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EXHIBIT 10.31
[Gettysburg, PA]
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE ("Amendment") is dated as of
March 31, 1997, by and between HCPI TRUST, a Maryland real estate investment
trust ("Lessor"), and BCC AT MT. ROYAL PINES, INC., a Delaware corporation
("Lessee").
RECITALS
A. Lessor and Lessee entered into a Lease dated as of March
21, 1996 (the "Lease"), covering a 40-unit assisted-living facility located on
certain Leased Property in the City of Xxxxxxx Park, County of Allegheny,
Commonwealth of Pennsylvania, as more particularly described in the Lease.
B. Pursuant to Section 9.3 of the Lease, Lessee agreed to
complete a Capital Renovation Project with respect to the Leased Property on or
before March 31, 1997, and Lessor agreed to fund the lesser of (i) one-half
(1/2) of the out-of-pocket costs and expenses incurred by Lessee in completing
such Capital Renovation Project and (ii) $75,000.00 (the "Original Funding
Commitment"). As of the date hereof, with Lessor's knowledge and consent,
Lessee has not commenced the Capital Renovation Project and Lessee desires
additional time to complete the same. In addition, Lessee also desires (A) to
construct an approximately 7,885 square foot, 32-unit Capital Addition to the
Leased Property (the "32-Unit Capital Addition Project"), (B) to obtain
Lessor's consent to such 32-Unit Capital Addition Project and (C) to obtain
Lessor's agreement to fund (or accrue, as applicable) the lesser of ("Lessor's
Maximum Cost") (x) $1,395,597.00 and (y) the aggregate Project Costs (as
defined below) incurred or accrued in connection with the Capital Renovation
Project and the 32-Unit Capital Addition Project, notwithstanding the Original
Funding Commitment.
X. Xxxxxx is willing to consent and agree to the matters set
forth in Recital B above, and to amend the Lease accordingly, but only upon the
terms and conditions set forth herein.
AGREEMENT
Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Lease. NOW THEREFORE, Lessor and Lessee hereby
agree as follows:
1. CONFIRMATION MATTERS. Notwithstanding anything to the
contrary in the Lease, as hereby amended, Lessor and Lessee hereby agree as
follows:
(a) The Commencement Date of the Lease was March 21, 1996.
(b) The Fixed Term of the Lease shall terminate on the last
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day of February, 2011.
(c) The first Lease Year for the Lease commenced on the
Closing Date and ended February 28, 1997.
(d) The first Quarter for which Additional Rent pursuant to
Section 3.1.2 of the Lease shall be due is the Quarter commencing March 1, 1998
and ending May 30, 1998 (i.e., the first Quarter of the third (3rd) Lease Year).
2. DEFINITIONS.
(a) NEW DEFINITIONS. For all purposes of the Lease, as
hereby amended, except as otherwise expressly provided in the Lease or this
Amendment or unless the context otherwise requires, the terms defined in this
subparagraph shall have the meanings assigned to them in this subparagraph and
shall be added to and be deemed part of Article II of the Lease.
Architect: An architect and/or engineer licensed in the
State and approved by Lessor. For purposes of the Capital Projects, the
following Architect is hereby approved by Lessor: By Design Consultants, Inc.,
0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000; Fax No. (000) 000-0000.
Capital Projects: Collectively, (i) the Capital Renovation
Project as defined and further described in Section 9.3 of the Lease and
Exhibit D to the Lease and (ii) the 32-Unit Capital Addition Project as defined
in Recital B above, in each case as more particularly depicted on and to be
constructed/performed in accordance with the Plans, including (A) the fixtures
referred to in and/or shown thereon, (B) to the extent not shown on the Plans,
additions to the parking facilities so as to provide sufficient parking spaces
to comply with all Legal Requirements and as otherwise necessary for the
operation of the Facility (including the 32-Unit Capital Addition Project) for
its Primary Intended Use, (iii) all Offsite Improvements and (iv) any and all
site preparation, landscaping and drainage works and all other improvements
necessary to comply with all Legal Requirements and/or for the operation of the
Facility (including the 32-Unit Capital Addition Project) for its Primary
Intended Use.
Capital Projects Lease Rate: On the Capital Projects Rent
Commencement Date, the "Capital Projects Lease Rate" shall be the ten-year U.S.
Treasury Note rate published in the Wall Street Journal three (3) Business Days
prior to the Capital Projects Rent Commencement Date and quoting the rate as of
the immediately prior Business Day, plus Three and Twenty-Five Hundredths
Percent (3.25%). With respect to each funding or accrual of any Projects Costs
by Lessor under this Amendment following the Capital Projects Rent Commencement
Date, the "Capital Projects Lease Rate" shall be the ten-year U.S. Treasury
Note rate published in the Wall Street Journal as of the date of each such
particular funding or accrual by Lessor of Project Costs, plus Three and
Twenty-Five Hundredths Percent (3.25%).
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If the ten-year U.S. Treasury Note rate is discontinued prior to four (4)
Business Days prior to the Capital Projects Rent Commencement Date or prior to
any such post-Capital Projects Rent Commencement Date funding or accrual of
Project Costs, then such calculation shall be made instead by reference to a
substitute rate selected by Lessor that is comparable with the ten-year U.S.
Treasury Note rate, and such substitute rate shall be compared to the ten-year
U.S. Treasury Note rate, published in the Wall Street Journal as of the date of
this Amendment. Similarly, if the Wall Street Journal is discontinued, a
substitute publication selected by Lessor shall be used.
Capital Projects Rent Commencement Date: The earliest of (i)
the Completion Date, (ii) the date the 32-Unit Capital Addition Project is
first opened for business for its Primary Intended Use and (iii) the Outside
Date.
Completion Date: The date on which the construction/
performance of the Capital Projects has been substantially completed such that
Lessor has received the following: (i) a certificate of substantial completion
from the Architect in the form attached hereto as Exhibit I, (ii) a certificate
of occupancy or its equivalent issued in accordance with all Legal Requirements
and by the appropriate Governmental Authority having jurisdiction over the
Leased Property which permits the occupancy of the improvements constructed as
part of the Capital Projects and (iii) all other licenses, authorizations and
permits, if any, required by any Governmental Authority for the use and
operation of the Capital Projects as part of the Facility for its Primary
Intended Use. For purposes of the Lease, as hereby amended, "substantially
completed" shall mean that the improvements being constructed/performed as part
of the Capital Projects and all other work which Lessee is obligated to perform
under the Lease, as hereby amended, with respect to the Capital Projects have
been completed in accordance with the Plans and the applicable provisions of the
Lease, as hereby amended, notwithstanding the fact that Punch-List Items remain
to be performed.
Construction Contracts: The contracts between Lessee and the
General Contractor, Lessee and the Architect and/or Lessee or any other
contractor (including subcontractors) relating to rendering of services or
furnishing of materials in connection with the construction/performance of the
Capital Projects, contracts between the General Contractor and any
subcontractor and contracts between any of the foregoing and any other Person
relating to rendering of services or furnishing of materials in connection with
construction/performance of the Capital Projects.
Construction Period Interest: An annual interest rate of Two
Percent (2%) over the Prime Rate applied to the disbursed/accrued portion of
Lessor's Maximum Costs, as computed each month (but in no event greater than
the maximum rate then permitted under applicable law). Construction Period
Interest shall accrue monthly in arrears based on a 360 day year.
General Contractor: A bondable general contractor licensed
in the State and
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approved by Lessor. For purposes of the Capital Projects, the following General
Contractor is hereby approved by Lessor: Xxxxxx Construction, Inc., 0000
Xxxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000; Fax No. (000) 000-0000.
Governmental Authority: The United States, the state,
county, city and political subdivisions in which the Leased Property is located
or which exercise jurisdiction over the Leased Property or the
construction/performance of the Capital Projects, and any court administrator,
agency, department, commission, board, bureau or instrumentality of any of them
which exercises jurisdiction over the Leased Property or the
construction/performance of the Capital Projects.
Lessee's Affidavit: A sworn affidavit of Lessee, in form and
substance satisfactory to Lessor, stating that to the best of Lessee's
knowledge, all labor and material bills of every kind and character incurred by
Lessee to the date of such affidavit in connection with the Capital Projects
have been paid in accordance with the payment provisions of the applicable
Construction Contracts except for the unpaid bills to be paid from the proceeds
of the current advance request, and that the builder's risk insurance described
in Paragraph 5(e)(iv) below contains sufficient coverage for the
construction/performance of the Capital Projects, including the value of
materials stored off the Leased Property.
Lessor's Maximum Cost: As defined in Recital B above (i.e,
$1,395,597.00).
Major Subcontractors: Subcontractors, materialmen and other
vendors with Construction Contracts in excess of Twenty-Five Thousand Dollars
($25,000.00).
Offsite Improvements: (i) Any streets, roads, walks, curbs and
the like (whether or not ultimately dedicated for public use and/or maintenance)
necessary to provide access to public roads, streets and highways, (ii) any
improvements and other works necessary or desirable for the provision of
utilities to the 32-Unit Capital Addition Project and/or the existing Facility
and (iii) any other improvements on property other than the Land that are (A)
required by Legal Requirements, (B) necessary for the construction/performance
of the Capital Projects in accordance with the Plans and the applicable
provisions of the Lease, as hereby amended, and/or (C) necessary for operation
of the Facility (including the 32-Unit Capital Addition Project) for its Primary
Intended Use.
Outside Date: October 1, 1997.
Plans: (i) The final plans and specifications for the
construction/performance of the Capital Projects prepared by the Architect and
approved by Lessor and (ii) all amendments, modifications and supplements
thereto which do not require the approval of Lessor or which have been approved
by Lessor subsequent to the approval of the plans and specifications described
in clause (i).
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Project Budget: The budget attached hereto as Exhibit E,
together with (i) the detailed estimate report prepared by the General
Contractor and attached to such Exhibit E as Schedule 1, which report provides
a detailed cost breakdown of the "Hard Construction Costs" line item shown on
Exhibit E and (ii) any other detailed budget information as Lessor may
reasonably request and approve from Lessee, including a further breakdown of
Hard Construction Costs to a level of detail that will allow Lessor to
determine the actual cost and percentage of completion of construction as of
the date of any Request for Advance.
Project Costs: All the costs and expenses incurred in
connection with (i) entering into this Amendment and all other documents or
instruments provided for herein; and (ii) the construction/performance of the
Capital Projects, as contemplated by the Project Budget, including the costs of
constructing/performing work depicted by the Plans and otherwise in accordance
with applicable provisions of the Lease, as hereby amended, costs for bonds,
costs and fees for surveys, costs for title work and premiums for title
insurance, environmental fees and expenses, architect fees, engineering costs,
Lessor's appraisal fees and Lessor's and Lessee's accounting fees, Lessee's and
Lessor's legal fees (including in-house legal costs), Construction Period
Interest, Two Percentage (2%) points of Lessor's Maximum Cost to be accrued as
a cost by Lessor, the cost of purchase and installation of all furniture,
fixtures and equipment and other Personal Property included as part of the
Capital Projects, all governmental licenses and fees, and the other fees and
allowances specified in Paragraph 5(d) below. Without limiting the foregoing,
Project Costs include all amounts funded, advanced or accrued by Lessor
pursuant to the Lease, as hereby amended, on account of the Capital Projects.
Punch List Items: Minor details of construction, mechanical
adjustments or decorations which remain to be completed following the
Completion Date and which do not (i) prevent the issuance of a certificate of
occupancy (or the local equivalent thereof) for the 32-Unit Capital Addition
Project and/or (ii) materially interfere with Lessee's use of the Facility
(including the 32-Unit Capital Addition Project) for its Primary Intended Use.
Remaining Funds: The unadvanced portion of Lessor's Maximum
Cost, if any.
Request for Advance: Certificates of Lessee and, to the
extent applicable, the Architect, in each case on the appropriate American
Institute of Architects ("AIA") form, including form G702 together with
attached AIA form G703 (or equivalent, which AIA form G703 or equivalent shall
be modified to include columns for the original estimate of scheduled values
for each line item, changes to the scheduled values for each line item and a
revised scheduled value for each line item after any such change) and/or such
other form(s) as Lessor may hereafter reasonably request which shall: (i) set
forth the parties to whom money is owed and the amount owed each; (ii) certify
among other things that such amounts represent payments due for services
actually rendered or materials actually acquired or furnished in connection
with the construction/performance of the Capital Projects; (iii) state that the
sum requested is Project Cost within the Project Budget for such item and that,
in the opinion of the Architect, to the extent applicable, and Lessee, the
Remaining Funds are sufficient to complete
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the Capital Projects pursuant to the Plans and to pay for all labor, material,
interest and other expenses in connection therewith; (iv) be accompanied by
copies of billing statements, fee schedules, documentation supporting all costs
to date, copies of all subcontracts not previously submitted and vouchers or
invoices from the parties named therein, in form reasonably satisfactory to
Lessor; (v) refer to an attached schedule, to be verified by the Architect prior
to the advance being requested, identifying in a manner reasonably satisfactory
to Lessor all materials not yet affixed or incorporated into the Capital
Projects but which have been covered by certificates submitted to date,
including the current certificate; (vi) contain a statement, to be verified by
the Architect prior to the advance being requested, that all such materials not
yet affixed or incorporated into the Capital Projects have been stored at the
Leased Property or at one or more other bonded locations approved by Lessor
identified therein (specifying the materials located at each location) under
adequate safeguards to minimize the possibility of loss, damage or commingling
with other materials or projects, and that builder's risk insurance coverage for
such materials stored off the Leased Property is not less than the full
insurable value of such materials then being stored off the Leased Property; and
(vii) be accompanied by appropriate waivers of lien rights (to the extent not
previously received and approved by Lessor) with respect to work and materials
for which funds have already been advanced pursuant to the Lease, as hereby
amended, or which was performed or were supplied prior to the date of this
Amendment, executed by the General Contractor and all contractors,
subcontractors, mechanics and materialmen no more than one month in arrears and
who have furnished labor or material to date and whose charges are or will be
greater than Five Thousand Dollars ($5,000.00) and, unless Lessee has provided a
statutory payment bond in accordance with applicable Legal Requirements by all
other contractors, subcontractors, mechanics and materialmen. Notwithstanding
anything set forth herein to the contrary, the Request for Advance for the first
advance of funds by Lessor hereunder and for each advance that is for an item on
the Project Budget that is not a hard cost shall mean such certificate with
respect thereto as Lessor may reasonably request.
Total Project Cost: The sum of all Project Costs funded or
accrued by Lessor pursuant to the Lease, as hereby amended, including any
amounts funded or accrued by Lessor hereunder following the Capital Projects
Rent Commencement Date; provided, however, nothing contained herein shall
obligate Lessor or be deemed to be Lessor's agreement to fund or accrue any
Project Costs in excess of Lessor's Maximum Cost.
(b) AMENDMENTS TO EXISTING DEFINITIONS IN LEASE.
(i) The definition of Base Gross Revenues appearing in
Article II of the Lease is hereby amended to read, in its entirety, as follows:
"Base Gross Revenues: (i) For the Fixed Term, the lesser of
(A) 96.5% of the Gross Revenues for the third Lease Year of
the Fixed Term and (B) $1,183,474.00 and (ii) for each
Extended Term, if either, the Gross Revenues for the first
Lease Year of such Extended Term."
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(ii) The last sentence in the definition of Capital
Additions appearing in Article II of the Lease is hereby amended to read, in its
entirety, as follows:
"The Capital Projects shall be treated for all purposes of
this Lease as a `Capital Addition,' and all Project Costs
advanced, funded or accrued by Lessor on account thereof or
with respect thereto shall be treated as "Capital Addition
Costs" paid for by Lessor."
(iii) Upon the Completion Date, the term "Facility" as
defined in Article II of the Lease shall mean and include the existing Facility
together with the Capital Projects.
(iv) For purposes of the Lease, as hereby amended,
"Lessor's Personal Property" as defined in Article I of the Lease shall include
all Personal Property paid for or funded by Lessor as part of the Capital
Projects. At the request of Lessor, Lessee shall prepare a schedule of all
Personal Property paid for or funded by Lessor as part of the Project Costs and
the same shall be initialed by each of Lessor and Lessee and attached to
Exhibit B to the Lease as Schedule 1, and will thereafter form a part of the
Lease. Failure of either Lessor or Lessee to prepare and/or initial such
Schedule 1 shall not affect the definition of or what Personal Property
constitutes Lessor's Personal Property in accordance with the provisions of this
clause (iv).
3. MINIMUM RENT. Effective as the expiration of the first
Lease Year of the Fixed Term (i.e., February 28, 1997), Section 3.1.1 of the
Lease shall be amended to read, in its entirety, as follows:
"3.1.1 Minimum Rent.
"(i) Subject to upward adjustments as provided in
clauses (ii) and (iii) below, for the period from March 1,
1997, through the expiration of the Fixed Term, Lessee shall
pay to Lessor as `Minimum Rent' monthly, in advance on or
before the first day of each calendar month, an amount equal
to $20,562.50. Minimum Rent payable for any partial calendar
month at the end of the Term of this Lease shall be prorated
based upon a 30-day month and a 360-day year.
"(ii) Effective as of the Capital Projects Rent
Commencement Date, the monthly Minimum Rent payable pursuant
to clause (i) above shall be increased by an amount equal to
one-twelfth (1/12) of the product of (A) the applicable
Capital Projects Lease Rate in effect on the Capital Projects
Rent Commencement Date, times (B) the Total Project Cost. Such
monthly Minimum Rent shall be further increased from time to
time on the date of funding or accrual of any Project Costs by
Lessor following the Capital Projects
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Rent Commencement Date by one-twelfth (1/12th) of the product
of (x) the amount of the particular payment, funding or
accrual by Lessor, times (y) the Capital Projects Lease Rate
applicable to such payment, funding or accrual. Monthly
Minimum Rent payable for any months during which such
increases are applicable shall be prorated based upon the
number of days for which the different rental amounts apply.
"(iii) If the rate in (y) below is greater than the
rate in (x) below, than as of the expiration of the tenth
(10th) Lease Year (i.e., February 28, 2006), the monthly
Minimum Rent then in effect shall be increased by an amount
equal to one-twelfth (1/12th) of the product of (A) the
positive difference between (x) 6.17% (i.e., the five-year
U.S. Treasury Note rate published in the Wall Street Journal
three (3) Business Days prior to the Commencement Date and
quoting the rate as of the immediately prior Business Day),
and (y) the five-year U.S. Treasury Note rate published in the
Wall Street Journal three (3) Business Days prior to the
expiration of the tenth (10th) Lease Year and quoting the rate
as of the immediately prior Business Day, times (B) the
Minimum Repurchase Price as of such date; provided, however,
that in no event shall the monthly Minimum Rent after any such
adjustment pursuant to this clause (iii) be less than One
Hundred Percent (100%) nor more than One Hundred Three Percent
(103%) of the monthly Minimum Rent in effect immediately prior
to such adjustment. If the five-year U.S. Treasury Note rate
is discontinued prior to four (4) Business Days prior to the
expiration of the tenth (10th) Lease Year, then such
calculation shall be made instead by reference to a substitute
rate selected by Lessor that is comparable with the five-year
U.S. Treasury Note rate, and such substitute rate shall be
compared to the five-year U.S. Treasury Note rate, published
in the Wall Street Journal as of the Commencement Date.
Similarly, if the Wall Street Journal is discontinued, a
substitute publication selected by Lessor shall be used.
"(iv) Following any changes in the monthly Minimum Rent
pursuant to this Lease, the parties shall execute an amendment
to this Lease in form similar to Exhibit C-2 attached hereto
(but with appropriate changes thereto) to confirm the monthly
Minimum Rent payable pursuant to this Section 3.1.1.
Notwithstanding the foregoing, the failure of Lessor to
prepare and/or the failure of Lessee to execute and deliver
any such amendment shall not affect Lessor's determination of
the monthly Minimum Rent payable under this Lease."
4. CAPITAL RENOVATION PROJECT. Section 9.3 of the Lease is
hereby amended to read, in its entirety, as follows:
"9.3 Capital Repairs to be Performed by Lessee. Lessee
shall, on or
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before the Outside Date, make certain repairs to the Facility
based on the recommendations of Barge, Xxxxxxxx, Xxxxxx and
Xxxxxx, Inc., as described in the Building Condition
Evaluation Report dated January 19, 1996, and agreed upon by
Lessee and Lessor, which agreed upon improvements and repairs
are summarized on Exhibit D attached hereto (the `Capital
Renovation Project')."
The performance and completion by Lessee of the Capital Renovation Project and
Lessor's agreement to fund or accrue the Project Costs associated therewith up
to Lessor's Maximum Cost shall be further governed by the provisions of
Paragraph 5 below.
5. CAPITAL PROJECTS; PERFORMANCE, COMPLETION AND FUNDING.
Without limiting any other obligation or liability of Lessee under the Lease
with respect to the Leased Property, the following shall apply with respect to
the Capital Projects and the construction/performance of the same:
(a) OBLIGATIONS OF LESSEE.
(i) CONSTRUCTION/PERFORMANCE OF CAPITAL PROJECTS.
Lessee shall be responsible to arrange, supervise, coordinate and carry out all
services necessary for the construction, performance and completion of the
Capital Projects in accordance with the Plans and the applicable provisions of
the Lease, as hereby amended, and Lessee undertakes and accepts such
responsibility with the understanding that all Project Costs up to Lessor's
Maximum Cost will be funded by Lessor to Lessee or its designee pursuant to, but
subject to the applicable terms of, the Lease, as hereby amended. Lessee shall
cause the Capital Projects to be completed substantially in accordance with the
Plans and the terms of the Construction Contracts, subject to the terms of the
Lease, as hereby amended, and for an amount not to exceed the Lessor's Maximum
Cost and the Completion Date to occur by the Outside Date. If and to the extent
total Project Costs exceed the Lessor's Maximum Cost, Lessee shall pay and shall
not be reimbursed for such excess. If and when total Project Costs exceed
Lessor's Maximum Cost, Lessee shall thereupon commence to pay to Lessor (rather
than accrue) interest on the sum of Lessor's Maximum Cost at an annual rate of
Two Percent (2%) over the Prime Rate (but in no event greater than the maximum
rate then permitted under applicable law) and continue to pay such interest
until the Capital Projects Rent Commencement Date. Said interest shall accrue on
a daily basis and be payable monthly in arrears based on a 360 day year, with
the first payment commencing on the last day of the month in which Lessor has
advanced to Lessee Lessor's Maximum Cost and thereafter shall continue on the
last day of each subsequent month until the Capital Projects Rent Commencement
Date. If total Project Costs do not exceed Lessor's Maximum Cost, Lessee shall
not be entitled to any portion of the difference between Lessor's Maximum Cost
and total Project Costs.
(ii) DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of Lessee with respect to the Capital Projects shall
specifically include the following:
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(A) Subject to the other provisions of the Lease,
as hereby amended, to negotiate and enter into Construction Contracts and other
agreements necessary for construction/performance of the Capital Projects in
accordance with the Plans, which such contracts, by their terms, may be assigned
by Lessee to Lessor;
(B) To establish operating procedures and a
system of records and accounts suitable for record keeping during
construction/performance satisfactory to Lessor;
(C) To administer and monitor the performance
under all Construction Contracts and other agreements relating to the
construction/performance of the Capital Projects and the monthly reporting of
the status of estimated costs of completing the same in relation to the Project
Budget and other applicable budgets;
(D) To manage and coordinate contractors,
engineers, architects and other consultants and monitor their compliance with
their respective contracts or agreements;
(E) To do all things and take all actions
necessary for the provision of water, sewer, gas, electric, telephone, drainage
and other utility equipment, facilities and services required by Legal
Requirements and/or necessary for the operation of the Facility (including the
32-Unit Capital Addition Project) for its Primary Intended Use;
(F) To monitor and review and, when in the
judgment of Lessee it is in the best interest of Lessor, propose changes in the
Plans or in any budget relating to the construction/performance of the Capital
Projects;
(G) To review and make a recommendation to Lessor
with respect to payment of all applications for payment under the Construction
Contracts and other agreements relating to the construction/performance of the
Capital Projects and make payments of any and all bills, invoices or other
matters calling for payment by Lessee or Lessor or for the Lessor's account in
connection with the construction/performance of the Capital Projects;
(H) To perform all functions and duties of Lessee
or Lessor under the Construction Contracts and other contracts and agreements
related to the construction/performance of the Capital Projects;
(I) To make recommendations and render assistance
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for the development and administration of an effective labor relations program
for, and the avoidance of labor disputes during, the construction/performance of
the Capital Projects;
(J) To coordinate with the Architect and any
inspecting engineer employed by Lessor in the performance of periodic
inspections of the Leased Property in order to confirm that the materials
furnished and work performed are in accordance with the Plans and that the work
on the Capital Projects is progressing on schedule;
(K) To stop the work and cause the correction of
any defect in the materials or workmanship furnished by any contractor or of any
failure by any contractor to perform its obligations under its Construction
Contract and to immediately inform Lessor of any instances of faulty materials
and/or workmanship;
(L) To make available to Lessor, upon request,
the identities of and copies of contracts with all subcontractors and any other
Person supplying labor or materials for the construction/performance of the
Capital Projects; and
(M) To obtain all approvals necessary to
construct/perform the Capital Projects and to operate the Facility (including
the 32-Unit Capital Addition Project) for its Primary Intended Use.
(iii) PERFORMANCE OF DUTIES. Lessee agrees that,
subject to the performance by Lessor of its obligations under the Lease, as
hereby amended, Lessee shall act with prudence and diligence in performing its
duties and responsibilities under the Lease, as hereby amended, with respect to
the Capital Projects and in good faith in the best interests of Lessor.
(b) COMPLETION GUARANTEE.
(i) CONSTRUCTION AND COST GUARANTEE. Lessee
unconditionally guarantees to Lessor (A) the construction/performance of the
Capital Projects in accordance with the Plans and all covenants and obligations
of Lessee under the Lease, as hereby amended, by the Outside Date (subject only
to the performance by Lessor of its obligations under this Paragraph 5) and (B)
the payment without demand, and without right to reimbursement therefor, of all
development, construction and related costs of the Capital Projects incurred for
any reason whatsoever in excess of the Lessor's Maximum Cost.
(ii) FAILURE TO CONSTRUCT. If for any reason or under
any contingency the General Contractor shall default under a Construction
Contract, fail to commence, or abandon construction of, the Capital Projects, or
fail to complete the Capital
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Projects within the maximum construction time in accordance with the terms of
the Construction Contracts, then in any such event, without the need of any
demand by Lessor, Lessee shall assume all responsibility for and control over
the construction, performance and completion of the Capital Projects and shall
cause the Capital Projects to be fully completed in accordance with the Lease,
as hereby amended, on or before the Outside Date, other than Punch List Items.
If Lessee fails to complete the Capital Projects in accordance with the Plans
prior to the Outside Date other than the Punch List Items, Lessor, at Lessor's
option, shall have the right to complete the Capital Projects in accordance with
the Plans and expend such sums as Lessor reasonably deems proper in order so to
complete the Capital Projects. The amount of any and all expenditures made by
Lessor pursuant to this clause (ii) which, when combined with all Project Costs
previously funded by Lessor, are in excess of Lessor's Maximum Cost, shall be
immediately due and payable by Lessee to Lessor as an Additional Charge,
together with interest thereon from the date of such expenditure to the date
paid by Lessee at a daily rate equal to Two Percent (2%) above the Prime Rate
(but in no event greater than the maximum rate of interest then permitted by
law). Upon any assumption by Lessor of the obligation to complete the Capital
Projects as provided herein, Lessee shall forthwith surrender and deliver to
Lessor, or Lessor's designee, any funds which have been received from Lessor but
have not been disbursed by Lessee, and all records, plans, specifications,
permits and other governmental approvals, purchase agreements, contracts,
receipts for deposits, unpaid bills and all other records, papers and documents
in the possession of Lessee relating to the Capital Projects.
(iii) COMPLETION OF PUNCH LIST ITEMS. All Punch List
Items, other than those reasonably requiring more than thirty (30) days to
complete due to long scheduling or ordering time or other reasonable factors,
shall be completed within thirty (30) days after the Completion Date, but in no
event later than thirty (30) days after the Outside Date. Any Punch List Items
reasonably requiring more than thirty (30) days to complete shall be diligently
pursued and completed as promptly as practicable, but in no event later than
sixty (60) days after the Outside Date.
(c) COOPERATION BY LESSOR. Lessor shall cooperate with
Lessee as may be requested by Lessee in furtherance of the
construction/performance of the Capital Projects as specified in the Lease, as
hereby amended.
(d) FEES AND OTHER ACCRUALS TO LESSEE/LESSOR.
(i) PROJECT COORDINATION FEE. For performance by
Lessee of its obligations under this Amendment in connection with the Capital
Projects, Lessor shall pay to Lessee a project coordination fee equal to
$50,000.00. Such project coordination fee will be payable to Lessee Twenty-Five
Percent (25%) with the first advance of funds by Lessor to Lessee following the
date Lessee commences construction/performance of the Capital Projects,
Twenty-Five Percent (25%) with the advance of funds by Lessor under this
Amendment immediately following the date that Lessee achieves Fifty Percent
(50%)
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completion of the Capital Projects, and the balance shall be paid with the final
advance of funds by Lessor under this Amendment following the Completion Date.
For purposes of this clause (i), the phrase "commences construction/performance"
shall mean the date Lessee first commences physical site work in connection with
the construction/performance of the Capital Projects. Such project coordination
fee is included within Project Costs and is a line item on the Project Budget.
Notwithstanding the foregoing, in no event shall Lessee be entitled to receive
any portion of the project coordination fee if the payment of the same would
cause the total of all Project Costs funded or accrued by Lessor under this
Amendment to exceed Lessor's Maximum Cost.
(ii) CONSTRUCTION ADMINISTRATION FEE. Lessor shall
accrue in arrears from and after the date hereof until the Completion Date, a
monthly construction administration fee in the form of an allowance equal to One
Thousand Five Hundred Dollars ($1,500) per month for the costs associated with
the administration of the construction/performance of the Capital Projects and
the making of advances hereunder. Such allowance is included within the Project
Costs and is a line item on the Project Budget.
(iii) TWO (2) POINT FEE. On the date hereof Lessor
shall receive an allowance for points hereunder in an amount equal to Two
Percent (2%) of Lessor's Maximum Cost. Such amount is included within the
Project Costs and is a line item on the Project Budget.
(e) OTHER COVENANTS OF LESSEE.
(i) CONSTRUCTION/PERFORMANCE OF THE CAPITAL PROJECTS.
Construction/performance of Capital Projects will be prosecuted by Lessee in
accordance with the Plans in a good and workmanlike manner and in accordance
with sound building and engineering practices and all applicable Legal
Requirements. All materials, fixtures or articles used in the
construction/performance of the Capital Projects, or to be used in the
operation thereof shall be substantially in accordance with the Plans as
prepared by the Architect and approved by Lessor. Lessee shall ensure that no
asbestos or asbestos-containing materials or other Hazardous Substances will be
contained in the completed Capital Projects. Lessee will complete the
construction/performance of the Capital Projects substantially in accordance
with the Plans on or before the Outside Date, free and clear of liens or claims
for liens for material supplied and for labor or services performed in
connection with the construction of the Capital Projects (except for permitted
contests pursuant to Article XII of the Lease).
(ii) LEGAL REQUIREMENTS. Lessee will cause all Legal
Requirements and all restrictive covenants affecting the Leased Property to be
complied with promptly, and Lessor will be furnished, on demand, evidence of
such compliance.
(iii) CHANGE ORDERS, DEFECTS.
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(A) Lessee may, without obtaining the prior
written approval of Lessor, change the Plans, permit the Plans to be changed or
permit construction/performance of the Capital Projects other than in accordance
with the Plans; provided, however, that if (1) any such change would (w) change
the basic structure or character of the Facility (including the proposed 32-Unit
Capital Addition Project); (x) materially increase or decrease in any manner the
size of the 32-Unit Capital Addition Project, or any component thereof; (y)
materially change the appearance of the Facility (including the proposed 32-Unit
Capital Addition Project); or (z) materially change or reduce the quality of the
basic building systems, including the mechanical, electrical, sprinkler,
plumbing, life-safety, heating, air conditioning and ventilation systems within
the Facility (including the proposed 32-Unit Capital Addition Project), (2) any
single change in the Plans involves an amount in excess of Ten Thousand Dollars
($10,000.00), (3) any number of changes in the Plans involves in the aggregate
an amount not in excess of Thirty-Five Thousand Dollars ($35,000.00), or (4) any
such change in the Plans results in the Project Costs exceeding the Lessor's
Maximum Cost, then in any such event Lessee must obtain the prior written
approval of Lessor prior to implementing such change, which approval may be
given or withheld in the sole and absolute discretion of Lessor.
(B) Lessee will at its sole cost and expense and
not as part of the Project Costs correct or cause to be corrected any defect in
the Capital Projects or any departure from the Plans not approved by Lessor or
permitted herein without such approval or any encroachment by any part of the
Capital Projects or any other structures on or over any building lines,
easements, property lines or other restricted areas which any survey or
inspection reflects.
(iv) INSURANCE. To the extent not already maintained
by Lessee pursuant to Article XIII of the Lease, Lessee will at all times
maintain or cause to be maintained the following insurance during the
construction/performance of the Capital Projects (including through the date of
completion of the Punch List Items):
(A) Builder's risk insurance covering the
construction/performance of the Capital Projects, in a face amount of not less
than the full insurable value of the Capital Projects and materials supplied in
connection therewith, with appropriate provisions made to include coverage of
materials stored off the Leased Property in an amount not less than the full
insurable value of such materials stored off the Leased Property from time to
time.
(B) Liability insurance against claims for
personal injury, death or property damage suffered by members of the public or
others in or about the Leased Property or adjacent land used in connection with
the construction/performance of the Capital Projects or occurring by reason of
the maintenance, use or operation by Lessee, the General Contractor or any
subcontractor, agent or employee thereof of any plants, shops, machinery,
automobiles, trucks or
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other vehicles or other facilities on or in connection with the Leased Property
or the construction/performance of the Capital Projects, in an amount of at
least Three Million Dollars ($3,000,000).
(C) Workers' compensation and employer's
liability insurance as may be required by Lessor or similar insurance as may be
required under any Legal Requirement.
(D) Errors and omissions insurance by the
Architect in an amount at least equal to One Million Dollars ($1,000,000) which
can be applied to the construction/performance of the Capital Projects, covering
the entire period of design and construction/performance of the Capital Projects
and terminating upon the receipt of the certificate of occupancy issued by the
appropriate municipality.
All such insurance maintained or caused to be maintained by
Lessee pursuant to clauses (A), (B) and (D) of this clause (iv) shall name
Lessor as an additional insured. All insurance maintained or caused to be
maintained by Lessee pursuant to clause (A) of this clause (iv) shall name
Lessee, Lessor and the General Contractor, jointly, as loss payee. In addition,
all such insurance to be maintained or caused to be maintained by Lessee shall
otherwise, to the extent applicable, comply with the provisions of Article XIII
of the Lease.
(v) PERFORMANCE AND PAYMENT BOND. Lessee shall
procure or cause to be procured a performance and payment bond for the total
amount of the Hard Construction Costs (including labor and materials) set forth
in the Project Budget. The General Contractor's performance and payment bond
shall equal the amount by which (A) such Hard Construction Costs exceed (B) the
sum of the amounts of the Major Subcontractors' payment and performance bonds.
All performance and payment bonds shall name Lessor as an additional obligee and
be in form and substance and from an institution satisfactory to Lessor in its
sole discretion.
(vi) INDEMNIFICATION. Without limiting any other
indemnification obligation of Lessee under the Lease, and notwithstanding the
existence and without regard to the policy limits of any insurance required to
be maintained pursuant to Paragraph 5(e)(iv) above and notwithstanding the
existence and without regard to the amount of the bond required pursuant to
Paragraph 5(e)(v) above, Lessee shall protect, defend, indemnify and hold
harmless, Lessor from and against, and reimburse Lessor for, any and all
actions, causes of action, obligations, damages, penalties, suits, debts,
losses, costs, expenses, liabilities, claims or demands whatsoever, at law or in
equity (including reasonable attorneys' fees and expenses and Environmental
Costs) imposed on, incurred by or asserted against Lessor in connection with or
with respect to the construction/performance of the Capital Projects and any
loss in value of or title to the Leased Property resulting therefrom, including
arising from:
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(A) any misstatements or inaccuracies made by
or on behalf of Lessee contained within or other matters arising out of any
applications for building, foundation, grading or other permits and/or
authorizations necessary for the construction/performance of the Capital
Projects, including those required for the use and operation of the Facility for
its Primary Intended Use, whether filed or submitted to the applicable
Governmental Authority in the name of Lessor or Lessee; or
(B) any act or omission of Lessee, the
Architect, the General Contractor, or any other contractor, subcontractor or
supplier of materials or other Person in connection with the
construction/performance of the Capital Projects.
Lessee's liability under this clause (vi) shall be reduced by any and all
amounts recovered by Lessor under any insurance required to be maintained
pursuant to Paragraph 5(e)(iv) and/or under the bond required to be maintained
under Paragraph 5(e)(v). Furthermore, notwithstanding anything to the contrary
contained in this clause (vi), Lessee shall have no obligation to protect,
defend, indemnify or hold harmless, Lessor pursuant to this clause (vi) from
and against, or to reimburse Lessor for, any or all actions, causes of action,
obligations, damages, penalties, suits, debts, losses, costs, expenses,
liabilities, claims or demands whatsoever, at law or in equity (including
reasonable attorneys' fees and expenses and Environmental Costs) caused by
Lessor's gross negligence or willful misconduct.
(vii) LIENS ON MATERIALS. Lessee shall not at any
time during the performance of the work, make or cause to be made, or permit the
General Contractor or any other contractor to make, any contract for materials
or equipment of any kind or nature whatsoever to be incorporated in or to become
a part of the Leased Property, title to which is not good or which is subject to
any lien or title retention arrangement other than inchoate mechanic's liens.
Lessee will deliver to Lessor, on demand, true copies of any contracts, bills of
sale, statements, receipted vouchers, or agreements, under which Lessee claims
title to any materials, fixtures, or articles used in the
construction/performance of the Capital Projects.
(viii) STORAGE OF MATERIALS. Lessee will cause all
materials acquired or furnished in connection with the construction/performance
of the Capital Projects, but not affixed or incorporated into the Leased
Property, to be stored at the Leased Property or at bonded locations approved by
Lessor, in each case under adequate safeguards to minimize the possibility of
loss, theft, damage or commingling with other materials or projects. Lessee will
employ suitable means to protect from theft or vandalism the Leased Property and
all tools and building materials stored on the Leased Property.
(ix) INSPECTIONS. Without limiting any of Lessor's
rights under the Lease, at any time during regular business hours, Lessor and/or
its representatives will be permitted to enter upon the Leased Property and any
other location where materials for the Capital Projects are being stored to
inspect the same and all materials to be used in the construction/performance
thereof, and to examine all detailed plans and shop drawings which
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are or may be kept at the construction site, provided that in so doing, Lessor
shall not unreasonably interfere with the construction/performance of the
Capital Projects. Upon request, Lessor will be furnished with reasonable
information regarding the construction/performance of the Capital Projects from
Lessee, Architect, General Contractor and any other contractors or
subcontractors.
(x) NOTICES. Lessee will furnish Lessor with a copy of
any (A) notice or claim made by any Governmental Authority pertaining to the
Leased Property, (B) any notice of any termination, late payment or other
material aspect of any Construction Contract involving more than Five Thousand
Dollars ($5,000.00), together with a copy of each such Construction Contract and
(C) any fire, casualty, notice of any condemnation or other event materially
affecting the Leased Property.
(xi) USE OF FUNDS, DEFICIENCY.
(A) Lessee shall expend all the proceeds of each
advance hereunder for Project Costs in amounts and for the purposes provided in
the Project Budget and for no other purpose whatsoever.
(B) Lessee will promptly advise Lessor if and
when (1) Project Costs shall exceed or appear likely to exceed the Lessor's
Maximum Cost or (2) Project Costs with respect to any particular item in the
Project Budget shall exceed or appear likely to exceed the amount specified for
any such item in the Project Budget, and shall give Lessor sufficiently detailed
information with respect thereto.
(C) If, in the sole good faith judgment of
Lessor, it appears at any time or from time to time that the Remaining Funds
will be insufficient to complete the construction/performance of the Capital
Projects substantially in accordance with the Plans on or before the Outside
Date, and to pay for all Project Costs incurred in connection with such
construction/performance, or if any other expenses are required for such
completion which were not scheduled in the Project Budget, Lessor may request
that Lessee demonstrate that the Remaining Funds are sufficient for such
completion and payment. If Lessee does not so demonstrate to Lessor's reasonable
satisfaction within five (5) Business Days of receipt of Lessor's request to do
so, then Lessee shall deposit with Lessor additional monies as shall, in the
reasonable good faith judgment of Lessor, when added to the Remaining Funds, be
sufficient to complete and/or pay for the construction/performance of the
Capital Projects. Such additional monies of Lessee shall be applied for payment
of costs prior to Lessor advancing any additional funds under the Lease, as
hereby amended, and Lessor shall have no obligation to advance any such
additional funds until the additional monies deposited with Lessor shall have
been so applied. Lessee, in demonstrating whether the Remaining Funds are
sufficient to complete the Capital Projects, may offset any savings caused by
the actual amount of expenses being less than budgeted against amounts of other
items for which actual costs were in excess of those budgeted.
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(xii) ASSIGNMENT OF CONSTRUCTION CONTRACTS. Upon the
first to occur of an Event of Default or the Completion Date, and at the request
of Lessor, Lessee shall assign to Lessor each Construction Contract to which
Lessee is a party utilizing an assignment instrument in form and substance
acceptable to Lessor and shall cause each other party to such Construction
Contract to consent to such assignment, if required by the terms thereof.
(xiii) DOCUMENTS AT COMPLETION. Without limiting any
other provision of this Amendment, from time to time as requested by Lessor and
as soon as practicable following the Completion Date, Lessee shall supply or
cause to be supplied to Lessor each of those documents and information described
on Exhibit J attached hereto with respect to the Capital Projects, as
applicable.
(f) ADDITIONAL EVENTS OF DEFAULT; REMEDIES.
(i) ADDITIONAL EVENTS OF DEFAULT. In addition to and
without limiting the "Events of Default" set forth in Section 16.1 of the Lease,
any one or more of the following shall also constitute an "Event of Default"
under the Lease, as hereby amended:
(A) Lessee fails to perform any of the obligations
to be performed by Lessee under this Amendment with respect to the Capital
Projects, and such failure is not cured within thirty (30) days after notice
thereof from Lessor or, if such failure cannot reasonably be cured within such
thirty (30) day period, such longer period as reasonably may be required to
remedy such default as long as Lessee has commenced such cure within such thirty
(30) day period, thereafter diligently prosecutes such cure and completes such
cure not later than sixty (60) days after notice from Lessor but in any event
prior to the Outside Date; or
(B) Lessee fails to satisfy any condition to an
advance under this Amendment for a period in excess of thirty (30) days, or, if
such failure cannot reasonably be cured within such thirty (30) day period, such
longer period as reasonably may be required to remedy such failure as long as
Lessee has commenced such cure within such thirty (30) day period, thereafter
diligently prosecutes such cure and completes such cure within sixty (60) days
but in any event prior to the Outside Date; or
(C) Lessee uses any monies advanced by Lessor
under this Amendment for any purpose other than as allowed or contemplated under
this Amendment; or
(D) Except as a result of a casualty, Condemnation
or other Unavoidable Delay, work on the Capital Projects ceases for thirty (30)
consecutive days for any reason; or
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(E) The Completion Date does not occur by the
Outside Date, free and clear of mechanics', materialmen's and other liens (other
than except for permitted contests pursuant to Article XII of the Lease); or
(F) Except for change orders allowed pursuant to
the provisions of this Amendment, Lessee modifies, amends or terminates any
Construction Contract without Lessor's written consent; or
(G) Any mechanics', materialmen's or other lien is
filed or asserted against the Leased Property, or any part thereof, or any suit
or other proceeding is instituted to enforce or foreclose such a lien (except
for permitted contests pursuant to Article XII of the Lease).
(g) ADVANCES OF FUNDS BY LESSOR.
(i) FUNDING. Subject to the satisfaction by Lessee
of the conditions set forth in Paragraph 5(h) below and the other provisions of
the Lease, as hereby amended, Lessor will advance to Lessee funds up to the
Lessor's Maximum Cost (less all costs, fees, allowances and charges of Lessor
which are included within Project Costs) for the purpose of paying or
reimbursing Lessee for the payment of the Project Costs.
(ii) LIMITATION OF FUNDING OBLIGATION. Lessor
shall not be obligated to advance to Lessee any sums (A) in excess of the
Lessor's Maximum Cost or for which a Request for Advance is received more than
thirty (30) days after the Outside Date, (B) when any of the conditions set
forth in Paragraph 5(h) have not been met or fulfilled.
(iii) ADVANCES OF FUNDS BY LESSOR. Draw requests
will be reviewed monthly and will be based on the pro rata share completion to
date of each construction line item listed in the Project Budget. All advances
of funds under this Amendment shall be made by Lessor in accordance with a
Request for Advance. Each Request for Advance shall be honored within ten (10)
Business Days of receipt of the same delivered in accordance with the Notice
provisions in the Lease and Paragraph 5(i)(v) below, together with the
information required therein, subject, however, to the limitations herein. In no
event shall Lessor be required to make any advance for a particular line item
which, when aggregated with prior advances, is in excess of the Project Budget
for such line item except to the extent amounts from contingency line items are
unused and/or to the extent savings, in Lessor's reasonable good faith
discretion, in other budget line items remain unused. Lessor shall issue checks
payable to, or otherwise advance funds to, Lessee, the payees designated in a
Request for Advance or jointly to Lessee and such payees, as Lessor shall
reasonably determine. Advances of funds to such payees or jointly to Lessee and
any such payee shall constitute an advance hereunder as though advanced directly
to Lessee.
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(iv) HOLDBACKS. Any advances for costs and
expenses of labor and materials connected with the construction/performance of
the Capital Projects shall be limited to Ninety Percent (90%) of such costs and
expenses and shall be made in accordance with the payment schedule of the
Construction Contract with the General Contractor. The final advance of proceeds
representing the Ten Percent (10%) retainage for any particular item will not be
made until the last to occur of (A) the Completion Date, (B) completion of all
Punch List Items and (C) the date Lessor receives (1) either (x) all final lien
releases and waivers provided for herein or (y) evidence and assurances
satisfactory to Lessor in its sole and absolute discretion (including a legal
opinion from counsel acceptable to Lessor) that the period during which any
liens may be perfected with respect to any work in accordance with Legal
Requirements has expired and that no such liens have been perfected and remain
unsatisfied, (2) an "As-Built" set of plans and specifications, (3) an ALTA
"As-Built" survey and (4) such other documents as Lessor may reasonably request.
In no event shall any portion of such retainage be paid if any mechanics' and/or
materialmen's liens or other encumbrances have been filed and remain on the
Leased Property (except for permitted contests pursuant to Article XII of the
Lease).
(h) CONDITIONS TO LESSOR OBLIGATIONS TO ADVANCE FUNDS.
Lessor shall not be obligated to make any advance of funds under this Amendment,
including the first advance, unless and until the following conditions shall
have been satisfied (with proof thereof in form and sufficiency as may be
reasonably requested by Lessor):
(i) APPROVALS/ENTITLEMENTS. To the extent not
theretofore received and approved by Lessor and to the extent of a material
change not permitted herein without approval, Lessor shall have received and
approved (A) the Plans; (B) all Construction Contracts with the General
Contractor, the Architect and any other subcontractor or material supplier that
may be requested by Lessor; and (C) all authorizations and permits required by
any Governmental Authority for the construction/performance of the Capital
Projects, including building and grading permits, a foundation letter (if
applicable) and such other authorizations and permits as are required for the
use and operation of the Facility (including the 32-Unit Capital Addition
Project) for its Primary Intended Use, which are presently procurable. In
addition, Lessor shall have received agreements from the Architect, the General
Contractor and each Major Subcontractor in the forms of Exhibits F, G and H
attached hereto, respectively.
(ii) UTILITIES AND ACCESS. Lessor shall have
received evidence satisfactory to Lessor that (A) all existing public utilities,
including telephone, water, sewage, electricity and gas are adequate for the
construction of the 32-Unit Capital Addition Project to the Facility and the use
thereof upon completion for its Primary Intended Use; and (B) all existing means
of ingress and egress, parking, access to public streets and drainage facilities
are adequate for 32-Unit Capital Addition Project to the Facility and the use
thereof upon completion for its Primary Intended.
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(iii) SOILS AND OTHER TESTS. Lessor shall have
received and approved test borings, engineering reports and such other site
analysis as Lessor may require, all of which must indicate that the soil is
adequate for the proposed construction/performance of the Capital Projects in
accordance with the Plans.
(iv) PROCEEDINGS. Lessor shall have reviewed and
approved all corporate proceedings to be taken by Lessee and Guarantor in
connection with the transactions contemplated under the Lease, as hereby
amended.
(v) INSURANCE. Lessor shall have received (A)
certificates with respect to, and copies of the policies of, the insurance
required to be carried by Lessee or other Persons pursuant to Paragraph 5(e)(iv)
above, together with evidence satisfactory to Lessor that the premiums therefor
have been paid in full, and (B) evidence satisfactory to Lessor of the insurance
required to be carried by the Architect and General Contractor also as set forth
in such Paragraph 5(e)(iv).
(vi) PAYMENT AND PERFORMANCE BOND(S). Lessor shall
have received the payment and performance bond(s) fulfilling the requirements
set forth in Paragraph 5(e)(v) above and shall have made arrangements, to the
extent applicable, for the recordation and/or filing of the same for recordation
in the Official Records in the County in which the Land is located, along with a
copy of the approved Construction Contract with the General Contractor.
(vii) OPINION OF COUNSEL. Lessor shall have
received an opinion or opinions of counsel to Lessee and Guarantor and each
incorporating any necessary opinions from local counsel to Lessee and Guarantor,
to the effect that:
(A) Each of Lessee and Guarantor is duly
organized, validly existing and in good standing in its state of
organization/formation and is qualified to do business in the
State; the execution and delivery of this Amendment and all other
documents to be executed by Lessee or Guarantor, as applicable,
hereunder have been duly authorized; and the Lease, as hereby
amended, and the Guaranty, as hereby reaffirmed, are valid and
binding instruments, enforceable against Lessee and Guarantor, as
applicable, in accordance with their respective terms;
(B) The execution and delivery of this
Amendment and all other documents to be executed and delivered by
Lessee or Guarantor hereunder and the consummation of the
transactions contemplated hereunder do not and will not constitute
an event of default under, or a violation of the
articles/certificate of incorporation or by-laws of Lessee or
Guarantor and or any Legal Requirement, contract or other
agreement by which Lessee or
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Guarantor is or may be bound, including Governmental Requirements
applicable to the construction/performance of the Capital Projects
or the use and operation of the Facility for its Primary Intended
Use upon completion of the 32-Unit Capital Addition Project;
(C) There are (1) no pending or, to the best
knowledge of such counsel, threatened, proceedings with respect to
or in any manner affecting Lessee, Guarantor or the Leased
Property or in which Lessee; or (2) to the best knowledge of such
counsel, present plans or studies by any Governmental Authority
which in any way challenge, affect or would challenge or affect in
a material and adverse manner such ownership, development or
leasing; and
(D) to the best knowledge of such
counsel, Lessee has received the grading, building and foundation
permits and any final approval of the Plans and any consents,
permits, licenses and other approvals or authorizations presently
required from Governmental Authorities or other third parties
which are necessary to construct/perform the Capital Projects. In
addition, the Capital Projects, if completed in accordance with
the Plans therefor, will comply with all applicable zoning
ordinances and the matters affecting title to the Leased Property.
(viii) APPRAISAL. If requested by Lessor,
Lessor shall have received and approved an appraisal of the Leased Property from
an appraisal firm and in form and substance satisfactory to Lessor indicating
that the value of the Leased Property upon completion of the Capital Projects
will exceed the Fair Market Value of the Leased Property immediately prior
thereto by an amount not less than Ninety-Five Percent (95%) of the total
Project Costs for the Capital Projects.
(ix) NO DEFAULT. No Event of Default shall
have occurred under the Lease, as hereby amended, and no event or condition
shall exist which, with notice and/or lapse of time, or both, would constitute
such an Event of Default under the Lease, as hereby amended.
(x) CONDEMNATION; CASUALTY. No Condemnation
shall be pending or threatened and no casualty shall have occurred, in either
case with respect to the Leased Property or any portion thereof.
(xi) OTHER DOCUMENTS AND ASSURANCES. Lessor
shall have received such other documents and assurances as Lessor shall have
reasonably requested, including any endorsements to Lessor existing policy of
title insurance updating the same without any additional exception except as may
be approved by Lessor and increasing the policy limit thereof to an amount equal
to the Project Costs funded or accrued by Lessor (less the amount thereof funded
by Lessor for furniture, fixtures and equipment as shown on the
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Project Budget).
(xii) REQUEST FOR ADVANCE. Lessor shall have
received and approved (A) a Request for Advance accompanied by all necessary
documents and certificates as set forth in the definition thereof; (B) a
Lessee's Affidavit; and (C) to the extent applicable, a certificate from the
Architect to the effect that in the Architect's opinion (1) the
construction/performance of the Capital Projects theretofore performed is in
accordance with the Plans and (2) the amount requested is appropriate in light
of the percentage of construction completed and amount of stored material.
(i) MISCELLANEOUS PROVISIONS APPLICABLE TO CAPITAL
PROJECTS.
(i) OWNERSHIP OF CAPITAL PROJECTS. At all
times all Capital Projects shall be owned entirely by Lessor subject to the
leasehold interest of Lessee under the Lease, as hereby amended, with respect to
the Capital Projects. Upon the request of Lessor, Lessee shall execute and/or
cause any Affiliate of Lessee to execute such documents as Lessor may reasonably
request evidencing and confirming Lessor's ownership of such Capital Projects.
(ii) ADVANCE NOT A WAIVER. No advance of funds
under this Amendment shall constitute a waiver of any of the conditions to
Lessor's obligation to make further advances nor, if Lessee is unable to satisfy
any such condition, shall any such advance have the effect of precluding Lessor
from thereafter declaring such inability to be an Event of Default under the
Lease, as hereby amended.
(iii) CONDITIONS FOR BENEFIT OF LESSOR. All
conditions to the obligations of Lessor hereunder are imposed solely for the
benefit of Lessor and no other Person shall have standing to require
satisfaction of such conditions.
(iv) COMPLIANCE RESPONSIBILITY.
Notwithstanding the review and approval by Lessor of the Plans or any other
matter, Lessor shall have no responsibility for compliance by the Leased
Property, the Capital Projects or the construction/performance of the Capital
Projects with Legal Requirements, sound architectural or engineering practices
or other matters.
(v) NOTICES. Any Notices with respect to
Request for Advances and/or change orders (only) shall be sent to Lessor in
accordance with the provisions for notices in the Lease, except that the same
shall be sent to the following address:
To Lessor: HCPI Trust
c/o Health Care Property Investors, Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
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Attn: Xxxxxx X. Xxxxx,
Vice President-Development
Fax:(000) 000-0000
with a copy to: HCPI Trust
c/o Health Care Property Investors, Inc.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Legal Department
Fax: (000) 000-0000
(vi) ATTORNEYS' FEES AND COSTS. Subject to
Lessor's funding obligations under this Amendment, Lessee shall pay to Lessor
all of Lessor's attorneys' fees and other costs and expenses expended or
incurred in connection with (A) amendments or other modifications to any of the
Construction Contracts or the Plans; and (B) any other matter related to the
construction/performance of the Capital Projects.
6. EXHIBIT C-1 TO LEASE. The parties acknowledge and agree
that this Amendment is being executed in lieu and stead of the form of
amendment attached to the Lease as Exhibit C-1, which the parties originally
intended to execute and deliver.
7. ACCESS TO RENT CALCULATION RECORDS. To the extent required
by applicable Legal Requirements, Lessor shall make available, upon request by
the Secretary of Health and Human Services or upon the request by the U.S.
Comptroller General, or any duly authorized representative of either of them,
such reasonable books and records of Lessor that were used by Lessor to
determine or otherwise support the calculation of Rent payable by Lessee under
the Lease, as hereby amended; provided, however, that: (a) Lessor shall only be
required to maintain the foregoing described books and records for a period of
four (4) years after the expiration of each Lease Year; and (b) Lessee shall
reimburse to Lessor upon demand, as an Additional Charge under the Lease, as
hereby amended, all reasonable costs of Lessor in responding to any such
request.
8. MISCELLANEOUS. Except as hereby amended, the Lease
shall remain in full force and effect. This Amendment may be executed in any
number of counterparts, all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Lease to be executed as of the day and year first above written.
"Lessor" "Lessee"
HCPI TRUST, a Maryland real estate BCC AT MT. ROYAL PINES, INC., a
investment trust Delaware corporation
By: [/s/ illegible] By: /s/ Xxxxx X. Xxxxx
------------------------------ ----------------------------
Its: Vice President Its: Vice President
----------------------------- ---------------------------
CONSENT AND AGREEMENT OF GUARANTOR
The undersigned "Guarantor" hereby consents to this First Amendment to
Lease and reaffirms to and agrees with Lessor that its obligations under the
Guaranty of Obligations dated as of March 21, 1996, remain in full force and
effect with respect to the Lease, as amended hereby.
"Guarantor"
BALANCED CARE CORPORATION, a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Its: -----------------------------
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