Exhibit 10.1
LEASE AGREEMENT
This Lease Agreement ("Lease" or "Agreement") is made effective as of
the 1st day of May, 1999 (the "Effective Date") between HEALTH CARE REIT, INC.,
a corporation organized under the laws of the State of Delaware ("Landlord"),
having its principal office located at Xxx XxxXxxx, Xxxxx 0000, X.X. Xxx 0000,
Xxxxxx, Xxxx 00000, and JUST LIKE HOME, INC. and JLH SERIES I, INC., each a
corporation organized under the laws of the State of Florida (collectively
called "Tenant"), both having their chief executive office located at 0000
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx 00000-0000.
R E C I T A L S
A. As of April 16, 1999, Landlord and Tenant entered into a written
settlement agreement ("Settlement Agreement"), a copy of which is attached
hereto as Exhibit I and incorporated herein, concerning five actions initiated
by Landlord against Tenant in connection with the Leased Property (defined
below). Landlord previously leased the Leased Property to Tenant under five
lease agreements. Landlord terminated the five lease agreements following
Tenant's default under the leases.
B. Pursuant to the terms of the Settlement Agreement, Landlord has
now agreed to lease the Leased Property to Tenant and Tenant has agreed to lease
the Leased Property from Landlord under one consolidated lease upon the terms
set forth herein.
NOW, THEREFORE, Landlord and Tenant agree as follows:
ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS
1.1 Leased Property. Landlord hereby leases to Tenant and Tenant
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hereby leases from Landlord the following property:
(a) The land described in Exhibit A attached hereto (the
"Land").
(b) All buildings, structures, and other improvements, including
without limitation, sidewalks, alleys, utility pipes, conduits, and lines,
parking areas, and roadways, now or hereafter situated upon the Land (the
"Improvements").
(c) All easements, rights and other appurtenances relating to
the Land and Improvements (the "Appurtenances").
(d) All permanently affixed equipment, machinery, fixtures, and
other items of real and personal property, including all components thereof,
located in, or used in connection with, and permanently affixed to or
incorporated into the Improvements, including without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, and built-in oxygen and vacuum
systems, all of which, to the greatest extent permitted by law, are hereby
deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto but specifically
excluding all items included within the category of Personal Property as defined
below (collectively the "Fixtures").
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(e) All machinery, equipment, furniture, furnishings, movable
walls or partitions, computers, trade fixtures, consumable inventory and
supplies, and other personal property used or useful in Tenant's business on the
Leased Property, including without limitation, all items of furniture,
furnishings, equipment, supplies and inventory listed on Exhibit A-1 attached
hereto and the replacements therefor, except items, if any, included within the
definition of Fixtures (collectively the "Personal Property").
SUBJECT, HOWEVER, to all easements, liens, encumbrances, restrictions,
agreements, and other title matters existing as of the date hereof as listed on
Exhibit B attached hereto (the "Permitted Exceptions").
1.2 Term. The term ("Term") of this Lease commences on the Effective
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Date and expires at 12:00 Midnight Eastern Time on January 31, 2000 (the
"Expiration Date"); provided, however, that the Term may be extended pursuant to
(S)13.6.
1.3 Definitions. Except as otherwise expressly provided, [i] the
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terms defined in this section have the meanings assigned to them in this section
and include the plural as well as the singular; [ii] all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as of the time applicable; and [iii]
the words "herein", "hereof", and "hereunder" and similar words refer to this
Lease as a whole and not to any particular section.
"ADA" means the federal statute entitled Americans with Disabilities
Act, 42 U.S.C. (S)12101, et seq.
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"Affiliate" means any person, corporation, partnership, limited
liability company, trust, or other legal entity that, directly or indirectly,
controls, or is controlled by, or is under common control with Tenant or
Guarantor. "Control" (and the correlative meanings of the terms "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such entity.
"Annual Financial Statements" means [i] for Tenant, the audited
balance sheet and statement of income for the most recent fiscal year on an
individual facility and consolidated basis; [ii] for the Facility, an audited
Facility Financial Statement for the most recent fiscal year; [iii] for
Guarantor, if Guarantor is or includes a corporation, partnership or limited
liability company, the audited balance sheet and statement of income for the
most recent fiscal year; and [iv] for Guarantor, if Guarantor is or includes an
individual, a current unaudited personal financial statement.
"Base Rent" has the meaning set forth in (S)2.1, as increased from
time to time pursuant to (S)2.2.
"Business Day" means any day other than a Saturday, Sunday, or
national holiday.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"Closing" means the closing of the lease of the Leased Property to
Tenant.
"Commencement Date" means the Effective Date if such date is the first
day of a month, and if it is not, the first day of the first month following the
Effective Date.
"Construction Liens Letter of Credit" means, individually and
collectively, any Letter of Credit delivered to Landlord pursuant to
(S)7.3.1(a).
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"Effective Date" means the date of this Lease.
"Environmental Laws" means all federal, state, and local laws,
ordinances and policies the purpose of which is to protect human health and the
environment, as amended from time to time, including but not limited to [i]
CERCLA; [ii] the Resource Conservation and Recovery Act; [iii] the Hazardous
Materials Transportation Act; [iv] the Clean Air Act; [v] Clean Water Act; [vi]
the Toxic Substances Control Act; [vii] the Occupational Safety and Health Act;
[viii] the Safe Drinking Water Act; and [ix] analogous state laws and
regulations.
"Event of Default" has the meaning set forth in (S)8.1.
"Expiration Date" has the meaning set forth in (S)1.2.
"Facility" means individually and collectively, the assisted living
facilities identified on Exhibit A-2 and located on the Leased Property.
"Facility Financial Statement" means the financial statement for the
Facility which shall include the balance sheet, statement of income and expense,
statement of cash flows, statement of shareholders' equity, occupancy census
data (including payor mix) and a comparison of the actual financial data versus
the Facility's internal budget for the applicable period.
"Facility Uses" means the uses relating to the operation of the
Facility as assisted living facilities with the number of beds or units
described on Exhibit A-2.
"Financial Statements" means [i] the annual, quarterly and year to
date financial statements of Tenant and Guarantor; and [ii] all operating
statements for the Facility, that were submitted to Landlord prior to the
Effective Date.
"Government Authorizations" means all permits, licenses, approvals,
consents, and authorizations required to comply with all Legal Requirements,
including but not limited to, [i] zoning permits, variances, exceptions, special
use permits, conditional use permits, and consents; [ii] the permits, licenses,
provider agreements and approvals required for licensure and operation of the
assisted living facilities described on Exhibit A-2 certified as a provider
under the federal Medicare and state Medicaid programs; [iii] environmental,
ecological, coastal, wetlands, air, and water permits, licenses, and consents;
[iv] curb cut, subdivision, land use, and planning permits, licenses, approvals
and consents; [v] building, sign, fire, health, and safety permits, licenses,
approvals, and consents; and [vi] architectural reviews, approvals, and consents
required under restrictive covenants.
"Hazardous Materials" means any substance [i] the presence of which
poses a hazard to the health or safety of persons on or about the Land including
but not limited to asbestos containing materials; [ii] which requires removal or
remediation under any Environmental Law, including without limitation any
substance which is toxic, explosive, flammable, radioactive, or otherwise
hazardous; or [iii] which is regulated under or classified under any
Environmental Law as hazardous or toxic including but not limited to any
substance within the meaning of "hazardous substance", "hazardous material",
"hazardous waste", "toxic substance", "regulated substance", "solid waste", or
"pollutant" as defined in any Environmental Law.
"Impositions" has the meaning set forth in (S)3.2.
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"Issuer" means a financial institution satisfactory to Landlord
issuing any Letter of Credit and such Issuer's successors and assigns. Any
"Issuer" shall have a Lace Financial Service Rating of "C+" or higher at all
times throughout the Term.
"KDA" means KDA Financial, Inc., F/K/A KDA, Inc.
"Landlord Affiliate" means any person, corporation, partnership,
limited liability company, trust, or other legal entity that, directly or
indirectly, controls, or is controlled by, or is under common control with
Landlord. "Control" (and the correlative meanings of the terms "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such entity. "Landlord Affiliate" includes, without limitation, HCRI Texas
Properties, Ltd., HCRI Pennsylvania Properties, Inc., and HCRI Nevada
Properties, Inc.
"Lease Amount" means $10,420,780.00.
"Lease Payments" means the sum of the Base Rent payments for the
applicable period.
"Leased Property" means, collectively, the Land, Improvements,
Appurtenances, Fixtures and Personal Property.
"Legal Requirements" means all laws, regulations, rules, orders,
writs, injunctions, decrees, certificates, requirements, agreements, conditions
of participation and standards of any federal, state, county, municipal or other
governmental entity, administrative agency, insurance underwriting board,
architectural control board, private third-party payor, accreditation
organization, or any restrictive covenants applicable to the development,
construction, condition and operation of the Facility by Tenant, including but
not limited to, [i] zoning, building, fire, health, safety, sign, and
subdivision regulations and codes; [ii] certificate of need laws (if
applicable); [iii] licensure to operate as the assisted living facilities
described on Exhibit A-2; [iv] Medicare and Medicaid certification requirements
(if applicable); [v] the ADA; [vi] any Environmental Laws; and [vii]
requirements, conditions and standards for participation in third-party payor
insurance programs.
"Letter of Credit" means, individually and collectively, any
irrevocable and transferable Letter of Credit delivered by Tenant to Landlord
pursuant to this Lease (including but not limited to a Letter of Credit in an
amount equal to $270,000.00 to be delivered at Closing, the Construction Liens
Letter of Credit, and the Operating Performance Letter of Credit), issued by an
Issuer in favor of Landlord as security for Tenant's Obligations and in form
acceptable to Landlord, and any amendments thereto or replacements or
substitutions therefor.
"Material Obligation" means [i] any indebtedness secured by a security
interest in or a lien, deed of trust or mortgage on any of the Leased Property
(or any part thereof, including any Personal Property) and any agreement
relating thereto; [ii] any obligation or agreement that is material to the
construction or operation of the Facility or that is material to Tenant's
business or financial condition; [iii] any indebtedness or capital lease of
Tenant that has an outstanding principal balance of at least $50,000.00 and any
agreement relating thereto; [iv] any obligation to or agreement with the Issuer
relating to the Letter of Credit; and [v] any sublease of the Leased Property.
"Operating Performance Letter of Credit" means, individually and
collectively, any Letter of Credit delivered to Landlord pursuant to (S)15.7.
"Overdue Rate" has the meaning set forth in (S)8.6.
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"Periodic Financial Statements" means [i] for Tenant, the unaudited
balance sheet and statement of income of Tenant for the most recent quarter;
[ii] for the Facility, the unaudited Facility Financial Statement for the most
recent month; [iii] for Guarantor, if Guarantor is or includes a corporation,
partnership, or limited liability company, the unaudited balance sheet and
statement of income of Guarantor for the most recent quarter; and [iv] for
Guarantor, if Guarantor is or includes an individual, a current unaudited
personal financial statement.
"Permitted Exceptions" means the exceptions to title set forth on
Exhibit B.
"Permitted Liens" means [i] liens granted to Landlord; [ii] liens
customarily incurred by Tenant in the ordinary course of business for items not
delinquent including construction liens and deposits and charges under worker's
compensation laws; [iii] liens for taxes and assessments not yet due and
payable; [iv] any lien, charge, or encumbrance which is being contested in good
faith pursuant to this Agreement; [v] the Permitted Exceptions; and [vi]
purchase money financing and capitalized equipment leases for the acquisition of
personal property provided, however, that Landlord obtains a nondisturbance
agreement from the purchase money lender or equipment lessor
(substantially in the form of Exhibit H attached hereto) if the original cost of
the equipment exceeds $50,000.00.
"Pro Forma Statement" means a financial forecast for the Facility the
next 9 month period prepared in accordance with the standards for forecasts
established by the American Institute of Certified Public Accountants
establishing operating benchmarks for the Facility, a copy of which is attached
hereto as Exhibit J.
"Purchase Price" has the meaning set forth in (S)13.3.
"Receivables" means [i] all of Tenant's rights to receive payment for
providing resident care and services as set forth in any accounts, contract
rights, and instruments, and [ii] those documents, chattel paper, inventory
proceeds, provider agreements, participation agreements, ledger sheets, files,
records, computer programs, tapes, and agreements relating to Tenant's rights to
receive payment for providing resident care services.
"Rent" has the meaning set forth in (S)2.3.
"Settlement Agreement" has the meaning set forth in Recital A.
"State" means the State of Florida.
"Tenant's Obligations" means all payment and performance obligations
of Tenant under this Lease and all documents executed by Tenant in connection
with this Lease.
"Tenant's Organizational Documents" means [i] for a corporate Tenant,
the Articles of Incorporation of Tenant certified by the Secretary of State of
the state of organization, as amended to date, and the Bylaws of Tenant
certified by Tenant, as amended to date; [ii] for a partnership Tenant, the
Partnership Agreement of Tenant certified by Tenant, as amended to date and the
Partnership Certificate, certified by the appropriate authority, as amended to
date; and [iii] for a limited liability Tenant, the Articles of Organization of
Tenant certified by the Secretary of State of the state of organization, as
amended to date and the Operating Agreement of Tenant certified by Tenant, as
amended to date.
"Term" has the meaning set forth in (S)1.2.
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ARTICLE 2: RENT
2.1 Base Rent. Tenant shall pay Landlord base rent ("Base Rent") in
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advance in consecutive monthly installments payable on the first day of each
month during the Term commencing on the Commencement Date. If the Effective Date
is not the first day of a month, Tenant shall pay Landlord Base Rent on the
Effective Date for the partial month, i.e. for the period commencing on the
Effective Date and ending on the day before the Commencement Date. The Base Rent
for the Term will be $781,244.68 payable monthly as follows:
May 1, 1999 $86,049.18
June 1, 1999 $86,049.18
July 1, 1999 $86,538.76
August 1, 1999 $87,101.26
September 1, 1999 $87,101.26
October 1, 1999 $87,101.26
November 1, 1999 $87,101.26
December 1, 1999 $87,101.26
January 1, 2000 $87,101.26
2.2 [Intentionally Deleted].
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2.3 Additional Rent. In addition to Base Rent, Tenant shall pay all
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other amounts, liabilities, obligations and Impositions which Tenant assumes or
agrees to pay under this Lease and any fine, penalty, interest, charge and cost
which may be added for nonpayment or late payment of such items (collectively
the "Additional Rent"). The Base Rent and Additional Rent are hereinafter
referred to as "Rent". Landlord shall have all legal, equitable and contractual
rights, powers and remedies provided either in this Lease or by statute or
otherwise in the case of nonpayment of the Rent.
2.4 Place of Payment of Rent. Tenant shall make all payments of Rent
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at the Landlord's address set forth in the first paragraph of this Lease or at
such other place as Landlord may designate from time to time.
2.5 Net Lease. This Lease shall be deemed and construed to be an
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"absolute net lease", and Tenant shall pay all Rent and other charges and
expenses in connection with the Leased Property throughout the Term, without
abatement, deduction or set-off.
2.6 No Termination, Abatement, Etc. Except as otherwise specifically
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provided in this Lease, Tenant shall remain bound by this Lease in accordance
with its terms. Tenant shall not, without the consent of Landlord, modify,
surrender or terminate the Lease, nor seek nor be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent. Except
as expressly provided in this Lease, the obligations of Landlord and Tenant
shall not be affected by reason of [i] any damage to, or destruction of, the
Leased Property or any part thereof from whatever cause or any Taking (as
hereinafter defined) of the Leased Property or any part thereof; [ii] the lawful
or unlawful prohibition of, or restriction upon, Tenant's use of the Leased
Property, or any part thereof, the interference with such use by any person,
corporation, partnership or other entity, or by reason of eviction by paramount
title; [iii] any claim which Tenant has or might have against Landlord or by
reason of any default or breach of any warranty by Landlord under this Lease or
any other agreement between Landlord and Tenant, or to which Landlord and Tenant
are parties; [iv] any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding affecting
Landlord or any assignee or transferee of Landlord; or [v] any other cause,
whether similar or dissimilar to any of the foregoing, other than a discharge of
Tenant from any such obligations as a matter of law. Except as otherwise
specifically provided in this Lease, Tenant hereby
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specifically waives all rights, arising from any occurrence whatsoever, which
may now or hereafter be conferred upon it by law [a] to modify, surrender or
terminate this Lease or quit or surrender the Leased Property or any portion
thereof; or [b] entitling Tenant to any abatement, reduction, suspension or
deferment of the Rent or other sums payable by Tenant hereunder. The obligations
of Landlord and Tenant hereunder shall be separate and independent covenants and
agreements and the Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provisions of this Lease or by
termination of this Lease other than by reason of an Event of Default.
2.7 Computational Method. Landlord and Tenant acknowledge that all
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rates under this Lease will be computed based on the actual number of days
elapsed over a 360-day year (365/360 method).
2.8 [Intentionally Deleted].
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2.9 [Intentionally Deleted].
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ARTICLE 3: IMPOSITIONS AND UTILITIES
3.1 Payment of Impositions. Tenant shall pay, as Additional Rent, all
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Impositions that may be levied or become a lien on the Leased Property or any
part thereof at any time (whether prior to or during the Term), without regard
to prior ownership of said Leased Property, before any fine, penalty, interest,
or cost is incurred; provided, however, Tenant may contest any Imposition in
accordance with (S)3.7. At Closing, Tenant shall pay or provide to Landlord
evidence of payment in full of all real estate taxes and assessments, personal
property taxes, and all penalties and interest accrued in connection with such
taxes that became delinquent as of March 31, 1999. Tenant shall deliver to
Landlord [i] not more than 5 days after the due date of each Imposition, copies
of the invoice for such Imposition and the check delivered for payment thereof;
and [ii] not more than 30 days after the due date of each Imposition, a copy of
the official receipt evidencing such payment or other proof of payment
satisfactory to Landlord. Tenant's obligation to pay such Impositions shall be
deemed absolutely fixed upon the date such Impositions become a lien upon the
Leased Property or any part thereof. Tenant, at its expense, shall prepare and
file all tax returns and reports in respect of any Imposition as may be required
by governmental authorities. Tenant shall be entitled to any refund due from any
taxing authority if no Event of Default shall have occurred hereunder and be
continuing. Landlord shall be entitled to any refund from any taxing authority
if an Event of Default has occurred and is continuing. Any refunds retained by
Landlord due to an Event of Default shall be applied as provided in (S)8.8.
Landlord and Tenant shall, upon request of the other, provide such data as is
maintained by the party to whom the request is made with respect to the Leased
Property as may be necessary to prepare any required returns and reports. In the
event governmental authorities classify any property covered by this Lease as
personal property, Tenant shall file all personal property tax returns in such
jurisdictions where it may legally so file. Landlord, to the extent it possesses
the same, and Tenant, to the extent it possesses the same, will provide the
other party, upon request, with cost and depreciation records necessary for
filing returns for any property so classified as personal property. Where
Landlord is legally required to file personal property tax returns, Tenant will
be provided with copies of assessment notices indicating a value in excess of
the reported value in sufficient time for Tenant to file a protest. Tenant may,
upon notice to Landlord, at Tenant's option and at Tenant's sole cost and
expense, protest, appeal, or institute such other proceedings as Tenant may deem
appropriate to effect a reduction of real estate or personal property
assessments and Landlord, at Tenant's expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action, and grant to
Tenant a limited power of attorney as is reasonable and necessary for the
purposes of such protest, appeal or other action. Tenant shall reimburse
Landlord for all personal property taxes paid by Landlord within 30 days after
receipt of xxxxxxxx accompanied by copies of a xxxx therefor and payments
thereof which identify the personal property with respect to which such payments
are made. Impositions imposed in respect to the tax-fiscal period during which
the Term terminates shall be adjusted and prorated between Landlord
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and Tenant, whether or not such Imposition is imposed before or after such
termination, and Tenant's obligation to pay its prorated share thereof shall
survive such termination.
3.2 Definition of Impositions. "Impositions" means, collectively, [i]
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taxes (including without limitation, all capital stock and franchise taxes of
Landlord imposed by the State or any governmental entity in the State due to
this lease transaction or Landlord's ownership of the Leased Property and the
income arising therefrom, or due to Landlord being considered as doing business
in the State because of Landlord's ownership of the Leased Property or lease
thereof to Tenant), all real estate and personal property ad valorem, sales and
use, business or occupation, single business, gross receipts, transaction
privilege, rent or similar taxes; [ii] assessments (including without
limitation, all assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed with the Term); [iii] ground rents, water, sewer or other rents and
charges, excises, tax levies, and fees (including without limitation, license,
permit, inspection, authorization and similar fees); [iv] all taxes imposed on
Tenant's operations of the Leased Property, including without limitation,
employee withholding taxes, income taxes and intangible taxes; [v] all taxes
imposed by the State or any governmental entity in the State with respect to the
conveyance of the Leased Property by Landlord to Tenant or Tenant's designee,
including without limitation, conveyance taxes and capital gains taxes; and [vi]
all other governmental charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character in
respect of the Leased Property or any part thereof and/or the Rent (including
all interest and penalties thereon due to any failure in payment by Tenant),
which at any time prior to, during or in respect of the Term hereof may be
assessed or imposed on or in respect of or be a lien upon [a] Landlord or
Landlord's interest in the Leased Property or any part thereof; [b] the Leased
Property or any part thereof or any rent therefrom or any estate, right, title
or interest therein; or [c] any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with the Leased Property
or the leasing or use of the Leased Property or any part thereof. Tenant shall
not, however, be required to pay any tax based on net income (whether
denominated as a franchise or capital stock or other tax) imposed on Landlord by
any governmental entity other than as described in clause [i] above.
3.3 Escrow of Impositions. If an Event of Default occurs and while it
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remains uncured, Tenant shall, at Landlord's election, deposit with Landlord on
the first day of each month a sum equal to 1/12th of the Impositions assessed
against the Leased Property for the preceding tax year, which sums shall be used
by Landlord toward payment of such Impositions. Tenant, on demand, shall pay to
Landlord any additional funds necessary to pay and discharge the obligations of
Tenant pursuant to the provisions of this section. The receipt by Landlord of
the payment of such Impositions by and from Tenant shall only be as an
accommodation to Tenant, the mortgagees, and the taxing authorities, and shall
not be construed as rent or income to Landlord, Landlord serving, if at all,
only as a conduit for delivery purposes.
3.4 Utilities. Tenant shall pay, as Additional Rent, all taxes,
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assessments, charges, deposits, and bills for utilities, including without
limitation charges for water, gas, oil, sanitary and storm sewer, electricity,
telephone service, and trash collection, which may be charged against the
occupant of the Improvements during the Term. If an Event of Default occurs and
while it remains uncured, Tenant shall, at Landlord's election, deposit with
Landlord on the first day of each month a sum equal to 1/12th of the amount of
the annual utility expenses for the preceding Lease year, which sums shall be
used by Landlord to pay such utilities. Tenant shall, on demand, pay to Landlord
any additional amount needed to pay such utilities. Landlord's receipt of such
payments shall only be an accommodation to Tenant and the utility companies and
shall not constitute rent or income to Landlord. Tenant shall at all times
maintain that amount of heat necessary to ensure against the freezing of water
lines. Tenant hereby agrees to indemnify and hold Landlord harmless from and
against any liability or damages to the utility systems and the Leased Property
that may result from Tenant's failure to maintain sufficient heat in the
Improvements.
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3.5 Discontinuance of Utilities. Landlord will not be liable for
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damages to person or property or for injury to, or interruption of, business for
any discontinuance of utilities nor will such discontinuance in any way be
construed as an eviction of Tenant or cause an abatement of rent or operate to
release Tenant from any of Tenant's obligations under this Lease.
3.6 Business Expenses. Tenant shall promptly pay all expenses and
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costs incurred in connection with the operation of the Facility on the Leased
Property, including without limitation, employee benefits, employee vacation and
sick pay, consulting fees, and expenses for inventory and supplies.
3.7 Permitted Contests. Tenant, on its own or on Landlord's behalf
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(or in Landlord's name), but at Tenant's expense, may contest, by appropriate
legal proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any Legal
Requirement or insurance requirement or any lien, attachment, levy, encumbrance,
charge or claim provided that [i] in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Landlord and from the Leased Property; [ii] neither the Leased Property nor any
Rent therefrom nor any part thereof or interest therein would be in any
immediate danger of being sold, forfeited, attached or lost; [iii] in the case
of a Legal Requirement, Landlord would not be in any immediate danger of civil
or criminal liability for failure to comply therewith pending the outcome of
such proceedings; [iv] in the event that any such contest shall involve a sum of
money or potential loss in excess of $50,000.00, Tenant shall deliver to
Landlord and its counsel an opinion of Tenant's counsel to the effect set forth
in clauses [i], [ii] and [iii], to the extent applicable; [v] in the case of a
Legal Requirement and/or an Imposition, lien, encumbrance or charge, Tenant
shall give such reasonable security as may be demanded by Landlord to insure
ultimate payment of the same and to prevent any sale or forfeiture of the
affected Leased Property or the Rent by reason of such nonpayment or
noncompliance; provided, however, the provisions of this section shall not be
construed to permit Tenant to contest the payment of Rent (except as to contests
concerning the method of computation or the basis of levy of any Imposition or
the basis for the assertion of any other claim) or any other sums payable by
Tenant to Landlord hereunder; [vi] in the case of an insurance requirement, the
coverage required by Article 4 shall be maintained; and [vii] if such contest be
finally resolved against Landlord or Tenant, Tenant shall, as Additional Rent
due hereunder, promptly pay the amount required to be paid, together with all
interest and penalties accrued thereon, or comply with the applicable Legal
Requirement or insurance requirement. Landlord, at Tenant's expense, shall
execute and deliver to Tenant such authorizations, limited powers of attorney
and other documents as may be reasonably required in any such contest, and, if
reasonably requested by Tenant or if Landlord so desires, Landlord shall join as
a party therein. Tenant hereby agrees to indemnify and save Landlord harmless
from and against any liability, cost or expense of any kind that may be imposed
upon Landlord in connection with any such contest and any loss resulting
therefrom.
ARTICLE 4: INSURANCE
4.1 Property Insurance. At Tenant's expense, Tenant shall maintain in
------------------
full force and effect a property insurance policy or policies insuring the
Leased Property against the following:
(a) Loss or damage commonly covered by a "Special Form" policy
insuring against physical loss or damage to the Improvements and Personal
Property, including but not limited to, risk of loss from fire and other
hazards, collapse, transit coverage, vandalism, malicious mischief, theft,
earthquake (if the Leased Property is in earthquake zone 1 or 2) and sinkholes
(if usually recommended in the area of the Leased Property). The policy shall be
in the amount of the full replacement value (as defined in (S)4.5) of the
Improvements and Personal Property and shall contain a deductible amount
acceptable to Landlord. Landlord shall be named as an additional insured. The
policy shall include a stipulated value endorsement or agreed amount endorsement
and endorsements for contingent liability for operations of building laws,
demolition costs, and increased cost of construction.
9
(b) If applicable, loss or damage by explosion of steam boilers,
pressure vessels, or similar apparatus, now or hereafter installed on the Leased
Property, in commercially reasonable amounts acceptable to Landlord.
(c) Consequential loss of rents and income coverage insuring
against all "Special Form" risk of physical loss or damage with limits and
deductible amounts acceptable to Landlord covering risk of loss during the first
9 months of reconstruction, and containing an endorsement for extended period of
indemnity of at least 6 months, and shall be written with a stipulated amount of
coverage if available at a reasonable premium.
(d) If the Leased Property is located, in whole or in part, in a
federally designated 100-year flood plain area, flood insurance for the
Improvements in an amount equal to the lesser of [i] the full replacement value
of the Improvements; or [ii] the maximum amount of insurance available for the
Improvements under all federal and private flood insurance programs.
(e) Loss or damage caused by the breakage of plate glass in
commercially reasonable amounts acceptable to Landlord.
(f) Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper currency,
depositor's forgery, and loss of property of patients accepted by Tenant for
safekeeping, in commercially reasonable amounts acceptable to the Landlord.
4.2 Liability Insurance. At Tenant's expense, Tenant shall maintain
-------------------
liability insurance against the following:
(a) Claims for personal injury or property damage commonly
covered by comprehensive general liability insurance with endorsements for
incidental malpractice, contractual, personal injury, owner's protective
liability, voluntary medical payments, products and completed operations, broad
form property damage, and extended bodily injury, with commercially reasonable
amounts for bodily injury, property damage, and voluntary medical payments
acceptable to Landlord, but with a combined single limit of not less than
$5,000,000.00 per occurrence.
(b) Claims for personal injury and property damage commonly
covered by comprehensive automobile liability insurance, covering all owned and
non-owned automobiles, with commercially reasonable amounts for bodily injury,
property damage, and for automobile medical payments acceptable to Landlord, but
with a combined single limit of not less than $5,000,000.00 per occurrence.
(c) Claims for personal injury commonly covered by medical
malpractice insurance in commercially reasonable amounts acceptable to Landlord.
(d) Claims commonly covered by worker's compensation insurance
for all persons employed by Tenant on the Leased Property. Such worker's
compensation insurance shall be in accordance with the requirements of all
applicable local, state, and federal law.
4.3 Builder's Risk Insurance. In connection with any construction
------------------------
(which does not constitute a nonstructural renovation), Tenant shall maintain in
full force and effect a builder's completed value risk policy ("Builder's Risk
Policy") of insurance in a nonreporting form insuring against all "Special Form"
risk of physical loss or damage to the Improvements, including but not limited
to, risk of loss from fire and other hazards, collapse, transit coverage,
vandalism, malicious mischief, theft, earthquake (if Leased Property is in
earthquake zone 1 or 2) and sinkholes (if usually recommended in the area of the
Leased
10
Property). The Builder's Risk Policy shall include endorsements providing
coverage for building materials and supplies and temporary premises. The
Builder's Risk Policy shall be in the amount of the full replacement value of
the Improvements and shall contain a deductible amount acceptable to Landlord.
Landlord shall be named as an additional insured. The Builder's Risk Policy
shall include an endorsement permitting initial occupancy.
4.4 Insurance Requirements. The following provisions shall apply to
----------------------
all insurance coverages required hereunder:
(a) The form and substance of all policies shall be subject to
the approval of Landlord, which approval will not be unreasonably withheld.
(b) The carriers of all policies shall have a Best's Rating of
"A" or better and a Best's Financial Category of X or higher and shall be
authorized to do insurance business in the State.
(c) Tenant shall be the "named insured" and Landlord shall be an
"additional insured" on each liability policy, excluding any policy of workers
compensation. On all property and casualty policies, Landlord and Tenant shall
be joint loss payees.
(d) At Closing, Tenant shall deliver to Landlord certificates or
policies showing the required coverages and endorsements. The policies of
insurance shall provide that the policy may not be cancelled or not renewed, and
no material change or reduction in coverage may be made, without at least 30
days' prior written notice to Landlord.
(e) The policies shall contain a severability of interest and/or
cross-liability endorsement, provide that the acts or omissions of Tenant or
Landlord will not invalidate the coverage of the other party, and provide that
Landlord shall [i] not be responsible for payment of premiums; and [ii] receive
at least 30 days prior written notice of cancellation.
(f) All loss adjustment shall require the written consent of
Landlord and Tenant, as their interests may appear.
(g) At least 30 days prior to the expiration of each insurance
policy, Tenant shall deliver to Landlord a certificate showing renewal of such
policy and payment of the annual premium therefor and a current Certificate of
Compliance (in the form delivered at the time of Closing) completed and signed
by Tenant's insurance agent.
4.5 Replacement Value. The term "full replacement value" means the
-----------------
actual replacement cost thereof from time to time including increased cost of
construction endorsement, with no reductions or deductions. Tenant shall, in
connection with each annual policy renewal, deliver to Landlord a
redetermination of the full replacement value by the insurer or an endorsement
indicating that the Leased Property is insured for its full replacement value.
If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased
Property, Landlord may have such full replacement value redetermined at any time
after such Permitted Alterations are made, regardless of when the full
replacement value was last determined.
4.6 Blanket Policy. Notwithstanding anything to the contrary
--------------
contained in this section, Tenant may carry the insurance required by this
Article under a blanket policy of insurance, provided that the coverage afforded
Tenant will not be reduced or diminished or otherwise be different from that
which would exist under a separate policy meeting all of the requirements of
this Lease.
11
4.7 No Separate Insurance. Tenant shall not take out separate
---------------------
insurance concurrent in form or contributing in the event of loss with that
required in this Article, or increase the amounts of any then existing
insurance, by securing an additional policy or additional policies, unless all
parties having an insurable interest in the subject matter of the insurance,
including Landlord and any mortgagees, are included therein as additional
insureds or loss payees, the loss is payable under said insurance in the same
manner as losses are payable under this Lease, and such additional insurance is
not prohibited by the existing policies of insurance. Tenant shall immediately
notify Landlord of the taking out of such separate insurance or the increasing
of any of the amounts of the existing insurance by securing an additional policy
or additional policies.
4.8 Waiver of Subrogation. Each party hereto hereby waives any and
---------------------
every claim which arises or may arise in its favor and against the other party
hereto during the Term for any and all loss of, or damage to, any of its
property located within or upon, or constituting a part of, the Leased Property,
which loss or damage is covered by valid and collectible insurance policies, to
the extent that such loss or damage is recoverable under such policies. Said
mutual waiver shall be in addition to, and not in limitation or derogation of,
any other waiver or release contained in this Lease with respect to any loss or
damage to property of the parties hereto. Inasmuch as the said waivers will
preclude the assignment of any aforesaid claim by way of subrogation (or
otherwise) to an insurance company (or any other person), each party hereto
agrees immediately to give each insurance company which has issued to it
policies of insurance, written notice of the terms of said mutual waivers, and
to have such insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverage by reason of said waivers, so long as
such endorsement is available at a reasonable cost.
4.9 Mortgages. The following provisions shall apply if Landlord now
---------
or hereafter places a mortgage on the Leased Property or any part thereof: [i]
Tenant shall obtain a standard form of lender's loss payable clause insuring the
interest of the mortgagee; [ii] Tenant shall deliver evidence of insurance to
such mortgagee; [iii] loss adjustment shall require the consent of the
mortgagee; and [iv] Tenant shall provide such other information and documents as
may be required by the mortgagee.
4.10 Escrows. After an Event of Default occurs hereunder, Tenant
-------
shall make such periodic payments of insurance premiums in accordance with
Landlord's requirements after receipt of notice thereof from Landlord.
ARTICLE 5: INDEMNITY
5.1 Tenant's Indemnification. Tenant hereby indemnifies and agrees to
------------------------
hold harmless Landlord, any successors or assigns of Landlord, and Landlord's
and such successor's and assign's directors, officers, employees and agents from
and against any and all demands, claims, causes of action, fines, penalties,
damages (including consequential damages), losses, liabilities (including strict
liability), judgments, and expenses (including, without limitation, reasonable
attorneys' fees, court costs, and the costs set forth in (S)8.7) incurred in
connection with or arising from: [i] the use or occupancy of the Leased Property
by Tenant or any persons claiming under Tenant; [ii] any activity, work, or
thing done, or permitted or suffered by Tenant in or about the Leased Property;
[iii] any acts, omissions, or negligence of Tenant or any person claiming under
Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant
or any such person; [iv] any breach, violation, or nonperformance by Tenant or
any person claiming under Tenant or the employees, agents, contractors,
invitees, or visitors of Tenant or of any such person, of any term, covenant, or
provision of this Lease or any law, ordinance, or governmental requirement of
any kind including, without limitation, any failure to comply with any
applicable requirements under the ADA; [v] any injury or damage to the person,
property or business of Tenant, its employees, agents, contractors, invitees,
visitors, or any other person entering upon the Leased Property; and [vi] any
construction, alterations, changes or demolition of the Facility performed by or
contracted for Tenant or its employees, agents or contractors. If any action or
12
proceeding is brought against Landlord, its employees, or agents by reason of
any such claim, Tenant, upon notice from Landlord, will defend the claim at
Tenant's expense with counsel reasonably satisfactory to Landlord. Landlord and
Tenant shall jointly approve or disapprove any settlement offer in an amount of
$500,000 or more made or accepted in connection with any such action, suit or
proceeding. Tenant may solely approve or disapprove a settlement offer in an
amount less than $500,000 made or accepted in connection with any such action,
suit or proceeding. All amounts payable to Landlord under this section shall be
payable on written demand and any such amounts which are not paid within 10 days
after demand therefor by Landlord shall bear interest at the Overdue Rate. In
case any action, suit or proceeding is brought against Tenant by reason of any
such occurrence, Tenant shall use its best efforts to defend such action, suit
or proceeding. Tenant's indemnity under this section does not include tortuously
intentional acts or gross negligence of Landlord.
5.1.1 Notice of Claim. Landlord shall notify Tenant in writing of any
---------------
claim or action brought against Landlord in which indemnity may be sought
against Tenant pursuant to this section. Such notice shall be given in
sufficient time to allow Tenant to defend or participate in such claim or
action, but the failure to give such notice in sufficient time shall not
constitute a defense hereunder nor in any way impair the obligations of Tenant
under this section unless the failure to give such notice precludes Tenant's
defense of any such action.
5.1.2 Survival of Covenants. The covenants of Tenant contained in
this section shall remain in full force and effect after the termination of this
Agreement until the expiration of the period stated in the applicable statute of
limitations during which a claim or cause of action may be brought and payment
in full or the satisfaction of such claim or cause of action and of all expenses
and charges incurred by Landlord relating to the enforcement of the provisions
herein specified.
5.1.3 Reimbursement of Expenses. Unless prohibited by law, Tenant
-------------------------
hereby agrees to pay to Landlord all of the reasonable fees, charges and
reasonable out-of-pocket expenses related to the Facility and required hereby,
or incurred by Landlord in enforcing the provisions of this Agreement.
5.2 Environmental Indemnity; Audits.
-------------------------------
5.2.1 Indemnification. Tenant hereby indemnifies and agrees to hold
---------------
harmless Landlord, any successors to Landlord's interest in this Lease, and
Landlord's and such successors' directors, officers, employees and agents from
and against any losses, claims, damages (including consequential damages),
penalties, fines, liabilities (including strict liability), costs (including
cleanup and recovery costs), and expenses (including expenses of litigation and
reasonable consultants' and attorneys' fees) incurred by Landlord or any other
indemnitee or assessed against the Leased Property by virtue of any claim or
lien by any governmental or quasi-governmental unit, body, or agency, or any
third party, for cleanup costs or other costs pursuant to any Environmental Law.
Tenant's indemnity shall survive the termination of this Lease. Provided,
however, Tenant shall have no indemnity obligation with respect to [i] Hazardous
Materials first introduced to the Leased Property subsequent to the date that
Tenant's occupancy of the Leased Property shall have fully terminated; or [ii]
Hazardous Materials introduced to the Leased Property by Landlord, its agent,
employees, successors or assigns. If at any time during the Term of this Lease
any governmental authority notifies Landlord or Tenant of a violation of any
Environmental Law or Landlord has good cause to believe that a Facility may
violate any Environmental Law, Landlord may require an environmental audit of
the Leased Premises (and such further action as may be indicated by such
environmental audit) in such form, scope and substance as specified by Landlord,
at Tenant's expense. Tenant shall, within 30 days after receipt of an invoice
from Landlord, reimburse Landlord for all costs and expenses incurred in
reviewing any environmental audit, including without limitation, reasonable
attorneys' fees and costs.
13
5.3 Limitation of Landlord's Liability. Landlord, its agents, and
----------------------------------
employees, will not be liable for any loss, injury, death, or damage (including
consequential damages) to persons, property, or Tenant's business occasioned by
theft, act of God, public enemy, injunction, riot, strike, insurrection, war,
court order, requisition, order of governmental body or authority, fire,
explosion, falling objects, steam, water, rain or snow, leak or flow of water
(including water from the elevator system), rain or snow from the Leased
Property or into the Leased Property or from the roof, street, subsurface or
from any other place, or by dampness or from the breakage, leakage, obstruction,
or other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, or lighting fixtures of the Leased Property, or from construction,
repair, or alteration of the Leased Property or from any acts or omissions of
any other occupant or visitor of the Leased Property, or from any other cause
beyond Landlord's control.
ARTICLE 6: USE AND ACCEPTANCE OF PREMISES
6.1 Use of Leased Property. Tenant shall use and occupy the Leased
----------------------
Property exclusively for the Facility Uses and for all lawful and licensed
ancillary uses, and for no other purpose without the prior written consent of
the Landlord. Tenant shall obtain and maintain all approvals, licenses, and
consents needed to use and operate the Leased Property as herein permitted.
Tenant shall deliver to Landlord complete copies of surveys, examinations,
certification and licensure inspections, compliance certificates, and other
similar reports issued to Tenant by any governmental agency within 10 days after
Tenant's receipt of each item.
6.2 Acceptance of Leased Property. Tenant acknowledges that [i]
-----------------------------
Tenant and its agents have had an opportunity to inspect the Leased Property;
[ii] Tenant has found the Leased Property fit for Tenant's use; [iii] Landlord
will deliver the Leased Property to Tenant in "as-is" condition; [iv] Landlord
is not obligated to make any improvements or repairs to the Leased Property; and
[v] the roof, walls, foundation, heating, ventilating, air conditioning,
telephone, sewer, electrical, mechanical, elevator, utility, plumbing, and other
portions of the Leased Property are in good working order. Tenant waives any
claim or action against Landlord with respect to the condition of the Leased
Property. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN
RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR
USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS
TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.
6.3 Conditions of Use and Occupancy. Tenant agrees that during the
-------------------------------
Term it shall use and keep the Leased Property in a careful, safe and proper
manner; not commit or suffer waste thereon; not use or occupy the Leased
Property for any unlawful purposes; not use or occupy the Leased Property or
permit the same to be used or occupied, for any purpose or business deemed
extrahazardous on account of fire or otherwise; keep the Leased Property in such
repair and condition as may be required by the Board of Health, or other city,
state or federal authorities, free of all cost to Landlord; not permit any acts
to be done which will cause the cancellation, invalidation, or suspension of any
insurance policy; and permit Landlord and its agents to enter upon the Leased
Property at all reasonable times to examine the condition thereof.
ARTICLE 7: REPAIRS AND MECHANICS' LIENS
7.1 Maintenance. Tenant shall maintain, repair, and replace the
-----------
Leased Property, including without limitation, all structural and nonstructural
repairs and replacements to the roof, foundations, exterior walls, parking
areas, sidewalks, water, sewer, and gas connections, pipes, and mains. Tenant
shall pay, as Additional Rent, the full cost of maintenance, repairs, and
replacements. Tenant shall maintain all drives, sidewalks, parking areas, and
lawns on or about the Leased Property in a clean and orderly condition, free of
accumulations of dirt, rubbish, snow and ice. Tenant shall permit Landlord to
inspect the Leased
14
Property at all reasonable times, and shall consider in good faith all
reasonable suggestions of the Landlord as to the maintenance and replacement of
the Leased Property.
7.2 Required Alterations. Tenant shall, at Tenant's sole cost and
--------------------
expense, make any additions, changes, improvements or alterations to the Leased
Property, including structural alterations, which may be required by any
governmental authorities, including those required to maintain licensure or
certification under the Medicare and Medicaid programs (if so certified),
whether such changes are required by Tenant's use, changes in the law,
ordinances, or governmental regulations, defects existing as of the date of this
Lease, or any other cause whatever. All such additions, changes, improvements or
alterations shall be deemed to be Permitted Alterations and shall comply with
all laws requiring such alterations and with the provisions of (S)16.4.
7.3 Construction Liens. Tenant shall have no authority to permit or
create a lien against Landlord's interest in the Leased Property, and Tenant
shall post notices or file such documents as may be required to protect
Landlord's interest in the Leased Property against liens. Tenant hereby agrees
to defend, indemnify, and hold Landlord harmless from and against any
construction liens against the Leased Property by reason of work, labor,
services or materials supplied or claimed to have been supplied on or to the
Leased Property. Tenant shall remove, bond-off, or otherwise obtain the release
of any construction lien filed against the Leased Property within 10 days after
the filing thereof. Tenant shall pay all expenses in connection therewith,
including without limitation, damages, interest, court costs and reasonable
attorneys' fees.
7.3.1 Obligations Related to KDA Liens and Other Liens.
------------------------------------------------
Notwithstanding (S)7.3, Landlord and Tenant acknowledge that construction liens
have been filed by KDA and certain subcontractors against portions of the Leased
Property. As soon as possible after Closing, Tenant shall enter into a written,
binding settlement agreement with KDA ("KDA Settlement Agreement") that provides
for the dismissal of the arbitration and litigation proceedings against Landlord
and Tenant with prejudice and the release of any lien that KDA or any of its
subcontractors may have against the Leased Property. Landlord agrees to
contribute, directly or indirectly, 50% of the initial payment to be made to KDA
under the KDA Settlement Agreement, up to a total amount of $100,000.00 subject
to Tenant's obligation to reimburse Landlord for such contribution as provided
in Paragraph 5 of the Settlement Agreement. Tenant shall obtain the release of
any other construction liens filed against the Leased Property.
(a) Construction Liens Letter of Credit. Tenant shall deliver
-----------------------------------
to Landlord a Letter of Credit in the amount of $50,000.00 at Closing as
security for Tenant's obligations under (S)7.3.1 ("Construction Liens Letter of
Credit"). On the first day of each month of the Term commencing on June 1, 1999,
Tenant shall increase the Construction Liens Letter of Credit by the amount of
$17,500.00 per month or deliver an additional Construction Liens Letter of
Credit in the amount of $17,500.00 per month until KDA and Tenant enter into the
KDA Settlement Agreement. Landlord shall release the Construction Liens Letter
of Credit upon receipt of a fully executed KDA Settlement Agreement.
(b) KDA Settlement Agreement. Tenant shall comply with all
------------------------
terms and conditions of the KDA Settlement Agreement.
7.4 Replacements of Fixtures and Personal Property. Tenant shall
----------------------------------------------
not remove Fixtures and Personal Property from the Leased Property except to
replace the Fixtures and Personal Property by other similar items of equal
quality and value for which replacement of Fixture and Personal Property,
Landlord shall execute and deliver bills of sale or other documents of transfer
necessary to accomplish such replacements. Items being replaced by Tenant may be
removed and shall become the property of Tenant and items replacing the same
shall be and remain the property of Landlord. Tenant shall execute, upon written
request from Landlord, any and all documents necessary to evidence Landlord's
ownership of the Personal Property and replacements therefor. Tenant may finance
replacements for the Fixtures and Personal Property
15
by equipment lease or by a security agreement and financing statement if [i]
Landlord has consented to the terms and conditions of the equipment lease or
security agreement; and [ii] the equipment lessor or lender has entered into a
nondisturbance agreement with Landlord upon terms and conditions reasonably
acceptable to Landlord, including without limitation, the following: [a]
Landlord shall have the right (but not the obligation) to assume such security
agreement or equipment lease upon the occurrence of an Event of Default under
this Lease; [b] the equipment lessor or lender shall notify Landlord of any
default by Tenant under the equipment lease or security agreement and give
Landlord a reasonable opportunity to cure such default; and [c] Landlord shall
have the right to assign its rights under the equipment lease, security
agreement, or nondisturbance agreement. Tenant shall, within 30 days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in reviewing and approving the equipment lease, security
agreement, and nondisturbance agreement, including without limitation,
reasonable attorneys' fees and costs.
ARTICLE 8: DEFAULTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
-----------------
following shall be an event of default ("Event of Default") hereunder:
(a) Tenant fails [i] to pay in full any installment of Rent
under this Lease when such payment is due; [ii] to pay Landlord's attorney's
fees and expenses as provided under the Settlement Agreement; [iii] to comply
with (S)3.1, (S)4.1, (S)4.2, (S)4.4, (S)7.3.1(a)-(b), (S)15.8, (S)15.10, and
Article 19 of this Lease; or [iv] to deliver the Operating Performance Letter of
Credit to Landlord as required under (S)15.7.
(b) Tenant fails to pay any other monetary obligation payable by
Tenant under this Lease when such payment is due.
(c) Tenant fails to comply with any covenant set forth in
Article 14, (S)15.6, (S)15.9, or Article 20 of this Lease.
(d) Tenant fails to observe and perform any other covenant,
condition or agreement under this Lease to be performed by Tenant and [i] such
failure continues for a period of 30 days after written notice thereof is given
to Tenant by Landlord; or [ii] if, by reason of the nature of such default, the
same cannot be remedied within said 30 days, Tenant fails to proceed with
diligence reasonably satisfactory to Landlord after receipt of the notice to
cure the same or, in any event, fails to cure such default within 60 days after
receipt of the notice. The foregoing notice and cure provisions do not apply to
any Events of Default other than those specifically described in this (S)8.1(d).
(e) Tenant abandons or vacates the Leased Property or any
material part thereof or ceases to do business or ceases to exist for any reason
for any one or more days, excepting absences due to construction or
nonstructural renovations.
(f) [i] The filing by Tenant of a petition under 11 U.S.C. or
the commencement of a bankruptcy or similar proceeding by Tenant; [ii] the
failure by Tenant to assume or reject this Lease within one month of the filing
of a bankruptcy proceeding; [iii] the failure by Tenant within 60 days to
dismiss an involuntary bankruptcy petition or other commencement of a
bankruptcy, reorganization or similar proceeding against Tenant, or to lift or
stay any execution, garnishment or attachment of such consequence as will impair
its ability to carry on its operation at the Leased Property; [iv] the entry of
an order for relief under 11 U.S.C. in respect of Tenant; [v] any assignment by
Tenant for the benefit of its creditors; [vi] the entry by Tenant into an
agreement of composition with its creditors; [vii] the approval by a court of
competent jurisdiction of a petition applicable to Tenant in any proceeding for
its reorganization instituted under the provisions of any state or federal
bankruptcy, insolvency, or similar laws; [viii] appointment by final order,
judgment, or decree of a court of competent jurisdiction of a receiver of a
whole or any substantial part of the
16
properties of Tenant (provided such receiver shall not have been removed or
discharged within 60 days of the date of his qualification).
(g) [i] Any receiver, administrator, custodian or other person
takes possession or control of any of the Leased Property and continues in
possession for 60 days; [ii] any writ against any of the Leased Property is not
released within 60 days; [iii] any judgment is rendered or proceedings are
instituted against the Leased Property or Tenant which affect the Leased
Property or any part thereof, which is not dismissed for 60 days (except as
otherwise provided in this section); [iv] all or a substantial part of the
assets of Tenant or Guarantor are attached, seized, subjected to a writ or
distress warrant, or are levied upon, or come into the possession of any
receiver, trustee, custodian, or assignee for the benefit of creditors; [v]
Tenant or Guarantor is enjoined, restrained, or in any way prevented by court
order, or any proceeding is filed or commenced seeking to enjoin, restrain or in
any way prevent Tenant from conducting all or a substantial part of its business
or affairs; or [vi] except as otherwise permitted hereunder, a final notice of
lien, levy or assessment is filed of record with respect to all or any part of
the Leased Property or any property of Tenant located at the Leased Property and
is not dismissed, discharged, or bonded-off within 30 days.
(h) Any material representation or warranty made by Tenant or
Guarantor in this Lease or any other document executed in connection with this
Lease, any guaranty of or other security for this Lease, or any report,
certificate, application, financial statement or other instrument furnished by
Tenant or Guarantor pursuant hereto or thereto shall prove to be false,
misleading or incorrect in any material respect as of the date made.
(i) Tenant, any Guarantor, or any Affiliate defaults on any
indebtedness or obligation to Landlord or any Landlord Affiliate, or any
agreement with Landlord or any Landlord Affiliate including, without limitation,
any lease with Landlord or any Landlord Affiliate, or Tenant or any Guarantor
defaults on any Material Obligation, and any applicable grace or cure period
with respect to default under such indebtedness or obligation expires without
such default having been cured. This provision applies to all such indebtedness,
obligations and agreements as they may be amended, modified, extended, or
renewed from time to time.
(j) The occurrence of any change in Tenant's leasehold interest
in the Leased Property, without the prior written consent of Landlord.
(k) Any guarantor of the Lease dies, dissolves, terminates, is
adjudicated incompetent, files a petition in bankruptcy, or is adjudicated
insolvent under 11 U.S.C. or any other insolvency law, or fails to comply with
any covenant or requirement of such guarantor set forth in this Lease or in the
guaranty of such guarantor, and in the case of the death or incompetency of an
individual guarantor only, Tenant fails within 30 days to deliver to Landlord a
substitute guaranty or other collateral reasonably satisfactory to Landlord.
(l) The license for any Facility or any other Government
Authorization, is cancelled, suspended or otherwise invalidated, notice of
impending revocation proceedings is received and Tenant fails to diligently
contest such proceeding, or any reduction occurs in the number of licensed beds
or units at the Facility.
8.2 Remedies. Landlord may exercise any one or more of the following
--------
remedies upon the occurrence of an Event of Default:
(a) Landlord may re-enter and take possession of the Leased
Property without terminating the Lease, and lease the Leased Property for the
account of Tenant, holding Tenant liable for all
17
costs of the Landlord in reletting the Leased Property and for the difference in
the amount received by such reletting and the amounts payable by Tenant under
the Lease.
(b) Landlord may terminate this Lease, exclude Tenant from
possession of the Leased Property and use efforts to lease the Leased Property
to others, holding Tenant liable for the difference in the amounts received from
such reletting and the amounts payable by Tenant under the Lease.
(c) Landlord may re-enter the Leased Property and have,
repossess and enjoy the Leased Property as if the Lease had not been made, and
in such event, Tenant and its successors and assigns shall remain liable for any
contingent or unliquidated obligations or sums owing at the time of such
repossession.
(d) Landlord may have access to and inspect, examine and make
copies of the books and records and any and all accounts, data and income tax
and other returns of Tenant insofar as they pertain to the Leased Property.
(e) Landlord may accelerate all of the unpaid Rent hereunder so
that the present value of the aggregate Rent for the unexpired term of this
Lease becomes immediately due and payable.
(f) Landlord may take whatever action at law or in equity as may
appear necessary or desirable to collect the Rent and other amounts payable
under the Lease then due and thereafter to become due, or to enforce performance
and observance of any obligations, agreements or covenants of Tenant under this
Lease.
(g) With respect to the Collateral and Landlord's security
interest therein, Landlord may exercise all of its rights as secured party under
Article 9 of the Uniform Commercial Code as adopted in the State. Landlord may
sell the Collateral by public or private sale upon 5 days notice to Tenant.
Tenant agrees that a commercially reasonable manner of disposition of the
Collateral shall include, without limitation and at the option of Landlord, a
sale of the Collateral, in whole or in part, concurrently with the sale of the
Leased Property.
(h) Landlord may obtain control over and collect the Receivables
and apply the proceeds of the collections to satisfaction of Tenant's
Obligations unless prohibited by law. Tenant appoints Landlord or its designee
as attorney for Tenant with powers [i] to receive, to indorse, to sign and/or to
deliver, in Tenant's name or Landlord's name, any and all checks, drafts, and
other instruments for the payment of money relating to the Receivables, and to
waive demand, presentment, notice of dishonor, protest, and any other notice
with respect to any such instrument; [ii] to sign Tenant's name on any invoice
or xxxx of lading relating to any Receivable, drafts against account debtors,
assignments and verifications of Receivables, and notices to account debtors;
[iii] to send verifications of Receivables to any account debtor; and [iv] to do
all other acts and things necessary to carry out this Lease. Landlord shall not
be liable for any omissions, commissions, errors of judgment, or mistakes in
fact or law made in the exercise of any such powers. At Landlord's option,
Tenant shall [i] provide Landlord a full accounting of all amounts received on
account of Receivables with such frequency and in such form as Landlord may
require, either with or without applying all collections on Receivables in
payment of Tenant's Obligations or [ii] deliver to Landlord on the day of
receipt all such collections in the form received and duly indorsed by Tenant.
At Landlord's request, Tenant shall institute any action or enter into any
settlement determined by Landlord to be necessary to obtain recovery or redress
from any account debtor in default of Receivables. Landlord may give notice of
its security interest in the Receivables to any or all account debtors with
instructions to make all payments on Receivables directly to Landlord, thereby
terminating Tenant's authority to collect Receivables. After terminating
Tenant's authority to enforce or collect Receivables, Landlord shall have the
right to take
18
possession of any or all Receivables and records thereof and is hereby
authorized to do so, and only Landlord shall have the right to collect and
enforce the Receivables. Prior to the occurrence of an Event of Default, at
Tenant's cost and expense, but on behalf of Landlord and for Landlord's account,
Tenant shall collect or otherwise enforce all amounts unpaid on Receivables and
hold all such collections in trust for Landlord, but Tenant may commingle such
collections with Tenant's own funds, until Tenant's authority to do so has been
terminated, which may be done only after an Event of Default. Notwithstanding
any other provision hereof, Landlord does not assume any of Tenant's obligations
under any Receivable, and Landlord shall not be responsible in any way for the
performance of any of the terms and conditions thereof by Tenant.
(i) Without waiving any prior or subsequent Event of Default,
Landlord may waive any Event of Default or, with or without waiving any Event of
Default, remedy any default.
(j) [Intentionally Deleted].
(k) Landlord may enter and take possession of the Land and
Facility without terminating the Lease and complete construction and renovation
of the Improvements (or any part thereof) and perform the obligations of Tenant
under the Lease Documents. Without limiting the generality of the foregoing and
for the purposes aforesaid, Tenant hereby appoints Landlord its lawful attorney-
in-fact with full power to do any of the following: [i] complete construction,
renovation and equipping of the Improvements in the name of Tenant; [ii] use
unadvanced funds remaining under the Lease Amount, or funds that may be
reserved, escrowed, or set aside for any purposes hereunder at any time, or to
advance funds in excess of the Lease Amount, to complete the Improvements; [iii]
make changes in the plans and specifications that shall be necessary or
desirable to complete the Improvements in substantially the manner contemplated
by the plans and specifications; [iv] retain or employ new general contractors,
subcontractors, architects, engineers, and inspectors as shall be required for
said purposes; [v] pay, settle, or compromise all existing bills and claims,
which may be liens or security interests, or to avoid such bills and claims
becoming liens against the Facility or security interest against fixtures or
equipment, or as may be necessary or desirable for the completion of the
construction and equipping of the Improvements or for the clearance of title;
[vi] execute all applications and certificates, in the name of Tenant, that may
be required in connection with any construction; [vii] do any and every act that
Tenant might do in its own behalf, to prosecute and defend all actions or
proceedings in connection with the Improvements; and [viii] to execute, deliver
and file all applications and other documents and take any and all actions
necessary to transfer the operations of the Facility to Landlord or Landlord's
designee. This power of attorney is a power coupled with an interest and cannot
be revoked.
(l) Upon the occurrence of an Event of Default under (S)8.1(a)
only and the failure of Tenant to cure such Event of Default within 48 hours
(excluding weekends) after written notice thereof is given to Tenant by
facsimile, during the hours of 9:00 a.m. - 5:00 p.m. Monday through Friday, to
Tenant's corporate offices at (000) 000-0000, to Tenant's directors at the
following numbers: Xxxxxxx Xxxxxx at (000) 000-0000, Xxx Xxxxx at (314) 727-
2622, and Xxxxx Xxxxxx at (000) 000-0000, to Xxxxxx Xxxx at (000) 000-0000, and
to Tenant's attorney, Xxxxxxx Xxxxxxx, Esq. at (000) 000-0000, Landlord may
obtain an immediate order evicting Tenant from the Leased Property upon filing
an affidavit as provided in the Settlement Agreement stating that an Event of
Default has occurred and the 48-hour cure period has expired without the cure
being effectuated.
8.3 Right of Set-Off. Landlord may, and is hereby authorized by
----------------
Tenant to, at any time and from time to time without advance notice to Tenant
(any such notice being expressly waived by Tenant), set-off and apply any and
all sums held by Landlord, any indebtedness of Landlord to Tenant, and any
claims by Tenant against Landlord, against any obligations of Tenant hereunder
and against any claims by Landlord against Tenant, whether or not such
obligations or claims of Tenant are matured and whether or not Landlord
19
has exercised any other remedies hereunder. The rights of Landlord under this
section are in addition to any other rights and remedies Landlord may have
against Tenant.
8.4 Performance of Tenant's Covenants. Landlord may perform any
---------------------------------
obligation of Tenant which Tenant has failed to perform within 5 days after
Landlord has sent a written notice to Tenant informing it of its specific
failure. Tenant shall reimburse Landlord on demand, as Additional Rent, for any
expenditures thus incurred by Landlord and shall pay interest thereon at the
Overdue Rate (as defined in (S)8.6).
8.5 Late Payment Charge. Tenant acknowledges that any default in the
-------------------
payment of any installment of Rent payable hereunder will result in loss and
additional expense to Landlord in servicing any indebtedness of Landlord secured
by the Leased Property, handling such delinquent payments, and meeting its other
financial obligations, and because such loss and additional expense is extremely
difficult and impractical to ascertain, Tenant agrees that in the event any Rent
payable to Landlord hereunder is not paid within 10 days after the due date,
Tenant shall pay a late charge of 5% of the amount of the overdue payment as a
reasonable estimate of such loss and expenses, unless applicable law requires a
lesser charge, in which event the maximum rate permitted by such law may be
charged by Landlord. The 10 day grace period set forth in this section shall not
extend the time for payment of Rent or the period for curing any default or
constitute a waiver of such default.
8.6 Interest. In addition to the late payment charge, any payment not
--------
made by Tenant within 10 days after the due date shall thereafter bear interest
at the rate (the "Overdue Rate") of 18% per annum, provided, however, that at no
time will Tenant be required to pay interest at a rate higher than the maximum
legal rate and, provided further, that if a court of competent jurisdiction
determines that any other charges payable under this Lease are deemed to be
interest, the Overdue Rate shall be adjusted to ensure that the aggregate
interest payable under this Lease does not accrue at a rate in excess of the
maximum legal rate. Tenant shall not be required to pay interest upon any late
payment fees assessed pursuant to (S)8.5.
8.7 Litigation; Attorneys' Fees. Within 5 days after Tenant has
---------------------------
knowledge of any litigation or other proceeding that may be instituted against
Tenant, against the Leased Property to secure or recover possession thereof, or
that may affect the title to or the interest of Landlord in the Leased Property,
Tenant shall give written notice thereof to Landlord. Tenant shall pay all
reasonable costs and expenses incurred by Landlord in enforcing or preserving
Landlord's rights under this Lease, whether or not an Event of Default has
actually occurred or has been declared and thereafter cured, including without
limitation, [i] the fees, expenses, and costs of any litigation, receivership,
administrative, bankruptcy, insolvency or other similar proceeding; [ii]
reasonable attorney, paralegal, consulting and witness fees and disbursements,
whether in house counsel or outside counsel; and [iii] the expenses, including
without limitation, lodging, meals, and transportation, of Landlord and its
employees, agents, attorneys, and witnesses in preparing for litigation,
administrative, bankruptcy, insolvency or other similar proceedings and
attendance at hearings, depositions, and trials in connection therewith. All
such costs, charges and fees payable by Tenant shall be deemed to be Additional
Rent under this Lease.
8.8 Escrows and Application of Payments. As security for the
-----------------------------------
performance of its obligations hereunder, Tenant hereby assigns to Landlord all
its right, title, and interest in and to all monies escrowed with Landlord under
this Lease and all deposits with utility companies, taxing authorities and
insurance companies; provided, however, that Landlord shall not exercise its
rights hereunder until an Event of Default has occurred. Any payments received
by Landlord under any provisions of this Lease during the existence or
continuance of an Event of Default shall be applied to Tenant's obligations in
the order which Landlord may determine.
20
8.9 Remedies Cumulative. The remedies of Landlord herein are
-------------------
cumulative to and not in lieu of any other remedies available to Landlord at law
or in equity. The use of any one remedy shall not be taken to exclude or waive
the right to use any other remedy.
8.10 Rights and Remedies. Upon the occurrence of any Event of
-------------------
Default under this Lease, and at any time thereafter until Landlord waives the
default in writing or acknowledges cure of the default in writing, at Landlord's
option, without declaration, notice of nonperformance, protest, notice of
protest, notice of default, or any other notice or demand of any kind, Landlord
may exercise any and all rights and remedies provided in this Agreement or any
Lease Document.
8.11 Waivers. Tenant waives [i] any notice required by statute or
-------
other law as a condition to bringing an action for possession of, or eviction
from, any of the Leased Property, [ii] any right of re-entry or repossession,
[iii] any right to a trial by jury in any action or proceeding arising out of or
relating to this Lease, [iv] any objections, defenses, claims or rights with
respect to the exercise by Landlord of any rights or remedies, [v] all
presentments, demands for performance, notices of nonperformance, protest,
notices of protest, notices of dishonor and any other notice or demand of any
kind, and [vi] all notices of the existence, creation or incurring of any
obligation or advance under the Lease before or after this date.
ARTICLE 9: DAMAGE AND DESTRUCTION
9.1 Notice of Casualty. If the Leased Property shall be destroyed,
------------------
in whole or in part, or damaged by fire, flood, windstorm or other casualty (a
"Casualty"), Tenant shall give written notice thereof to the Landlord within one
business day after the occurrence of the Casualty. Within 15 days after the
occurrence of the Casualty or as soon thereafter as such information is
reasonably available to Tenant, Tenant shall provide the following information
to Landlord: [i] the date of the Casualty; [ii] the nature of the Casualty;
[iii] a description of the damage or destruction caused by the Casualty
including the type of Leased Property damaged and the area of the Improvements
damaged; [iv] a preliminary estimate of the cost to repair, rebuild, restore or
replace the Leased Property; [v] a preliminary estimate of the schedule to
complete the repair, rebuilding, restoration or replacement of the Leased
Property; [vi] a description of the anticipated property insurance claim
including the name of the insurer, the insurance coverage limits, the deductible
amount, the expected settlement amount, and the expected settlement date; and
[vii] a description of the business interruption claim including the name of the
insurer, the insurance coverage limits, the deductible amount, the expected
settlement amount, and the expected settlement date. Within five days after
request from Landlord, Tenant will provide Landlord with copies of all
correspondence to the insurer and any other information reasonably requested by
Landlord.
9.2 Substantial Destruction.
-----------------------
9.2.1 The term "substantially destroyed" means any casualty resulting
in the loss of use of 50% or more of the licensed beds at any one Facility.
9.2.2 If the Improvements are substantially destroyed during the
Term, Landlord may elect to terminate this Lease, at Landlord's option, and
retain the insurance proceeds. If Landlord elects to terminate, Landlord shall
give notice ("Termination Notice") of its election to terminate this Lease
within 30 days after receipt of Tenant's notice of the damage, and this Lease
shall terminate on the 15th day after delivery of the Termination Notice. If
this Lease is so terminated, Tenant shall be liable to Landlord for all Rent and
all other obligations accrued under this Lease through the effective date of
termination.
9.3 Partial Destruction. If the Leased Property is not
-------------------
substantially destroyed, then Tenant shall comply with the provisions of (S)9.4
and Landlord shall make the insurance proceeds available to Tenant for such
restoration.
21
9.4 Restoration. Tenant shall promptly repair, rebuild, or restore
-----------
the Leased Property, at Tenant's expense, so as to make the Leased Property at
least equal in value to the Leased Property existing immediately prior to such
occurrence and as nearly similar to it in character as is practicable and
reasonable. Before beginning such repairs or rebuilding, or letting any
contracts in connection with such repairs or rebuilding, Tenant will submit for
Landlord's approval, which approval Landlord will not unreasonably withhold or
delay, plans and specifications meeting the requirements of (S)16.2 for such
repairs or rebuilding. Promptly after receiving Landlord's approval of the plans
and specifications and receiving the proceeds of insurance, Tenant will begin
such repairs or rebuilding and will prosecute the repairs and rebuilding to
completion with diligence, subject, however, to strikes, lockouts, acts of God,
embargoes, governmental restrictions, and other causes beyond Tenant's
reasonable control. Landlord will make available to Tenant the net proceeds of
any fire or other casualty insurance paid to Landlord for such repair or
rebuilding as the same progresses, after deduction of any costs of collection,
including attorneys' fees. Payments will be made against properly certified
vouchers of a competent architect in charge of the work and approved by
Landlord. Prior to commencing the repairing or rebuilding, Tenant shall deliver
to Landlord for Landlord's approval a schedule setting forth the estimated
monthly draws for such work. Landlord will contribute to such payments out of
the insurance proceeds an amount equal to the proportion that the total net
amount received by Landlord from insurers bears to the total estimated cost of
the rebuilding or repairing, multiplied by the payment by Tenant on account of
such work. Landlord may, however, withhold 10% from each payment until the work
is completed and proof has been furnished to Landlord that no lien or liability
has attached or will attach to the Leased Property or to Landlord in connection
with such repairing or rebuilding. Upon the completion of rebuilding and the
furnishing of such proof, the balance of the net proceeds of such insurance
payable to Tenant on account of such repairing or rebuilding will be paid to
Tenant. Tenant will obtain and deliver to Landlord a temporary or final
certificate of occupancy before the Leased Property is reoccupied for any
purpose. Tenant shall complete such repairs or rebuilding free and clear of
mechanic's or other liens, and in accordance with the building codes and all
applicable laws, ordinances, regulations, or orders of any state, municipal, or
other public authority affecting the repairs or rebuilding, and also in
accordance with all requirements of the insurance rating organization, or
similar body. Any remaining proceeds of insurance after such restoration will be
Tenant's property.
9.5 Insufficient Proceeds. If the proceeds of any insurance
---------------------
settlement are not sufficient to pay the costs of such repair, rebuilding or
restoration in full, Tenant shall deposit with Landlord at Landlord's option,
and within 30 days of Landlord's request, an amount sufficient in Landlord's
reasonable judgment to complete such repair, rebuilding or restoration. Tenant
shall not, by reason of the deposit or payment, be entitled to any reimbursement
from Landlord or diminution in or postponement of the payment of the Rent.
9.6 Not Trust Funds. Notwithstanding anything herein or at law or
---------------
equity to the contrary, none of the insurance proceeds paid to Landlord as
herein provided shall be deemed trust funds, and Landlord shall be entitled to
dispose of such proceeds as provided in this Article 9. Tenant expressly assumes
all risk of loss, including a decrease in the use, enjoyment or value, of the
Leased Property from any casualty whatsoever, whether or not insurable or
insured against.
9.7 Landlord's Inspection. During the progress of such repairs or
---------------------
rebuilding, Landlord and its architects and engineers may, from time to time,
inspect the Leased Property and will be furnished, if required by them, with
copies of all plans, shop drawings, and specifications relating to such repairs
or rebuilding. Tenant will keep all plans, shop drawings, and specifications at
the building, and Landlord and its architects and engineers may examine them at
all reasonable times. If, during such repairs or rebuilding, Landlord and its
architects and engineers determine that the repairs or rebuilding are not being
done in accordance with the approved plans and specifications, Landlord will
give prompt notice in writing to Tenant, specifying in detail the particular
deficiency, omission, or other respect in which Landlord claims such repairs
22
or rebuilding do not accord with the approved plans and specifications. Upon the
receipt of any such notice, Tenant will cause corrections to be made to any
deficiencies, omissions, or such other respect. Tenant's obligations to supply
insurance, according to Article 4, will be applicable to any repairs or
rebuilding under this section.
9.8 Landlord's Costs. Tenant shall, within 30 days after receipt of
----------------
an invoice from Landlord, pay the costs, expenses, and fees of any architect or
engineer employed by Landlord to review any plans and specifications and to
supervise and approve any construction, or for any services rendered by such
architect or engineer to Landlord as contemplated by any of the provisions of
this Lease, or for any services performed by Landlord's attorneys in connection
therewith. The daily fee for Landlord's consulting engineer is $750.00.
9.9 No Rent Abatement. Rent will not xxxxx pending the repairs or
-----------------
rebuilding of the Leased Property.
9.10 Business Interruption Insurance. All business interruption
-------------------------------
insurance proceeds shall be paid to Tenant.
ARTICLE 10: CONDEMNATION
10.1 Total Taking. If, by exercise of the right of eminent domain or
------------
by conveyance made in response to the threat of the exercise of such right
("Taking"), the entire Leased Property is taken, or so much of the Leased
Property is taken that the Leased Property cannot be used by Tenant for the
purposes for which it was used immediately before the Taking, then this Lease
will end on the earlier of the vesting of title to the Leased Property in the
condemning authority or the taking of possession of the Leased Property by the
condemning authority. All damages awarded for such Taking under the power of
eminent domain shall be the property of the Landlord, whether such damages shall
be awarded as compensation for diminution in value of the leasehold or the fee
of the Leased Property.
10.2 Partial Taking. If, after a Taking, so much of the Leased
--------------
Property remains that the Leased Property can be used for substantially the same
purposes for which it was used immediately before the Taking, then [i] this
Lease will end as to the part taken on the earlier of the vesting of title to
the Leased Property in the condemning authority or the taking of possession of
the Leased Property by the condemning authority; [ii] at its cost, Tenant shall
restore so much of the Leased Property as remains to a sound architectural unit
substantially suitable for the purposes for which it was used immediately before
the Taking, using good workmanship and new, first-class materials; [iii] upon
completion of the restoration, Landlord will pay Tenant the lesser of the net
award made to Landlord on the account of the Taking (after deducting from the
total award, attorneys', appraisers', and other fees and costs incurred in
connection with the obtaining of the award and amounts paid to the holders of
mortgages secured by the Leased Property), or Tenant's actual out-of-pocket
costs of restoring the Leased Property; and [iv] Landlord shall be entitled to
the balance of the net award. The restoration shall be completed in accordance
with (S)(S)9.4, 9.5, 9.7, 9.8 and 9.9 with such provisions deemed to apply to
condemnation instead of casualty.
10.3 Condemnation Proceeds Not Trust Funds. Notwithstanding anything
-------------------------------------
in this Lease or at law or equity to the contrary, none of the condemnation
award paid to Landlord shall be deemed trust funds, and Landlord shall be
entitled to dispose of such proceeds as provided in this Article 10. Tenant
expressly assumes all risk of loss, including a decrease in the use, enjoyment,
or value, of the Leased Property from any Condemnation.
23
ARTICLE 11: TENANT'S PROPERTY
11.1 Tenant's Property. Tenant shall install, place, and use on the
-----------------
Leased Property such fixtures, furniture, equipment, inventory and other
personal property in addition to the Personal Property as may be required or as
Tenant may, from time to time, deem necessary or useful to operate the Leased
Property for its permitted purposes. All fixtures, furniture, equipment,
inventory, and other personal property installed, placed, or used on the Leased
Property which is owned by Tenant or leased by Tenant from third parties is
hereinafter referred to as "Tenant's Property".
11.2 Requirements for Tenant's Property. Tenant shall comply with
----------------------------------
all of the following requirements in connection with Tenant's Property:
(a) Tenant shall, at Tenant's sole cost and expense, maintain,
repair, and replace Tenant's Property.
(b) Tenant shall, at Tenant's sole cost and expense, keep
Tenant's Property insured against loss or damage by fire, vandalism and
malicious mischief, sprinkler leakage, earthquake, and other physical loss
perils commonly covered by fire and extended coverage, boiler and machinery, and
difference in conditions insurance in an amount not less than 90% of the then
full replacement cost thereof. Tenant shall use the proceeds from any such
policy for the repair and replacement of Tenant's Property. The insurance shall
meet the requirements of (S)4.3.
(c) Tenant shall pay all taxes applicable to Tenant's
Property.
(d) If Tenant's Property is damaged or destroyed by fire or
any other cause, Tenant shall promptly repair or replace Tenant's Property
unless Landlord elects to terminate this Lease pursuant to (S)9.2.2.
(e) Unless an Event of Default or any event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
has occurred, Tenant may remove Tenant's Property from the Leased Property from
time to time provided that [i] the items removed are not required to operate the
Leased Property for the Facility Uses (unless such items are being replaced by
Tenant); and [ii] Tenant repairs any damage to the Leased Property resulting
from the removal of Tenant's Property.
(f) Tenant shall not, without the prior written consent of
Landlord or as otherwise provided in this Lease, remove any Tenant's Property or
Leased Property. Tenant shall, at Landlord's option, remove Tenant's Property
upon the termination or expiration of this Lease and shall repair any damage to
the Leased Property resulting from the removal of Tenant's Property. If Tenant
fails to remove Tenant's Property within 30 days after request by Landlord, then
Tenant shall be deemed to have abandoned Tenant's Property, Tenant's Property
shall become the property of Landlord, and Landlord may remove, store and
dispose of Tenant's Property. In such event, Tenant shall have no claim or right
against Landlord for such property or the value thereof regardless of the
disposition thereof by Landlord. Tenant shall pay Landlord, upon demand, all
expenses incurred by Landlord in removing, storing, and disposing of Tenant's
Property and repairing any damage caused by such removal. Tenant's obligations
hereunder shall survive the termination or expiration of this Lease.
(g) Tenant shall perform its obligations under any equipment
lease or security agreement for Tenant's Property. For equipment loans or leases
for equipment having an original cost in excess of $50,000.00, Tenant shall
cause such equipment lessor or lender to enter into a nondisturbance agreement
with Landlord upon terms and conditions acceptable to Landlord, including
without limitation, the following: [i] Landlord shall have the right (but not
the obligation) to assume such equipment lease or
24
security agreement upon the occurrence of an Event of Default by Tenant
hereunder; [ii] such equipment lessor or lender shall notify Landlord of any
default by Tenant under the equipment lease or security agreement and give
Landlord a reasonable opportunity to cure such default; and [iii] Landlord shall
have the right to assign its interest in the equipment lease or security
agreement and nondisturbance agreement. Tenant shall, within 30 days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in reviewing and approving the equipment lease, security
agreement and nondisturbance agreement, including without limitation, reasonable
attorneys' fees and costs.
ARTICLE 12: [INTENTIONALLY DELETED]
ARTICLE 13: RIGHT TO PURCHASE LEASED PROPERTY
13.1 Right to Purchase. During the Term, Tenant shall have the right
-----------------
to purchase all of the Leased Property (but not any part thereof) in accordance
with the terms of this Article 13.
13.2 Conditions Precedent to Right to Purchase. Tenant's right to
-----------------------------------------
purchase the Leased Property is subject to satisfaction of the following
conditions on or before the closing of the purchase.
(a) Notice. Landlord must receive from Tenant a written notice
------
of intent to purchase prior to the expiration of the Term.
(b) No Defaults. No Event of Default shall have occurred under
-----------
this Lease (excluding any default which has been cured in accordance with the
terms of this Lease or which has been waived in writing by Landlord), nor any
event which with the giving of notice or the passage of time or both, would
constitute such an Event of Default.
(c) Payment to KDA. Tenant shall have paid all amounts owed to
--------------
KDA under the KDA Settlement Agreement; KDA and any of its subcontractors that
have filed liens against the Leased Property shall have released such liens; and
KDA shall have dismissed with prejudice all of KDA's claims against Tenant and
Landlord in the arbitration and litigation proceedings.
13.3 Purchase Price. If the purchase of the Leased Property is
--------------
closed on or before August 31, 1999, the purchase price ("Purchase Price") will
be the sum of [i] $10,356,510.42, plus [ii] $50,000.00 owed by Tenant to
Landlord for Landlord's attorneys' fees and expenses as set forth in Paragraph 4
of the Settlement Agreement, plus [iii] any amounts to be paid by Tenant to
Landlord under Paragraphs 4 and 5 of the Settlement Agreement that remain
unpaid, plus [iv] any amount paid by Landlord to KDA, directly or indirectly, in
accordance with (S)7.3.1 of the Lease and Paragraph 5 of the Settlement
Agreement. If the purchase of the Leased Property is closed after August 31,
1999 but on or before September 30, 1999, the Purchase Price will be the amount
calculated in the preceding sentence plus .75% of such amount. If the purchase
of the Leased Property is closed after September 30, 1999 but on or before
January 31, 2000, the Purchase Price will be the Purchase Price that would have
been required to be paid if the closing had occurred during the preceding month
increased by .75% of such amount. In addition to the Purchase Price, Tenant
shall pay all closing costs and expenses in connection with the transfer of the
Leased Property to Tenant including but not limited to the following: [a] real
property conveyance or transfer fees or deed stamps; [b] title search fees,
title insurance commitment fees, and title insurance premiums; [c] survey fees;
[d] environmental assessment fees; [e] recording fees; [f] fees of any escrow
agent; and [g] all amounts, costs, expenses, charges, Additional Rent and other
items payable by Tenant to Landlord under this Lease. Title insurance will be
issued by Blalock, Landers, Xxxxxxx & Xxxxxx, P.A. or such other party
designated by Tenant. Tenant acknowledges and agrees that the Purchase Price is
equal to the fair market value of the Leased Property.
25
13.4 Closing. The purchase of the Leased Property by Tenant shall
-------
close on a date agreed to by Landlord and Tenant. At the closing, Tenant shall
pay the Purchase Price and all closing costs in immediately available funds and
Landlord shall convey title to the Leased Property to Tenant by a transferable
and recordable special or limited warranty deed and special or limited warranty
xxxx of sale.
13.5 Failure to Exercise Right to Purchase. If Tenant for any reason
-------------------------------------
does not exercise its right to purchase in accordance with the terms and
conditions of this Lease before the expiration of the Term, Tenant shall be
deemed to have forfeited all interest in the Leased Property. Tenant
acknowledges and agrees that the right to purchase the Lease Property
automatically expires at the end of the Lease Term.
13.6 Effect of Delivery of Financing Commitment. The following terms
------------------------------------------
and conditions will be applicable if prior to the Expiration Date, Tenant
delivers to Landlord an executed, binding commitment letter for the financing of
Tenant's purchase of the Leased Property from a lender acceptable to Landlord:
(a) Extension of Current Term. The current Term will be
-------------------------
extended (the "Extended Term") for 90 days.
(b) Lease Obligations. During the Extended Term, Tenant shall
-----------------
continue to perform Tenant's Obligations under the Lease, including but not
limited to making monthly payments of Rent (including Base Rent) in an amount
equal to the January 1, 2000 Rent payment.
(c) Purchase Price Increase. During the Extended Term, the
-----------------------
Purchase Price shall continue to increase by .75% each month.
ARTICLE 14: NEGATIVE COVENANTS
Until Tenant's Obligations shall have been performed in full, Tenant
and Guarantor covenant and agree that Tenant (and Guarantor where applicable)
shall not do any of the following without the prior written consent of Landlord:
14.1 No Debt. Tenant shall not create, incur, assume, or permit to
-------
exist any indebtedness other than [i] trade debt incurred in the ordinary course
of Tenant's business; and [ii] indebtedness relating to the Letter of Credit;
and [iii] indebtedness that is secured by any Permitted Lien.
14.2 No Liens. Tenant shall not create, incur, or permit to exist
--------
any lien, charge, encumbrance, easement or restriction upon the Leased Property
or any lien upon or pledge of any interest in Tenant, except for Permitted
Liens.
14.3 No Guaranties. Tenant shall not create, incur, assume, or
-------------
permit to exist any guarantee of any loan or other indebtedness except for [i]
the endorsement of negotiable instruments for collection in the ordinary course
of business; and [ii] guarantee of the indebtedness permitted under (S)14.1.
14.4 No Transfer. Tenant shall not sell, lease, sublease, mortgage,
-----------
convey, assign or otherwise transfer any legal or equitable interest in the
Leased Property or any part thereof, except for transfers made in connection
with any Permitted Lien.
14.5 No Dissolution. Tenant, Manager (if applicable) or Guarantor
--------------
shall not dissolve, liquidate, merge, consolidate or terminate its existence or
sell, assign, lease, or otherwise transfer (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired).
26
14.6 No Change in Management or Operation. No material change shall
------------------------------------
occur in the management of Tenant or in the management or licensed operation of
the Facility. Xxxxxx Xxxx or an entity controlled by Xxxxxx Xxxx shall be solely
responsible for the management of the Facility and Tenant shall remain the
licensed operator of the Facility as stated on Exhibit A-2. Xxxxxx Xxxx shall
remain the Chief Executive Officer of Tenant.
14.7 No Investments. Tenant shall not purchase or otherwise acquire,
--------------
hold, or invest in securities (whether capital stock or instruments evidencing
indebtedness) of or make loans or advances to any person, including, without
limitation, any Guarantor, any Affiliate, or any shareholder, member or partner
of Tenant, Guarantor or any Affiliate, except for cash balances temporarily
invested in short-term or money market securities and investments in marketable
securities.
14.8 [Intentionally Deleted]
14.9 Subordination of Payments to Affiliates. After the occurrence
---------------------------------------
of an Event of Default and until such Event of Default is cured, Tenant and
Guarantor shall not make any payments or distributions (including, without
limitation, salary, bonuses, fees, principal, interest, dividends, liquidating
distributions, management fees, cash flow distributions or lease payments) to
Guarantor, Manager (if applicable), any Affiliate, or any shareholder, member or
partner of Tenant, Guarantor, Manager (if applicable) or any Affiliate.
14.10 Change of Location or Name. Tenant shall not change any of the
--------------------------
following without giving Landlord at least 20 days prior written notice: [i] the
location of the principal place of business or chief executive office of Tenant,
or any office where any of Tenant's books and records are maintained; or [ii]
the name under which Tenant conducts any of its business or operations.
ARTICLE 15: AFFIRMATIVE COVENANTS
15.1 Perform Obligations. Tenant shall perform all of its
-------------------
obligations under this Lease (including the Settlement Agreement), the
Government Authorizations, the Permitted Exceptions, and all Legal Requirements.
15.2 Proceedings to Enjoin or Prevent Construction. If any
---------------------------------------------
proceedings are filed seeking to enjoin or otherwise prevent or declare invalid
or unlawful Tenant's construction, occupancy, maintenance, or operation of the
Facility or any portion thereof, Tenant will cause such proceedings to be
vigorously contested in good faith, and in the event of an adverse ruling or
decision, prosecute all allowable appeals therefrom, and will, without limiting
the generality of the foregoing, resist the entry or seek the stay of any
temporary or permanent injunction that may be entered, and use its best efforts
to bring about a favorable and speedy disposition of all such proceedings and
any other proceedings.
15.3 Documents and Information.
-------------------------
15.3.1 Furnish Documents. Tenant shall periodically during the term of
-----------------
the Lease deliver to Landlord the Annual Financial Statements, Periodic
Financial Statements and other documents described on Exhibit C within the
specified time periods. With each delivery of Annual Financial Statements and
Periodic Financial Statements (other than the monthly Facility Financial
Statement) to Landlord, Tenant shall also deliver to Landlord a certificate
signed by the Chief Financial Officer, general partner or managing member (as
applicable) of Tenant, an Annual Facility Financial Report or Quarterly Facility
Financial Report, as applicable, and a Quarterly Facility Accounts Receivable
Aging Report all in the form of Exhibit D. In addition, Tenant shall deliver to
Landlord the Annual Facility Financial Report and a Quarterly
27
Facility Accounts Receivable Aging Report (based upon internal financial
statements) within 60 days after the end of each fiscal year.
15.3.2 Furnish Information. Tenant shall [i] promptly supply Landlord
-------------------
with such information concerning its financial condition, affairs and property,
as Landlord may reasonably request from time to time hereafter; [ii] promptly
notify Landlord in writing of any condition or event that constitutes a breach
or event of default of any term, condition, warranty, representation, or
provisions of this Agreement or any other agreement, and of any material adverse
change in its financial condition; [iii] maintain a standard and modern system
of accounting; [iv] permit Landlord or any of its agent or representatives to
have access to and to examine all of its books and records regarding the
financial condition of the Facility at any time or times hereafter during
business hours and after reasonable oral or written notice; and [v] permit
Landlord to copy and make abstracts from any and all of said books and records.
15.3.3 Further Assurances and Information. Tenant shall, on request
----------------------------------
of Landlord from time to time, execute, deliver, and furnish documents as may be
necessary to fully consummate the transactions contemplated under this
Agreement. Within 15 days after a request from Landlord, Tenant shall provide to
Landlord such additional information regarding Tenant, Tenant's financial
condition or the Facility as Landlord, or any existing or proposed creditor of
Landlord, or any auditor or underwriter of Landlord, may require from time to
time, including, without limitation, a current Tenant's Certificate and Facility
Financial Report in the form of Exhibit D. Upon Landlord's request, but not more
than once every three years, Tenant shall provide to Landlord, an appraisal
prepared by an MAI appraiser setting forth the current fair market value of the
Leased Property.
15.3.4 Material Communications. Tenant shall transmit to Landlord,
-----------------------
within 10 business days after receipt thereof, any material communication
affecting a Facility, this Lease, the Legal Requirements or the Government
Authorizations, and Tenant will promptly respond to Landlord's inquiry with
respect to such information. Tenant shall promptly notify Landlord in writing
after Tenant has knowledge of any potential, threatened or existing litigation
or proceeding against, or investigation of, Tenant, Guarantor, or the Facility
that may affect the right to operate the Facility or Landlord's title to the
Facility or Tenant's interest therein.
15.3.5 Requirements for Financial Statements. Tenant shall meet the
-------------------------------------
following requirements in connection with the preparation of the financial
statements: [i] all audited financial statements shall be prepared in accordance
with general accepted accounting principles consistently applied; [ii] all
unaudited financial statements shall be prepared in a manner substantially
consistent with prior audited and unaudited financial statements submitted to
Landlord; [iii] all financial statements shall fairly present the financial
condition and performance for the relevant period in all material respects; [iv]
the financial statements shall include all notes to the financial statements and
a complete schedule of contingent liabilities and transactions with Affiliates;
and [v] the audited financial statements shall contain an unqualified opinion.
15.4 Compliance With Laws. Tenant shall comply with all Legal
--------------------
Requirements and keep all Government Authorizations in full force and effect.
Tenant shall pay when due all taxes and governmental charges of every kind and
nature that are assessed or imposed upon Tenant at any time during the term of
the Lease, including, without limitation, all income, franchise, capital stock,
property, sales and use, business, intangible, employee withholding, and all
taxes and charges relating to Tenant's business and operations. Tenant shall be
solely responsible for compliance with all Legal Requirements, including the
ADA, and Landlord shall have no responsibility for such compliance.
15.5 Broker's Commission. Tenant shall indemnify Landlord from
-------------------
claims of brokers arising by the execution hereof or the consummation of the
transactions contemplated hereby and from expenses incurred by Landlord in
connection with any such claims (including attorneys' fees).
28
15.6 Existence and Voting Trust. Tenant shall maintain its
--------------------------
existence throughout the term of this Agreement. All shares of stock of Tenant
owned by Xxxxxxx and Xxxxx Xxxxxx and their affiliates and all shares of stock
of Tenant owned by Xxxx Xxxxxxxx and his affiliates shall be placed in a voting
trust approved by Landlord that will be controlled and voted by Xxxxxx Xxxx as
provided in the Settlement Agreement.
15.7 Financial Covenants. As of July 1, 1999, Tenant shall be in
-------------------
compliance with the Pro Forma Statement. If Tenant is not in compliance, Tenant
shall have an additional 30 days to comply. If Tenant is not in compliance with
the Pro Forma Statement as of August 1, 1999, Tenant shall deliver to Landlord a
Letter of Credit in the amount of $68,000.00 ("Operating Performance Letter of
Credit"). For each month that Tenant is not in compliance with the Pro Forma
Statement, Tenant shall increase the Operating Performance Letter of Credit by
the amount of $45,000.00 or deliver an additional Operating Performance Letter
of Credit to Landlord in the amount of $45,000.00.
15.8 Transfer of License. If this Lease is terminated due to
-------------------
expiration of the Term, pursuant to an Event of Default or for any reason other
than Tenant's purchase of the Leased Property, or if Tenant vacates the Leased
Property without termination of this Lease, Tenant shall execute, deliver and
file all documents and statements requested by Landlord to effect the transfer
of the Facility license and Government Authorizations to an entity designated by
Landlord, subject to any required approval of governmental regulatory
authorities, and Tenant shall provide to Landlord all information and records
required by Landlord in connection with the transfer of the license and
Government Authorizations.
15.9 New Payables. Tenant shall timely pay Tenant's New Payables as
------------
defined in the Settlement Agreement and provide evidence of all money being
invested in or contributed to Tenant.
15.10 Accounts Payable. On or before May 19, 1999, Tenant shall pay
----------------
$200,000.00 towards accounts payable existing as of April 16, 1999, including
but not limited to unpaid real estate taxes and assessments. In addition,
Tenant shall contribute an additional $25,000.00 per month toward accounts
payable existing as of April 16, 1999 until such accounts payable have been paid
in full.
15.11 Weekly Reports. Tenant shall provide reasonable weekly
--------------
financial reports to Landlord including check registers, accounts payable aging
reports, and census reports.
15.12 Travel Expenses. Tenant shall pay Landlord's reasonable travel
---------------
expenses, up to an aggregate of $10,000.00 but with no more than $1,000.00 being
required to be paid in any one month, for Landlord's employees or
representatives to visit each Facility once a month.
15.13 Release of Claims. At Closing, Tenant shall execute and
-----------------
deliver to Landlord a release of any and all claims Tenant has or may have
against Landlord.
ARTICLE 16: ALTERATIONS, CAPITAL
IMPROVEMENTS, AND SIGNS
16.1 Prohibition on Alterations and Improvements. Except for
-------------------------------------------
Permitted Alterations (as hereinafter defined), Tenant shall not make any
structural or nonstructural changes, alterations, additions and/or improvements
(hereinafter collectively referred to as "Alterations") to the Leased Property.
16.2 Approval of Alterations. If Tenant desires to perform any
-----------------------
Permitted Alterations, Tenant shall deliver to Landlord plans, specifications,
drawings, and such other information as may be reasonably requested by Landlord
(collectively the "Plans and Specifications") showing in reasonable detail
29
the scope and nature of the Alterations that Tenant desires to perform. It is
the intent of the parties hereto that the level of detail shall be comparable to
that which is referred to in the architectural profession as "design development
drawings" as opposed to working or biddable drawings. Landlord agrees not to
unreasonably delay its review of the Plans and Specifications. Within 30 days
after receipt of an invoice, Tenant shall reimburse Landlord for all costs and
expenses incurred by Landlord in reviewing and, if required, approving or
disapproving the Plans and Specifications, inspecting the Leased Property, and
otherwise monitoring compliance with the terms of this Article 16. Tenant shall
comply with the requirements of (S)16.4 in making any Permitted Alterations.
16.3 Permitted Alterations. Permitted Alterations means any one of
---------------------
the following: [i] Alterations approved by Landlord; [ii] Alterations required
under (S)7.2; [iii] Alterations having a total cost of less than $25,000.00; or
[iv] repairs, rebuilding and restoration required or undertaken pursuant to
(S)9.4.
16.4 Requirements for Permitted Alterations. Tenant shall comply with
--------------------------------------
all of the following requirements in connection with any Permitted Alterations:
(a) The Permitted Alterations shall be made in accordance with
the approved Plans and Specifications.
(b) The Permitted Alterations and the installation thereof
shall comply with all applicable legal requirements and insurance requirements.
(c) The Permitted Alterations shall be done in a good and
workmanlike manner, shall not impair the value or the structural integrity of
the Leased Property, and shall be free and clear of all construction liens.
(d) For any Permitted Alterations having a total cost of
$100,000.00 or more, Tenant shall deliver to Landlord a payment and performance
bond, with a surety acceptable to Landlord, in an amount equal to the estimated
cost of the Permitted Alterations, guaranteeing the completion of the work free
and clear of liens and in accordance with the approved Plans and Specifications,
and naming Landlord and any mortgagee of Landlord as joint obligees on such
bond.
(e) Tenant shall, at Tenant's expense, obtain a builder's
completed value risk policy of insurance insuring against all risks of physical
loss, including collapse and transit coverage, in a nonreporting form, covering
the total value of the work performed, and equipment, supplies, and materials,
and insuring initial occupancy. Landlord and any mortgagee of Landlord shall be
additional insureds of such policy. Landlord shall have the right to approve the
form and substance of such policy.
(f) Tenant shall pay the premiums required to increase the
amount of the insurance coverages required by Article 4 to reflect the increased
value of the Improvements resulting from installation of the Permitted
Alterations, and shall deliver to Landlord a certificate evidencing the increase
in coverage.
(g) Tenant shall, not later than 60 days after completion of
the Permitted Alterations, deliver to Landlord a revised "as-built" survey of
the Leased Property if the Permitted Alterations altered the Land or "foot-
print" of the Improvements and an "as-built" set of Plans and Specifications for
the Permitted Alterations in form and substance reasonably satisfactory to
Landlord.
(h) Tenant shall, not later than 30 days after Landlord sends
an invoice, reimburse Landlord for any reasonable costs and expenses, including
attorneys' fees and architects' and engineers' fees, incurred in connection with
reviewing and approving the Permitted Alterations and ensuring
30
Tenant's compliance with the requirements of this section. The daily fee for
Landlord's consulting engineer is $750.00.
16.5 Ownership and Removal of Permitted Alterations. The Permitted
----------------------------------------------
Alterations shall become a part of the Leased Property, owned by Landlord, and
leased to Tenant subject to the terms and conditions of this Lease. Tenant
shall not be required or permitted to remove any Permitted Alterations.
16.6 Signs. Tenant may, at its own expense, erect and maintain
-----
identification signs at the Leased Property, provided such signs comply with all
laws, ordinances, and regulations. Upon the termination or expiration of this
Lease, Tenant shall, within 30 days after notice from Landlord, remove the signs
and restore the Leased Property to its original condition.
ARTICLE 17: [RESERVED]
ARTICLE 18: ASSIGNMENT AND SALE OF LEASED PROPERTY
18.1 Prohibition on Assignment and Subletting. Tenant acknowledges
----------------------------------------
that Landlord has entered into this Lease in reliance on the personal services
and business expertise of Tenant. Tenant may not assign, sublet, mortgage,
hypothecate, pledge, or transfer any interest in this Lease, or in the Leased
Property, in whole or in part, without the prior written consent of Landlord,
which Landlord may withhold in its sole and absolute discretion. The following
transactions will be deemed an assignment or sublease requiring Landlord's prior
written consent: [i] an assignment by operation of law; [ii] an imposition
(whether or not consensual) of a lien, mortgage, or encumbrance upon Tenant's
interest in the Lease; [iii] an arrangement (including but not limited to,
management agreements, concessions, licenses, and easements) which allows the
use or occupancy of all or part of the Leased Property by anyone other than
Tenant; and [iv] a change of ownership of Tenant. Landlord's consent to any
assignment or sublease will not release Tenant (or any guarantor) from its
payment and performance obligations under this Lease, but rather Tenant, any
guarantor, and Tenant's assignee or sublessee will be jointly and severally
liable for such payment and performance. An assignment or sublease without the
prior written consent of Landlord will be void at the Landlord's option.
Landlord's consent to one assignment or sublease will not waive the requirement
of its consent to any subsequent assignment or sublease.
18.2 Requests for Landlord's Consent to Assignment, Sublease or
----------------------------------------------------------
Management Agreement. If Tenant requests Landlord's consent to a specific
--------------------
assignment, sublease, or management agreement, Tenant shall give Landlord [i]
the name and address of the proposed assignee, subtenant or manager; [ii] a copy
of the proposed assignment, sublease or management agreement; [iii] reasonably
satisfactory information about the nature, business and business history of the
proposed assignee, subtenant, or manager and its proposed use of the Leased
Property; and [iv] banking, financial, and other credit information, and
references about the proposed assignee, subtenant or manager sufficient to
enable Landlord to determine the financial responsibility and character of the
proposed assignee, subtenant or manager. Any assignment, sublease or management
agreement shall contain provisions to the effect that [a] such assignment,
sublease or management agreement is subject and subordinate to all of the terms
and provisions of this Lease and to the rights of Landlord; [b] such assignment,
sublease or management agreement may not be modified without the prior written
consent of Landlord not to be unreasonably withheld or delayed; [c] if this
Lease shall terminate before the expiration of such assignment, sublease or
management agreement, the assignee, subtenant or manager thereunder will, at
Landlord's option, attorn to Landlord and waive any right the assignee,
subtenant or manager may have to terminate the assignment, sublease or
management agreement or surrender possession thereunder as a result of the
termination of this Lease; and [d] if the assignee, subtenant or manager
receives a written notice from Landlord stating that Tenant is in default under
this Lease, the assignee, subtenant or manager shall thereafter pay all rentals
or payments under the assignment, sublease or management agreement directly to
Landlord until such default has been cured.
31
Tenant hereby collaterally assigns to Landlord, as security for the performance
of its obligations hereunder, all of Tenant's right, title, and interest in and
to any assignment, sublease or management agreement now or hereafter existing
for all or part of the Leased Property. Tenant shall, at the request of
Landlord, execute such other instruments or documents as Landlord may request to
evidence this collateral assignment. If Landlord, in its sole and absolute
discretion, consents to such assignment, sublease, or management agreement, such
consent shall not be effective until [i] a fully executed copy of the instrument
of assignment, sublease or management agreement has been delivered to Landlord;
[ii] in the case of an assignment, Landlord has received a written instrument in
which the assignee has assumed and agreed to perform all of Tenant's obligations
under the Lease; and [iii] Tenant has paid to Landlord a fee in the amount of
$2,500.00; and [iv] Landlord has received reimbursement from Tenant or the
assignee for all attorneys' fees and expenses and all other reasonable out-of-
pocket expenses incurred in connection with determining whether to give its
consent, giving its consent and all matters relating to the assignment.
18.3 Agreements with Residents. Notwithstanding (S)18.1, Tenant may
-------------------------
enter into an occupancy agreement with residents of the Leased Property without
the prior written consent of Landlord provided that [i] the agreement does not
provide for lifecare services; [ii] Tenant may not collect rent for more than
one month in advance other than deposits for first and lst month's rent; and
[iii] all residents of the Leased Property are accurately shown in Tenant's
accounting records.
18.4 Sale of Leased Property. If Landlord or any subsequent owner of
-----------------------
the Leased Property sells the Leased Property, its liability for the performance
of its agreements in this Lease will end on the date of the sale of the Leased
Property, and Tenant will look solely to the purchaser for the performance of
those agreements. For purposes of this section, any holder of a mortgage or
security agreement which affects the Leased Property at any time, and any
landlord under any lease to which this Lease is subordinate at any time, will be
a subsequent owner of the Leased Property when it succeeds to the interest of
Landlord or any subsequent owner of the Leased Property.
18.5 Assignment by Landlord. Landlord may transfer, assign,
----------------------
mortgage, collaterally assign, or otherwise dispose of Landlord's interest in
this Lease or the Leased Property.
ARTICLE 19: HOLDOVER AND SURRENDER
19.1 Holding Over. Tenant shall have no right to hold and occupy the
------------
Leased Property upon expiration of this Lease.
19.2 Surrender. Except for [i] Permitted Alterations; [ii] normal
---------
and reasonable wear and tear (subject to the obligation of Tenant to maintain
the Leased Property in good order and repair during the Term); and [iii] damage
and destruction not required to be repaired by Tenant, Tenant shall immediately
and voluntarily, without resistance of any kind, surrender and deliver up the
Leased Property at the expiration or termination of the Term in as good order
and condition as of the Commencement Date.
ARTICLE 20: LETTER OF CREDIT
20.1 Terms of Letter of Credit. As security for the performance of
-------------------------
its obligations under this Lease, Tenant shall provide Landlord with the Letter
of Credit. Except as provided under (S)7.3.1, Tenant shall maintain the Letter
of Credit in favor of Landlord until Tenant's Obligations are performed in full.
The Letter of Credit shall permit partial draws and shall permit drawing upon
presentation of a draft drawn on the Issuer and a certificate signed by Landlord
stating that an Event of Default has occurred under this Lease. The Letter of
Credit shall be for an initial term of one year and shall be automatically
renewed annually for successive terms of at least one year unless Landlord
receives notice from the Issuer, by certified mail, at least
32
60 days prior to the expiry date then in effect that the Letter of Credit will
not be extended for an additional one-year period.
20.2 Replacement Letter of Credit. Tenant shall provide a
----------------------------
replacement Letter of Credit which satisfies the requirements of (S)20.1 from an
Issuer acceptable to Landlord within 30 days after the occurrence of any of the
following: [i] Landlord's receipt of notice from the Issuer that the Letter of
Credit will not be extended for an additional one-year period; [ii] Landlord
gives notice to Tenant that the Lace Financial Service Rating of the Issuer is
less than a "C+"; or [iii] Landlord gives notice to Tenant of the admission by
Issuer in writing of its inability to pay its debts generally as they become
due, or Issuer's filing of a petition in bankruptcy or petitions to take
advantage of any insolvency act, making an assignment for the benefit of its
creditors, consenting to the appointment of a receiver of itself or petition or
answer seeking reorganization or arrangement under the federal bankruptcy laws
or any other applicable law or statute of the United States of America or any
state thereof. Tenant's failure to comply with the requirements of this section
shall be an immediate Event of Default without any notice (other than as
provided for in the section), cure or grace period.
20.3 Draws. Landlord may draw under the Letter of Credit upon the
-----
occurrence of an Event of Default hereunder. Any such draw shall not cure an
Event of Default. Landlord shall have the right, but not the obligation, to
apply all or any portion of the proceeds from the Letter of Credit to pay all or
any portion of [i] all Rent and other charges and expenses payable by Tenant
under this Lease; plus [ii] all expenses and costs incurred by Landlord in
enforcing or preserving Landlord's rights under this Lease or any security for
the Lease, including without limitation, [a] the fees, expenses, and costs of
any litigation, receivership, administrative, bankruptcy, insolvency, or other
similar proceeding; [b] attorney, paralegal, consulting and witness fees and
disbursements; and [c] the expenses, including without limitation, lodging,
meals and transportation of Landlord and its employees, agents, attorneys, and
witnesses in preparing for litigation, administrative, bankruptcy, insolvency,
or similar proceedings and attendance at hearings, depositions, and trials in
connection therewith.
With respect to any portion of the Letter of Credit proceeds that is
not applied to payment of Tenant's Obligations, Landlord shall have the option
to either [i] deposit the proceeds into an interest-bearing account with a
financial institution chosen by Landlord ("LC Account"); or [ii] require Tenant
to obtain a replacement Letter of Credit satisfactory to Landlord, with the
Letter of Credit proceeds made available to Tenant to secure Tenant's
reimbursement obligation for the Letter of Credit. All interest accruing on the
LC Account shall be paid to Landlord and may, from time to time, be withdrawn
from the LC Account by Landlord. At any time and from time to time until
Tenant's Obligations are performed in full, Landlord may apply all or any
portion of Tenant's Obligations. Within 10 days after any such payment from the
LC Account, Landlord shall give written notice to Tenant describing the amount
of such payment and how it was applied to Tenant's Obligations.
Upon the occurrence of either [i] Landlord's receipt of a replacement
Letter of Credit that satisfies the requirements of (S)20.1 and is issued by an
Issuer acceptable to Landlord; or [ii] the date on which all of Tenant's
Obligations are performed in full, Landlord shall pay the principal balance of
the LC Account (but not any accrued interest) to Tenant.
20.4 Partial Draws. Upon the occurrence of a monetary Event of
-------------
Default under this Lease, Landlord may, at its option, make a partial draw on
the Letter of Credit in an amount not to exceed the amount of Tenant's monetary
obligations then past due, Tenant shall, within 10 days after notice from
Landlord of such partial draw and payment, cause the amount of the Letter of
Credit to be reinstated to the amount in effect prior to such partial draw.
Tenant's failure to comply with the requirements of this section shall be an
immediate Event of Default under the Loan Documents without any notice (other
than as provided
33
for in this section), cure or grace period. Landlord's rights under this (S)20.4
are in addition to, and not in limitation of, Landlord's rights under (S)20.3.
20.5 Substitute Letter of Credit. Tenant may, from time to time,
---------------------------
deliver to Landlord a substitute Letter of Credit meeting the requirements of
this Agreement and issued by an Issuer acceptable to Landlord. Upon Landlord's
approval of the substitute Letter of Credit, Landlord shall release the previous
Letter of Credit to the Tenant.
20.6 Construction Liens Letter of Credit. Notwithstanding the
-----------------------------------
foregoing, Landlord shall only draw under the Construction Liens Letter of
Credit upon an Event of Default under (S)7.3.1. In addition, if Landlord draws
under the Construction Liens Letter of Credit, Landlord shall apply all of the
proceeds from the Construction Liens Letter of Credit to payment of amounts owed
by Tenant to KDA.
ARTICLE 21: QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND ESTOPPEL
CERTIFICATES
21.1 Quiet Enjoyment. So long as Tenant performs all of its
---------------
obligations under this Lease, Tenant's possession of the Leased Property will
not be disturbed by Landlord.
21.2 Subordination. Subject to the terms and conditions of this
-------------
section, this Lease and Tenant's rights under this Lease are subordinate to any
ground lease or underlying lease, first mortgage, first deed of trust, or other
first lien against the Leased Property, together with any renewal,
consolidation, extension, modification or replacement thereof, which now or at
any subsequent time affects the Leased Property or any interest of Landlord in
the Leased Property, except to the extent that any such instrument expressly
provides that this Lease is superior. The foregoing subordination provision is
expressly conditioned upon any lessor or mortgagee being obligated and bound to
recognize Tenant as the tenant under this Lease, and such lessor or mortgagee
shall have no right to disturb Tenant's possession, use and occupancy of the
Leased Property or Tenant's enjoyment of its rights under this Lease unless and
until an Event of Default occurs hereunder. Any foreclosure action or proceeding
by any mortgagee with respect to the Leased Property shall not affect Tenant's
rights under this Lease and shall not terminate this Lease unless and until an
Event of Default occurs hereunder. The foregoing provisions will be self-
operative, and no further instrument will be required in order to effect them.
However, Tenant shall execute, acknowledge and deliver to Landlord, at any time
and from time to time upon demand by Landlord, such documents as may be
requested by Landlord or any mortgagee or any holder of any mortgage or other
instrument described in this section, to confirm or effect any such
subordination, provided that any such document shall include a non-disturbance
provision as set forth in this section satisfactory to Tenant. Any mortgagee of
the Leased Property shall be deemed to be bound by the non-disturbance provision
set forth in this section. If Tenant fails or refuses to execute, acknowledge,
and deliver any such document within 20 days after written demand, Landlord may
execute acknowledge and deliver any such document on behalf of Tenant as
Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably appoints
Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge, and deliver on behalf of Tenant any documents described in this
section. This power of attorney is coupled with an interest and is irrevocable.
21.3 Attornment. If any holder of any mortgage, indenture, deed of
----------
trust, or other similar instrument described in (S)21.2 succeeds to Landlord's
interest in the Leased Property, Tenant will pay to such holder all Rent
subsequently payable under this Lease. Tenant shall, upon request of anyone
succeeding to the interest of Landlord, automatically become the tenant of, and
attorn to, such successor in interest without changing this Lease. The successor
in interest will not be bound by [i] any amendment or modification of this Lease
made after the successor in interest succeeds to Landlord's interest and made
without its consent as provided in this Lease; [ii] any claim against Landlord
arising prior to the date on which the successor
34
succeeded to Landlord's interest; or [iii] any claim or offset of Rent against
the Landlord. Upon request by Landlord or such successor in interest and without
cost to Landlord or such successor in interest, Tenant will execute, acknowledge
and deliver an instrument or instruments confirming the attornment. If Tenant
fails or refuses to execute, acknowledge, and deliver any such instrument within
20 days after written demand, then Landlord or such successor in interest will
be entitled to execute, acknowledge, and deliver any document on behalf of
Tenant as Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably
appoints Landlord, its successors and assigns, as Tenant's attorney-in-fact to
execute, acknowledge, and deliver on behalf of Tenant any such document. This
power of attorney is coupled with an interest and is irrevocable.
21.4 Estoppel Certificates. At the request of Landlord or any
---------------------
mortgagee or purchaser of the Leased Property, Tenant shall execute,
acknowledge, and deliver an estoppel certificate, in recordable form, in favor
of Landlord or any mortgagee or purchaser of the Leased Property certifying the
following: [i] that the Lease is unmodified and in full force and effect, or if
there have been modifications that the same is in full force and effect as
modified and stating the modifications; [ii] the date to which Rent and other
charges have been paid; [iii] whether Tenant or Landlord is in default or
whether there is any fact or condition which, with notice or lapse of time, or
both, would constitute a default, and specifying any existing default, if any;
[iv] that Tenant has accepted and occupies the Leased Property; [v] that Tenant
has no defenses, set-offs, deductions, credits, or counterclaims against
Landlord, if that be the case, or specifying such that exist; and [vi] such
other information as may reasonably be requested by Landlord or any mortgagee or
purchaser. Any purchaser or mortgagee may rely on this estoppel certificate. If
Tenant fails to deliver the estoppel certificates to Landlord within 10 Business
Days after the request of the Landlord, then Tenant shall be deemed to have
certified that [a] the Lease is in full force and effect and has not been
modified, or that the Lease has been modified as set forth in the certificate
delivered to Tenant; [b] Tenant has not prepaid any Rent or other charges except
for the current month; [c] Tenant has accepted and occupies the Leased Property;
[d] neither Tenant nor Landlord is in default nor is there any fact or condition
which, with notice or lapse of time, or both, would constitute a default; and
[e] Tenant has no defenses, set-offs, deductions, credits, or counterclaims
against Landlord. Tenant hereby irrevocably appoints Landlord as Tenant's
attorney-in-fact to execute, acknowledge, and deliver on Tenant's behalf any
estoppel certificate to which Tenant does not object within 10 days after
Landlord sends the certificate to Tenant. This power of attorney is coupled with
an interest and is irrevocable.
ARTICLE 22: REPRESENTATIONS AND WARRANTIES
Tenant hereby makes the following representations and warranties, as
of the Effective Date, to Landlord and acknowledges that Landlord is granting
the Lease in reliance upon such representations and warranties. Tenant's
representations and warranties shall survive the Closing and, except to the
extent made as of a specific date, shall continue in full force and effect until
Tenant's Obligations have been performed in full.
22.1 Organization and Good Standing. Each Tenant is a corporation,
------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Florida.
22.2 Power and Authority. Tenant has the power and authority to
-------------------
execute, deliver and perform this Lease. Tenant has taken all requisite action
necessary to authorize the execution, delivery and performance of Tenant's
obligations under this Lease.
22.3 Enforceability. This Lease constitutes a legal, valid, and
--------------
binding obligation of Tenant enforceable in accordance with its terms.
22.4 Government Authorizations. The Facility is in compliance with
-------------------------
all Legal Requirements. All Government Authorizations are in full force and
effect. Except as otherwise noted in
35
Exhibit E, Tenant holds all Government Authorizations necessary for the
operation of the Facility as assisted living facilities as shown on Exhibit A-2.
Upon Closing, Tenant is authorized to operate the Facility as assisted living
facilities.
22.5 Financial Statements. Tenant has furnished Landlord with true,
--------------------
correct, and complete copies of the Financial Statements. The Financial
Statements fairly present the financial position of Tenant and Guarantor as
applicable, as of the respective dates and the results of operations for the
periods then ended in conformance with generally accepted accounting principles
applied on a basis consistent with prior periods. The Financial Statements and
other information furnished to Landlord are true, complete and correct and, as
of the Effective Date, no material adverse change has occurred since the
furnishing of such statements and information. As of the Effective Date, the
Financial Statements and other information do not contain any untrue statement
or omission of a material fact and are not misleading in any material respect.
Tenant and Guarantor are solvent, and no bankruptcy, insolvency, or similar
proceeding is pending or contemplated by or, to the knowledge of Tenant, against
Tenant or Guarantor.
22.6 Condition of Facility. To the best of Tenant's knowledge, all
---------------------
of the mechanical and electrical systems, heating and air-conditioning systems,
plumbing, water and sewer systems, and all other items of mechanical equipment
or appliances are in good working order, condition and repair, are of sufficient
size and capacity to service the Facility for the Facility Uses and conform with
all applicable ordinances and regulations, and with all building, zoning, fire,
safety, and other codes, laws and orders. The Improvements, including the roof
and foundation, are structurally sound and free from leaks and other defects.
22.7 Compliance with Laws. To the best of Tenant's knowledge, there
--------------------
is no violation of, or noncompliance with, [i] any laws, orders, rules or
regulations, ordinances or codes of any kind or nature whatsoever relating to
the Facility or the ownership or operation thereof (including without
limitation, building, fire, health, occupational safety and health, zoning and
land use, planning and environmental laws, orders, rules and regulations); [ii]
any covenants, conditions, restrictions or agreements affecting or relating to
the ownership, use or occupancy of the Facility; or [iii] any order, writ,
regulation or decree relating to any matter referred to in [i] or [ii] above.
22.8 No Litigation. To the best of Tenant's knowledge, as of the
-------------
Effective Date and except for the litigation involving KDA and as disclosed on
Exhibit F, [i] there are no actions or suits, or any proceedings or
investigations by any governmental agency or regulatory body pending against
Tenant, Guarantor or the Facility; [ii] Tenant has not received notice of any
threatened actions, suits, proceedings or investigations against Tenant,
Guarantor or the Facility at law or in equity, or before any governmental board,
agency or authority which, if determined adversely to Tenant or Guarantor, would
materially and adversely affect the Facility or title to the Facility (or any
part thereof), the right to operate the Facility as presently operated, or the
financial condition of Tenant or Guarantor; [iii] there are no unsatisfied or
outstanding judgments against Tenant, Guarantor or the Facility; [iv] there is
no labor dispute materially and adversely affecting the operation or business
conducted by Tenant, Guarantor, or the Facility; and [v] Tenant does not have
knowledge of any facts or circumstances which might reasonably form the basis
for any such action, suit, or proceeding.
22.9 Consents. The execution, delivery and performance of this Lease
--------
will not require any consent, approval, authorization, order, or declaration of,
or any filing or registration with, any court, any federal, state, or local
governmental or regulatory authority, or any other person or entity, the absence
of which would materially impair the ability of Tenant to operate the Facility
for the Facility Uses except for the post-acquisition filing for licensure of
the Facility.
36
22.10 No Violation. The execution, delivery and performance of this
------------
Lease [i] do not and will not conflict with, and do not and will not result in a
breach of Tenant's Organizational Documents; [ii] do not and will not conflict
with, and do not and will not result in a breach of, and do not and will not
constitute a default under (or an event which, with or without notice or lapse
of time, or both, would constitute a default under), any of the terms,
conditions or provisions of any agreement or other instrument or obligation to
which Tenant is a party or by which its assets are bound; and [iii] do not and
will not violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Tenant or the Facility.
22.11 Reports and Statements. All reports, statements, certificates
----------------------
and other data furnished by or on behalf of Tenant or Guarantor to Landlord in
connection with this Lease, and all representations and warranties made herein
or in any certificate or other instrument delivered in connection herewith and
therewith, are true and correct in all material respects and do not omit to
state any material fact or circumstance necessary to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading as of the date of such report, statement, certificate or
other data. The copies of all agreements and instruments submitted to Landlord,
including, without limitation, all agreements relating to management of the
Facility, the Letter of Credit, and Tenant's working capital are true, correct
and complete copies and include all amendments and modifications of such
agreements.
22.12 ERISA. All plans (as defined in (S)4021(a) of the Employee
-----
Retirement Income Security Act of 1974, as amended or supplemented from time to
time ("ERISA")) for which Tenant is an "employer" or a "substantial employer"
(as defined in (S)(S)3(5) and 4001(a)(2) of ERISA, respectively) are in
compliance with ERISA and the regulations and published interpretations
thereunder. To the extent Tenant maintains a qualified defined benefit pension
plan: [i] there exists no accumulated funding deficiency; [ii] no reportable
event and no prohibited transaction has occurred; [iii] no lien has been filed
or threatened to be filed by the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA; and [iv] Tenant has not
been deemed to be a substantial employer.
22.13 Chief Executive Office. Tenant maintains its chief executive
----------------------
office and its books and records at the address set forth in the introductory
paragraph of this Agreement. Tenant does not conduct any of its business or
operations other than at its chief executive office and at the Facility.
22.14 Other Name or Entities. Except as disclosed herein or as
otherwise consented to by Landlord, none of Tenant's business is conducted
through any corporate subsidiary, unincorporated association or other entity and
Tenant has not, within the six years preceding the date of this Agreement [i]
changed its name, [ii] used any name other than the name stated at the beginning
of this agreement, or [iii] merged or consolidated with, or acquired any of the
assets of, any corporation or other business.
22.15 Parties in Possession. Except as disclosed on Exhibit B, there
---------------------
are no parties in possession of any Leased Property or any portion thereof as
managers, lessees, tenants at sufferance, or trespassers.
22.16 Access. Access to the Land is directly from a dedicated public
------
right-of-way without any easement. To the knowledge of Tenant, there is no fact
or condition which would result in the termination or reduction of the current
access to and from the Land to such right-of-way.
22.17 Utilities. There are available at the Land gas, municipal
---------
water, and sanitary sewer lines, storm sewers, electrical and telephone services
in operating condition which are adequate for the operation of the Facility at a
reasonable cost. The Land has direct access to utility lines located in a
dedicated public right-of-way without any easement. As of the Effective Date,
there is no pending or, to the knowledge of Tenant, threatened governmental or
third party proceeding which would impair or result in the termination of such
utility availability.
37
22.18 Condemnation and Assessments. As of the Effective Date, Tenant
----------------------------
has not received notice of, and there are no pending or, to the best of Tenant's
knowledge, threatened, condemnation, assessment or similar proceedings affecting
or relating to the Facility, or any portion thereof, or any utilities, sewers,
roadways or other public improvements serving the Facility.
22.19 Zoning. To the best of Tenant's knowledge, as of the Effective
------
Date, [i] the use and operation of the Facility for the Facility Uses is a
permitted use under the applicable zoning code; [ii] except as disclosed on
Exhibit E hereto, no special use permits, conditional use permits, variances, or
exceptions have been granted or are needed for such use of the Facility; [iii]
the Land is not located in any special districts such as historical districts or
overlay districts; and [iv] the Facility has been constructed in accordance with
and complies with all applicable zoning laws, including but not limited to,
dimensional, parking, setback, screening, landscaping, sign and curb cut
requirements.
22.20 Pro Forma Statement. Tenant has delivered to Landlord a true,
-------------------
correct and complete copy of the Pro Forma Statement. The Pro Forma Statement
shows Tenant's reasonable expectation of the most likely results of Facility
operations for the next 9 month period.
22.21 Environmental Matters. Except as disclosed in environmental
---------------------
reports provided by Tenant to Landlord, during the period of Tenant's ownership
or possession of the Leased Property and, to the best of Tenant's knowledge
after diligent inquiry, for the period prior to Tenant's ownership or possession
of the Leased Property, [i] the Leased Property is in compliance with all
Environmental Laws; [ii] there were no releases or threatened releases of
Hazardous Materials on, from, or under the Leased Property, except in compliance
with all Environmental Laws; [iii] no Hazardous Materials have been, are or will
be used, generated, stored, or disposed of at the Leased Property, except in
compliance with all Environmental Laws; [iv] asbestos has not been and will not
be used in the construction of any Improvements; [v] no permit is or has been
required from the Environmental Protection Agency or any similar agency or
department of any state or local government for the use or maintenance of any
Improvements; [vi] underground storage tanks on or under the Land, if any, have
been and currently are being operated in compliance with all applicable
Environmental Laws; [vii] any closure, abandonment in place or removal of an
underground storage tank on or from the Land was performed in compliance with
applicable Environmental Laws and any such tank had no release contaminating the
Leased Property or, if there had been a release, the release was remediated in
compliance with applicable Environmental Laws to the satisfaction of regulatory
authorities; [viii] no summons, citation or inquiry has been made by any such
environmental unit, body or agency or a third party demanding any right of
recovery for payment or reimbursement for costs incurred under CERCLA or any
other Environmental Laws and the Land is not subject to the lien of any such
agency; and [ix] to the best of Tenant's knowledge, the Environmental Assessment
is true, complete and accurate. "Disposal" and "release" shall have the meanings
set forth in CERCLA.
22.22 [Intentionally Deleted]
22.23 No Default. As of the Effective Date, [i] there is no existing
----------
Event of Default under this Lease; and [ii] no event has occurred which, with
the giving of notice or the passage of time, or both, would constitute or result
in such an Event of Default.
38
ARTICLE 23: [INTENTIONALLY DELETED]
ARTICLE 24: SECURITY INTEREST
24.1 Collateral. Tenant hereby grants to Landlord a security
----------
interest in the following described property, whether now owned or hereafter
acquired by Tenant (the "Collateral"), to secure the payment and performance of
Tenant's Obligations:
(a) All machinery, furniture, equipment, trade fixtures,
appliances, inventory and all other goods (as "equipment," "inventory" and
"goods" are defined for purposes of Article 9 ("Article 9") of the Uniform
Commercial Code as adopted in the State) and any leasehold interest of Tenant in
any of the foregoing, now or hereafter located in or on or used or usable in
connection with the Land, Improvements, or Fixtures and replacements, additions,
and accessions thereto, including without limitation those items which are to
become fixtures or which are building supplies and materials to be incorporated
into an Improvement or Fixture.
(b) All accounts, contract rights, general intangibles,
instruments, documents, and chattel paper [as "accounts", "contract rights",
"general intangibles", "instruments", "documents", and "chattel paper", are
defined for purposes of Article 9] now or hereafter arising in connection with
the business located in or on or used or usable in connection with the Land,
Improvements, or Fixtures, and replacements, additions, and accessions thereto.
(c) All franchises, permits, licenses, operating rights,
certifications, approvals, consents, authorizations and other general
intangibles regarding the use, occupancy or operation of the Improvements, or
any part thereof, including without limitation, certificates of need, state
health care facility licenses, and Medicare and Medicaid provider agreements, to
the extent permitted by law.
(d) Unless expressly prohibited by the terms thereof, all
contracts, agreements, contract rights and materials relating to the design,
construction, operation or management of the Improvements, including but not
limited to, plans, specifications, drawings, blueprints, models, mock-ups,
brochures, flyers, advertising and promotional materials and mailing lists.
(e) All ledger sheets, files, records, computer programs,
tapes, other electronic data processing materials, and other documentation
relating to the preceding listed property or otherwise used or usable in
connection with the Land and Improvements.
(f) The products and proceeds of the preceding listed
property, including without limitation cash and non-cash proceeds, proceeds of
proceeds, and insurance proceeds.
24.2 Additional Documents. At the request of Landlord, Tenant shall
--------------------
execute additional security agreements, financing statements, and such other
documents as may be requested by Landlord to maintain and perfect such security
interest. Tenant hereby irrevocably appoints Landlord, its successors and
assigns, as Tenant's attorney-in-fact to execute, acknowledge, deliver and file
such documents on behalf of Tenant. This power of attorney is coupled with an
interest and is irrevocable.
24.3 Notice of Sale. With respect to any sale or other disposition
--------------
of any of the Collateral after the occurrence of an Event of Default, Landlord
and Tenant agree that the giving of 5 days notice by Landlord, sent by overnight
delivery, postage prepaid, to Tenant's notice address designating the time and
place of any public sale or the time after which any private sale or other
intended disposition of such Collateral is to be made, shall be deemed to be
reasonable notice thereof and Tenant waives any other notice with respect
thereto.
39
ARTICLE 25: MISCELLANEOUS
25.1 Notices. Landlord and Tenant hereby agree that all notices,
-------
demands, requests, and consents (hereinafter "notices") required to be given
pursuant to the terms of this Lease except for the notices required under
(S)8.1(a) shall be in writing, shall be addressed to the addresses set forth in
the introductory paragraph of this Lease, and shall be served by [i] personal
delivery; [ii] certified mail, return receipt requested, postage prepaid; or
[iii] nationally recognized overnight courier. All notices shall be deemed to be
given upon the earlier of actual receipt or 3 days after mailing, or one
business day after deposit with the overnight courier. Any notices meeting the
requirements of this section shall be effective, regardless of whether or not
actually received. Landlord or Tenant may change its notice address at any time
by giving the other party notice of such change.
25.2 Advertisement of Leased Property. In the event the parties
--------------------------------
hereto have not executed a renewal Lease within 120 days prior to the expiration
of this Lease, then Landlord or its agent shall have the right to enter the
Leased Property at all reasonable times for the purpose of exhibiting the Leased
Property to others and to place upon the Leased Property for and during the
period commencing 120 days prior to the expiration of this Lease, "for sale" or
"for rent" notices or signs.
25.3 Entire Agreement. This Lease contains the entire agreement
----------------
between Landlord and Tenant with respect to the subject matter hereof. No
representations, warranties, and agreements have been made by Landlord except as
set forth in this Lease.
25.4 Severability. If any term or provision of this Lease is held or
------------
deemed by Landlord to be invalid or unenforceable, such holding shall not affect
the remainder of this Lease and the same shall remain in full force and effect,
unless such holding substantially deprives Tenant of the use of the Leased
Property or Landlord of the rents herein reserved, in which event this Lease
shall forthwith terminate as if by expiration of the Term.
25.5 Captions and Headings. The captions and headings are inserted
---------------------
only as a matter of convenience and for reference and in no way define, limit or
describe the scope of this Lease or the intent of any provision hereof.
25.6 Governing Law. This Lease shall be construed under the laws of
-------------
the State.
25.7 Memorandum of Lease. Tenant shall not record this Lease. Tenant
may, however, record a memorandum of lease approved by Landlord.
25.8 Waiver. No waiver by Landlord of any condition or covenant
------
herein contained, or of any breach of any such condition or covenant, shall be
held or taken to be a waiver of any subsequent breach of such covenant or
condition, or to permit or excuse its continuance or any future breach thereof
or of any condition or covenant, nor shall the acceptance of Rent by Landlord at
any time when Tenant is in default in the performance or observance of any
condition or covenant herein be construed as a waiver of such default, or of
Landlord's right to terminate this Lease or exercise any other remedy granted
herein on account of such existing default.
25.9 Binding Effect. This Lease will be binding upon and inure to
--------------
the benefit of the heirs, successors, personal representatives, and permitted
assigns of Landlord and Tenant.
25.10 Power of Attorney. Effective upon [i] the occurrence and during
-----------------
the continuance of an Event of Default, or [ii] termination of this Lease for
any reason other than Tenant's purchase of the
40
Leased Property, Tenant hereby irrevocably and unconditionally appoints
Landlord, or Landlord's authorized officer, agent, employee or designee, as
Tenant's true and lawful attorney-in-fact, to act for Tenant in Tenant's name,
place, and stead, to execute, deliver and file all applications and any and all
other necessary documents and statements to effect the issuance, transfer,
reinstatement, renewal and/or extension of the Facility license and all
Governmental Authorizations issued to Tenant or applied for by Tenant in
connection with Tenant's operation of the Facility, to permit any designee of
Landlord or any other transferee to operate the Facility under the Governmental
Authorizations, and to do any and all other acts incidental to any of the
foregoing. Tenant irrevocably and unconditionally grants to Landlord as its
attorney-in-fact full power and authority to do and perform every act necessary
and proper to be done in the exercise of any of the foregoing powers as fully as
Tenant might or could do if personally present or acting, with full power of
substitution, hereby ratifying and confirming all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is
coupled with an interest and is irrevocable prior to Tenant's purchase of the
Leased Property. Except in the case of an emergency, Landlord shall give Tenant
three business days prior written notice before acting on behalf of Tenant
pursuant to this power of attorney.
25.11 No Offer. Landlord's submission of this Lease to Tenant is not
--------
an offer to lease the Leased Property, or an agreement by Landlord to reserve
the Leased Property for Tenant. Landlord will not be bound to Tenant until
Tenant has duly executed and delivered duplicate original leases to Landlord,
and Landlord has duly executed and delivered one of these duplicate original
leases to Tenant.
25.12 Modification. This Lease may only be modified by a writing
------------
signed by both Landlord and Tenant. All references to this Lease, whether in
this Lease or in any other document or instrument, shall be deemed to
incorporate all amendments, modifications and renewals of this Lease, made after
the date hereof. If Tenant requests Landlord's consent to any change in
ownership, merger or consolidation of Tenant or Guarantor, any assumption of the
Lease, or any material modification of the Lease, Tenant shall provide Landlord
all relevant information and documents sufficient to enable Landlord to evaluate
the request. In connection with any such request, Tenant shall pay to Landlord a
fee in the amount of $2,500.00 and shall pay all of Landlord's reasonable
attorney's fees and expenses and other reasonable out-of-pocket expenses
incurred in connection with Landlord's evaluation of Tenant's request, the
preparation of any documents and amendments, the subsequent amendment of any
documents between Landlord and its collateral pool lenders (if applicable), and
all related matters.
25.13 Landlord's Modification. Tenant acknowledges that Landlord may
-----------------------
mortgage the Leased Property or use the Leased Property as collateral for a
collateralized mortgage obligations or Real Estate Mortgage Investment Companies
(REMICS). If any mortgage lender of Landlord desires any modification of this
Lease, Tenant agrees to consider such modification in good faith and to execute
an amendment of this Lease if Tenant finds such modification acceptable.
25.14 No Merger. The surrender of this Lease by Tenant or the
cancellation of this Lease by agreement of Tenant and Landlord or the
termination of this Lease on account of Tenant's default will not work a merger,
and will, at Landlord's option, terminate any subleases or operate as an
assignment to Landlord of any subleases. Landlord's option under this paragraph
will be exercised by notice to Tenant and all known subtenants of the Leased
Property.
25.15 Laches. No delay or omission by either party hereto to exercise
------
any right or power accruing upon any noncompliance or default by the other party
with respect to any of the terms hereof shall impair any such right or power or
be construed to be a waiver thereof.
25.16 Limitation on Tenant's Recourse. Tenant's sole recourse against
-------------------------------
Landlord, and any successor to the interest of Landlord in the Leased Property,
is to the interest of Landlord, and any such successor, in the Leased Property.
Tenant will not have any right to satisfy any judgment which it may have
41
against the Landlord, or any such successor, from any other assets of Landlord,
or any such successor. In this section, the terms "Landlord" and "successor"
include the shareholders, venturers, and partners of "Landlord" and "successor"
and the officers, directors, and employees of the same. The provisions of this
section are not intended to limit Tenant's right to seek injunctive relief or
specific performance.
25.17 Construction of Lease. This Lease has been prepared by Landlord
---------------------
and its professional advisors and reviewed by Tenant and its professional
advisors. Landlord, Tenant, and their advisors believe that this Lease is the
product of all their efforts, that it expresses their agreement, and agree that
it shall not be interpreted in favor of either Landlord or Tenant or against
either Landlord or Tenant merely because of their efforts in preparing it.
Tenant acknowledges and agrees that this Lease is a true lease, that this Lease
is not a financing lease or a mortgage, that Tenant does not have an option to
purchase other than the rights set forth in this Lease, and that Tenant does not
have any other ownership interest in any of the Leased Property.
25.18 Counterparts. This Lease may be executed in multiple
------------
counterparts, each of which shall be deemed an original hereof.
25.19 [RESERVED]
----------
25.20 Custody of Escrow Funds. Any funds paid to Landlord in escrow
-----------------------
hereunder may be held by Landlord or, at Landlord's election, by a financial
institution, the deposits or accounts of which are insured or guaranteed by a
federal or state agency. The funds shall not be deemed to be held in trust, may
be commingled with the general funds of Landlord or such other institution, and
shall not bear interest.
25.21 Landlord's Status as a REIT. Tenant acknowledges that Landlord
---------------------------
(or a Landlord Affiliate) has now and may hereafter elect to be taxed as a real
estate investment trust ("REIT") under the Internal Revenue Code.
25.22 Exhibits. The following exhibits are attached hereto and
--------
incorporated herein:
Exhibit A: Legal Description
Exhibit A-1: Personal Property
Exhibit A-2: Designation of Facilities
Exhibit B: Permitted Exceptions
Exhibit C: Documents to be Delivered
Exhibit D: Certificate and Facility Financial Reports
Exhibit E: Government Authorizations to be Obtained; Zoning Permits
Exhibit F: Pending Litigation
Exhibit G: [Intentionally Deleted]
Exhibit H: Nondisturbance Agreement
Exhibit I: Settlement Agreement
Exhibit J: Pro Forma Statement
25.23 WAIVER OF JURY TRIAL. LANDLORD AND TENANT WAIVE TRIAL BY JURY
--------------------
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE
OTHER ON ALL MATTERS ARISING OUT OF THIS LEASE OR THE USE AND OCCUPANCY OF THE
LEASED PROPERTY (EXCEPT CLAIMS FOR PERSONAL INJURY OR PROPERTY DAMAGE). IF
LANDLORD COMMENCES ANY SUMMARY PROCEEDING FOR NONPAYMENT OF RENT, TENANT WILL
NOT INTERPOSE, AND WAIVES THE RIGHT TO INTERPOSE, ANY COUNTERCLAIM IN ANY SUCH
PROCEEDING.
42
25.24 CONSENT TO JURISDICTION. TENANT HEREBY IRREVOCABLY SUBMITS AND
-----------------------
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT HAVING JURISDICTION OVER XXXXX COUNTY, OHIO OR LAKE COUNTY, VOLUSIA
COUNTY, POLK COUNTY, OR MANATEE COUNTY, FLORIDA FOR ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO [I] THE SETTLEMENT
AGREEMENT; [II] THIS LEASE; OR [III] ANY DOCUMENT EXECUTED BY TENANT IN
CONNECTION WITH THIS LEASE. TENANT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT TENANT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. TENANT AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.
TENANT AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST
LANDLORD OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY OF LANDLORD,
CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THE COMMITMENT, THIS LEASE
OR ANY RELATED DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT HAVING
JURISDICTION OVER XXXXX COUNTY, OHIO OR LAKE COUNTY, VOLUSIA COUNTY, POLK
COUNTY, OR MANATEE COUNTY, FLORIDA.
TENANT HEREBY CONSENTS TO SERVICE OF PROCESS BY LANDLORD IN ANY MANNER
AND IN ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT OR IMPAIR
LANDLORD'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW, OR
LANDLORD'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST TENANT OR THE
PROPERTY OF TENANT IN THE COURTS OF ANY OTHER JURISDICTION.
25.25 Attorney's Fees and Expenses. Tenant shall pay to Landlord all
----------------------------
reasonable costs and expenses incurred by Landlord in administering this Lease
and the security for this Lease, enforcing or preserving Landlord's rights under
this Lease and the security for this Lease, and in all matters of collection,
whether or not an Event of Default has actually occurred or has been declared
and thereafter cured, including but not limited to, [a] reasonable attorney's
and paralegal's fees and disbursements; [b] the fees and expenses of any
litigation, administrative, bankruptcy, insolvency, receivership and any other
similar proceeding; [c] court costs; [d] the expenses of Landlord, its
employees, agents, attorneys and witnesses in preparing for litigation,
administrative, bankruptcy, insolvency and other proceedings and for lodging,
travel, and attendance at meetings, hearings, depositions, and trials; and [e]
consulting and witness fees incurred by Landlord in connection with any
litigation or other proceeding.
25.26 Survival. The following provisions shall survive termination of
--------
the Lease: Article 9 (Damage & Destruction), Article 10 (Condemnation); Article
16 (Alterations); and (S)25.26 (Survival).
25.27 Warrants. Tenant has issued stock warrants to Landlord upon the
--------
terms and conditions set forth therein.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
43
IN WITNESS WHEREOF, the parties hereto have executed this Lease or
caused the same to be executed by their respective duly authorized officers as
of the date first set forth above.
Signed and acknowledged
in the presence of: HEALTH CARE REIT, INC.
Signature_________________________ By:____________________________________
Print Name________________________
Title:_________________________________
Signature_________________________
Print Name________________________
JUST LIKE HOME, INC.
Signature_________________________ By:____________________________________
Print Name________________________
Title:_________________________________
Signature_________________________
Print Name________________________ Tax I.D. No.: 00-0000000
JLH SERIES I, INC.
Signature_________________________ By:____________________________________
Print Name________________________
Title:_________________________________
Signature_________________________
Print Name________________________ Tax I.D. No.: 00-0000000
STATE OF OHIO )
) SS:
COUNTY OF XXXXX )
The foregoing instrument was acknowledged before me this _____ day of
_____________, 1999 by ___________________________, the _________________ of
Health Care REIT, Inc., a Delaware corporation, on behalf of the corporation.
Notary Public
My Commission Expires:____________ [SEAL]
44
EXHIBIT A: LEGAL DESCRIPTION
CHARIS CENTER
Parcel 1:
Lot 2, less the South 49 feet thereof, and Lot 3, less the West 85 feet and less
the South 49 feet thereof, all in Block 22, City of Leesburg, according to the
plat thereof recorded in Plat Book 2, page 19, Public Records of Lake County,
Florida.
Parcel 2:
The South 100 feet of the East 75 feet of the West 85 feet of Xxx 0, Xxxxx 00,
less the South 49 feet thereof, City of Leesburg, according to the plat thereof
recorded in Plat Book 2, page 19, Public Records of Lake County, Florida.
Also described as:
BEGIN at the Northeast corner of Block 22, City of Leesburg, according to the
Plat thereof recorded in Plat Book 2, Page 19, Public Records of Lake County,
Florida thence run S00/degrees/00'26" W along the East line of said Block 22 for
a distance of 237.73 feet to the North right of way line of Magnolia Street
(being a 60.00 feet right of way); thence run N89/degrees/49'19" W along said
North right of way line for a distance of 293.25 feet to the East line of the
West 10.00 feet of the aforesaid Block 22; thence run N00/degrees/00'43" E along
said East line of the West 10.00 feet of Block 22 for a distance of 100.00 feet
to the North line of the South 100.00 feet of said Xxxxx 00 xxxxx Xxxxx xx
Xxxxxxxx Xxxxxx; thence run S89/degrees/49'19" E along said North line of the
South 100.00 feet of said Block 22 lying North of Magnolia Street for a distance
of 75.00 feet to the East line of the West 85.00 feet of said Block 22; thence
run N00/degrees/00'00'43" E along said East line of West 85.00 feet of Block 22
for a distance of 142.20 feet to the North line of said Block 22; thence run
S88/degrees/38'52" E along said North line of Block 22 for a distance of 218.29
feet to the Point of Beginning.
CONTAINING 1.374 acres (59,851 square feet), more or less, and being subject to
any easements or rights of way of record.
JUST LIKE HOME AT XXXXXX CITY
Block A of REPLAT OF XXXXXX XXXX XXXXX ADDITION, according to the map
or plat thereof recorded in Plat Book 25, Page 40, of the public records of Polk
County, Florida, LESS AND EXCEPT the East 75.00 feet of the South 150.00 feet
thereof.
45
JUST LIKE HOME I - 0000 00xx Xxxxxx XX, Xxxxxxxxx, Xxxxxxx, more fully described
as follows, to-wit:
Lots, 14, 15, 16, 17, and 18, Block 1, Pinehurst Subdivision as
per Plat thereof recorded in Plat Book 1, Page 204, Public
Records of Manatee County, Florida.
Containing 37,299.01 Square Feet more or less.
JUST LIKE HOME III - 0000 00xx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx, more fully
described as follows, to-wit:
Begin at the NW corner of the SW 1/4 of the SE 1/4 of Section
31, Township 34 South, Range 17 East, thence run South 150
feet; thence East to the center of Cedar Hammock Canal; thence
in a Northwesterly direction along the center of said canal to
the North line of said forty; thence West 165 feet to the point
of beginning; less West 30 feet for roads; also less the
property described in Official Records Book 1228, Page 2202,
Official Records Book 1208, Page 1322, and Official Records
Book 1254, Page 1588, Deed to Manatee County, all lying and
being in Manatee County, Florida.
Containing 32,375.33 Square Feet more or less.
JUST LIKE HOME VII & VIII - 0000 00xx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx, more
fully described as follows, to-wit:
Xxxx 0 xxx 0, Xxxxxx Xxxx Xxxxxxx as per plat thereof recorded
in Plat Book 13, Page 15, of the public records of Manatee
County, Florida, less that part of Lot 2 described as follows:
Begin at the Xxxxxxxxx xxxxxx xx Xxx 0, Xxxxxx Xxxx Xxxxxxx as
per Plat thereof recorded in Plat Book 13, Page 15, of the
public records of Manatee County, Florida; thence
S.00/degrees/03' W along the West line of said lot 90 feet;
thence N. 25/degrees/07'22" E. to a point on the Northerly line
of said lot; thence N. 82/degrees/25'20"W. along said North
line 40 feet to the POB.
Containing 90,219.84 Square Feet more or less.
46
JUST LIKE HOME AT LAKE WALES
A portion of the Northwest 1/4 of the Southwest 1/4 of the Northeast
1/4 of Section 11, Township 30 South, Range 27 East, Polk County, Florida, being
more particularly described as follows: Begin at the intersection of the South
right of way boundary of Grove Avenue and the East boundary of said Northwest
1/4 of the Southwest 1/4 of the Northeast 1/4, thence run on an assumed bearing
of South 00/degrees/03'50" West, along said East boundary, 400.00 feet, thence
run North 89/degrees/59'45" West, parallel with said South right of way boundary
of Grove Avenue, 300.00 feet, thence run North 00/degrees/03'50" East, parallel
with said East boundary, 400.00 feet to said South right of way boundary of
Grove Avenue, thence run South 89/degrees/59'45" East along said right of way
boundary 300.00 feet, returning to the Point of Beginning. Subject to a utility
easement over and across the East 15 feet thereof.
JUST LIKE HOME AT ORANGE CITY
Commence at a point on the intersection of the East right of way of
U.S. 17 -92 & the South right of way of Strawberry Oaks Drive; thence North 89
degrees 50 minutes 52 seconds East along the South right of way line of
Strawberry Oaks Drive a distance of 212.75 feet to the POINT OF BEGINNING;
thence continue North 89 degrees 50 minutes 52 seconds East along the South
right of way line of Strawberry Oaks Drive to a distance of 472.06 feet to a
point; thence departing said South right xx xxx xxxx, xxx Xxxxx 00 degrees 15
minutes 08 seconds East a distance of 238.31 feet to a point; thence South 89
degrees 50 minutes 52 seconds West a distance of 473.16 feet to a point; thence
North 00 degrees 00 minutes 41 seconds East a distance of 238.81 feet to the
POINT OF BEGINNING. Said lands lying and being in Volusia County, Florida.
47
EXHIBIT A-2
-----------
DESIGNATION OF FACILITIES
-------------------------
Just Like Home I
----------------
Number of Beds: 16
Local Address: 0000 00xx Xxxxxx X.X.
Xxxxxxxxx, Xxxxxxx 00000
Licensed Operator: JLH Series I, Inc.
Allocated Lease Amount: $475,000.00
Just Like Home III
------------------
Number of Beds: 20
Local Address: 0000 00xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Licensed Operator: JLH Series I, Inc.
Allocated Lease Amount: $425,000.00
Just Like Home VII (also known as Just Like Home at Twin Oaks)
--------------------------------------------------------------
Number of Beds: 20
Local Address: 0000 00xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Licensed Operator: JLH Series I, Inc.
Allocated Lease Amount: $900,000.00
Just Like Home VIII (also known as Just Like Home at Twin Oaks)
---------------------------------------------------------------
Number of Beds: 20
Local Address: 0000 00xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Licensed Operator: JLH Series I, Inc.
Allocated Lease Amount: $900,000.00
Just Like Home at Xxxxxx City
-----------------------------
Number of Units: 42
Local Address: 000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxx
Licensed Operator: Just Like Home, Inc.
Allocated Lease Amount: $2,049,000.00
Just Like Home at Lake Wales
----------------------------
Number of Beds: 42
Local Address: Xxxx Xxxxx Xx.
Xxxx Xxxxx, Xxxxxxx
Licensed Operator: Just Like Home, Inc.
Allocated Lease Amount: $2,049,000.00
48
Charis Center
-------------
Number of Beds: 36
Local Address: 0000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
Licensed Operator: Just Like Home, Inc.
Allocated Lease Amount: $1,240,000.00
Just Like Home at Orange City
-----------------------------
Number of Units: 42
Local Address: 000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxx
Licensed Operator: Just Like Home, Inc.
Allocated Lease Amount: $2,382,780.00
49
