MASTER LEASE
THIS MASTER LEASE (this "Lease") is entered into this 31st day of
October, 1995 by and between Continental Xxxxxxx Holdings, Inc., a New Jersey
corporation ("Lessor"), and Senior Care Foundation, Inc., a nonprofit New Jersey
corporation ("Lessee").
RECITALS:
A. The Lessor is the owner of a certain parcel of land commonly known
as The Heritage at Xxxxxxx, and which is legally described on Exhibit A,
attached hereto and made a part hereof (the "Land").
B. Upon the Land is situated a building and certain other improvements
(the "Building"; the Land, the Building and any other improvements located on
the Land together with all attendant rights are collectively referred to herein
as the "Premises").
C. The Lessee desires to lease the Premises from the Lessor and the
Lessor desires to lease the Premises to the Lessee all in accordance with the
terms hereof.
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Lessor and Lessee hereby agree as follows:
AGREEMENTS:
SECTION 1 Grant. The Lessor hereby demises and leases to Lessee, and
Lessee hereby leases and accepts from Lessor, the Premises, subject to the
Permitted Exceptions, and all terms and provisions contained herein.
SECTION 2 Definitions. Terms used but not otherwise defined in this
Lease shall have the meaning given such term in the Loan Agreement, dated as of
even date herewith, by and between Nomura Asset Capital Corporation, Lessor,
Jayber Inc., P.V.M. Associates, Inc. and Pompton Avenue Associates, Inc. The
following terms shall have the meanings ascribed to them below when used in this
Lease, unless the context otherwise requires:
"Additional Rent" shall have the meaning ascribed to such term
in Section 4.2.
"Base Rent" shall have the meaning ascribed to such term in
Section 4.1.
"Building" shall have the meaning ascribed to such term in
the Second Recital.
"Commencement Date" shall have the meaning ascribed to such
term in Section 3.1.
"Debt Service Coverage Ratio" shall have the meaning ascribed
to such term in Section 24.3.
"Equipment" means, with respect to the Premises and Lessee,
all fixtures, appliances, machinery, furniture, furnishings,
decorations, tools and supplies, now owned or hereafter acquired,
including but not limited to, all beds, linen, radios, televisions,
carpeting, telephones, cash registers, computers, lamps, glassware,
restaurant and kitchen equipment, all medical, dental, rehabilitation,
therapeutic and paramedic equipment and supplies, any building
equipment, including but not limited to, all heating, lighting,
incinerating, waste removal and power equipment, engines, pipes, tanks,
motors, conduits, switchboards, security and alarm systems, plumbing,
lifting, cleaning, fire prevention, fire extinguishing, refrigeration,
ventilating, and communications apparatus, air cooling and air
conditioning apparatus, escalators, elevators, ducts, and compressors,
materials and supplies, and all other machinery, apparatus, equipment,
fixtures and fittings now owned or hereafter acquired by such Lessee,
or any appurtenances thereto, together with all additions,
replacements, parts, fittings, accessions, attachments, accessories,
modifications and alterations of any of the foregoing, to the extent
relating to the Premises or Lessee, provided, however, that, with
respect to any items which are leased and not owned Lessee, the
Equipment shall include the leasehold interest only of such Lessee,
together with any options to purchase any of said items and any
additional or greater rights with respect to such items which such
Lessee may hereafter acquire. In addition to the foregoing, the term
"Equipment" shall include the meaning such term has in the UCC.
"Event of Default" shall have the meaning ascribed to such
term in Section 21.
"Governmental Authorities" shall mean all federal, state,
county, municipal and local governments, and all departments, agencies,
commissions, boards, bureaus and offices thereof, having or claiming
jurisdiction over the Premises.
"Improvements" means, with respect to the Premises and Lessee,
all buildings, structures and improvements of every nature whatsoever
situated on the Land on the Closing Date or thereafter, including, but
not limited to, all gas and electric fixtures, radiators, heaters,
engines and machinery, boilers, ranges, elevators and motors, plumbing
and heating fixtures, antennas, carpeting and other floor coverings,
water heaters, awnings and storm sashes, and cleaning apparatus which
are or shall be attached to the Land or said buildings, structures or
improvements.
"Inventory" means, with respect to the Premises and Lessee,
all goods now owned or hereinafter acquired by the Lessee, intended for
sale or lease, or to be furnished under contracts of service by Lessee,
in connection with the Premises, including without limitation, all
inventories of food and beverages held by Lessee, for sale or use at or
from such the Premises and all other such goods, wares, merchandise,
and materials and supplies of every nature held by Lessee, for sale to
or for consumption by guests of the Premises and others, and all such
other goods returned to or repossessed by Lessee. In addition to the
foregoing, the term "Inventory" shall include the meaning as such term
has in Section 9-109 of the UCC.
"Land" shall have the meaning ascribed to such term in the
First Recital.
"Leases" means, with respect to each Borrower, all leases
(including, without limitation, any Master Lease) and other agreements or
arrangements affecting the use or occupancy of all or any portion of such
Borrower's Facility now in effect or hereafter entered into (including, without
limitation, all patient admissions and resident care agreements, lettings,
subleases, licenses, concessions, tenancies and other occupancy agreements
covering or encumbering all or any portion of such Borrower's Facility),
together with any guarantees, supplements, amendments, modifications, extensions
and renewals of the same, and all additional remainders, reversions, and other
rights and estates appurtenant thereto.
"Lease Term" shall have the meaning ascribed to such term in
Section 3.1.
"Lessee" shall have the meaning ascribed to such term in the
Introductory Paragraph.
"Lessor" shall have the meaning ascribed to such term in the
Introductory Paragraph.
"Licenses" shall have the meaning set forth in Section 18.26.
"Loss Proceeds" shall have the meaning ascribed to such term
in Section 13.
"Material Adverse Effect" means a material adverse effect upon
(i) the business or the financial position or results of operation of any
Borrower, (ii) the ability of any Borrower to perform, or of Lender to enforce,
any of the Loan Documents, (iii) the value of (x) the Collateral taken as a
whole or (y) any Facility or (iv) the ability of the Operator, if any, to
perform Operator's obligations under the relevant Master Lease.
"Permits" means, with respect to the Premises and Lessee, all
licenses, registrations, permits, allocations, filings, authorizations,
approvals and certificates used in connection with the ownership,
operation, construction, renovation, use or occupancy of the Premises,
including, without limitation, building permits, business licenses,
state health department licenses, food service licenses, liquor
licenses, licenses to conduct business, and all such other permits,
licenses and rights, obtained from any Governmental Authority or
private Person concerning ownership, operation, renovation use or
occupancy of the Premises.
"Permitted Exceptions" means, collectively, (i) the Lien
created by the Related Mortgage or the other Loan Documents of record,
(ii) all Liens and other matters disclosed in the applicable Title
Insurance Policy concerning the Premises or any part thereof which have
been approved by Lender in Lender's discretion, (iii) Liens, if any,
for Impositions imposed by any Governmental Authority not yet due or
delinquent or being contested in good faith and by appropriate
proceedings in accordance with the Related Mortgage, (iv) subject to
Section 2.06(b) of the Related Mortgage, any mechanics' and
materialmen's Liens deleted from the exceptions to, or affirmatively
insured against collection with respect to, the Facility under the
applicable Title Insurance Policies, and (v) without limiting the
foregoing, any and all governmental, public utility and private
restrictions, covenants, reservations, easements, licenses or other
agreements of an immaterial nature which may be granted by Lessor after
the Closing Date and which do not affect (A) the ability of Lessor to
pay any of its obligations to any Person as and when due, (B) the
marketability of title to the Premises, (C) the fair market value of
the Premises, or (D) the use or operation of the Premises as of the
Closing Date and thereafter, (vi) [intentionally deleted], and (vii)
[intentionally deleted].
"Permitted Transfers" shall mean (i) Permitted Encumbrances;
(ii) all transfers, conveyances or sales of personalty in the ordinary
course of business; (iii) all transfers of worn out or obsolete
furnishings, fixtures or equipment that are replaced with equivalent
property; and (iv) all resident care agreements in the ordinary course
of business.
"Permitted Uses" shall have the meaning ascribed to such term
in Section 7.
"Premises" shall have the meaning ascribed to such term in
the Second Recital.
"Rents" means, with respect to each Lessee and the Premises,
all rents (whether denoted as advance rent, minimum rent, percentage
rent, additional rent or otherwise), issues, income, royalties,
profits, revenues, proceeds, bonuses, deposits (whether denoted as
security deposits or otherwise), lease termination fees or payments,
rejection damages, buy-out fees and any other fees made or to be made
in lieu of rent, any award made hereafter to Lessee in any court
proceeding involving any tenant, lessee, licensee or concessionaire
under any of the Leases in any bankruptcy, insolvency or reorganization
proceedings in any state or federal court, and all other payments,
rights and benefits of whatever nature from time to time due under the
Leases, including, without limitation, (i) rights to payment earned
under the Leases for space in the Improvements for the operation of
ongoing businesses such as restaurants, news stands, xxxxxx shops,
beauty shops and pharmacies, and (ii) all other income, consideration,
issues, accounts, profits or benefits of any nature arising from the
ownership, possession, use or operation of the Premises, including,
without limitation, all rights to payment from the Medicare and
Medicaid programs or similar state or federal programs, boards, bureaus
or agencies and rights to payment from patients or private insurers,
arising from the operation of the Premises.
"Transfer" means any conveyance, transfer, sale, lease,
(including any amendment, extension, modification, waiver or renewal
thereof or hereof), assignment, mortgage, pledge, grant of a security
interest, or hypothecation, whether by law or otherwise of this Lease
or the Premises (including any legal or beneficial direct or indirect
interest herein or in Lessee) other than a Permitted Transfer.
SECTION 3 Lease Term and Renewal Option.
SECTION 3.1 Term. The term of this Lease shall be for a period of
twenty-five (25) years commencing on the date hereof (the "Commencement Date")
and ending on October 31, 2020 (the "Lease Term") unless sooner terminated as
provided in this Lease.
SECTION 4 Rent.
SECTION 4.1 Base Rent. Lessee shall pay as base rent (the "Base Rent")
the monthly rental amounts set forth on Schedule 4.1 as Base Rent beginning on
the Commencement Date and on the eleventh day of each month thereafter during
the Lease Term. In the event the obligation to begin paying Rent commences on a
date which is not the eleventh day of a month or if the last day of the Lease
Term is not the eleventh day of a month, the Rent shall be prorated on a per
diem basis. Lessor shall open and maintain at a Collection Account Bank a demand
deposit account "Collection Account". The Collection Account shall be assigned a
separate and unique identification number by the Collection Account Bank and
shall be opened and maintained in the name Continental Xxxxxxx Holdings, Inc.,
as Debtor, and Nomura Asset Capital Corporation, as Secured Party, pursuant to
the Loan Agreement dated as of [insert date of Loan Agreement]." Lessee shall
collect all Rents (other than security deposits) from the Premises and shall
endorse all checks and deposit all such funds and other receipts, within one
Business Day after receipt thereof, directly into the Collection Account for the
Premises. Lessor shall open and maintain for the Premises a demand deposit
account "Security Deposit Account". The Security Deposit Account shall be
assigned a separate and unique identification number by the relevant Collection
Account Bank and shall be opened and maintained in the name Continental Xxxxxxx
Holdings, Inc., as Debtor, and Nomura Asset Capital Corporation, as Secured
Party, pursuant to the Loan Agreement dated as of [insert date of the Loan
Agreement]" and on the Closing Date (and at all times thereafter), and Lessee
shall cause all rents, revenues or income of any kind derived by Lessee or from
the Premises to be deposited within one Business Day after receipt thereof,
directly into the Collection Account for the Premises. Lessee shall collect or,
if applicable, shall instruct and cause the Manager to collect all security
deposits with respect to the Premises and shall deposit or cause the deposit of
all such funds and other receipts within one Business Day after receipt thereof,
directly into the Security Deposit Account for the Premises. Lessee shall have
no right of withdrawal from a Security Deposit Account except that, prior to the
Collection Account Bank's receipt of notice of the occurrence of an Event of
Default hereunder or under the Loan Documents, Lessor may withdraw funds from
the Security Deposit Account for the Premises to refund or apply security
deposits as required by the related Leases or by applicable Legal Requirements,
and, after delivery of such notice, Lender, on written request from Lessee with
appropriate supporting materials, will direct the relevant Collection Account
Bank to release funds from such Security Deposit Account to refund security
deposits as required by the Leases or by applicable Legal Requirements. Lessor
may designate a new financial institution to serve as a Collection Account Bank
hereunder as provided in the Loan Agreement. Each Collection Account shall at
all times be an Eligible Account. Lessee shall have any right of withdrawal from
the Collection Account. Any breach of this Section by Lessee or Lessor shall be
an Event of Default hereunder.
SECTION 4.2 Additional Rent. In addition to the Base Rent, all other
payments to be made by Lessee under this Lease shall be deemed additional rent
(the "Additional Rent"). The parties acknowledge and agree that this Lease shall
be "triple net" and that the Base Rent shall be absolutely net to Lessor, and
that all costs, expenses and obligations of every kind and nature relating to
the Premises shall be paid by Lessee, except as expressly set forth in this
Lease. All such costs, expenses and obligations shall be deemed Additional Rent.
The Base Rent and the Additional Rent shall be referred to collectively herein
as the "Rent." Notwithstanding anything contained herein to the contrary, the
Rent shall at all times be an amount adequate to enable Lessor to satisfy all of
its obligations to Lender under the Loan Documents.
SECTION 5 Real Estate Taxes. The Lessee hereby agrees to pay when due
all taxes (including, without limitation, all real estate, ad valorem, sales
(including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible transaction privilege, privilege, license or
similar taxes), assessments (including, without limitation, to the extent not
discharged prior to the Commencement Date, all assessments for public
improvements or benefits, whether or not commenced or completed within the
Term), ground rents, water, sewer or other rents and charges, excises, levies,
fees (including, without limitation, license, permit, inspection, authorization
and similar fees), and all other governmental charges, in each case whether
general or special, ordinary or extraordinary, foreseen or unforeseen, of every
character in respect of the Premises or in respect of Lessee (including all
interest and penalties thereon), 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 (i) Lessee (including, without limitation, all income, franchise,
single business or other taxes imposed on Lessee for the privilege of doing
business in the jurisdiction in which the Premises is located), Lessor or
Lender, (ii) the Premises, or (iii) any occupancy, operation, use or possession
of, or sales from, or activity conducted on, or in connection with the Premises
or the leasing or use of the Premises or any part thereof, or the acquisition or
financing of the acquisition of the Premises. Notwithstanding the foregoing, the
Lessee at its expense may, after prior notice to the Lessor, contest by
appropriate legal, administrative or other proceedings conducted in good faith
and with due diligence, the validity or application, in whole or in part, of any
such impositions as long as the Lessee shall have furnished to the Lessor
additional security in respect of the claim being contested or the loss or
damage that may result from the Lessee's failure to prevail in such contest in
such amount as may be reasonably requested by the Lessor but in no event less
than 125% of the amount of such claim.
SECTION 6 Utility Services.
SECTION 6.1 Heat, Electricity, etc. The Lessor shall have no duty or
obligation to provide any air conditioning, heat, electricity, water or other
utility services under this Lease. However, the Lessor hereby represents to the
Lessee that electricity, water and sewer service, and natural gas are available
from public or quasi-public utility companies. All costs for such services
rendered to the Premises prior to the Commencement Date shall be the sole
obligation of the Lessor. The Lessee shall also be responsible for trash and
refuse removal during the Lease Term.
SECTION 6.2 Telephone. Lessee shall make arrangements directly with the
telephone company servicing the Premises for telephone service in the Premises
as desired by Lessee. Lessee shall pay for all telephone services it receives.
SECTION 6.3 Other Installations. In addition to all other rights,
Lessee shall have the right to obtain telegraphic, alarm, computer installations
or signal services for the Premises. Such installations or services shall be at
Lessee's sole expense and shall be installed in compliance with all applicable
laws and governmental codes and ordinances.
SECTION 7 Permitted Uses. The Lessee is hereby permitted to use the
Premises or any portion thereof for the operation of a skilled nursing facility
licensed by the New Jersey Department of Public Health and such other uses as
may be reasonably necessary in connection with the operation of such skilled
nursing facility ("Permitted Uses").
SECTION 8 Possession. Lessor shall give to Lessee sole, exclusive, and
peaceful possession of the Premises, subject to the Permitted Exceptions, on the
Commencement Date. As long as no Event of Default by Lessee shall have occurred
and be continuing, Lessee shall have the right at all times during the Lease
Term to freely, peaceably, and quietly occupy, use and enjoy the full and
exclusive possession of the Premises and the tenements, hereditaments, and
appurtenances thereto belonging, and the rights and privileges herein granted
without molestation or hindrance, subject to the Permitted Exceptions.
SECTION 9 No Transfer.
The Lessee shall not permit any Transfer to occur.
SECTION 10 Certain Rights Reserved by Lessor. Unless expressly waived
by Lessor in writing, Lessor shall have the following rights (but no
obligation), which may be exercised without notice (except as expressly provided
to the contrary in this Lease), without any liability to Lessee for damage or
injury to person, property or business, without being deemed an eviction or
disturbance in any manner of Lessee's use or possession of the Premises and
without relieving Lessee from its obligation to pay all Rent when due or from
any other obligation hereunder:
(a) To make such repairs to the Premises as Lessor may deem
necessary or desirable; and
(b) To inspect the Premises after giving reasonable notice
during the business hours of Lessee.
In exercising any of the foregoing rights, Lessor shall at all times exercise
due care and perform the foregoing in such manner as will cause the least
disturbance to Lessee as is practicable. Except in the event of an emergency or
a hazardous condition pursuant to which the Lessor may forcibly enter the
Premises, Lessor shall enter the Premises only after providing Lessee
twenty-four (24) hours prior notice in accordance with Section 25.4 hereof.
SECTION 11 Insurance and Casualty Events.
(a) At all times during the term of this Lease, the
Lessee shall maintain the following insurance:
(i) During any period of repair or restoration,
builder's "all risk" insurance in an amount equal to not less than the
full insurable value of the Premises against such risks (including,
without limitation, fire and extended coverage and collapse of the
Improvements to agreed limits) as Lender may request, in form and
substance acceptable to Lender;
(ii) Insurance with respect to the Improvements,
Equipment and Inventory against any peril included within the
classification "All Risks of Physical Loss" with extended coverage in
amounts at all times sufficient to prevent the Lessee from becoming a
co-insurer within the terms of the applicable policies, but in any
event such insurance shall be maintained in an amount equal to the full
insurable value of the Improvements, Equipment and Inventory located on
the Premises, the term "full insurable value" to mean the actual
replacement cost of the Improvements, Equipment and Inventory (without
taking into account any depreciation) determined annually by an insurer
or by the Lessee or, at the request of the Lender, by an independent
insurance broker (subject to the Lender's reasonable approval)
including an endorsement covering acts of municipal authorities
including increased cost of construction and demolition;
(iii) Comprehensive general liability insurance,
including contractual injury, bodily injury, broad form death and
property damage liability, and umbrella liability insurance against any
and all claims, including all legal liability to the extent insurable
imposed upon the Lessee and all court costs and attorneys' fees and
expenses, arising out of or connected with the possession, use,
leasing, operation, maintenance or condition of the Premises in such
amounts as are generally required by institutional lenders for
properties comparable to the Premises but in no event with limits for
the Premises of less than $1,000,000 per occurrence if the Premises
does not have elevators and $3,000,000 if there are elevators on the
Premises;
(iv) Statutory workers' compensation insurance (to
the extent the risks to be covered thereby are not already covered by
other policies of insurance maintained by the Lessee), with respect to
any work on or about the Premises;
(v) Business interpretation and/or loss of "rental
value" insurance for the Premises in an amount equal to eighteen months
estimated Gross Revenue attributable to the Premises and based on the
Gross Revenue for the immediately preceding year and otherwise
sufficient to avoid any co- insurance penalty;
(vi) If all or any portion of the Improvements, or
any portion of the land which, if lost or flooded, is located within a
federally designated flood hazard zone, flood insurance in an amount
equal to the lesser of the full insurable value of the Premises or the
maximum amount available;
(vii) Insurance against loss or damage from (A)
leakage of sprinkler systems and (B) explosion of steam boilers, air
conditioning equipment, pressure vessels or similar apparatus now or
hereafter installed at the Premises, in such amounts as the Lender may
from time to time require and which are customarily required by
institutional mortgagees with respect to similar properties similarly
situated; and
(viii) Such other insurance with respect to the
Improvements, Equipment and Inventory located on the Premises against
loss or damage as is requested by the Lender (including without
limitation liquor/dram insurance and earthquake insurance) provided
such insurance is of the kind from time to time customarily insured
against and in such amounts as are generally required by institutional
lenders for properties comparable to the Premises or which Lender may
deem necessary in its reasonable discretion.
(b) The Lessee will maintain the insurance coverage described
in Section 11 with companies acceptable to Lender and with a claims paying
ability of not less than AA by Standard and Poors Rating Services and "AA" (or
its equivalent) by any other Rating Agency. All insurers providing insurance
required by this Lease shall be authorized to issue insurance in the state where
the Premises is located.
The insurance coverage required under Section 11(a) may be effected
under a blanket policy or policies covering the Premises and other property and
assets not constituting a part of the Premises; provided that any such blanket
policy shall specify, except in the case of public liability insurance, the
portion of the total coverage of such policy that is allocated to the Premises
and Equipment and Inventory located thereof, and any sublimits in such blanket
policy applicable to the Premises, which amounts shall not be less than the
amounts required pursuant to Section 11(a) and which shall in any case comply in
all other respects with the requirements of this Section 11.
(c) All insurance policies shall be in such form and with such
endorsements and in such amounts as shall be satisfactory to Lender (and Lender
shall be entitled to approve amounts, form, risk coverage, deductibles, loss
payees and insureds). The policy referred to in Section 11(a)(ii) shall contain
a replacement cost endorsement and a waiver of depreciation. Originals of all of
the above-mentioned insurance policies have been delivered to and shall be held
by the Lender. All such policies shall name the Lender as additional
insureds/loss payees, shall provide that all Insurance Proceeds be payable to
the Lender as set forth in Section 11(d), and shall contain: (i) "Non
Contributory Standard and Lender Clause" and a Lender's Loss Payable Endorsement
(Form 438 BFUNS) or their equivalents naming Lender as the person to which all
payments shall be paid, (ii) a waiver of subrogation endorsement as to the
Lender and its assigns providing that no policy shall be impaired or invalidated
by virtue of any act, failure to act, negligence of, or violation of
declarations, warranties or conditions contained in such policy by the Lessee,
the Lender or any other named insured, additional insured or loss payee, except
for the willful misconduct of the Lender knowingly in violation of the
conditions of such policy; (iii) an endorsement indicating that neither the
Lender nor the Lessee shall be or be deemed to be a co-insurer with respect to
any risk insured by such policies and shall provide for a deductible per loss of
an amount not more than that which is customarily maintained by prudent owners
of property of the same type and quality as the Premises, but in no event in
excess of $2,000; (iv) a provision that such policies shall not be canceled or
amended, including, without limitation, any amendment reducing the scope or
limits of coverage, without at least 30 days prior written notice to the Lender
in each instance; and (v) include effective waivers by the insurer of all claims
for insurance premiums against any loss payees, additional insureds and named
insureds (other than the Lessee). Certificates of insurance with respect to all
renewal and replacement policies shall be delivered to the Lender not less than
ten days prior to the expiration date of any of the insurance policies required
to be maintained hereunder which certificates shall bear notations evidencing
payment of applicable premiums and originals of such insurance policies shall be
delivered to the Lender promptly after the Lessee's receipt thereof. If the
Lessee fails to maintain and deliver to the Lender the original policies or
certificates of insurance required by this Lease, the Lender may, at its option,
after written notice to Lessee, procure such insurance, and the Lessee shall
reimburse the Lender for the amount of all premiums paid by the Lender thereon
promptly, after demand by the Lender, with interest thereon at the Default Rate
from the date paid by the Lender to the date of repayment. The aggregate
deductible applicable to all insurance policies required by this Lease shall not
exceed $2,000.
The Lender shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and the Lessee hereby expressly assumes full
responsibility therefor and all liability, if any, with respect thereto.
(d) The Lender shall be entitled to receive and collect all
Insurance Proceeds and all of the Insurance Proceeds are hereby assigned to the
Lender. The Lessee shall execute such further assignments of the Insurance
Proceeds as the Lender may from time to time reasonably require. Without
limiting the generally of the foregoing, following the occurrence of any
casualty or damage involving the Premises or any part thereof, the Lessee shall
give prompt notice thereof to the Lender and shall cause all Insurance Proceeds
payable as a result of such casualty or damage to be paid to the Lender in
accordance with Section 13. Notwithstanding the foregoing, all checks and
payments shall be payable directly to Lender and shall be applied in accordance
with this Lease.
(e) Notwithstanding anything to the contrary set forth in
Section 11(d), the Lender agrees that the Lender shall make the Insurance
Proceeds (other than business interruption insurance proceeds, which shall be
held and disbursed as provided in Section 2.12(h) of the Loan Agreement)
available to the Lessee for the Lessee's repair, restoration and replacement of
the Improvements, Equipment and Inventory damaged or taken on the following
terms and subject to the Lessee's satisfaction of the following conditions:
(i) At the time of such loss or damage and at all
times thereafter while the Lender is holding any portion of such
Insurance Proceeds, there shall exist no Event of Default;
(ii) The Improvements, Equipment and Inventory for
which loss or damage has resulted shall be capable of being restored
(including replacements) to their pre-existing condition and utility in
all material respects with a value equal to or greater than prior to
such loss or damage, and shall be capable of being completed ten years
and six months prior to the Termination Date and prior to the
expiration of business interruption insurance;
(iii) The Lessee shall demonstrate to the Lender's
reasonable satisfaction the Lessee's ability to pay the Rent relating
to the Premises coming due during such restoration period;
(iv) Within 30 days from the date of such loss or
damage the Lessee shall have given the Lender a written notice electing
to have the Insurance Proceeds applied for such purpose;
(v) Within 60 days following the date of notice under
the preceding subparagraph (iv) and prior to any Insurance Proceeds
being disbursed to the Lessee, the Lessee shall have provided to the
Lender all of the following:
(1) if loss or damage exceeds $25,000, complete plans
and specifications for restoration, repair and replacement of the
Improvements, Equipment and Inventory damaged to the condition, utility
and value required by the preceding subparagraph (ii).
(2) if loss or damage exceeds $25,000, fixed-price or
guaranteed maximum cost construction contracts for completion of the
repair and restoration work in accordance with such plans and
specifications,
(3) if loss or damage exceeds $25,000, builder's risk
insurance for the full cost of construction with the Lender named under
a standard Lender loss-payable clause,
(4) such additional funds as in the Lender's
reasonable opinion are necessary to complete the repair, restoration
and replacement, and
(5) if loss or damage exceeds $25,000, copies of all
permits and licenses necessary to complete the work in accordance with
the plans and specifications.
(vi) If loss or damage exceeds $25,000, the Lender may, at the
Lessee's expense to the extent such expenses and fees are reasonable retain an
independent inspector to review and approve plans and specifications and
completed construction and to approve all requests for disbursement, which
approvals shall be conditions precedent to release of the Insurance Proceeds as
work progresses;
(vii) No portion of such Insurance Proceeds shall be made
available by the Lender for purposes which are not directly attributable to the
cost of repairing, restoring or replacing the Improvements, Equipment and
Inventory for which a loss or damage has occurred unless the same are covered by
such insurance;
(viii) The Lessee shall commence such work within 60 days
after such loss or damage and shall diligently pursue such work to completion;
(ix) If loss or damage exceeds $25,000, each disbursement by
the Lender of such Insurance Proceeds shall be funded subject to conditions and
in accordance with disbursement procedures which a commercial construction
lender would typically establish in the exercise of sound banking practices and
shall be made only upon receipt of disbursement requests on an AIA G702/703 form
(or similar form approved by the Lender) signed and certified by the Lessee and
its architect and general contractor with appropriate invoices, lien waivers and
any other documents, instruments or things which may be required by the Lender;
(x) The Lender shall have a first lien and security interest
in all building materials and completed repair and restoration work and in all
fixtures and equipment acquired with such Insurance Proceeds, and the Lessee
shall execute and deliver such mortgages, deeds of trust, security agreements,
financing statements and other instruments as the Lessor or Lender shall
reasonably request to create, evidence, or perfect such lien and security
interest; and
(xi) In the event and to the extent such Insurance Proceeds
are not required to be used for the repair, restoration and replacement of the
Improvements, Equipment and Inventory for which a loss or damage has occurred,
or in the event the Lessee fails to timely make such election or having made
such election fails to timely comply with or is otherwise unable to satisfy the
terms and conditions set forth herein, upon five Business Days prior notice to
the Lessee, the Lender shall be entitled without consent from the Lessee to
apply such Insurance Proceeds, or the balance thereof, at the Lender's option
either (x) to the full or partial payment or prepayment of the Loan Obligations
in accordance with Section 2.7 of the Loan Agreement, or (y) to the repair,
restoration and/or replacement of all or any part of such Improvements,
Equipment and Inventory for which a loss or damage has occurred.
(f) The Lessee appoints the Lender to act after an Event of
Default as the Lessee's attorney-in-fact, coupled with an interest, to cause the
issuance of or an endorsement of any policy to bring the Lessee into compliance
herewith and, as limited above, at the Lender's sole option, to make any claim
for, receive payment for, and execute and endorse any documents, checks or other
instruments in payment for loss, theft, or damage covered under any such
insurance policy; however, in no event will the Lender be liable for failure to
collect any amounts payable under any insurance policy.
(g) The Lender shall be entitled at its option to participate
in any compromise, adjustment or settlement in connection with any claims for
loss, damage or destruction under any policy or policies of insurance, in excess
of $25,000, and the Lessee shall within ten Business Days after request therefor
reimburse the Lender for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and disbursements) incurred by the Lender in
connection with such participation. The Lessee shall not make any compromise,
adjustment or settlement in connection with any such claim in excess of $25,000
without the prior written approval of the Lender.
SECTION 12 Condemnation.
(a) Should the Premises or any part thereof be taken or
damaged by reason of a Taking, or should the Lessee receive any written notice
regarding any such proceeding, the Lessee shall give prompt notice thereof to
the Lender.
(b) The Lender shall be entitled to all Condemnation Proceeds,
and all such compensation, awards, damages and other payments or relief,
together with all rights and causes of action relating thereto or arising out of
any Taking, are hereby assigned to the Lender. The Lessee shall execute such
further assignments of the Condemnation Proceeds as the Lender may from time to
time require. Without limiting the generality of the foregoing, following the
occurrence of any Taking involving the Premises or any part thereof, the Lessee
shall give prompt notice thereof to the Lender and shall cause all Condemnation
Proceeds payable as a result of such Taking to be paid to the Lender in
accordance with Section 13.
(c) Notwithstanding anything to the contrary in paragraph (b)
above, the Lender agrees that the Lender shall make the Condemnation Proceeds
available to the Lessee for the Lessee's repair, restoration and replacement of
the Improvements, Equipment and Inventory affected by the Taking on the
following terms and subject to the Lessee's satisfaction of the following
conditions:
(i) At the time of such Taking and at all times
thereafter while the Lender is holding any portion of such
Condemnation Proceeds, there shall exist no Event of Default;
(ii) The Improvements, Equipment and Inventory
affected by the Taking shall be capable of being restored and
utility in all material respects with a value equal to or
greater than prior to such Taking and shall be capable of
being completed ten years and six months prior to the
Termination Date;
(iii) The Lessee shall demonstrate to the Lender's
reasonable satisfaction the Lessee's ability to pay the Rent
relating to the Premises coming due during such restoration
period;
(iv) Within 30 days from the date of such Taking the
Lessee shall have given the Lender a written notice electing
to have the Condemnation Proceeds applied for such purpose;
(v) Within sixty (60) days following the date of
notice under the preceding subparagraph (iv) and prior to any
Condemnation Proceeds being disbursed to the Lessee, the
Lessee shall have provided to the Lender all of the following:
(1) if loss or damage exceeds $25,000,
complete plans and specifications for
restoration, repair and replacement of the
Improvements, Equipment and Inventory
damaged to the condition, utility and value
required by the preceding subparagraph (ii),
(2) If loss or damage exceeds $25,000,
fixed-price or guaranteed maximum cost
construction contracts for completion of the
repair and restoration work in accordance
with such plans and specifications,
(3) if loss or damage exceeds $25,000,
builder's risk insurance for the full cost
of construction with the Lender named under
a standard Lender loss-payable clause,
(4) such additional funds as in the
Lender's reasonable opinion are necessary
to complete the repair, restoration and
replacement, and
(5) if loss or damage exceeds $25,000,
copies of all permits and licenses
necessary to complete the work in
accordance with the plans and
specifications;
(vi) If loss or damage exceeds $25,000, the Lender may, at the
Lessee's expense to the extent such expenses and fees are reasonable, retain an
independent inspector to review and approve plans and specifications and
completed construction and to approve all requests for disbursement, which
approvals shall be conditions precedent to release of the Condemnation Proceeds
as work progresses;
(vii) No portion of such Condemnation Proceeds shall be made
available by the Lender for purposes which are not directly attributable to the
cost of repairing, restoring or replacing the Improvements, Equipment and
Inventory;
(viii) The Lessee shall commence such work within sixty (60)
days after such Taking and shall diligently pursue such work to completion;
(ix) If loss or damage exceeds $25,000, each disbursement by
the Lender of such Condemnation Proceeds shall be funded subject to conditions
and in accordance with disbursement procedures which a commercial construction
lender would typically establish in the exercise of sound banking practices and
shall be made only upon receipt of disbursement requests on an AIA G702/703 form
(or similar form approved by the Lender) signed and certified by the Lessee and
its architect and general contractor with appropriate invoices, lien waivers and
any other instruments, documents and things which Lender may require;
(x) The Lessor shall have a first lien and security interest
in all building materials and completed repair and restoration work and in all
fixtures and equipment acquired with such Condemnation Proceeds, and the Lessee
shall execute and deliver such mortgages, deeds of trust, security agreements,
financing statements and other instruments as the Lessor or Lender shall
reasonably request to create, evidence or perfect such lien and security
interest; and
(xi) In the event and to the extent such Condemnation Proceeds
are not used for the repair, restoration and replacement of the Improvements,
Equipment and Inventory affected by the Taking, or in the event the Lessee fails
to timely make such election or having made such election fails to timely comply
with or is otherwise unable to satisfy the terms and conditions set forth
herein, upon five Business Days prior notice to the Lessee, the Lender shall be
entitled without consent from the Lessee to apply such Condemnation Proceeds, or
the balance thereof, at the Lender's option either (x) to the full or partial
payment or prepayment of the Loan Obligations in accordance with Section 2.7(a)
of the Loan Agreement, or (y) to the repair, restoration and/or replacement of
all or any part of such Improvements, Equipment and Inventory affected by the
Taking.
(d) The Lender shall be entitled at its option to participate
in any compromises, adjustment or settlement in connection with any Taking
involving an amount in controversy in excess of $25,000, and the Lessee shall
within ten Business Days after request therefor reimburse the Lender for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
disbursements) incurred by the Lender in connection with such participation. The
Lessee shall not make any compromises, adjustment or settlement in connection
with any such claim in excess of $25,000 without the prior written approval of
the Lender.
SECTION 13 Insurance and Condemnation Proceeds. Subject to Section 11
and Section 12, Insurance Proceeds and Condemnation Proceeds (collectively, the
"Loss Proceeds") not made available to Lessee pursuant to such Sections shall be
applied in accordance with Section 2.12(h) of the Loan Agreement.
SECTION 14 Alteration of Premises. The Lessee shall not renovate,
remodel or otherwise alter the Premises without first obtaining the written
consent of Lender and Lessor. With respect to any renovation performed on the
Premises to which Lessor may consent, the Lessee hereby agrees to:
(a) provide plans and/or blueprints describing the extent
and scope of the work to be performed prior to the commencement of
any work on the Premises; and
(b) any renovation and construction shall be performed in a
good and workmanlike manner and in accordance with the ordinances of
the governmental agencies having jurisdiction over the Premises.
The Lessor shall not be liable for the payment of any expense incurred or for
the value of any work done or material furnished in connection with any
alterations, replacements, changes, additions, repairs or renovations made to
the Premises. If by any reason of any matter set forth in this Section 14, any
mechanic's or other lien, charge or order for the payment of money shall be
filed against the Premises against the Lessor and regardless of whether or not
such lien, charge or order is valid or enforceable as such, Lessee shall, at its
own cost and expenses, cause the same to be bonded or insured over within ninety
(90) days after Lessee shall have received notice of the filing thereof. The
amount of any such bond shall be in an amount as is satisfactory to Lender and,
in any event, equal to 125% of the amount of the lien. In the event of the
failure of the Lessee to bond or otherwise insure over or discharge within such
period any such lien, charge or order which is hereunder required to be paid or
discharged by the Lessee, the Lessor may pay such items or discharge such
liability by payment, or bond or both after delivering a written notice thereof
to the Lessee, and Lessee shall repay to Lessor, upon demand, the amount of such
liability or bond, plus interest at the Default Rate. In any event, any such
lien shall be subordinate to the rights of the Lessor as the owner of the
Premises. The Lessee hereby agrees to protect and defend the Lessor from all
liability or claims asserted against the Lessor by reason of any lien described
in this Section 14.
SECTION 15 Compliance with Law. Lessee agrees, for itself, its
employees, agents, clients, customers, invitees and guests, to comply with all
statutes, rules and regulations promulgated by any Governmental Authority,
including but not limited to standards, rules and regulations of the New Jersey
Department of Public Health.
SECTION 16 Environmental; Hazardous Substances on Premises. In the
event that the Lessee brings onto or permits the entry onto the Premises any
hazardous waste or any chemical or substance which constitutes a threat to the
life, safety or welfare of any individual, it shall be Lessee's duty and
obligation, at its sole cost and expense to promptly remove same. Lessee shall
indemnify, defend and hold Lessor harmless from and against any cost, loss,
damage or expense (including attorneys' fees and costs) which may be incurred by
Lessor as a result of Lessee's failure to comply with this provision, and
Lessee, at its sole cost and expense, and after demand by Lessor, shall
undertake the defense of Lessor for any action or litigation which may be
instituted, wherein Lessor may be named as a party, arising out of any of any of
the foregoing. This covenant shall survive the termination of this Lease.
SECTION 17 Real Estate Brokers. The parties hereby represent to each
other that no real estate broker has been engaged, employed or consulted in
connection with this Lease.
SECTION 18 Lessee's Representations and Warranties. Lessee represents
and warrants as follows:
SECTION 18.1 Organization. Lessee (i) is a duly organized and validly
existing corporation in good standing under the laws of the State of its
formation (ii) has the requisite power and authority to carry on its business as
now being conducted, and (iii) has the requisite corporate power to execute and
deliver, and perform its obligations under this Lease.
SECTION 18.2 Authorization. The execution and delivery by Lessee
of this Lease, Lessee's performance of its obligations thereunder and the
creation of the security interests and liens provided for in this Lease (i)
have been duly authorized by all requisite corporate action on the part of
Lessee, (ii) will not violate any provision of any Legal Requirements, any
order of any court or other Governmental Authority, the articles of formation
or operating agreement of Lessee or any indenture or material agreement or
other instrument to which Lessee is a party or by which Lessee is bound,
(iii) will not be in conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under, or result in the
creation or imposition of any Lien of any nature whatsoever upon any of the
property or assets of Lessee pursuant to, any such indenture or material
agreement or instrument. Other than those obtained or filed on or prior to the
Closing Date, Lessee is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any
Governmental Authority or other agency in connection with or as a condition to
the execution, delivery or performance of this Lease.
SECTION 18.3 Single-Purpose Entity.
(i) Lessee at all times since its formation has been,
and will continue to be, a duly formed and existing corporation, and,
as of the Closing Date, will be a Single-Purpose Entity.
(ii) Lessee at all times since its formation has
complied, and will continue to comply, with the provisions of its
articles of incorporation and the laws of the State of its formation
relating to corporations.
(iii) All customary formalities regarding the
existence of Lessee have been observed at all times since its formation
and will continue to be observed.
(iv) Lessee has been at all times since its formation
and will continue to be adequately capitalized in light of the nature
of its business.
SECTION 18.4 Litigation. There are no actions, suits or proceedings at
law or in equity by or before any Governmental Authority or other agency now
pending and served or, to the knowledge of Lessee, threatened against Lessee or
the Premises.
SECTION 18.5 Agreements. Lessee is not a party to any agreement or
instrument or subject to any restriction which is reasonably likely to have a
Material Adverse Effect. Lessee is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by
which Lessee or the Premises is bound.
SECTION 18.6 No Bankruptcy Filing. Lessee is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of Lessee's
assets or property, and Lessee has no knowledge of any Person contemplating
the filing of any such petition against it.
SECTION 18.7 Full and Accurate Disclosure. No statement of fact
made by or on behalf of Lessee in this Lease contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact presently known to
Lessee which has not been disclosed to Lender which adversely affects, nor as
far as Lessee can foresee, might materially affect the business, operations or
condition (financial or otherwise) of Lessee.
SECTION 18.8 Location of Chief Executive Offices. The location of
Lessee's principal place of business and chief executive office is the Premises.
SECTION 18.9 Compliance. Lessee, the Premises and Lessee's use thereof
and operations thereat comply in all material respects with all applicable Legal
Requirements, including without limitation, building and zoning ordinances and
codes. Lessee is not in default or violation of any order, writ, injunction,
decree or demand of any Governmental Authority, the violation of which is
reasonably likely to have a Material Adverse Effect.
SECTION 18.10 Other Debt and Obligations. Lessee has no material
financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Lessee is a party incurred
in the ordinary course of business relating to the ownership and operation of
the Premises or by which Lessee or the Premises is bound, other than unsecured
trade payables incurred in the ordinary course of business relating to the
ownership and operation of the Premises which are paid within sixty (60) days of
the date incurred, except for outstanding trade payables as of the Commencement
Date which do not require payment within sixty (60) days.
SECTION 18.11 ERISA. Each Plan, and, to the knowledge of Lessee, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, its terms and the
applicable provisions of ERISA, the Code and any other federal or state law.
SECTION 18.12 Solvency. Lessee (i) has not entered into this Lease
with the actual intent to hinder, delay, or defraud any creditor, and (ii) has
received reasonably equivalent value in exchange for its obligations under this
Lease. Giving effect to the transactions contemplated hereby, the fair saleable
value of Lessee's assets exceeds and will, immediately following the execution
and delivery of this Lease, exceed Lessee's total liabilities, including,
without limitation, subordinated, unliquidated or disputed liabilities or
Contingent Obligations. The fair saleable value of Lessee's assets is and will,
immediately following the execution and delivery of this Lease, be greater than
Lessee's probable liabilities, including the maximum amount of its Contingent
Obligations or its debts as such debts become absolute and matured. Lessee's
assets do not and, immediately following the execution and delivery of this
Lease, will not, constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. Lessee does not intend to, and does
not believe that it will, incur debts and liabilities (including, without
limitation, Contingent Obligations and other commitments) beyond its ability to
pay such debts as they mature (taking into account the timing and amounts to be
payable on or in respect of obligations of Lessee).
SECTION 18.13 Not Foreign Person. Lessee is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
SECTION 18.14 Enforceability. This Lease is the legal, valid and
binding obligation of Lessee, enforceable against Lessee in accordance with its
terms, subject to bankruptcy, insolvency and other limitations on creditors'
rights generally and to equitable principles.
SECTION 18.15 Investment Company Act; Public Utility Holding Company
Act. Lessee is not (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.
SECTION 18.16 No Setoff or Defense. Lessee does not have any defense or
right of offset with respect to its rights, duties and obligations under this
Lease or any claim of right against Lessor.
SECTION 18.17 Labor Matters. No collective bargaining agreement will
have a Material Adverse Effect, and all obligations which accrued under any
collective bargaining agreement prior to the date hereof have been satisfied
in full without exception.
SECTION 18.18 Financial Information. All historical financial data
concerning Lessee and the Premises that has been delivered by Lessee to Lender
is true, complete and correct in all material respects. Since the delivery of
such data, there has been no material adverse change in the financial position
of Lessee or the Premises, or in the results of operations of Lessee. Lessee has
not incurred any obligation or liability, contingent or otherwise, not reflected
in such financial data which might have a Material Adverse Effect.
SECTION 18.19 Condemnation. No Taking has been commenced or, to
Lessee's knowledge, is contemplated with respect to all or any portion of the
Premises or for the relocation of roadways providing access to the Premises.
SECTION 18.20 Use of Facilities. The Premises are used exclusively as a
nursing home and uses ancillary thereto.
SECTION 18.21 Certificate of Occupancy. Lessee has obtained (in its own
name), all Permits necessary to use and operate the Premises for the Permitted
Uses. The use being made of the Premises is in conformity in all material
respects with the certificate of occupancy and/or Permits for the Premises and
any other restrictions, covenants or conditions affecting the Premises.
SECTION 18.22 Intellectual Property. All material trademarks, trade
names and service marks that Lessee owns or has pending, or under which it is
licensed, are in good standing and uncontested. There is no right under any
trademark, trade name or service xxxx necessary to the business of Lessee as
presently conducted or as Lessee contemplates conducting its business. Lessee
has not infringed, is not infringing, and has not received notice of
infringement with respect to asserted trademarks, trade names and service marks
of others. To Lessee's knowledge, there is no infringement by others of material
trademarks, trade names and service marks of Lessee.
SECTION 18.23 Conduct of Business. Lessee does not conduct its business
also known as, doing business as or under any other than as set forth in the
Loan Agreement.
SECTION 18.24 Nursing Home Representations.
SECTION 18.25 Compliance with Laws. Lessee and the Premises comply with
all applicable federal, state and local laws, regulations, quality and safety
standards, accreditation standards and requirements of the applicable state
Department of Health (each a "DOH") and all other Governmental Authorities
including, without limitation, those relating to the quality and adequacy of
medical care, distribution of pharmaceuticals, rate setting, equipment,
personnel, operating policies, additions to facilities and services and fee
splitting.
SECTION 18.26 Licenses. All governmental licenses, permits, regulatory
agreements or other approvals or agreements necessary or desirable for the use
and operation of the Premises as intended are held by the Lessee and are in full
force and effect, including, without limitation, a valid certificate of need
("CON") or similar certificate, license, or approval issued by the DOH for the
requisite number of beds, and approved provider status in any approved provider
payment program (collectively, the "Licenses").
SECTION 18.27 Ownership of Licenses. The Licenses, including without
limitation, the CON:
(a) may not be, and have not been, transferred to any
location other than the Premises;
(b) are held free from restrictions or known conflicts which
would materially impair the use or operation of the Premises as
intended, and are not provisional, probationary or restricted in any
way;
(c) have not been pledged as collateral security for any
other loan or indebtedness.
SECTION 18.28 Medicare and Medicaid Compliance. The Premises is in
compliance with all requirements for participation in Medicare and Medicaid,
including without limitation, the Medicare and Medicaid Patient and Program
Protection Act of 1987. The Premises are in conformance in all material respects
with all insurance, reimbursement and cost reporting requirements, and has a
current provider agreement which is in full force and effect under Medicare and
Medicaid as applicable on the Closing Date.
SECTION 18.29 Patient Care Agreements. There are no patient or resident
care agreements with patients or residents or with any other persons which
deviate in any material adverse respect from the standard form customarily used
at the Premises.
SECTION 18.30 Patient Records. All patient or resident records at the
Premises, including patient or resident trust fund accounts, are true and
correct in all material respects.
SECTION 18.31 Management and Operating Agreements. Any existing
Management Agreement with respect to the Premises is in full force and effect
and is not in default by any party thereto.
SECTION 19 Lessee's Affirmative Covenants. During the term of this
Lease, Lessee covenants and agrees as follows:
SECTION 19.1 Existence; Compliance with Legal Requirements; Insurance.
Lessee shall do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its existence as a corporation, rights, Licenses,
Permits and franchises necessary for the conduct of its business and comply in
all material respects with all Legal Requirements and Insurance Requirements
applicable to it and the Premises.
SECTION 19.2 Impositions and Other Claims. Lessee shall pay and
discharge or cause to be paid and discharged all Impositions, as well as all
lawful claims for labor, materials and supplies or otherwise, which could become
a Lien.
SECTION 19.3 Litigation. Lessee shall give prompt written notice to
Lessor and Lender of any litigation or governmental proceedings pending or
threatened against Lessee which is reasonably likely to have a Material Adverse
Effect.
SECTION 19.4 Copies of Notices. Lessee shall immediately transmit to
Lessor and Lender copies of any citations, orders, notices or other written
communications received from any Person or any Governmental Authority and any
notices, reports or other written communications submitted to any Governmental
Authority with respect to Lessee or the Premises.
SECTION 19.5 Access to Facilities. Lessee shall permit Lessors and
Lender and agents, representatives and employees of Lessor and Lender to inspect
Lessee's Facility or any part thereof at such reasonable times as may be
requested by Lessor or Lender upon advance notice, subject, however, to the
rights of the tenants, occupants and guests of the Premises.
SECTION 19.6 Insurance Benefits. Lessee shall cooperate with Lessor and
Lender in obtaining for Lender the benefits of any Insurance Proceeds lawfully
or equitably payable to Lender in connection with the Premises, and Lender shall
be reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys' fees and disbursements and the payment by Lessee of the
expense of an Appraisal on behalf of Lender in case of a fire or other casualty
affecting the Premises or any part thereof, but excluding internal overhead,
administrative and similar costs of Lender) out of such Insurance Proceeds, all
as more specifically provided in the Related Mortgage.
SECTION 19.7 Nursing Home Covenants. Lessee shall:
(i) operate the Premises in full compliance with the
laws;
(ii) operate the Premises or cause the Premises to
be operated in a manner such that the Licenses shall remain
in full force and effect; and
(iii) comply with all requirements for participation
in Medicare and Medicaid, and shall keep in full force and
effect a current provider agreement under Medicare and
Medicaid.
SECTION 19.8 Trade Indebtedness. Lessee will pay its trade payables
within sixty (60) days of the date incurred, except for outstanding trade
payables existing on the Closing Date which do not require payment within sixty
(60) days, unless Lessee is in good faith contesting Lessee's obligation to pay
such trade payables in a manner satisfactory to Lender (which may include
Lender's requirement that Lessee post security with respect to the contested
trade payable).
SECTION 20 Lessee's Negative Covenants. During the term of this Lease,
Lessee covenants and agrees that it will not do any of the following, indirectly
or directly, without the prior written consent of Lessor and Lender:
SECTION 20.1 Liens on the Premises. Incur, create, assume, become or be
liable in any manner with respect to, or permit to exist, any Lien with respect
to the Premises, except: (i) Liens in favor of Lender, and (ii) the Permitted
Exceptions.
SECTION 20.2 Transfer. Allow any Transfer to occur, terminate the
Management Agreement, or enter into a new management contract with respect to
the Premises.
SECTION 20.3 Other Indebtedness. Incur, except for unsecured trade
payables incurred in the ordinary course of business relating to the ownership
and operation of ownership of the Premises which are paid within sixty (60) days
of the date incurred, except for outstanding trade payables existing on the
Closing Date which do not require payment within sixty (60) days, create,
assume, become or be liable in any manner with respect to indebtedness.
SECTION 20.4 Change In Business. Cease to be a Single-Purpose Entity,
or make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.
SECTION 20.5 Debt Cancellation. Cancel or otherwise forgive or release
any material claim or debt owed to Lessee by any Person, except for adequate
consideration or in the ordinary course of Lessee's business.
SECTION 20.6 Affiliate Transactions. Enter into, or be a party to, any
transaction with an Affiliate of Lessee, except in the ordinary course of
business and on terms which are no less favorable to Lessee or such Affiliate
than would be obtained in a comparable arm's length transaction with an
unrelated third party and, if the amount to be paid to the Affiliate pursuant to
the transaction or series of related transactions is greater than $50,000
(determined annually on an aggregate basis) fully disclosed to Lessor and Lender
in advance.
SECTION 20.7 Creation of Easements. Create, or permit Lessee's
Facility or any part thereof to become subject to, any easement, license or
restrictive covenant, other than a Permitted Exception.
SECTION 20.8 Assignment of Licenses and Permits. Assign or transfer
any of its interest in any Permits pertaining to Lessee's Facility, or assign,
transfer or remove or permit any other Person to assign, transfer or remove any
records pertaining to Lessee's Facility without the prior written consent of
Lender and Lessor, which consent may be granted or refused in Lender's sole
discretion.
SECTION 20.9 Place of Business. Change its chief executive office or
its principal place of business or place where its books and records are kept
without giving Lender at least 30 days' prior written notice thereof and
promptly providing Lender such information as Lender may request in connection
therewith.
SECTION 20.10 Nursing Home Negative Covenants: Lessee shall not:
(i) transfer the Licenses to any location other
than the Premises nor shall Lessee pledge the Licenses as
collateral security;
(ii) rescind, withdraw, revoke, amend, modify,
supplement, or otherwise alter the nature, tenor or scope of
the Licenses for the Premises;
(iii) amend or otherwise change the Premises's
authorized bed capacity to decrease the number of beds
approved by the DOH;
(iv) replace or transfer all or any part of the
Premises's beds to another site or location;
(v) jeopardize in any manner its participation with
any Third-Party Payors' Programs to which Lessee is subject
as of the Closing Date;
(vi) enter into any patient or resident care
agreements with patients or residents or with any other
persons which deviate in any material adverse respect in the
standard form customary used at the Premises; or
(vii) other than in the normal course of business,
change the terms of any of the Third Party Payors' Programs or
its normal billing payment or reimbursement policies and
procedures with respect thereto (including without limitation
the amount and timing of finance charges, fees and
write-offs).
SECTION 21 Lessee's Default and Remedies.
SECTION 21.1 Default by Lessee. Each of the following shall constitute
an "Event of Default" by Lessee hereunder:
(a) If Lessee shall fail to pay any installment of Base Rent
or Additional Rent as and when the same shall become due and payable;
or
(b) Lessee vacates or fails to operate the Nursing Home or
removes its property from the Premises and fails to occupy the Premises
with or without notice to Lessor or notifies Lessor that it is vacating
the Premises or otherwise abandons the Premises; or
(c) This Lease or the Premises or any part of the Premises is
taken upon execution or by other process of law directed against
Lessee, or is taken upon or subjected to any attachments by any
creditor of Lessee or claimant against Lessee, and the attachment is
not discharged within fifteen (15) days after its levy; or
(d) Lessee files a petition in bankruptcy or insolvency or for
reorganization or arrangement under the bankruptcy laws of the United
States or under any insolvency act of any state, or is dissolved, or
makes an assignment for the benefit of creditors; or
(e) Involuntary proceedings under any bankruptcy laws or
insolvency act or for the dissolution of Lessee are instituted against
Lessee or any principal of the Lessee, or any guarantor hereof, or a
receiver or trustee is appointed for all or substantially all of
Lessee's property, and the proceeding is not dismissed or the
receivership or trusteeship is not vacated within sixty (60) days after
institution or appointment; or
(f) If an order, judgment or decree shall be entered by any
court adjudicating the Lessee a bankrupt or insolvent, or approving a
petition seeking reorganization of the Lessee or guarantor of this
Lease or appointing a receiver, trustee or liquidator of the Lessee, or
of all or a substantial part of its assets, and such order, judgment or
decree shall continue unstayed and in effect for any period of sixty
(60) days; or
(g) Lessee shall file an answer admitting the material
allegations of a petition filed against the Lessee in any bankruptcy,
reorganization or insolvency proceeding or under any laws relating to
the relief of debtors, readjustment or indebtedness, reorganization,
arrangements, composition or extension; or
(h) Lessee shall fail to comply with any written requirement
of any governmental body relating to the physical structure of the
Nursing Home and its facilities (as distinguished from staffing
requirements) which would prevent the Nursing Home from being licensed
as a skilled care facility, and such failure shall continue for thirty
(30) days, provided that the time to cure such default shall not exceed
the time allowed by the State to cure the failure to comply, and
provided further that if Lessee promptly begins to cure during such
thirty (30) day notice period and diligently pursues the same to
completion (and the governmental body allows Lessee additional time to
cure) Lessee shall not be in default hereunder during such additional
time allowed by the governmental body, and provided further that the
Lessee at its expense may, after prior notice to the Lessor, contest by
appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence the validity or application of any
such asserted deficiency, in whole or in part, as long as the Lessee
shall have furnished to the Lessor additional security in respect of
the claim being contested or the loss or damage that may result from
the Lessee's failure to prevail in such contest in such amount as may
be reasonably requested by the Lessor but in no event less than 125% of
the amount of such claim; or
(i) The termination by the New Jersey Department of Public
Health of the Nursing Home license because Lessee has been found to be
ineligible to operate nursing home facilities within the State of New
Jersey unless and except to the extent stayed by administrative order
or by court; or
(j) Subject to Lessee's right to cure as hereinafter set
forth, the State of New Jersey commences proceedings to (i) revoke the
Nursing Home license of Lessee, (ii) revoke the Medicaid certification
or participation of Nursing Home; provided, however, that it shall not
be an Event of Default hereunder so long as Lessee timely files a
request for a hearing on any and/or all aforesaid revocations and
diligently pursues said hearing to its conclusion, including but not
limited to, Lessee's exhaustion of all rights to appeal in any and/or
all courts of competent jurisdiction, and so long as Lessee maintains
the New Jersey Department of Public Health license in full force and
effect; or
(k) Subject to Lessee's right to cure as hereinafter set
forth, the United States Government commences proceedings to (i) revoke
the certification of the Nursing Home for participation in Medicare or
(ii) to terminate the Nursing Home's participation in Medicare;
provided, however, that it shall not be an Event of Default hereunder
so long as Lessee timely files a request for a hearing on any and/or
all aforesaid revocations and/or terminations and diligently pursues
said hearing(s) to its conclusion, including but not limited to,
Lessee's exhaustion of all rights to appeal in any and/or all courts of
competent jurisdiction. In the event the ultimate outcome of said
hearing and/or appeal is determined favorably to Lessee and no
revocation and/or termination occurs, it shall not be an Event of
Default hereunder; or
(l) The Nursing Home ceases to participate in Medicare or
Medicaid; or
(m) If Lessee shall fail to perform any other agreements,
terms, covenants or conditions required hereof on Lessee's part to be
performed and such non-performance shall continue for a period of
thirty (30) days after notice thereof by Lessor to Lessee or, if such
performance cannot be reasonably completed within such thirty (30) day
period, if Lessee shall not in good faith have commenced such
performance within such thirty (30) day period and shall not thereafter
diligently proceed therewith to completion.
(n) If Lessee shall fail to comply with any term or condition
of the Mortgage with which Lessor has encumbered the Premises or, if
applicable, any of the other Loan Documents.
(o) If Lessee shall fail to provide written notice to Lessor
and Lender within ten (10) days after Lessee receives a Survey Report
or other compliance report from any Governmental Authority.
(p) If Lessee shall attempt to make or make a Transfer in
violation of this Lease.
(q) The Adjusted Net Operating Income for all Facilities (as
defined in the Loan Agreement) calculated as of the end of any Interest
Accrual Period computed on the basis of the prior twelve (12) months is
less than 80% of Base NOI.
(r) If any representation or warranty made herein or in any
report, certificate, financial statement or other instrument, agreement
or document furnished by Lessee in connection with this Lease or any
other document executed and delivered by any Lessee, shall be false in
any material respect as of the date such representation or warranty was
made or remade and such Lessee fails to remedy such matters as to make
such representation or warranty true and correct within ten (10) days
after notice to such Lessee from Lessor or its successors or assigns in
the case of any matter which can be remedied by the payment of a sum of
money or for thirty (30) days after notice from Lessor or its
successors or assigns, in the case of any other matter.
SECTION 21.2 Lessor's Remedies. Upon the occurrence of an Event of
Default, the Lessor shall have the following non-exclusive rights:
(a) Lessor, at its option, shall have the right to: (i) cancel
and terminate this Lease, as well as all of the rights, title and
interest of Lessee hereunder by giving to Lessee and Lender written
notice of such cancellation and termination, and upon the giving of
such notice, this Lease and the Lease Term, as well as all of the
right, title and interest of Lessee hereunder shall expire in the same
manner and with the same force and effect, except as to Lessee's
liability, as if the date upon which such notice is given was the last
day of the Lease Term, or (ii) terminate Lessee's right to possession
by giving to Lessee written notice thereof, upon the receipt of which
Lessee shall peaceably and promptly vacate the Premises.
(b) Lessor, at its option, may, but shall not be obligated to,
make any payment required of Lessee herein or comply with any
agreement, term, covenant or condition, required hereby to be performed
by Lessee and the amount so paid, together with interest thereon at the
Default Rate, from the date of such payment by Lessor, shall be deemed
to be additional rent hereunder payable by Lessee and collectible as
such by Lessor with the next succeeding monthly installment of rent.
(c) Lessor shall have the right to enter the Premises for the
purpose of correcting or remedying any such default but neither any
such expenditure nor any such performance by Lessor shall be deemed to
waive or release Lessee's default or the right of Lessor to take such
action as may be otherwise permissible hereunder in the case of such
default.
(d) Lessor shall have all rights and remedies available to a
Lessor at law, in equity and under the Uniform Commercial Code.
SECTION 22 Lessor's Default and Remedies.
SECTION 22.1 Events of Default. The following events shall constitute
an "Event of Default" by Lessor:
(a) Any act or omission of the Lessor which prevents the
Lessee, its assignees, guests, agents or employees from using any
portion of the Premises for any Permitted Use; and
(b) Any failure of the Lessor to perform any other agreement,
term, covenant or condition required of the Lessor to be performed and
such non- performance continues for a period of thirty (30) days after
notice thereof by the Lessee to the Lessor or, if such performance
cannot be reasonably completed within such thirty (30) day period, if
Lessor shall not in good faith have commenced such performance within
such thirty day period and shall not thereafter diligently proceed
therewith to completion.
SECTION 22.2 Lessee's Remedies. Upon the occurrence of an Event of
Default by Lessor, the Lessee shall have the right to exercise any and all of
the following non-exclusive rights and remedies:
(a) The right to cancel and terminate this Lease by giving
at least ninety (90) days' prior written notice to Lessor and Lender;
and
(b) The right to exercise all rights and remedies available
at law or equity.
SECTION 23 Subordination/Attornment.
SECTION 23.1 Subordination.
(a) At the option of Lender and without requirement of a written
instrument, this Lease and Lessee's interest hereunder shall be subject and
subordinate to any Mortgage and the Loan Documents, or any method of financing
or refinancing now existing or hereafter placed against the land, and/or the
Premises; and to all renewals, modifications, replacements, consolidations and
extensions thereof. Upon written notice to Lessee, any mortgagee may elect, at
any time, to subordinate the lien of the Mortgage to that of this Lease, and
thereupon, this Lease shall be deemed prior to such Mortgage, without regard to
the execution or recording dates of the same.
(b) Lessee agrees to give to Lender notice simultaneously with any
notice given to Lessor to correct any default of Lessor as hereinabove provided,
and agrees that the holder of record of such first mortgage shall have the
right, within thirty (30) days after receipt of said notice, to correct or
remedy such default before Lessee may take any action under this Lease by reason
of such default, provided, that such thirty-day period shall be extended as long
as Lender is diligently pursuing the cure of such default.
SECTION 23.2 Attornment. At Lender's election, Lessee shall, in the
event of the sale or transfer or assignment of Lessor's interest in the
Premises, or in the event of any proceedings brought for the foreclosure of, or
in the event of exercise of the power of sale under the Mortgage, or in the
event of a transfer by a deed in lieu of foreclosure, made by Lessor covering
the Premises, attorn to the Lender or any purchaser and recognize such Lender or
purchaser as Lessor under this Lease, but no such Lender, or purchaser shall be
(a) liable for any act or omission of Lessor, (b) bound by any payment of Rent
or other charges made more than ten (10) days in advance of the due date
thereof, or be bound by any assignment, surrender, termination, cancellation,
amendment or modification of this Lease made without the express written consent
of Lender or purchaser.
SECTION 24 Further Covenants and Obligations; Grant of Security
Interest to Service Rent.
SECTION 24.1 Single Purpose Entity. Lessee represents, warrants and
covenants and agrees that it is a corporation, which, at all times since its
formation and thereafter (i) was organized solely for the purpose of operating
the Premises; (ii) has not and will not engage in any business unrelated to the
operation of the Premises; (iii) has not and will not have any assets other than
those related to the Premises; (iv) has not and will not engage in, seek or
consent to any dissolution, winding up, liquidation, consolidation, merger,
asset sale, transfer of shareholder interests, or amendment of its articles of
incorporation, (v) has and will have at least one Independent Director, (vi) the
board of directors may not take any action requiring the unanimous affirmative
vote of 100% of the members of the board of directors unless all of the
directors, including an Independent Director shall have participated in such
vote; (vii) will not fail to correct any known misunderstanding regarding its
separate identity; (viii) without the unanimous consent of all of the directors,
shall not file a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or to any other entity in which it
has a direct or indirect legal or beneficial ownership interest, (ix) has
maintained and will maintain its accounts, books and records separate from any
other person or entity, (x) has maintained and will maintain its books, records,
resolutions and agreements as official records, (xi) has not and will not
commingle its funds or assets with those of any other entity, (xii) has held and
will hold its assets in its own name, (xiii) has conducted and will conduct its
business in its name, (xiv) has maintained and will maintain its financial
statements, accounting records and other entity documents separate from any
other person or entity, (xv) has paid and will pay its own liabilities out of
its own funds and assets, (xvi) has observed and will observe all corporate
formalities, (xvii) has maintained and will maintain an arms-length relationship
with its affiliates, (xviii) has no indebtedness other than unsecured trade
payables incurred in the ordinary course of business relating to the operation
of Facility which are paid within sixty (60) days of the date incurred, except
outstanding trade payables existing on the Closing Date which do not require
payment within sixty (60) days, (xix) has not and will not assume or guarantee
or become obligated for the debts of any other entity or hold out its credit as
being available to satisfy the obligations of any other entity, (xx) has not and
will not acquire obligations or securities of its members or shareholders, (xxi)
has allocated and will allocate fairly and reasonably any overhead for any
shared expenses, including, without limitation, shared office space and uses
separate stationary, invoices and checks, (xxii) has not and will not pledge its
assets for the benefit of any other person or entity, (xxiii) has held and
identified itself and will hold itself out and identify itself as a separate and
distinct entity under its own name and not as a division or part of any other
person or entity, (xxiv) has not made and will not make loans to any person or
entity, (xxv) has not and will not identify its shareholders or any of its
affiliates as a division or part of it, (xxvi) has not entered and will not
enter into or be a party to, any transaction with its shareholders or its
affiliates, except in the ordinary course of its business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arms-length transaction with an unrelated third party.
SECTION 24.2 Grant of Security Interest. To secure the payment of Rent,
Lessee hereby grants to Lessor a security interest in the following (the
"Collateral"):
(a) All Inventory, fixtures, Equipment, Permits, Licenses and
accounts, now existing or hereafter arising or acquired;
(b) All present and future contract rights, lease rights, rents,
chattel paper and general intangibles (including trademarks,
trade names and patents of Lessee) not otherwise included as
Collateral under the foregoing;
(c) All other property necessary to operate the Premises for the
Permitted Uses.
(d) To the extent related to the property described in clauses (a)
through (c) above, all books, correspondence, credit files,
records, invoices, bills of lading and other documents
including, without limitation, to the extent so related, all
tapes, cards, computer runs, computer programs and other
papers and documents in the possession or control of Lessee or
any computer bureau from time to time acting for Lessee and,
to the extent so related, all rights in, to and under all
policies of insurance, including claims of rights to payments
thereunder and proceeds therefrom, including any credit
insurance; and
(e) Any other property in which Lessee can create or perfect a
security interest.
(f) All proceeds and products of any and all of the foregoing.
SECTION 25 Miscellaneous.
SECTION 25.1 No Waiver. The failure of either party hereto to insist
upon strict performance of any of the terms, covenants and conditions hereof
shall not be deemed a waiver of any rights or remedies that either party may
have and such omission shall not be deemed a waiver of any subsequent breach or
default in any of such terms, covenants and conditions.
SECTION 25.2 Consent. Whenever the consent or approval of the Lessor is
required hereunder, the Lessor shall not unreasonably withhold such consent or
approval or the delivery thereof; provided, however, that in the event that any
Lender's consent is required and such mortgagee withhold's its consent, Lessor
shall not be deemed to have unreasonably withheld its consent.
SECTION 25.3 Intentionally Omitted.
SECTION 25.4 Notices. Any notice, demand, request or other
communication shall be effective only if delivered by hand to the party whose
attention it is directed or by mailing the same by registered or certified mail
postage prepaid, return receipt requested, to the addresses listed on Schedule
25.4, or at such other address as the parties may from time to time designate by
notice. Every notice, demand, request or other communication hereunder shall be
deemed to have been given or served on the date at such other address as the
parties may from time to time designate by notice. Every notice, demand, request
or other communication hereunder shall be deemed to have been given or served on
the date that the same shall be received by Lessor or Lessee, as the case may
be.
SECTION 25.5 Force Majeure Whenever Lessee shall be required by the
terms of this Lease or by law to perform any contract, act, work, labor or
services, or to discharge any lien against the Premises, or to perform and
comply with any laws, rules, orders, ordinances, regulations or zoning
regulations, Lessee shall not be deemed to be in default herein and Lessor shall
not enforce or exercise any of its rights under this Lease, if and so long as
non-performance or default herein shall be directly caused by strikes,
unavailability of materials, war or national defense preemptions, governmental
restrictions, acts of God or other similar causes beyond the reasonable control
of Lessee.
SECTION 25.6 Relationship of Parties. Nothing herein contained shall be
deemed or construed by the parties hereto, nor by any third party, as creating
the relationship of principal and agent, or of partnership, or of joint venture
between the parties, it being understood and agreed that neither the method of
computation of rent, nor any other provision contained herein, nor any acts of
the parties, shall be deemed to create any relationship between the parties
hereto, other than the relationship of landlord and tenant.
SECTION 25.7 Entire Agreement. This Lease contains the entire agreement
between the parties and cannot be changed or terminated orally, but only by an
instrument in writing executed by the parties.
SECTION 25.8 New Jersey Law. This Lease shall be governed by and
constructed in accordance with the laws of the New Jersey.
SECTION 25.9 Attorneys' Fees. Upon the occurrence of an Event of
Default by a party hereto the defaulting party shall be liable for and shall pay
to the other party the reasonable attorney's fees, court costs, and other
reasonable costs and expenses incurred by said party in enforcing its rights
hereunder.
SECTION 25.10 Successors and Assigns. The agreements, terms, covenants
and conditions herein shall bind and inure to the benefit of Lessor and Lessee
and their respective heirs, personal representatives, successors, and assigns.
Nothing contained in the preceding sentence shall be construed to permit Lessee
to assign or sublet this Lease, in whole or in part, without the consent of
Lessor, which may be withheld by Lessor in Lessor's sole discretion. Nothing in
this Section 25.10 shall be in any way intended to limit the provisions of
Section 9.
SECTION 25.11 No Merger. There shall be no merger of this Lease, or of
the leasehold estate created by this Lease, with the Lessors's fee title estate
in the Premises by reason of the fact that this Lease or the leasehold estate
created by this Lease or any interest in this Lease or any such fee title estate
may be held directly or indirectly, by or for the account of any person,
persons, parties or entities of any kind or nature who shall own or have any
interest in such fee title estate, and no such merger, shall occur unless all
such persons, parties or entities at the time having an interest in such fee
title estate in the Premises and all such persons, parties or entities having an
interest in this Lease or in the leasehold estate created by this Lease shall
join in the execution, acknowledgment and delivery of a written instrument
effectuating such merger.
SECTION 25.12 Partial Invalidity. If any term or provision of this
Lease or the application thereof to any entity, person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
SECTION 25.13 Headings. Headings or captions contained in this Lease
are inserted only as a matter of convenience and in no way define, limit or
extend the scope or intent of this Lease or any provision hereof.
SECTION 25.14 Business Day. Whenever, under the terms and provisions of
this Lease, the time for performance of a condition is required to be performed
upon a Saturday, Sunday, or holiday such time for performance shall be extended
to the next business day.
SECTION 25.15 Benefit of Lender. The parties hereby acknowledge that
this Lease was executed in connection with and at the time of the Loan and the
provision hereof are intended to run to the benefit of and be enforceable by
Lender.
SECTION 25.16 Amendment. This Lease shall not be amended except
pursuant to a writing executed by Lessor and Lessee, which writing shall also be
approved by Lender, in Lender's sole discretion in writing.
SECTION 26 Additional Representations and Warranties.
SECTION 26.1 Environmental Compliance:
(i) Lessee and the Premises are in compliance with
all applicable Environmental Laws, which compliance includes, but is
not limited to, the possession by Lessee of and compliance with all
environmental, health and safety permits, licenses and other
governmental authorizations required in connection with the ownership
and operation of the Premises under all Environmental Laws, except
where the failure to comply with such laws is not reasonably likely to
result in a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to
Lender's knowledge, threatened, and no penalties arising under
Environmental Laws have been assessed, against Lessee, the Premises or
against any Person whose liability for any Environmental Claim Lessee
has or may have retained or assumed either contractually or by
operation of law, and no investigation or review is pending or, to the
knowledge of Lessee, threatened by any Governmental Authority, citizens
group, employee or other Person with respect to any alleged failure by
Lessee, or the Premises to have any environmental, health or safety
permit, license or other authorization required under, or to otherwise
comply with, any Environmental Law or with respect to any alleged
liability of Lessee for any Use or Release of any Hazardous Substances
or the presence, Use or Release of any Hazardous Substances at, on, in,
under, or from the Premises.
(iii) To the knowledge of Lessee after due inquiry,
there have been and are no past or present Releases of any Hazardous
Substance that are reasonably likely to form the basis of any
Environmental Claim against Lessee or, to Lessee's knowledge, against
any Person whose liability for any Environmental Claim Lessee has or
may have retained or assumed either contractually or by operation of
law.
(iv) To the knowledge of Lessee after due inquiry,
without limiting the generality of the foregoing, there is not present
at, on, in or under the Premises, PCB- containing equipment, asbestos
or asbestos containing materials, underground or aboveground storage
tanks or surface impoundments for Hazardous Substances, lead in
drinking water (except in concentrations that comply with all
Environmental Laws), or lead-based paint (nor have there been any
underground storage tanks present at, on, in, or under the Premises).
(v) No Liens are presently recorded with the
appropriate land records under or pursuant to any Environmental Law
with respect to Lessee's Premises and, to Lessee's knowledge, no
Governmental Authority has been taking or is in the process of taking
any action that could subject the Premises to Liens under any
Environmental Law.
(vi) There have been no environmental investigations,
studies, audits, reviews or other analyses conducted by or on behalf of
Lessee that are in the possession or control of Lessee in relation to
the Premises which have not been provided to Lender.
(vii) No conditions exist which would require Lessee
under any Environmental Laws to place a notice on any deed to its
Premises with respect to the presence, Use or Release of Hazardous
Substances at, on, in, under or from the Premises and the Premises has
no such notice in its deed.
SECTION 26.2 Enforceability. This Lease contains the legal, valid and
binding obligations of Lessee, enforceable against Lessee in accordance with its
terms, subject to bankruptcy, insolvency and other limitations on creditors'
rights generally and to equitable principles.
SECTION 26.3 Additional Nursing Home Representations and Warranties
(A) Third Party Payors. There is no threatened or
pending revocation, suspension, termination, probation, restriction, limitation,
or non-renewal affecting Lessee or the Premises or any participation or provider
agreement with any third party payor (including Medicare, Medicaid, Blue Cross
and/or Blue Shield, and any other private commercial insurance managed care and
employee assistance program) (such programs, the "Third Party Payors' Programs")
to which Lessee presently is subject. All Medicaid, Medicare, and private
insurance cost reports and financial reports submitted by Lessee are and will be
materially accurate and complete and have not been and will not be misleading in
any material respects. No cost reports for the Premises remain "open" or
unsettled, except as otherwise disclosed.
(B) Governmental Proceedings and Notices. Neither
Lessee nor the Premises is currently the subject of any proceeding by any
Governmental Authority, and no notice of any violation has been received from a
Governmental Authority that would, directly or indirectly, or with the passage
of time:
(i) have a Material Adverse Effect on
Lessee's ability to accept and/or retain patients or result in the
imposition of a fine, a sanction, a lower rate certification or a
lower reimbursement rate for services rendered to eligible patients;
(ii) modify, limit or annul or result in
the transfer, suspension, revocation or imposition of probationary
use of Lessee's Licenses; or
(iii) affect Lessee's continued
participation in the Medicaid or Medicare programs or any other of
the Third Party Payors' Programs, or any successor programs thereto,
at current rate certifications.
(C) Physical Plant Standards. The Premises and the
use thereof complies in all material respects with all applicable
local, state and federal building codes, fire codes, health care,
nursing facility and other similar regulatory requirements (the
"Physical Plant Standards") and no waivers of Physical Plant Standards
exist at such the Premises.
(D) Past Violations. The Premises has not received a
"Level A" (or equivalent) violation, and no statement of charges or
deficiencies has been made or penalty enforcement action has been
undertaken against the Premises or against Lessee or against any
partner, member, officer, director or stockholder of Lessee by any
Governmental Authority during the last three calendar years, and there
have been no violations over the past three years which have threatened
the Premises or Lessee's certification for participation in Medicare or
Medicaid or the other Third Party Payors' Programs.
(E) Audits. There are no current, pending or
outstanding Medicaid, Medicare or Third Party Payors' Programs
reimbursement audits or appeals pending at the Premises, and there are
no years that are subject to audits.
(F) Recoupment. There are no current or pending
Medicaid or Medicare or Third Party Payors' Programs recoupment efforts
at the Premises. The Lessee is not a participant in any federal program
whereby any Governmental Authority may have the right to recover funds
by reason of the advance of federal funds, including, without
limitation, those authorized under the Xxxx-Xxxxxx Act (42 U.S.C. 291,
et seq.).
(G) Pledges of Receivables. Lessee has not pledged
its receivables as collateral security for any other loan or
indebtedness.
SECTION 26.4 ISRA
The Premises is not an "industrial establishment" as defined
by the Industrial Site Recovery Act, NJSA B:1K-6 et seq., as amended.
IN WITNESS WHEREOF, this Lease has been executed as of the day and
year first above written.
Lessor:
CONTINENTAL XXXXXXX HOLDINGS, INC.
By:____________________________
Name:__________________________
Title:_________________________
WITNESS OR ATTEST:
By:________________________
LESSEE:
SENIOR CARE FOUNDATION, INC.
By:______________________________
Name:____________________________
Title:___________________________
WITNESS OR ATTEST
By:________________________
EXHIBIT A
Legal Description of Premises
SCHEDULE 4.1
ANNUAL RENT SCHEDULE
The Base Rent shall be $200,000 monthly of which $20,000 shall be allocated to
the rental of Equipment.
SCHEDULE 25.4
Addresses for Notices
(a) If intended for Lessor:
Senior Care Foundation, Inc.
c/o Continental Health Affiliates, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
(b) If intended for Lessee:
Continental Xxxxxxx Holdings, Inc.
c/o Continental Health Affiliates, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
With a copy to:
Shepisi & XxXxxxxxxx, P.A.
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Shepisi, Esq.
(c) If intended for Lender:
Nomura Asset Capital Corporation
2 World Financial Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
With a copy to:
Dechert Price & Xxxxxx
0000 Xxxx Xxxxxx
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile No.: 000-000-0000
