Amount budgeted for the construction of the Paris Facility will be at least equal to the sum
of 100% of the estimated Project Costs to complete the Paris Facility in accordance with the Plans
and Specifications (including all costs incurred in connection with changes in the Plans and
Specifications). If at any time it appears to Lessor that the undisbursed balance of the Funded
Amount is less than the amount required by this Section, Lessor may give written notice to Lessee
specifying the amount of the deficiency and Lessee immediately will deposit with Lessor the amount
of the deficiency, which will be expended first in the same manner as the Funded Amount before any
further payment of the Funded Amount will be made by Lessor. Lessor may reasonably determine the
cost of construction of the Paris Facility and Lessee will be obligated to pay any sums so
determined in excess of the Funded Amount prior to any payment under this Amendment.
10. Payments to Contractor, Subcontractors and Suppliers. In order to induce the
Title Company to insure Lessor’s title to the Paris Facility without exception for the construction
or mechanics’ liens, Lessor may make payments either through the Title Company or directly to any
contractor, subcontractor or supplier furnishing labor or materials to the Paris Facility.
11. Lessor’s Right to Cure. If Lessee fails to perform any of Lessee’s undertakings
set forth in this Amendment or in any other Transaction Document and fails to cure the same within
any grace or cure period applicable thereto, upon such Notice as may be expressly required herein
or therein (or, if Lessor reasonably determines that the giving of such Notice would risk loss to
the Paris Facility or cause damage to Lessor, upon such Notice as is practical under the
circumstances), and without waiving or releasing any obligation of Lessee, Lessor may, but will not
be required to, perform the same, and Lessee will reimburse Lessor any amounts expended by Lessor
in so doing.
12. Application of Advances. Lessee will apply each payment of Funded Amount against
amounts due and payable for construction of the Paris Facility or obligations in connection
therewith as set forth in each Request. Nothing contained in this Amendment will impose upon
Lessor any obligation to see to the proper application of the advances by Lessee or any other
party.
13. Construction or Other Liens. In the event any construction or other lien or
encumbrance is filed or attached against the Paris Facility or any part thereof without the prior
written consent of Lessor, and the same is not being contested by Lessee in accordance with Article
XII of the Existing Master Lease, Lessor may, at its option and without regard to the priority of
such construction or other lien or encumbrance, and without regard to any defenses that Lessee may
have with respect to the lien or encumbrance, pay the same, and Lessee will reimburse all amounts
expended by Lessor for such purpose within ten (10) days of written notice thereof.
13
14. Conditions to Final Payment. Lessor shall be entitled to withhold the final
payment of the Funded Amount unless and until all of the following conditions have been fulfilled
to Lessor’s satisfaction:
(a) All conditions for all previous disbursements have been, and, as of the date of the final
disbursement continue to be, fulfilled.
(b) Lessor have received, at least seven (7) Business Days prior to the final payment, the
following items, all of which Lessee agree to obtain and submit to Lessor at Lessee’ sole expense:
(i) A final “as built” survey prepared and certified in accordance with the Survey
Requirements;
(ii) Certificates of the Project Architect, Lessor’s Architect (if not the Project Architect),
and Lessee certified to both Lessor and Lessee and certifying that (a) to the best of its
knowledge, the Paris Facility are complete in accordance with the Plans and Specifications
therefor; (b) to the date thereof, there has been no material deviation from the budgeted cost of
the Paris Facility or construction progress schedule, except as authorized by Lessee and approved
by Lessor; and (c) the amount of the final payment will be sufficient to meet all known costs to
complete the work covered by the Plans and Specifications; and
(iii) A final, unconditional certificate of occupancy for the Paris Facility.
15. Guaranty of Completion. Subject to a temporary suspension of performance pursuant
to Section 16 or Lessor Delay, but regardless of whether the cost thereof exceeds the amount of the
Maximum Funded Amount, Lessee will diligently and continuously carry out or cause to be carried out
the construction of the Paris Facility so as to insure the completion of construction of the Paris
Facility, the opening of the Paris Facility and the acquisition of all Licenses for the Paris
Facility, all by the applicable Target Completion Date. Regardless of whether the cost thereof
exceeds the amount of the Funded Amount, Lessee will be responsible for payment of all costs of
completing, opening and licensing the Paris Facility, including the payment of all costs in excess
of the Construction Budgets. Promptly following receipt of written notice from Lessor specifying
the defect or departure, Lessee will correct any structural defects in the Paris Facility or any
departure from the Plans and Specifications not previously approved by Lessor. The approval or
absence of disapproval by Lessor of any payment of Funded Amount shall not constitute a waiver of
Lessor’s right to require compliance with this Section.
16. Force Majeure. Upon the occurrence and during the continuance of an Event of
Force Majeure and the giving of written notice thereof to Lessor, Lessee shall be temporarily
released without any liability on its part from the performance of its obligations to construct the
Paris Facility under this Amendment, except for the obligation to pay any amounts due and owing
thereunder, but only to the extent and only for the period that its performance of each such
obligation is prevented by the Event of Force Majeure. Such notice shall include a description of
the nature of the Event of Force Majeure, and its cause and possible consequences. Lessee shall
promptly notify Lessor of the termination of such event. Upon the request of Lessor, Lessee shall
provide confirmation of the existence of the circumstances constituting an Event of Force
14
Majeure. Such evidence may consist of a statement of an appropriate governmental department
or agency where available, or a statement describing in detail the facts claimed to constitute an
Event of Force Majeure. During the period that the performance by Lessee has been suspended by
reason of an Event of Force Majeure, Lessor may likewise suspend the performance of all or part of
its obligations under this Amendment to the extent that such suspension is commercially reasonable
and, notwithstanding anything in this Amendment to the contrary, Lessor shall have no obligation to
make disbursements of the Funded Amount.
17. Expenses of Lessor. All costs incurred by Lessor in connection with the
acquisition and construction of the Paris Facility and this Amendment, including, but not limited
to, Lessor’s legal counsel and due diligence costs, title insurance, survey, appraisal, UCC
searches and filing fees, environmental and building assessments, consulting fees and brokers’
fees, if any, shall be added to the Funded Amount; provided, however, to the extent the Maximum
Funded Amount has been funded by Lessor, such costs shall be paid (or reimbursed) to Lessor by
Lessee.
18. Amendments to Certain Provisions of Existing Master Lease. Section 8.3 of the
Existing Master Lease is hereby amended to add the following new Section 8.3.3 as follows:
8.3.3 Paris Facility Capital Expenditures. Notwithstanding the provisions of
Section 8.3.2 and as an exception thereto, Lessee shall not be required to expend any
Minimum Qualified Capital Expenditures during the first three (3) Lease Years, following the
Paris Base Rent Commencement Date. During such period, the number of licensed beds in the
Paris Facility shall be excluded from and not used in the calculations for determining the
Minimum Qualified Capital Expenditures under Section 8.3.2. During the fourth Lease Year
following the Paris Base Rent Commencement Date, Lessee shall expend with respect to the
Paris Facility at least One Hundred Fifty Dollars ($150.00) per-licensed-bed as Minimum
Qualified Capital Expenditures to improve the Paris Facility. During the fifth Lease Year
following the Paris Base Rent Commencement Date, Lessee shall expend with respect to the
Paris Facility at least Two Hundred Dollars ($200.00) per-licensed bed as Minimum Qualified
Capital Expenditure to improve the Paris Facility. Beginning with the sixth Lease Year
following the Paris Base Rent Commencement Date and continuing for the remainder of the
Term, Lessee shall expend with respect to the Paris Facility at least the amount of Minimum
Qualified Capital Expenditures per-licensed-bed to improve the Paris Facility as may be
required from time to time under Section 8.3.2, above.
19. Single, indivisible Lease. The Master Lease constitutes one indivisible lease of
the Leased Properties, and not separate leases governed by similar terms. The Leased Properties
constitute one economic unit, and the Base Rent and all other provisions have been negotiated and
agreed to based on a demise of all of the Leased Properties as a single, composite, inseparable
transaction and would have been substantially different had separate leases or a divisible lease
been intended. Except as expressly provided herein for specific, isolated purposes (and then only
to the extent expressly otherwise stated), all provisions of this Lease apply equally and uniformly
to all the Leased Properties as one unit. An Event of Default with respect to any Leased Property
is an Event of Default as to all of the Leased Properties. The parties intend that the provisions
of this Lease shall at all times be construed, interpreted and applied so as to carry out their
mutual objective to create an indivisible lease of all the Leased Properties and, in
15
particular but without limitation, that for purposes of any assumption, rejection or
assignment of this Lease under 11 U.S.C. 365, this is one indivisible and non-severable lease and
executory contract dealing with one legal and economic unit which must be assumed, rejected or
assigned as a whole with respect to all (and only all) the Leased Properties covered hereby.
20. Conditions to Commencement of Construction and Obligations of Lessor and Lessee under
this Amendment. Lessee shall not commence construction unless and until the the Acquisition
Date has occurred (the “Commencement Conditions”). If the Commencement Conditions have not
occurred on or before June 30, 2008, as such date may be extended by mutual agreement of Lessor and
Lessee, then either Lessor or Lessee may terminate their obligations under this Amendment by
written notice to other and this Amendment shall be of no further force or effect. If the
Commencement Conditions have not been satisfied on or before April 15, 2008, then the Target
Completion Date and the Rent Commencement Date shall each be extended one day for each day after
April 15, 2008 that the Commencement Conditions have not been satisfied.
21. Representations and Warranties of Lessee. Lessee hereby represents and warrants
to Lessor that (i) it has the right and power and is duly authorized to enter into this Amendment;
and (ii) the execution of this Amendment does not and will not constitute a breach of any provision
contained in any agreement or instrument to which Lessee is or may become a party or by which
Lessee is or may be bound or affected.
22. Execution and Counterparts. This Amendment may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be deemed to be an original, but
when taken together shall constitute one and the same Amendment.
23. Headings. Section headings used in this Amendment are for reference only and
shall not affect the construction of the Amendment.
24. Enforceability. Except as expressly and specifically set forth herein, the
Existing Master Lease remains unmodified and in full force and effect. In the event of any
discrepancy between the Existing Master Lease and this Amendment, the terms and conditions of this
Amendment will control and the Existing Master Lease is deemed amended to conform hereto.
[SIGNATURE PAGES AND ACKNOWLEDGEMENTS FOLLOW]
16
Signature Page to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| LESSOR: | ||||||
| STERLING ACQUISITION CORP., | ||||||
| a Kentucky corporation | ||||||
| By: | /s/ Xxxxxx Xxxxxxx | |||||
| Name: | ||||||
| Title: | Chief Executive Officer | |||||
STATE OF
MARYLAND )
COUNTY OF BALTIMORE )
This instrument was acknowledged before me on the 14th day of March, 2008, by Xxxxxx Xxxxxxx, the
CEO of STERLING ACQUISITION CORP., a Kentucky corporation, on behalf of said company.
| /s/ Xxxxxx X. Xxxxxx | ||||
| My commission expires: May 1, 2008 |
Signature Page 1 of 2
Signature Page to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| LESSEE: | ||||||
| DIVERSICARE LEASING CORP., | ||||||
| a Tennessee corporation | ||||||
| By: Name: |
/s/ Xxxxx Xxxxxx
|
|||||
| Title: | EVP and CFO | |||||
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
This instrument was acknowledged before me on the 14th day of March, 2008, by Xxxxx Xxxxxx, the EVP
& CFO of DIVERSICARE LEASING CORP., a Tennessee corporation, on behalf of said company
| /s/ Xxxxxxxxxx X. Xxxx | ||||
| My commission expires: 1/24/2010 |
Signature Page 2 of 2
Acknowledgment to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
The undersigned hereby consent to the transactions contemplated by this Sixth Amendment to
Consolidated Amended and Restated Master Lease (the “Sixth Amendment”), ratify and affirm
their respective Guaranties, Pledge Agreements, Security Agreements, Subordination Agreements and
other Transaction Documents, and acknowledge and agree that the performance of the Master Lease
and obligations described therein are secured by their Guaranties, Pledge Agreements, Security
Agreement, Subordination Agreement and other Transaction Documents on the same terms and conditions
in effect prior to this Amendment.
| ADVOCAT, INC. a Delaware corporation | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | ||||||
| Title: | EVP & CFO | |||||
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
The foregoing instrument was acknowledged before me this 14th day of March, 2008, by Xxxxx Xxxxxx,
who is EVP & CFO of ADVOCAT, INC. a Delaware corporation, on behalf of the corporation, who
acknowledged the same to be his or her free act and deed and the free act and deed of the
corporation.
| /s/ Xxxxxxxxxx X. Xxxx | ||||
| My Commission Expires: 1/24/2010 |
Acknowledgment Page 1 of 5
Acknowledgment to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| DIVERSICARE MANAGEMENT SERVICES CO., | ||||||
| a Tennessee corporation | ||||||
| By: Name: |
/s/ Xxxxx Xxxxxx
|
|||||
| Title: | EVP & CFO | |||||
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
The foregoing instrument was acknowledged before me this 14th day of March, 2008, by Xxxxx Xxxxxx,
who is EVP & CFO of DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee corporation, on behalf of the
corporation, who acknowledged the same to be his or her free act and deed and the free act and deed
of the corporation.
| /s/ Xxxxxxxxxx X. Xxxx | ||||
| My Commission Expires: 1/24/2010 |
Acknowledgment Page 2 of 5
Acknowledgment to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| ADVOCAT FINANCE INC., | ||||||
| a Delaware corporation | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | ||||||
| Title: | EVP & CFO | |||||
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
The foregoing instrument was acknowledged before me this 14th day of March, 2008, by Xxxxx Xxxxxx,
who is EVP & CFO of ADVOCAT FINANCE INC., a Delaware corporation, on behalf of the corporation, who
acknowledged the same to be his or her free act and deed and the free act and deed of the
corporation.
| /s/ Xxxxxxxxxx X. Xxxx | ||||
| My Commission Expires: 1/24/2010 |
Acknowledgment Page 3 of 5
Acknowledgment to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| STERLING HEALTH CARE | ||||||
| MANAGEMENT, INC., a Kentucky corporation | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | ||||||
| Title: | EVP & CFO | |||||
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
The foregoing instrument was acknowledged before me this 14th day of March, 2008, by Xxxxx Xxxxxx,
who is EVP & CFO of STERLING HEALTH CARE MANAGEMENT, INC., a Kentucky corporation, on behalf of the
corporation, who acknowledged the same to be his or her free act and deed and the free act and deed
of the corporation.
| /s/ Xxxxxxxxxx X. Xxxx
|
||||
| My Commission Expires: 1/24/2010 |
Acknowledgment Page 4 of 5
Acknowledgment to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| DIVERSICARE TEXAS I, LLC | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
|
|
||||||
| Name: | Xxxxx Xxxxxx | |||||
| Title: | EVP & CFO | |||||
| DIVERSICARE XXXXXXXXX, LLC | ||||||
| DIVERSICARE DOCTORS, LLC | ||||||
| DIVERSICARE ESTATES, LLC | ||||||
| DIVERSICARE HUMBLE, LLC | ||||||
| DIVERSICARE KATY, LLC | ||||||
| DIVERSICARE NORMANDY TERRACE, LLC | ||||||
| DIVERSICARE TREEMONT, LLC | ||||||
| BY: | DIVERSICARE TEXAS I, LLC, its sole member |
|||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | ||||||
| Title: | EVP & CFO | |||||
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
The foregoing instrument was acknowledged before me this 14th day of March, 2008, by Xxxxx Xxxxxx,
who is EVP & CFO of DIVERSICARE TEXAS I, LLC, on behalf of itself and as the sole member of each of
DIVERSICARE XXXXXXXXX, LLC, DIVERSICARE DOCTORS, LLC, DIVERSICARE ESTATES, LLC, DIVERSICARE HUMBLE,
LLC, DIVERSICARE KATY, LLC, DIVERSICARE NORMANDY TERRACE, LLC, and DIVERSICARE TREEMONT, LLC, each
a Delaware limited liability company, on behalf of the limited liability companies, who
acknowledged the same to be his or her free act and deed and the free act and deed of the limited
liability companies.
| /s/ Xxxxxxxxxx X. Xxxx
|
||||
| My Commission Expires: 1/24/2010 |
Acknowledgment Page 5 of 5
List of Exhibits and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
Exhibit A
|
Legal Description of Paris Facility | |
Exhibit B
|
Survey Requirements | |
Exhibit C
|
List of Facilities and Facility Trade Names | |
Exhibit D
|
Permitted Encumbrances for Paris Facility | |
Schedule 1
|
Construction Budget |
Exhibit and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
EXHIBIT A
Situated within the Limits of the City of Paris, County of
Xxxxx,
and State of Texas, part of the Xxxxxx Xxxxxxx Survey #786, and being part of a called and being a part of a
called 172.5 acre tract of land conveyed to May Xxxxx Xxxxxxx by deed recorded in Vol. 208, Page 316, of the Deed Records of said County and State.
Beginning
at a 1/2”
iron pin (f) for corner at the
Easterly Northeast corner of a called 31.61 acre tract of land conveyed to North Xxxxx Independent
School District by deed recording in Vol. 714, Page 748, of
said Deed Records, said North Xxxxx ISD 31.61 acre tract originally being a part of said Xxxxxxx 172.5 acre tract.
Thence North
26’57’07” West a distance of 798.43 feet to a 1/2”
capped (XXXXXX SURVEYING) iron pin (f)
for corner at the Northerly Northeast corner of said North Xxxxx ISD 31.61 acre tract;
Thence
South 86’45’33” East a distance of 505.04 feet to a
1/2”
capped (XXXXXX SURVEYING) iron pin (s) for corner;
Thence South
35’43’12” East a distance of 448.76 feet to a
1/2”
capped (XXXXXX SURVEYING) iron pin (s) for corner;
Thence along the Northwesterly Boundary Line of said Xxxxxxxxxx Xxxx / Xxxxx Xxxxxx Xxxx 00000
as follows:
South 54’43’04” West a distance of 43.45 feet to a
1/2”
capped (XXXXXX SURVEYING) iron pin (f);
South 55’2’33” West a distance of 162.05 feet to a
1/2”
a capped (XXXXXX SURVEYING) iron pin (f);
South 51’44’20” West a distance of 98.92 feet to a
1/2”
capped (XXXXXX SURVEYING) iron pin (f);
South 48’17’45” West a distance of 105.04 feet to a
1/2”
capped (XXXXXX SURVEYING) iron pin (f);
South 48’54’59” West a distance of 106.10 feet to the place of beginning and containing 286,255.28 square feet, or 6.5708 acres of land.
Note: Legal description will be revised as appropriate to match legal description of deed delivered
to Lessor on the Acquisition Date.
Exhibit A – Page 1 of 1
Exhibit and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
Exhibit B
SURVEY REQUIREMENTS
A staked, boundary survey of the property (including a legally adequate property description and a
statement of acreage). The survey shall be prepared by a surveyor or engineer duly licensed to
practice as such in the State of ___, acceptable to the Lessor and the title company,
shall be certified to the lender and the title company, and shall be a [specify either “Urban”,
“Suburban”, “Rural” or “Mountain”] “ALTA/ACSM LAND TITLE SURVEY” meeting the currently effective
Accuracy Standards adopted by ALTA and ACSM. The survey shall also incorporate items 1, 2, 3, 4,
6, 7, 8, 9, 10, 11, 13, 14, 16, 17 and 18 listed in Table A of the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys, jointly established and adopted by ALTA and ACSM in
2005.
SURVEY CERTIFICATION
certify to (name of lessor) and (name of title company) that this map
or plat and the survey on which it is based were made (i) in accordance with the “Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys” jointly established and adopted by ALTA and
ACSM in 2005, and incorporates items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 13, 14, 16, 17 and 18 listed
in Table A thereof, (ii) pursuant to the Accuracy Standards adopted by ALTA and ACSM and in effect
on the date of this certification for a(n) [insert either “Urban”, “Suburban”, “Rural”, or
“Mountain”] Survey, and (iii) after a review of (name of title company) Commitment No. ___,
effective date , 200___and the instruments referred to therein as exceptions to title.
Date:
|
||||
| (signature of surveyor) |
Exhibit B — Page 1 of 1
Exhibit and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
EXHIBIT C
| Name | Street Address | City | County | State | Zip | |||||||||
1.
|
Arbor Oaks Health & Rehab Center (Stillmeadow) |
000 Xxxxxxxxxxxx Xxxx, Xxxxx 2, Highway 00 Xxxxx |
Xxxxxxx | Xxx Xxxxxx | XX | 00000 | ||||||||
2.
|
Ash Flat Nursing & Rehab Center |
00 Xxxxxx Xxxx | Xxx Xxxx | Xxxxx | XX | 00000 | ||||||||
3.
|
Best Care, Inc. | 0000 Xxxxxxx Xxxxx | Xxxxxxxxxxxx | Xxxxxx | XX | 00000 | ||||||||
4.
|
Xxxxx Health Care Center, Inc. | Xxxx Xxxxx Xxxx, X.X. Xxx 000 | Xxxxxxxx | Xxxxx | XX | 00000 | ||||||||
5.
|
Xxxx Nursing and Rehab Center | 00000 Xxxxxxxxxx Xxxxx | Xxxxxxx | Xxxx | XX | 00000 | ||||||||
6.
|
Canterbury Health Center | 0000 Xxxxxxx Xxxx | Xxxxxx Xxxx | Xxxxxxx | XX | 00000 | ||||||||
7.
|
Xxxxxx Nursing & Rehab Center |
000 XxXxxxx Xxxxxxxxx, X.X. Xxx 000 | Xxxxxxx | Xxxxxx | XX | 00000 | ||||||||
8.
|
Conway Health & Rehab Center (Xxxxxxxx) |
0000 Xxxx Xxxx Xxxxx | Xxxxxx | Xxxxxxxx | XX | 00000 | ||||||||
9.
|
Des Arc Nursing & Rehab Center |
2216 West Main, P.O. box 000X | Xxx Xxx | Xxxxxxx | XX | 00000 | ||||||||
10.
|
Xxxxxxx Nursing & Rehab Center |
Xxxxxx Creek Road, P.O. Box 694, Route 32 East | Xxxxx Hook | Xxxxxxx | XX | 00000 | ||||||||
11.
|
Garland Nursing & Rehab Center and Apts. | 000 Xxxxxxxxx Xxx Xxxx | Xxx Xxxxxxx | Xxxxxxx | XX | 00000 | ||||||||
12.
|
Xxxxxx Manor Care Center | 000 Xxxxxx Xxxxx | Xxxxxxxx | Xxxxxx | XX | 00000 | ||||||||
13.
|
Xxxxxx Xxxxx Health Center | 902 Xxxxxxxx Road, X.X. Xxx 000 | Xxx Xxxxxxxx | Xxxxxxxxx | XX | 00000 | ||||||||
14.
|
Laurel Nursing & Rehab Center |
HC 75, Xxx 000, Xxxxxx Xxxx | Xxxxxxx | Xxxx | XX | 00000 | ||||||||
15.
|
Lynwood Nursing Home | 0000 Xxxxx Xxxx Xxxx | Xxxxxx | Xxxxxx | XX | 00000 | ||||||||
16.
|
Manor House of Dover | 000 Xxxxxx Xxxxxx, X.X. Xxx 000 | Xxxxx | Xxxxxxx | XX | 00000 | ||||||||
17.
|
Xxxxxxxx Rehab and Special Care Center | 000 Xxxxxxxx Xxxxx | Xxxxxx | Xxxxxxxxxx | XX | 00000 | ||||||||
18.
|
Northside Health Care | 000 Xxxxxxxx Xxx | Xxxxxxx | Xxxxxx | XX | 00000 | ||||||||
19.
|
Ouachita Nursing /Pine Manor Apts. | 0000 Xxxxxxx Xxxx Xxxx | Xxxxxx | Xxxxxxxx | XX | 00000 | ||||||||
20.
|
Pocahontas Nursing & Rehab Center |
000 Xxxxxxx Xxxx Xxxx | Xxxxxxxxxx | Xxxxxxxx | XX | 00000 | ||||||||
21.
|
Rich Mountain Nursing & Rehab Center |
000 Xxxxxxxx | Xxxx | Xxxx | XX | 00000 | ||||||||
22.
|
Sheridan Nursing & Rehab Center |
000 Xxxxx Xxxxxxxxx Xxxxx | Xxxxxxxx | Xxxxx | XX | 00000 | ||||||||
23.
|
South Shore Nursing & Rehab Center |
Xxxxx Xxxxxx Drive, P.O. box 000 | Xxxxx Xxxxx | Xxxxxxx | XX | 00000 | ||||||||
24.
|
The Pines Nursing & Rehab Center |
000 Xxxxxxxxx Xxx Xxxx | Xxx Xxxxxxx | Xxxxxxx | XX | 00000 | ||||||||
25.
|
Walnut Ridge Nursing & Rehab Center |
0000 Xxxx Xxxx | Xxxxxx Xxxxx | Xxxxxxxx | XX | 00000 | ||||||||
26.
|
West Liberty Nursing & Rehab Center |
000 Xxxxxxx Xxxx, X.X. Xxx 000, Xxxxx 0 Xxxxx Xxxx | Xxxx Xxxxxxx | Xxxxxx | XX | 00000 | ||||||||
27.
|
Westside Health Care Center | 0000 Xxxxxx Xxxx | Xxxxxxxxxx | Xxxxxxx | XX | 00000 | ||||||||
Exhibit C – Page 1 of 2
| Name | Xxxxxx Xxxxxxx | Xxxx | Xxxxxx | Xxxxx | Xxx | |||||||||
00.
|
Wurtland Nursing & Rehab Center |
100 Wurtland Avenue, P.O. Box 677 | Wurtland | Xxxxxxx | XX | 00000 | ||||||||
29.
|
Doctors Healthcare | 0000 Xxxxx Xxxx Xxxxx | Xxxxxx | Xxxxxx | XX | 00000 | ||||||||
30.
|
Estates at Ft. Worth | 000 Xxxxxxxx Xxxxxx Xxxx | Xxxx Xxxxx | Xxxxxxx | XX | 00000 | ||||||||
31.
|
Heritage Oaks Estates | 0000 X. 0xx Xxxxxx | Xxxxxxxxx | Xxxxxxx | XX | 00000 | ||||||||
32.
|
Humble | 0000 Xxxx Xxxxxxx Xxxxxxx | Xxxxxx | Xxxxxx | XX | 00000 | ||||||||
33.
|
IHS of Dallas at Treemont | 0000 Xxxxxxx Xxxx Xxxx | Xxxxxx | Xxxxxx | XX | 00000 | ||||||||
34.
|
Katy | 0000 Xxxx Xxxxx | Xxxx | Xxxxxx | XX | 00000 | ||||||||
35.
|
Normandy Terrace | 000 Xxxx Xxxx | Xxx Xxxxxxx | Xxxxx | XX | 00000 | ||||||||
36.
|
Paris Facility | ### Stillhouse Road | Xxxxx | Xxxxx | TX | |||||||||
Exhibit C – Page 2 of 2
Exhibit and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
EXHIBIT D
Permitted Exceptions
| 1. | Easement to Texas Power & Light Co. dated 07/08/52 and recorded in Book 327, Page 397, Xxxxx County Deed Records. | |
| 2. | Easement to Texas Power & Light Co., dated 05/09/56 and recorded in Book 349, Page 456, Xxxxx County Deed Records. | |
| 3. | Easement to Texas Power & Light Co., dated 05/12/66 and recorded in Book 443, Page 175, Xxxxx County Deed Records. | |
| 4. | Easement to Texas Power & Light Co, dated 03/21/68 and recorded in Book 469, Page 237, Xxxxx County Deed Records. | |
| 5. | Right of Way Easement to Xxxxx County Water Supply dated 02/09/83, and recorded in Book 655, Page 112, Xxxxx County Deed Records. | |
| 6. | Easement and Right of Way to Texas Power & Light Co., dated 05/17/49, and recorded in Book 308, Page 600, Xxxxx County Deed Records. |
Exhibit D – Page 1 of 1
Exhibit and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SCHEDULE 1
Construction Budget
| Omega/Paris | ||||||||||||
| Estimated Project Cost | ||||||||||||
FACILITY DESCRIPTION |
||||||||||||
Size in Square Feet |
45,000 | |||||||||||
Stories |
1 | |||||||||||
Units |
70 | |||||||||||
Beds |
120 | |||||||||||
Medicaid Beds |
||||||||||||
Double Occupancy (Units) |
50 | |||||||||||
Approximate Land Size (Acres) |
6.489 | |||||||||||
Approximate Land Size (SF) |
282,661 | |||||||||||
Units per Acre |
11 | |||||||||||
Beds per Acre |
18 | |||||||||||
DEVELOPMENT COST ANALYSIS |
||||||||||||
Total Development Cost |
6,841,902 | |||||||||||
Total Development Cost per Sq. Ft. |
152.04 | |||||||||||
Total Development Cost per Unit |
97,741 | |||||||||||
Total Development Cost per Bed |
57,016 | |||||||||||
Land Cost [1] |
175,203 | |||||||||||
Land Cost per Sq. Ft. |
0.62 | |||||||||||
Land Cost per Acre |
27,000 | |||||||||||
Land Cost per Unit |
2,503 | |||||||||||
Land Cost per Bed |
1,460 | |||||||||||
Building Cost |
4,000,635 | |||||||||||
Building Cost per Sq. Ft. |
88.90 | |||||||||||
Building Cost per Unit |
57,152 | |||||||||||
Building Cost per Bed |
33,339 | |||||||||||
FF& E |
552,500 | |||||||||||
FF& E per Sq. Ft. |
12.28 | |||||||||||
FF& E per Unit |
7,893 | |||||||||||
FF& E per Bed |
4,604 | |||||||||||
Ach. & Eng. Fees |
184,500 | |||||||||||
Site Work |
602,000 | |||||||||||
Interest Expense [2] |
315,000 | |||||||||||
Contingency [3] |
2.90 | % | 10.0 | % | 400,064 | |||||||
Schedule 1 – Page 1 of 2
Exhibit and Schedules to
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
SIXTH AMENDMENT TO CONSOLIDATED
AMENDED AND RESTATED MASTER LEASE
| Omega/Paris | ||||||||||||
| Estimated Project Cost | ||||||||||||
Medicaid Bed Contract [4] |
$ | 4,167 | $ | 4,000 | 408,000 | |||||||
Title |
35,000 | |||||||||||
Misc. Administrative Project Exp. |
7,500 | |||||||||||
Closing Fee |
5,000 | |||||||||||
Property Tax |
25,000 | |||||||||||
Developer’s Fee |
80,000 | |||||||||||
Points [5] |
1.15 | % | 0.00 | % | 0 | |||||||
Appraisal |
4,500 | |||||||||||
Insurance Premium |
12,000 | |||||||||||
Legal (Transaction Specific) |
35,000 | |||||||||||
TOTAL CONSTRUCTION COSTS |
6,841,902 | |||||||||||
Cost per Bed |
140 | 48,871 | ||||||||||
Cost per Bed |
120 | 57,016 | ||||||||||
Resulting Annual Rent at 10.25% |
701,294.90 | |||||||||||
Schedule 1 – Page 2 of 2
