EXHIBIT 10.77
MASTER LEASE
BETWEEN
MONARCH PROPERTIES, LP
AND
LYRIC HEALTH CARE HOLDINGS III, INC.
DATED AS OF DECEMBER 31, 1998
TABLE OF CONTENTS
Page
ARTICLE 1 LEASE; TERM; RENEWALS...............................................1
1.1 Lease...............................................................1
1.2 Term................................................................2
1.3 Allocation of Base Rent.............................................2
1.4 First Option to Renew...............................................2
1.5 Second Option to Renew. ...........................................2
1.6 Third Option to Renew. ............................................2
1.7 Other Conditions of Renewal.........................................2
ARTICLE 2 DEFINITIONS.........................................................3
2.1 Certain Definitions.................................................3
2.2 Other Definitions..................................................21
ARTICLE 3 RENT; RELATED MATTERS..............................................21
3.1 Rent...............................................................21
3.2 Additional Charges.................................................21
3.3 Earn Out Rent......................................................21
3.4 Late Charge; Interest..............................................22
3.5 Method of Payment of Rent..........................................22
3.6 Net Lease; No Offset...............................................22
ARTICLE 4 IMPOSITIONS; RELATED MATTERS.......................................22
4.1 Payment of Impositions.............................................22
4.2 Adjustment of Impositions..........................................23
4.3 Utility Charges....................................................23
4.4 Insurance Premiums.................................................23
ARTICLE 5 NO TERMINATION, ABATEMENT, ETC.....................................24
ARTICLE 6 OWNERSHIP OF LEASED PROPERTY; PERSONAL
PROPERTY...........................................................24
6.1 Ownership of the Leased Property...................................24
6.2 Landlord's Personal Property.......................................25
6.3 Tenant's Personal Property.........................................25
6.4 Grant of Security Interest in Tenant's Personal Property;
Restriction on Other Liens.........................................26
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ARTICLE 7 CONDITION AND USE OF LEASED PROPERTIES.............................26
7.1 Condition of the Leased Properties.................................26
7.2 Use of the Leased Property.........................................27
ARTICLE 8 LEGAL AND INSURANCE REQUIREMENTS...................................27
8.1 Compliance with Legal and Insurance Requirements...................27
8.2 Legal Requirement Covenants........................................28
8.3 Certain Financial and Other Covenants..............................28
8.4 Other Businesses. ................................................29
ARTICLE 9 MAINTENANCE AND REPAIR; ENCROACHMENTS..............................29
9.1 Maintenance and Repair.............................................29
9.2 Encroachments, Restrictions, etc...................................32
ARTICLE 10 ALTERATIONS AND ADDITIONS..........................................32
10.1 Construction of Alterations and Additions to Leased Property.......32
10.2 Asbestos Removal for Alterations and Additions.....................33
ARTICLE 11 REMOVAL OF LIENS...................................................33
ARTICLE 12 CONTEST OF LEGAL REQUIREMENTS, ETC.................................33
12.1 Permitted Contests.................................................34
12.2 Landlord's Requirement for Deposits................................34
ARTICLE 13 INSURANCE..........................................................35
13.1 General Insurance Requirements.....................................35
13.2 Replacement Cost...................................................37
13.3 Worker's Compensation Insurance....................................37
13.4 Waiver of Liability; Waiver of Subrogation.........................37
13.5 Other Requirements.................................................37
13.6 Intentionally Omitted..............................................38
13.7 Blanket Policy.....................................................38
13.8 No Separate Insurance..............................................38
ARTICLE 14 CASUALTY LOSS......................................................39
14.1 Insurance Proceeds.................................................39
14.2 Restoration in the Event of Damage or Destruction..................39
14.3 Intentionally Omitted..............................................40
14.4 Tenant's Personal Property.........................................40
14.5 Restoration of Tenant's Property...................................40
14.6 No Abatement of Rent...............................................40
14.7 Consequences of Purchase of Damaged Leased Property................40
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14.8 Damage Near End of Term............................................40
14.9 Waiver.............................................................41
14.10 Procedure for Disbursement of Insurance Proceeds...................41
ARTICLE 15 TAKINGS............................................................42
15.1 Total Taking.......................................................42
15.2 Allocation of Portion of Award.....................................42
15.3 Partial Taking.....................................................43
15.4 Temporary Taking...................................................43
ARTICLE 16 CONSEQUENCES OF EVENTS OF DEFAULT..................................44
16.1 Events of Default..................................................44
16.2 Landlord's Rights Upon Tenant's Default............................44
16.3 Liability for Costs and Expenses...................................44
16.4 Certain Remedies...................................................44
16.5 Damages............................................................44
16.6 Waiver.............................................................45
16.7 Application of Funds...............................................45
ARTICLE 17 LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT..........................45
ARTICLE 18 CERTAIN ENVIRONMENTAL MATTERS ....................................46
18.1 Prohibition Against Use of Hazardous Substances....................46
18.2 Notice of Environmental Claims, Actions or Contaminations..........46
18.3 Costs of Remedial Actions with Respect to Environmental Matters....46
18.4 Delivery of Environmental Documents................................46
18.5 Environmental Audit................................................47
18.6 Entry onto Leased Property for Environmental Matters...............47
18.7 Environmental Matters Upon Termination or Expiration of Term of
This Lease.........................................................47
18.8 Compliance with Environmental Laws.................................48
18.9 Environmental Related Remedies.....................................49
18.10 Environmental Indemnification......................................50
18.11 Rights Cumulative and Survival.....................................51
ARTICLE 19 HOLDOVER MATTERS...................................................52
19.1 Holding Over.......................................................52
19.2 Indemnity..........................................................52
ARTICLE 20 SUBORDINATION; ATTORNMENT; ESTOPPELS...............................52
20.1 Subordination......................................................52
20.2 Attornment.........................................................53
20.3 Estoppel Certificate...............................................53
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ARTICLE 21 RISK OF LOSS.......................................................53
ARTICLE 22 INDEMNIFICATION....................................................53
22.1 Indemnification....................................................53
22.2 Survival of Indemnification; Tenant Right to Defend Landlord.......55
ARTICLE 23 LIMITATIONS ON TRANSFERS...........................................55
23.1 General Prohibition against Transfer...............................55
23.2 Corporate or Partnership Transactions..............................56
23.3 Permitted Subleases................................................56
23.4 Transfers to a Controlled Entity...................................57
23.5 Subordination and Attornment.......................................57
23.6 Sublease Limitation................................................57
23.7 Facility Subleases Permitted.......................................57
ARTICLE 24 CERTAIN FINANCIAL MATTERS..........................................58
24.1 Officer's Certificates and Financial Statements....................58
24.2 Public Offering Information........................................59
ARTICLE 25 LANDLORD INSPECTION................................................60
ARTICLE 26 [INTENTIONALLY OMITTED]............................................61
ARTICLE 27 [INTENTIONALLY OMITTED]............................................61
ARTICLE 28 ACCEPTANCE OF SURRENDER............................................61
ARTICLE 29 MERGER OF TITLE; PARTNERSHIP.......................................61
29.1 No Merger of Title.................................................61
29.2 No Partnership.....................................................61
ARTICLE 30 CONVEYANCE BY LANDLORD.............................................62
ARTICLE 31 QUIET ENJOYMENT....................................................62
ARTICLE 32 [INTENTIONALLY OMITTED]............................................62
ARTICLE 33 APPRAISERS.........................................................62
ARTICLE 34 BREACH OF LEASE BY LANDLORD........................................63
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ARTICLE 35 PERSONAL PROPERTY OPTION; TRANSFER OF FACILITY CONTROL.............64
35.1 Landlord's Option to Purchase Tenant's Personal Property...........64
35.2 Facility Trade Names...............................................64
35.3 Transfer of Operational Control of the Facilities..................65
35.4 Intangibles and Personal Property..................................66
ARTICLE 36 [INTENTIONALLY OMITTED]............................................66
ARTICLE 37 MISCELLANEOUS......................................................66
37.1 Notices............................................................66
37.2 Survival, Choice of Law............................................67
37.3 Limitation on Recovery.............................................67
37.4 Waivers............................................................68
37.5 Consents...........................................................68
37.6 Counterparts.......................................................68
37.7 Options Follow Lease...............................................68
37.8 Rights Cumulative..................................................68
37.9 Entire Agreement...................................................68
37.10 Amendments in Writing..............................................68
37.11 Severability.......................................................69
37.12 Successors.........................................................69
37.13 Late Charges.......................................................69
37.14 Binding Effect.....................................................69
37.15 Exhibits and Schedules.............................................69
37.16 Waiver of Jury Trial...............................................69
37.17 Memorandum of Lease................................................69
37.18 Additional Tenant Obligations......................................69
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MASTER LEASE
THIS MASTER LEASE (this "Lease") is made and entered into as of the 31st
day of December, 1998 between MONARCH PROPERTIES, LP, a Delaware limited
partnership, with principal offices at 0000 Xxxxxxx Xxx Xxxxxxxxx, Xxxxxx,
Xxxxxxx 00000 ("Landlord") and LYRIC HEALTH CARE HOLDINGS III, INC., a Delaware
corporation, with principal offices at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxxx 00000 ("Tenant").
W I T N E S S E T H:
WHEREAS, pursuant to the Facilities Purchase Agreement, dated as of
December 31, 1998 (the "Facilities Purchase Agreement") among Landlord,
Integrated Health Services, Inc. ("IHS") and the various wholly owned
subsidiaries of Tenant described on Exhibit A hereto (individually, a "Facility
Subtenant" and, collectively, the "Facility Subtenants") Landlord acquired and
is the present owner of the real property, improvements fixtures, and personal
property constituting the health care facilities described on Exhibit A hereto
(each a "Facility" or a "Leased Property"); and
WHEREAS, Landlord wishes to lease to Tenant, and Tenant wishes to lease
from Landlord, all of the Facilities;
WHEREAS, immediately prior hereto, the Facilities were operated by the
Facility Subtenants and, contemporaneously with the execution and delivery of
this Lease, Tenant and each of the Facility Subtenants will execute a Facility
Sublease (as defined below) with respect to their respective Facilities;
NOW, THEREFORE, in consideration of the rents, mutual covenants, and
agreements set forth in this Lease, the parties agree that the use and occupancy
of the Facility demised herein shall be subject to, and be in accordance with,
the terms, conditions and provisions of this Lease, as follows:
ARTICLE 1
LEASE; TERM; RENEWALS
1.1 LEASE. Upon and subject to the terms and conditions set forth in this
Lease, Landlord leases to Tenant, and Tenant hires and takes from Landlord, all
the Leased Properties.
1.2 TERM. The Term shall commence for all Facilities on the Commencement
Date and end for each Facility on the Expiration Date indicated for such
Facility on Exhibit B hereto, subject to the renewals described in Sections 1.4
through 1.7 hereof.
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1.3 ALLOCATION OF BASE RENT. The allocation of Base Rent among the Leased
Properties (as of the Commencement Date as agreed by Landlord and Tenant solely
for purposes of this Lease), is set forth on Exhibit B hereto. Notwithstanding
the foregoing, within one hundred twenty (120) days after the earlier of (a) the
end of the third Lease Year or (b) any refinancing of the Loan Facility,
Landlord may, in its sole discretion, amend Exhibit B hereto to reallocate the
then current total Base Rent among the Leased Properties based upon each of the
Leased Properties' allocable percentage of the actual Cash Flow from the
Facilities for the prior Lease Year or based upon any other reasonable method of
reallocation mutually acceptable to Landlord and Tenant.
1.4 FIRST OPTION TO RENEW. Tenant is hereby granted the option to renew
this Lease for a First Renewal Term for each Facility, which option shall be
exercised by Notice to Landlord at least one hundred eighty (180) days, but not
more than three hundred sixty (360) days, before the Expiration Date for such
Facility specified in Exhibit B hereto; provided, however, that no Event of
Default exists either on the date on which Tenant gives such Notice to Landlord
or on the applicable Expiration Date. During the First Renewal Term, all of the
terms and conditions of this Lease shall remain in full force and effect.
1.5 SECOND OPTION TO RENEW. If the Term of this Lease has been renewed as
provided above, Tenant is hereby granted the option to renew this Lease for the
Second Renewal Term for each Facility, which option shall be exercised by Notice
to Landlord at least one hundred eighty (180) days, but not more than three
hundred sixty (360) days, prior to the expiration of the First Renewal Term for
such Facility; provided, however, that no Event of Default exists either on the
date on which Tenant gives such Notice to Landlord or on the date on which the
First Renewal Term expires. During the Second Renewal Term, all of the terms and
conditions of this Lease shall remain in full force and effect.
1.6 THIRD OPTION TO RENEW. If the Term of this Lease has been renewed as
provided above, Tenant is hereby granted the option to renew this Lease for the
Third Renewal Term for each Facility, which option shall be exercised by Notice
to Landlord at least one hundred eighty (180) days, but not more than three
hundred sixty (360) days, prior to the expiration of the Second Renewal Term;
provided, however, that no Event of Default exists either on the date on which
Tenant gives such Notice to Landlord or on the date on which the Second Renewal
Term expires. During the Third Renewal Term, all of the terms and conditions of
this Lease shall remain in full force and effect.
1.7 OTHER CONDITIONS OF RENEWAL. The options to renew granted pursuant to
Sections 1.4, 1.5 and 1.6 hereof may be exercised only with respect to all of
the Leased Properties specified in Exhibit A hereto for the exercise of such
options and the Base Rent and Earn Out Rent (if any) will be computed as if the
respective Renewal Term were merely an automatic extension of the preceding Term
(as specified in the definitions of Base Rent and Earn Out Rent).
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ARTICLE 2
DEFINITIONS
2.1 CERTAIN DEFINITIONS. For all purposes of this Lease, except as
otherwise expressly provided or unless the context otherwise requires, (a) all
accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with GAAP, (b) all references to designated "Articles," "Sections"
and other subdivisions are to the designated Articles, Sections and other
subdivisions of this Lease, and (c) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Lease as a whole and not to any
particular Article, Section or other subdivision. In addition, the following
terms shall have the following meanings:
Accounts: With respect to each Facility Subtenant, and to Tenant in
the event it should at any time operate the health care business on a
Leased Property, all accounts, accounts receivable, deposits, prepaid
items, documents, chattel paper, instruments, contract rights, general
intangibles, choses in action and rights to any refund of taxes previously
or subsequently paid to any governmental authority, in each case arising
from or in connection with such Facility Subtenant's (or Tenant's)
operation and use of the Leased Property.
Additional Charges: All Impositions and all amounts, liabilities and
obligations other than Base Rent and Earn Out Rent that Tenant assumes and
agrees to pay under this Lease.
Affiliate: Any Person who, directly or indirectly, Controls or is
Controlled by or is under Common Control with another Person.
Approval Threshold: One Million Dollars ($1,000,000).
Assessment: With respect to any Leased Property, any assessment for
public improvements or benefits commenced or completed after the date
hereof and whether or not to be completed within the Term.
Award: All compensation, sums or anything of value awarded, paid or
received in connection with a Taking or Partial Taking.
Base Rent: (a) For the first Lease Year, the sum of Thirteen Million
Nine Hundred Seventy-Two Thousand Five Hundred Dollars ($13,972,500), and
(b) for each Lease Year thereafter (including each Lease Year in any
Renewal Term), the sum of (i) the Base Rent for the preceding Lease Year
plus (ii) the product of the Base Rent for the
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preceding Lease Year and the lower of (x) two (2) times the percentage
increase in the Cost of Living Index during the period commencing as of the
beginning of the preceding Lease Year and ending as of the expiration of
the preceding Lease Year or (y) three percent (3%) (except that for the
first Lease Year, the Cost of Living Index shall be measured from the end
of the month preceding the Commencement Date); provided, however, that in
no event shall the annual Base Rent increase be less than one percent (1%).
Notwithstanding the forgoing, for each Lease Year after the first Lease
Year (including each Lease Year in any Renewal Term) the annual Base Rent
increase described in clause (ii) hereof shall not apply to increase Base
Rent for such Lease Year if the average occupancy level of the total beds
in service at all the Facilities covered by this Lease throughout the prior
Lease Year was less than seventy percent (70%).
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which national banks in the City of New York, New
York are authorized, or obligated, by law or executive order, to close.
Capital Lease: Any lease (other then this Lease) for which Tenant is
required, under GAAP, to account on its balance sheet as a capital lease.
Capitalized Lease Obligation: Any obligation of Tenant, as tenant or
guarantor, under a Capital Lease.
Cash Flow from the Facilities: The sum of (a) Net Income for the
applicable period; (b) the amount deducted by Tenant in computing Net
Income for the applicable period for (i) depreciation on any leasehold
improvements to the Facilities constructed by Tenant, (ii) amortization,
(iii) Base Rent and (iv) Earn Out Rent (if any); (c) interest; and (d)
Fees.
Cash Flow to Debt Service Requirement: For any fiscal period, the
ratio of Cash Flow from the Facilities to Debt Service (in each case
determined on a consolidated or combined basis with all the Facility
Subtenants) set forth with respect to such period on the schedule attached
as Exhibit C hereto.
Claim(s): Any lien, attachment, levy, encumbrance, charge or claim, or
any encroachment or restriction burdening any Leased Property.
Clean-Up: The investigation, removal, restoration, remediation and/or
elimination of, or other response to, Contamination, in each case to the
satisfaction of all governmental agencies having jurisdiction over the
applicable Leased Property and in compliance with or as may be required by
Environmental Laws.
Code: The Internal Revenue Code of 1986, as amended from time to time.
4
Commencement Date: January 1, 1999.
Condemnor: Any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
Construction Funds: The Net Proceeds available for restoration or
repair work pursuant to Article 14 of this Lease.
Contamination: The presence, Release or threatened Release of any
Hazardous Substance at a Leased Property in violation of any Environmental
Law, or in a quantity that would give rise to any affirmative Clean-Up
obligation under an Environmental Law, including, but not limited to, the
existence of any injury or potential injury to public health, safety,
natural resources or the environment associated therewith.
Control (and Controlled by and under Common Control with): possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, through the ownership of voting
securities, partnership interests or other equity interests.
Cost of Living Index: The United States Department of Labor, Bureau of
Labor Statistics Revised Consumer Price Index for All Urban Consumers
(1982-84=100), U.S. City Average, All Items, or, if such Index is not
available for the United States, an index available for the geographical
area in the United States which most closely corresponds to the entire
United States, published by such bureau or its successor, or, if none, by
any other instrumentality of the United States.
Date of Taking: The date on which the Condemnor has the right to
possession of the Leased Property that is the subject of the Taking or
Partial Taking.
Debt: As of any date, all (a) obligations, whether current or
long-term, that in accordance with GAAP would be included as liabilities on
a Person's balance sheet; (b) Capitalized Lease Obligations of such Person;
(c) obligations of others for which that Person is liable directly or
indirectly, by way of guaranty (whether by direct guaranty, suretyship,
discount, endorsement, take-or-pay agreement, agreement to purchase or
advance or keep in funds or other agreement having the effect of a
guaranty) or otherwise; (d) liabilities and obligations secured by liens on
any assets of that Person, whether or not those liabilities or obligations
are recourse to that Person; and(e) liabilities and obligations of that
Person, direct or contingent, with respect to letters of credit issued for
the account of that Person or others or with respect to bankers acceptances
created for that Person. However, Additional Charges shall not be deemed
Debt.
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Debt Service: With respect to any fiscal period of a Person, the sum
of (a) all interest due on Debt during the period (other than interest
imputed, pursuant to GAAP, on any Capitalized Lease Obligations and
interest on Debt that comprises Purchase Money Financing), (b) all payments
of principal of Debt required to be made during the period, (c) all Base
Rent due during the period and (d) all Earn Out Rent (if any) due during
the period.
Earn Out Rent: (a) For any Lease Year, the amount of any earn out
payments (if any) made by Landlord to IHS in accordance with Section 3.2 of
the Facilities Purchase Agreement times a rate equal to (i) the Base Rent
for the Lease Year in which the subject earn out payment is made divided by
(ii) $138,000,000, and (b) for each Lease Year thereafter (including each
Lease Year in any Renewal Term), the sum of (i) the full Earn Out Rent for
the preceding Lease Year as if all earn out payments and the related Earn
Out Rent were made effective the first day of the preceding Lease Year plus
(ii) the product of the Earn Out Rent for the preceding Lease Year and the
lower of (x) two (2) times the percentage increase in the Cost of Living
Index during the period commencing as of the beginning of the preceding
Lease Year and ending as of the expiration of the preceding Lease Year or
(y) three percent (3%) (except that for the first Lease Year, the Cost of
Living Index shall be measured from the end of the month preceding the
Commencement Date); provided, however, that in no event shall the annual
Earn Out Rent increase be less than one percent (1%). Notwithstanding the
forgoing, for each Lease Year after the first Lease Year (including each
Lease Year in any Renewal Term) the annual Earn Out Rent increase described
in clause (ii) hereof shall not apply to increase Earn Out Rent for such
Lease Year if the average occupancy level of the total beds in services at
all the Facilities covered by this Lease throughout the prior Lease Year
was less than seventy percent (70%). Notwithstanding further, no Earn Out
Rent shall be due in respect of earn out payments made by Landlord to IHS
involving any Leased Property that after such payments will no longer be
subject to this Lease.
Encumbrance: With respect to a Leased Property, any mortgage, deed of
trust, lien, encumbrance or other matter affecting title to the Leased
Property, or any portion thereof or interest therein.
Environmental Audit: A written certificate, in form and substance
satisfactory to Landlord, from an environmental firm acceptable to
Landlord, which states that there is no evidence of Contamination on the
applicable Leased Property and that the applicable Leased Property is
otherwise in compliance with Environmental Laws.
Environmental Documents: Documents received by Tenant or any Affiliate
from, or submitted by Tenant or any Affiliate to, the United States
Environmental Protection Agency and/or any other federal, state, county or
municipal agency responsible for enforcing or implementing Environmental
Laws with respect to the condition of the
6
Leased Property leased by Tenant or Tenant's operations at the Leased
Property; and written reviews, audits, reports or other documents
pertaining to environmental conditions, including, but not limited to, the
presence or absence of Contamination, at, in or under or with respect to
the Leased Property leased by Tenant that have been prepared by, for or on
behalf of Tenant.
Environmental Laws: All federal, state and local laws (including,
without limitation, common law), statutes, codes, ordinances, regulations,
rules, orders, permits or decrees from time to time in effect and relating
to (a) the introduction, emission, discharge or release of Hazardous
Substances into the indoor or outdoor environment (including, without
limitation, air, surface water, groundwater, land or soil); or the
manufacture, processing, distribution, use, treatment, storage,
transportation or disposal of Hazardous Substances; or (c) the Cleanup of
Contamination.
Equipment Lease Facility: Any equipment lease financing facility in
connection with Personal Property of a Facility designated as an Equipment
Lease Facility in Article 7 of any applicable Facility Management
Agreement.
Escrow Agreement: The Escrow Agreement of even date herewith between
Landlord and Tenant.
Estoppel Certificate: A statement in writing in substantially the same
form as Exhibit D hereto, with such changes thereto as reasonably may be
requested by the person relying on such certificate.
Event of Default: The occurrence of any of the following:
(a) If Tenant fails to pay Base Rent and Earn Out Rent (if any)
under this Lease when the same becomes due and payable within the earlier
of (i) five (5) Business Days after Notice or (ii) ten (10) Business Days
after the same becomes due and payable; or if Tenant fails to pay any
Additional Charges within ten (10) Business Days after Notice;
(b) If Tenant (i) admits in writing its inability to pay its
debts generally as they become due, (ii) files a petition in bankruptcy or
a petition to take advantage of any insolvency law, (iii) makes a general
assignment for the benefit of its creditors, (iv) consents to the
appointment of a receiver of itself or of the whole or any substantial part
of its property, or (v) files a petition or answer seeking reorganization
or arrangement under the Federal Bankruptcy Laws or any other applicable
law or statute of the United States of America or any state thereof; or
7
(c) If Tenant, on a petition in bankruptcy filed against it, is
adjudicated a bankrupt or has an order for relief thereunder entered
against it, or a court of competent jurisdiction enters an order or decree
appointing a receiver of such Tenant or of the whole or substantially all
of Tenant's property, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the Federal Bankruptcy Laws
or any other applicable law or statute of the United States of America or
any state thereof, and such judgment, order or decree is not vacated or set
aside or stayed within ninety (90) days from the date of the entry thereof;
or
(d) If Tenant is liquidated or dissolved, or begins proceedings
toward liquidation or dissolution, or has filed against it a petition or
other proceeding to cause it to be liquidated or dissolved, and the
proceeding is not dismissed within sixty (60) days thereafter, or in any
manner permits the sale or divestiture of substantially all of its assets
except in connection with a dissolution or liquidation following or related
to a merger or transfer of all or substantially all of the assets and
liabilities of Tenant with or to an Affiliate; or
(e) If the estate or interest of Tenant in the Leased Property or
any part thereof is levied upon or attached in any proceeding and the same
is not vacated or discharged within sixty (60) days after commencement
thereof (unless Tenant is in the process of contesting such lien or
attachment in good faith in accordance with Section 12.1 hereof); or
(f) If Tenant ceases operation of a Facility for a period in
excess of five (5) Business Days except upon prior written Notice to, and
with the express prior written consent of Landlord (which consent Landlord
may withhold in its absolute discretion), or as the unavoidable consequence
of damage or destruction as a result of a casualty, or a Taking or Partial
Taking, or as a result of an event described in subparagraph (g) below (as
to which the provisions of subparagraph (g) shall govern); or
(g) If the license to operate any Facility as a provider of
health care services in accordance with its Primary Intended Use is
revoked, or allowed to lapse, or, without Landlord's prior written consent,
transferred to a facility that is not one of the Leased Properties, or an
order is imposed with respect to a Facility suspending the right to operate
or accept patients, and Tenant does not promptly take reasonable steps to
cure the condition or conditions leading to such revocation or order and
cause such license and right to operate and accept patients to be
reinstated within sixty (60) days; or
(h) If any obligation of Tenant or of Guarantor to repay borrowed
money in excess of Three Million Dollars ($3,000,000) or, in the aggregate,
obligations in excess of Seven Million Dollars ($7,000,000) is accelerated
by a creditor after default, unless (i) Notice of a dispute between Tenant
or Guarantor and such creditor is given to
8
Landlord prior to such acceleration, (ii) Tenant or Guarantor have provided
Landlord with assurance, satisfactory to Landlord in its sole discretion,
that such acceleration will not materially affect Tenant, any of the Leased
Properties or the ability of Tenant and Guarantor to perform their
obligations under this Lease and the applicable Guaranty, and (iii)
Landlord has given Notice of such satisfaction to Tenant or Guarantor; or
(i) If Tenant fails to observe or perform any other term,
covenant or condition of this Lease and such failure is not cured within a
period of thirty (30) days after Notice thereof from Landlord, unless the
failure cannot with due diligence be cured within a period of thirty (30)
days, in which case the failure shall not be deemed to continue if (i)
Tenant proceeds promptly and with due diligence to cure the failure, (ii)
Tenant diligently and continuously completes the cure thereof and (iii)
such failure is cured prior to the time that the same results in civil or
criminal penalties to Landlord, Tenant or any Affiliates of either; or
(j) If any representation or warranty made by Tenant in the
Facilities Purchase Agreement or in the certificates delivered in
connection therewith proves to be untrue when made in any material respect,
and Landlord is materially and adversely affected thereby, and Tenant
fails, within twenty (20) days after Notice from Landlord thereof, to cure
such condition by terminating such adverse effect and making Landlord whole
for any damage suffered therefrom, or if with due diligence such cure
cannot be effected within twenty (20) days, if Tenant has failed to
commence to cure the same within the twenty (20) days or failed thereafter
to proceed promptly and with due diligence to cure such conditions and
prior to the time that the same results in civil or criminal penalties to
Landlord, Tenant, any Affiliates of either, or any of the Leased
Properties; or
(k) If a default occurs under any Guaranty of this Lease given to
Landlord to secure performance of any term or provision of this Lease and
is not cured within any applicable grace or cure period set forth therein;
or
(l) Subject to Article 23, if Tenant or any Facility Subtenant
transfers the operational control or management of the Facility currently
being operated by it without Landlord's prior written consent; or
(m) If (i) a default occurs on the part of Tenant or a Facility
Subtenant under the Master Management Agreement, the Master Franchise
Agreement, a Facility Management Agreement, a Facility Franchise Agreement,
the Escrow Agreement and any Facility Sublease and is not cured within any
applicable grace or cure period set forth therein, or (ii) a default occurs
on the part of Tenant or a Facility Subtenant under any other material
contract affecting any of the Facilities, Tenant or any Affiliate of
Tenant, or any Facility Subtenant, and the default is not cured within any
applicable grace or cure
9
period contained therein, provided, as to any such default under such other
contract, such default materially and adversely affects, or has the
reasonable potential of materially and adversely affecting, the operation
or value of the applicable Facility; or
(n) If a default occurs under the Security Agreement and is not
cured within any applicable grace or cure period set forth therein; or
(o) If Tenant breaches the financial covenants set forth in
Section 8.3 hereof, or Guarantor breaches the financial covenants set forth
in its Guaranty, and such failure is not cured within thirty (30) days of
the earlier of (i) the date on which Tenant or Guarantor has actual
knowledge of such breach or (ii) Notice from Landlord; or
(p) If a default occurs under any Equipment Lease Facility and is
not cured within any applicable grace or cure period set forth therein; or
(q) If Tenant or any Facility Subtenant breaches any
representation or warranty or fails to observe or perform any of the
covenants, duties and obligations set forth on Exhibit G hereto as required
to be made or performed under Section 37.18 hereof, which activity results
in a default or event of default under the Loan Facility.
Executive Officer: The Chairman of the Board of Directors, the
President, any Vice President and the Secretary of a corporation.
Expiration Date: The "Expiration Date" for each particular Facility
specified on Exhibit B hereto.
Facilities: The Leased Properties.
Facility: Any one of the Leased Properties.
Facility Franchise Agreement: The facility franchise agreement among
Franchisor, Tenant and a Facility Subtenant relating to such Facility
Subtenant's operations at its Facility.
Facility Management Agreement: The facility management agreement among
Manager, Tenant and a Facility Subtenant relating to the management of such
Facility Subtenant's operations at its Facility.
Facility Purchase Price: The Purchase Price allocated to the Facility
on the Commencement Date, as set forth on Exhibit F hereto, increased by
three percent (3%) per Lease Year, compounded annually, from the
Commencement Date to the date in question and prorated for any portion of
such period that is less than a full Lease Year.
10
Facility Rental Value: The Base Rent and Earn Out Rent (if any) (each
determined at the time in question) allocable to a Facility.
Facility Sublease: The facility sublease between Tenant and the
Facility Subtenant of such Facility.
Facility Subtenant: The subtenant of a Facility pursuant to a Facility
Sublease.
Facility Trade Names: The names under which the Facilities do or have
done business during the Term.
Fair Rental Value: The amount determined to be the Fair Rental Value
of the applicable Leased Property pursuant to the appraisal procedure set
forth in Article 33.
Fees: The fees payable by Tenant or a Facility Subtenant to Manager or
Franchisor pursuant to the Management Agreement or the Franchise Agreement,
as the case may be.
Financial Statement: For a fiscal year or other accounting period,
statements of earnings and retained earnings and of changes in financial
position and profit and loss for such period (for an interim period, from
the beginning of the respective fiscal year to the end of such period) and
the related balance sheet as at the end of such period, together with the
notes thereto, all in reasonable detail and setting forth in comparative
form the corresponding figures for the corresponding period in the
preceding fiscal year, and prepared in accordance with GAAP and reported on
by a "Big Six" certified public accounting firm or another certified public
accounting firm approved by Landlord, which approval will not be
unreasonably withheld or delayed; provided, however, the "Big Six" or
approved Accounting Firm requirements will not apply to statements prepared
for an interim period.
First Renewal Term: The period described as such for a particular
Facility as specified in Exhibit B hereto.
Fiscal Year: The calendar year.
Fixtures: All permanently affixed equipment, machinery, fixtures, and
other items of real and/or personal property, including all components
thereof, now and hereafter located in, on or used in connection with, and
permanently affixed to or incorporated into the Leased Improvements,
including, without limitation, any and all furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus (other
than individual units), sprinkler systems and
11
fire and theft protection equipment, and built-in oxygen and vacuum
systems, all of which to the greatest extent permitted by law, are hereby
deemed to constitute real estate, together with all replacements,
modifications, alterations and additions thereto but specifically excluding
all items included within the definition of the "Personal Property".
Franchise Agreement: Collectively, the Master Franchise Agreement and
each Facility Franchise Agreement.
Franchisor: Integrated Health Services Franchising Co., Inc., a
Delaware corporation.
GAAP: Generally accepted accounting principles in effect from time to
time, consistently applied.
Guarantor: Lyric Health Care LLC, a Delaware limited liability
company.
Guaranty: The Lyric Guaranty.
Hazardous Substances: Any and all toxic or hazardous material,
substance, pollutant, contaminant, chemical, waste (including medical
waste) or substance, including petroleum products, asbestos and PCBs,
regulated, restricted or prohibited under any Environmental Law.
IHS: Integrated Health Services, Inc., a Delaware corporation.
IHS Indemnity: The Indemnity Agreement executed by IHS in favor of
Landlord.
Impartial Appraiser: An appraiser selected by Landlord and reasonably
acceptable to Tenant.
Impositions: Collectively, all taxes (including, without limitation,
all real property taxes, ad valorem, sales and use, single business, gross
receipts, transaction privilege, rent or similar taxes), assessments,
ground rents, water, sewer or other rents and charges, excises, tax 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, or
foreseen or unforeseen, of every character in respect of any Leased
Property or the business conducted thereon by Tenant and/or the Rent
(including all interest and penalties thereon due to any failure of payment
by Tenant) applicable to periods of time within the Term hereof which at
any time may be assessed or imposed on or in respect of or be a lien upon
(a) the Facilities or any part thereof or (b) any rent therefrom or (c) any
estate, right, title or interest therein, or (d) any occupancy, operation,
use or possession of, or sales from, or activity conducted
12
on, the applicable Leased Property or (e) the leasing or use of the
Facilities or any part thereof or (f) the Rent. So long as the Facilities
include a Facility in New Hampshire, the term "Imposition" shall include
any "enterprise tax" imposed upon Landlord by the State of New Hampshire;
provided, however, that if and when Landlord owns property in New Hampshire
in addition to the Facility leased hereunder, such tax shall be fairly
allocated among such properties. "Imposition" shall not include: (a) any
federal, state or local tax based on gross or net income (whether
denominated as an income, capital stock or other tax) imposed on Landlord
generally and not exclusively in connection with any Leased Property, or
(b) any net revenue tax of Landlord or any other person, or (c) any tax
imposed with respect to the sale, financing, exchange or other disposition
by Landlord of any Leased Property or the proceeds thereof, or (d) any
principal or interest on any indebtedness of Landlord or (e) on any ground
rent or other rent payable by Landlord.
Initial Term:The period between, and inclusive of, the Commencement
Date and the earlier of the Expiration Date and the date upon which this
Lease terminates as provided herein.
Insurance Requirements: The terms, conditions and requirements of any
insurance policy required by this Lease.
Investigations: Soil and chemical tests or any other environmental
investigations, examinations or analyses.
Land: The real property described on attached Exhibit A hereto.
Landlord's Personal Property: All Personal Property, except Tenant's
Personal Property, that at the Commencement Date or thereafter during the
Term is located, or, but for a temporary relocation off-site on the
Commencement Date is normally located, on the Land or in the Leased
Improvements.
Lease Year: The period commencing on the first day of the calendar
month following the month in which the Commencement Date occurs and ending
on the last day of the twelfth (12th) full calendar month thereafter
(unless the Commencement Date is the first day of a month, in which event
the first Lease Year shall commence on such day). The period, if any,
between the Commencement Date and the first day of the following month
shall be deemed to be part of the first Lease Year. Thereafter, each Lease
Year will be January 1 through December 31. If this Lease is terminated
before the end of any Lease Year, the final Lease Year will be January 1
through the date of termination thereof.
Leased Improvements: All buildings, structures, Fixtures and other
improvements of every kind currently situated on the Land, including, but
not limited to, alleyways and
13
connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site
and off-site), parking areas and roadways appurtenant to such buildings and
structures.
Leased Properties (also "Facilities"): Collectively, the Land, Leased
Improvements, Related Rights and Landlord's Personal Property, and the
licensed nursing homes and/or other healthcare facilities being operated
thereon and therein, as identified on Exhibit A hereto.
Leased Property: Any one of the Leased Properties.
Legal Requirements: As to any Leased Property, all federal, state,
county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting the
Leased Property or the construction, use or alteration thereof, whether now
or hereafter enacted and in force, including any which may (a) require
repairs, modifications or alterations in or to the Leased Property or (b)
in any way adversely affect the use and enjoyment thereof, and all permits,
licenses and authorizations and regulations relating thereto, including,
but not limited to, those relating to existing health care licenses, those
authorizing the current number of licensed beds and the level of services
delivered from the Leased Property, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of
record or known to Tenant at any time in force affecting the Leased
Property, other than covenants, agreements, restrictions and encumbrances
created by Landlord without the consent of Tenant.
Lender: GMAC Commercial Mortgage Corporation, a California
corporation.
Loan Facility: The loan evidenced by the Loan Agreement, dated as of
December 30, 1998, between Landlord and Lender and the Loan Documents (as
defined therein), together with any and all other agreements or documents
executed by Landlord or others evidencing, securing or otherwise relating
to the Loan Facility.
Lyric: Lyric Health Care LLC, a Delaware limited liability company.
Lyric Guaranty: The Guaranty, dated as of the date hereof, executed by
Lyric in favor of Landlord.
Manager: IHS Facility Management, Inc., a Delaware corporation.
Management Agreement: Collectively, the Master Management Agreement
and each Facility Management Agreement.
14
Master Franchise Agreement: The Amended and Restated Master Franchise
Agreement, dated as of December 31, 1998, between Lyric and Franchisor, as
amended from time to time, setting forth common terms and conditions for
the franchising of certain trade names, systems and other proprietary
materials for the Facilities.
Master Management Agreement: The Amended and Restated Master
Management Agreement, dated as of December 31, 1998, between Lyric and
Manager, as amended from time to time, setting forth common terms and
conditions for management of the Facilities.
Mechanics Liens: Liens of mechanics, laborers, materialmen, suppliers
or vendors.
Monarch: Monarch Properties, LLC, a Delaware limited liability
corporation.
Net Income: The aggregate net income of the Facility Subtenants from
the operation of the Facilities, determined on an accrual basis in
accordance with GAAP, before federal, state and local income taxes, but
excluding extraordinary items.
Net Proceeds: All proceeds, net of any costs incurred by Landlord in
obtaining such proceeds, payable under any risk policy of insurance
required by Article 13 of this Lease (including proceeds with respect to
the Personal Property that Tenant elects to restore or replace pursuant to
Section 14.2 hereof).
Notice: A written notice given pursuant to Section 37.1 hereof.
Officer's Certificate: A certificate signed by any one or more of the
Executive Officers.
Overdue Rate: On any date, a rate equal to three (3) percentage points
above the Prime Rate, but in no event greater than the maximum rate then
permitted under applicable law.
Partial Taking: A Taking of a portion of a Facility or of less than
the whole fee title to a Facility.
Payment Date: The due date for the payment of the installments of Base
Rent, Earn Out Rent (if any), Additional Charges or any other sums payable
under this Lease.
15
Permitted Debt: Any of the following:
(a) Debt (other than Debt as to which an Affiliate of Tenant is
the creditor) incurred by Tenant and/or the Facility Subtenants solely to
provide working capital to the respective Facilities;
(b) Debt of Tenant to Landlord;
(c) unsecured Debt of Tenant, other than for money borrowed,
incurred solely for trade payables in the ordinary course of business;
(d) Debt of Tenant to taxing or other governmental authorities
for taxes, assessments, governmental charges or levies, to the extent that
payment thereof shall not at the time be required to be made in accordance
with the provisions of Article 4 or Article 12 hereof;
(e) Debt of Tenant in respect of judgments or awards (i) which
have been in force for less than the applicable appeal period and in
respect of which execution thereof shall have been stayed pending such
appeal or review, or (ii) which are fully covered by insurance payable to
Tenant, or (iii) which are for an amount not in excess of Three Million
Dollars ($3,000,000) in the aggregate at any one time outstanding, and (A)
which have been in force for not longer than the applicable appeal period,
so long as execution is not levied thereunder, or (B) in respect of which
an appeal or proceedings for review shall at the time be prosecuted in good
faith in accordance with the provisions of Article 12 hereof, and in
respect of which execution thereof shall have been stayed pending such
appeal or review.
(f) unsecured borrowings of Tenant from its Affiliates which are
by their terms expressly subordinate to the payment and performance of
Tenant's obligations under this Lease; or
(g) Debt incurred solely for the purchase or lease of Tenant's
Personal Property.
Permitted Encumbrances: With respect to each of the Leased Properties,
matters constituting Permitted Encumbrances under the Facilities Purchase
Agreement, including any such matters arising after the Commencement Date
which, had they existed on the Commencement Date, would have been
considered Permitted Encumbrances under the Facilities Purchase Agreement.
Permitted Environmental Conditions: The asbestos-containing materials,
underground storage tanks, and other Hazardous Substances that currently
are located in,
16
on, under or about the Leased Properties, in each case as disclosed in the
Environmental Audits delivered by Tenant to Landlord prior to the date of
this Lease, except to the extent that any such conditions are required to
be remedied by Tenant under the Facilities Purchase Agreement and the
Escrow Agreement.
Person: Any natural person, trust, partnership, limited liability
company, corporation, joint venture or other legal entity.
Personal Property: All equipment, furniture, fixtures, inventory
(including linens, dietary supplies and housekeeping supplies, and
including food and other consumable inventories), furnishings, movable
walls or partitions, trade fixtures, computers, software and data
pertaining to the business of a Facility (whether such data is stored in
computers or peripheral equipment that is included within the definition of
the term "Personal Property" or is otherwise in the possession of a Tenant
or a Facility Subtenant, or in computers and equipment that is not included
within the definition of the term "Personal Property" but is either owned
by Tenant or a Facility Subtenant or as to which Tenant or a Facility
Subtenant has a right of retrieval) and other tangible personal property
used in connection with the business of a Facility, together with all
replacements, modifications, alterations and additions thereto, except (a)
items, if any, included within the definition of Fixtures or Leased
Improvements, (b) personal property leased from third parties, (c)
computers owned or leased by a Tenant or a Facility Subtenant that
customarily are not located on any of the Leased Properties, and (d)
proprietary software owned by parties other than a Tenant or a Facility
Subtenant.
Primary Intended Use: With respect to any Facility, the operation of
the Facility as a licensed health care facility.
Prime Rate: On any date, a rate equal to the annual rate on such date
publicly announced by Citibank, N.A. to be its prime rate for 90-day
unsecured loans to its corporate borrowers of the highest credit standing,
but in no event greater than the maximum rate then permitted under
applicable law.
Proceeding: Any action, proposal or investigation by any agency or
entity.
Purchase Money Financing: Any financing (whether by lease, chattel
mortgage, installment sale, or otherwise) provided by a Person to Tenant or
a Facility Subtenant in connection with the acquisition of Personal
Property used in connection with the operation of a Facility, whether by
way of installment sale or otherwise.
Purchase Price: The Purchase Price set forth in the Facilities
Purchase Agreement.
17
Qualified Capital Expenditures: Expenditures capitalized on the books
of the Tenant or a Facility Subtenant for any of the following: replacement
of furniture, fixtures and equipment, including refrigerators, ranges,
major appliances, bathroom fixtures, doors (exterior and interior), central
air conditioning and heating systems (including cooling towers, water
chilling units, furnaces, boilers and fuel storage tanks) and major
replacement of siding; major roof replacements, including major
replacements of gutters, downspouts, xxxxx and soffits; major repairs and
replacements of plumbing and sanitary systems; overhaul of elevator
systems; major repaving, resurfacing and sealcoating of sidewalks, parking
lots and driveways; repainting of entire building exterior; but excluding
major alterations, renovations and additions.
Reconstruction Period: A period of three hundred sixty-five (365) days
following the date of any damage or destruction or the Date of Taking, as
applicable, subject to extension to the extent required by Unavoidable
Delay.
Regulatory Actions: With respect to any Leased Property, any claim,
demand, notice, action or proceeding brought or initiated by any
governmental authority in connection with any Environmental Law, including,
without limitation, civil, criminal and/or administrative proceedings, and
whether or not seeking costs, damages, equitable remedies, penalties or
expenses.
Related Rights: All easements, rights and appurtenances relating to
the Land and the Leased Improvements.
Release: The intentional or unintentional spilling, leaking, dumping,
pouring, emptying, seeping, disposing, discharging, emitting, depositing,
injecting, leaching, escaping, abandoning or other release or threatened
release, however defined, of any Hazardous Substance.
Rent: Collectively, the Base Rent, the Earn Out Rent (if any) and the
Additional Charges.
Rental Value: (a) With respect to any Leased Property that has been
relet during the period in question, the Rent actually received by Landlord
for the period in question from the reletting, net of all reasonable
expenses, including brokerage commissions, fees of attorneys and
consultants and the cost of any repairs and alterations required to obtain
such reletting; provided, however, that Landlord shall use its reasonable
efforts to negotiate and obtain terms and conditions for any reletting of
the Leased Property that are commercially reasonable terms and conditions
under the circumstances, including, but not limited to, Rent from the
reletting that is reasonable for the Leased Property, and Landlord shall
abide by the real property laws applicable to the Leased Property in
respect of reletting the Leased Property and mitigating the liability and
obligations of Tenant and
18
(b) with respect to any Leased Property that has not been relet during the
period in question, the Worth at the Time of the Award of the Rent
obtainable for the applicable Leased Property for the period in question,
under a lease of the applicable Leased Property on the same terms and
conditions as are set forth in this Lease, from a Tenant that is unrelated
to Landlord and has experience and a reputation in the health care industry
and a credit standing reasonably equivalent to that of Tenant and
Guarantors.
Replaced Property: Any Fixtures or Personal Property that from time to
time are replaced, pursuant to Section 9.1.5 hereof, after the date of this
Lease.
Replacement Property: Any Fixtures or Personal Property acquired by
Tenant or a Facility Subtenant, in accordance with Section 9.1.5 hereof,
after the date of this Lease for use in connection with any Facility in
replacement of any Replaced Property.
SEC: Securities and Exchange Commission.
Second Renewal Term: The period described as such for a particular
Facility as specified in Exhibit B hereto.
Security Agreement: The security agreement of even date herewith among
Landlord, Tenant and the Facility Subtenants.
State: With respect to each Facility, the state in which it is
located.
Taking: The exercise by a Condemnor of any governmental power, whether
by legal proceedings or otherwise, to acquire an interest in any Leased
Property, or a voluntary sale or transfer by Landlord to any Condemnor,
either under threat of condemnation or while legal proceedings for
condemnation are pending.
Tenant's Personal Property: All Personal Property (a) which Tenant or
a Facility Subtenant owns and uses, as of the date of this Lease, in
connection with the operation of the Leased Property, but that has not been
conveyed to Landlord pursuant to the Facilities Purchase Agreement or (b)
which Tenant or a Facility Subtenant acquires after the Commencement Date
for use by it in connection with any Facility.
Term: The Initial Term and, if renewed as provided in Article 1, the
First Renewal Term, the Second Renewal Term and the Third Renewal Term, as
applicable.
Third Party Claims: Any legal actions or proceedings (other than
Regulatory Actions but including, without limitation, those based on
negligence, trespass, strict liability, nuisance or toxic tort due to
Contamination), and whether or not seeking costs,
19
damages, penalties or expenses, brought by any person or entity other than
a governmental agency.
Third Renewal Term: The period described as such for a particular
Facility as specified in Exhibit B hereto.
Transfer: The (a) assignment, mortgaging or other encumbering of all
or any part of Tenant's interest in this Lease, a Facility Subtenant's
interest in a Facility Sublease or Tenant's or a Facility Subtenant's
interest in the Leased Property, (b) the subletting of the whole or any
part of the Leased Property to any Person other than a Facility Subtenant
or (c) the entering into of any management agreement (other than the
Management Agreement) or other arrangement under which any Facility is
operated by or licensed to be operated by an entity other than Tenant, a
Facility Subtenant or the Manager.
Transferee: Any assignee, subtenant or other occupant of any Leased
Property pursuant to any Transfer.
Umbrella Policies: Policies of insurance that cover risks in excess of
the liability limits of policies required to be carried under this Lease.
Unavoidable Delays: Delays due to strikes, lock-outs, inability to
procure materials, power failure, acts of God, governmental restrictions,
enemy action, civil commotion, fire, unavoidable casualty or other causes
beyond the reasonable control of the party responsible for performing an
obligation hereunder, provided that lack of funds shall not be deemed a
cause beyond the control of a party.
Unsuitable for Its Primary Intended Use: A state or condition of a
Facility such that, by reason of damage or destruction or a Partial Taking,
such Facility cannot reasonably be expected to be repaired and restored
within the Reconstruction Period to a condition in which it may be operated
on a commercially practicable basis for its Primary Intended Use, taking
into account, among other relevant factors, the number of useable beds, the
amount of square footage and the estimated revenue affected by such damage
or destruction or Partial Taking.
Worth at the Time of the Award: The present value of the applicable
amount, determined at the time required in Section 16.5 hereof, by
discounting the applicable amount by the Prime Rate.
2.2 OTHER DEFINITIONS. Other words and phrases are defined elsewhere in
this Lease and in the Exhibits and Schedules hereto.
20
ARTICLE 3
RENT; RELATED MATTERS
3.1 RENT. Tenant shall pay the Rent in lawful money of the United States of
America and legal tender for the payment of public and private debts. The first
payment of Base Rent shall be due on the Commencement Date, prorated for the
period from the Commencement Date until the last day of the first full calendar
month of the Term. After the first payment, Tenant shall pay the Base Rent in
equal, consecutive monthly installments in advance on the first day of each
calendar month of the Term. Unless otherwise agreed by the parties, Rent shall
be prorated as to any partial month at the end of the Term.
3.2 ADDITIONAL CHARGES. In addition to the Base Rent, Tenant will also pay
and discharge as and when due and payable all Additional Charges. If Tenant
fails to pay any Additional Charges as and when due, Tenant will also promptly
pay and discharge as Additional Charges every fine, penalty, interest and cost
which may be added for non-payment or late payment.
3.3 EARN OUT RENT. The first payment of Earn Out Rent shall be due on the
first day of the month following the date Landlord makes an earn out payment to
IHS in accordance with Section 3.2 of the Facilities Purchase Agreement;
provided, however, that the amount of Earn Out Rent due Landlord shall be
prorated for the period from the date Landlord makes the earn out payment to IHS
until the last day of the Lease Year, with the full amount of Earn Out Rent due
in the following Lease Year and throughout the remainder of the Term. Tenant
shall pay the Earn Out Rent in equal, consecutive monthly installments in
advance on the first day of each calendar month of the remaining Term.
3.4 LATE CHARGE; INTEREST. If any installment of Base Rent, Earn Out Rent
(if any) or any Additional Charges payable by Tenant to Landlord hereunder is
not paid within five (5) Business Days of the due date, Tenant shall pay
Landlord on demand, as an Additional Charge, (a) a late charge of five percent
(5%) of the amount due and unpaid and (b) if such payment is not made within
thirty (30) days of the date due, interest thereon at the Overdue Rate from such
thirtieth (30th) day until the date on which such payment plus such late charge
and interest is paid in full.
3.5 METHOD OF PAYMENT OF RENT. All Rent to be paid to Landlord shall be
paid by electronic funds transfer debit transactions through wire transfer of
immediately available funds to Landlord per the wiring instructions set forth on
Exhibit I hereto (as from time to time be changed by Landlord by Notice to
Tenant) and shall be initiated by Tenant for settlement on or before the due
date each calendar month; provided, however, if the due date is not a Business
Day, then settlement shall be made on the next succeeding day which is a
Business Day. Tenant shall inform Landlord of each payment by sending a
facsimile transmission of Tenant's wire
21
transfer confirmation not later than noon, eastern standard or daylight time, on
the Business Day immediately following the applicable payment date.
3.6 NET LEASE; NO OFFSET. The Rent shall be paid absolutely net to
Landlord, so that this Lease shall yield to Landlord the full amount of the
installments of Base Rent, Earn Out Rent (if any) and Additional Charges payable
hereunder throughout the Term, subject to the terms and conditions hereof. This
Lease is and shall be a "pure-net" or "triple-net" lease, as such terms are
commonly used in the real estate industry, it being intended that Tenant shall
pay all costs, expenses and charges arising out of the use, occupancy and
operation of the Leased Properties, without any offset, deduction, abatement, or
counterclaim whatsoever. Landlord shall not be required to furnish any services
whatsoever to any Facilities or to make any payment of any kind whatsoever; and
Landlord shall not be responsible for any loss or damage to any property of
Tenant, or a Facility Subtenant or any other user or occupant of any part of any
Facility, absent the gross negligence or willful misconduct of Landlord, its
employees or agents.
ARTICLE 4
IMPOSITIONS; RELATED MATTERS
4.1 PAYMENT OF IMPOSITIONS. Subject to the provisions of Article 12, Tenant
will pay or cause to be paid all Impositions before any fine, penalty, interest
or cost may be added for non-payment, and Tenant will promptly, upon request,
furnish to Landlord copies of official receipts or other satisfactory proof
evidencing such payments. If any such Imposition may, at the option of the
taxpayer, lawfully be paid in installments (whether or not interest shall accrue
on the unpaid balance of such Imposition), Tenant may exercise the option to pay
the same (and any accrued interest on the unpaid balance of such Imposition) in
installments and, in such event, Tenant shall pay such installments during the
Term hereof as the same respectively become due and before any fine, penalty,
premium, further interest or cost may be added thereto. Refunds of Impositions
paid by Tenant shall be paid to or retained by Tenant. Landlord shall remit
promptly to Tenant any refunds of Impositions received by Landlord. Landlord and
Tenant shall, upon request of the other, provide such data as is maintained by
the party to whom the request is made with respect to each Leased Property as
may be necessary to prepare any required returns and reports. Tenant will
provide Landlord, upon request, with cost and depreciation records in its
possession that are reasonably necessary for filing returns for any property
classified as personal property. Tenant may, at Tenant's sole cost and expense,
protest, appeal or institute such other proceedings as Tenant may deem
appropriate to effect a reduction of Impositions, and Landlord shall cooperate
with Tenant in such protest, appeal or other action. Tenant shall reimburse
Landlord for Landlord's direct costs of cooperating with Tenant with respect to
such protest, appeal or other action and shall indemnify, defend and hold
Landlord harmless against any expense or loss as a result thereof. The foregoing
shall not be construed as indemnifying Landlord against its own grossly
negligent acts or omissions or willful misconduct.
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4.2 ADJUSTMENT OF IMPOSITIONS. Impositions imposed in respect of the
tax-fiscal period during which the Term ends shall be adjusted and prorated
between Landlord and Tenant, whether or not such Imposition is imposed before or
after termination or expiration, and Tenant's obligation to pay their prorated
share thereof, if the same becomes due after such termination or expiration,
shall survive such termination or expiration.
4.3 UTILITY CHARGES. Tenant will pay or cause to be paid when due all
charges for electricity, power, gas, oil, water and other utilities used in the
respective Leased Properties during the Term.
4.4 INSURANCE PREMIUMS. Tenant will pay or cause to be paid when due all
premiums for the insurance coverage required to be maintained pursuant to
Article 13 during the Term.
ARTICLE 5
NO TERMINATION, ABATEMENT, ETC.
Except as otherwise specifically provided in this Lease, Tenant shall
remain bound by this Lease in accordance with its terms and shall not take any
action without the consent of Landlord to modify, surrender or terminate the
same, and shall not seek or be entitled to any offset, deduction abatement, or
counterclaim, or any deferral or reduction of Rent . The respective obligations
of Landlord and Tenant shall not be affected by reason of (a) any damage to, or
destruction of, any Leased Property or any portion thereof from whatever cause
or any Taking of any Leased Property or any portion thereof, except as expressly
set forth herein; (b) the lawful or unlawful prohibition of, or restriction
upon, Tenant's use of any Leased Property, or any portion thereof, or the
interference with such use by any Person (other than Landlord or its employees
or agents) or by reason of eviction by paramount title; (c) any claim which
Tenant has or might have against Landlord or by reason of any default or breach
of any warranty by Landlord under this Lease or any other agreement between
Landlord and Tenant, or to which Landlord and Tenant are parties, (d) any
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Landlord or any assignee
or transferee of Landlord, or (e) any other cause whether similar or dissimilar
to any of the foregoing other than a discharge of Tenant from any such
obligations as a matter of law. Tenant hereby specifically waives all rights,
arising from any occurrence whatsoever, which may now or hereafter be conferred
upon it by law to (i) modify, surrender or terminate this Lease or quit or
surrender any Leased Property or any portion thereof, or (ii) except as
otherwise specifically provided in this Lease, entitle Tenant to any reduction,
suspension or deferral of the Rent or other sums payable by Tenant hereunder
except and unless as otherwise specifically provided in this Lease.
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ARTICLE 6
OWNERSHIP OF LEASED PROPERTY; PERSONAL PROPERTY
6.1 OWNERSHIP OF THE LEASED PROPERTY. Tenant acknowledges that the Leased
Properties are the property of Landlord and that Tenant has only the right to
the possession and use of the Leased Property leased by it upon the terms and
conditions of this Lease. Tenant will not (a) file any income tax return or
other associated documents; (b) file any other document with or submit any
document to any governmental body or authority; (c) enter into any written
contractual arrangement with any Person; or (d) release any financial statements
of Tenant, in each case that takes any position other than that, throughout the
Term, Landlord is the owner of the Leased Properties for federal, state and
local income tax purposes and that this Lease is a "true lease".
6.2 LANDLORD'S PERSONAL PROPERTY. Tenant shall, during the entire Term,
maintain all of Landlord's Personal Property in good order, condition and repair
as shall be necessary in order to operate the Facilities for the Primary
Intended Use in compliance with applicable licensure and certification
requirements, applicable Legal Requirements and Insurance Requirements, and
customary industry practice for the Primary Intended Use. If any of Landlord's
Personal Property requires replacement in order to comply with the foregoing,
Tenant shall replace it with other similar property of the same or better
quality at Tenant's sole cost and expense; the Replaced Property shall no longer
be Landlord's Personal Property; and the Replacement Property shall become part
of Landlord's Personal Property. Tenant shall not permit or suffer Landlord's
Personal Property to be subject to any lien, charge, encumbrance, financing
statement or agreement or contract of sale or the like, except for any purchase
money security interest on equipment or Landlord's interest therein, expressly
approved in advance, in writing, by Landlord. At the expiration or earlier
termination of this Lease, all of Landlord's Personal Property shall be
surrendered to Landlord with the Leased Property in the condition required by
Section 9.1.6 hereof.
6.2.1 Motor Vehicles. Tenant acknowledges that the motor vehicles
described in the Xxxx of Sale were purchased by Landlord pursuant to
the Facilities Purchase Agreement, are the property of Landlord, and
are leased to Tenant hereunder, notwithstanding the fact that for the
convenience of the parties record title to such vehicles has not
changed and the interest of Landlord is not reflected on the
certificates of title of such vehicles. Upon demand of Landlord,
Tenant shall deliver to Landlord, and cause the Facility Subtenants to
deliver to Landlord, the certificates of title to any such vehicles.
6.3 TENANT'S PERSONAL PROPERTY. Tenant shall provide and maintain, during
the entire Term, such Personal Property, in addition to Landlord's Personal
Property, as shall be necessary and appropriate in order to operate each
Facility for its Primary Intended Use in
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compliance with all licensure and certification requirements, in compliance with
all applicable Legal Requirements and Insurance Requirements and otherwise in
accordance with customary practice in the industry for the Primary Intended Use.
Upon the expiration or earlier termination of this Lease, without the payment of
any additional consideration by Landlord, Tenant shall be deemed to have sold,
assigned, transferred and conveyed to Landlord all of Tenant's right, title and
interest in and to any of the respective Tenant's Personal Property that is
integral to the use of the respective Facilities for their Primary Intended Use,
and shall, upon Landlord's request, execute and deliver to Landlord a xxxx of
sale with respect thereto, and without Landlord's prior written consent Tenant
shall not remove the same from the respective Leased Properties. Any of Tenant's
Personal Property that is not integral to the use of the respective Facilities
at such time may be removed by Tenant, and, if not removed within thirty (30)
days following the expiration or earlier termination of this Lease, shall be
considered abandoned by Tenant and may be appropriated, sold, destroyed or
otherwise disposed of by Landlord without giving notice thereof to Tenant and
without any payment to Tenant or any obligation to account therefor. Tenant
will, at its expense, repair all damage to the Leased Properties that is caused
by the removal of any of Tenant's Personal Property, whether effected by Tenant
or Landlord.
6.4 GRANT OF SECURITY INTEREST IN TENANT'S PERSONAL PROPERTY; RESTRICTION
ON OTHER LIENS. Tenant and each Facility Subtenant have concurrently granted to
Landlord a security interest in Tenant's Personal Property upon the terms set
forth in the Security Agreement. Without Landlord's consent, Tenant shall not
permit or suffer Tenant's Personal Property to be subject to any lien, charge,
encumbrance, financing statement or contract of sale other than to secure
Permitted Debt.
ARTICLE 7
CONDITION AND USE OF LEASED PROPERTIES
7.1 CONDITION OF THE LEASED PROPERTIES. Tenant acknowledges that Tenant has
examined and otherwise has knowledge of the condition of the Leased Property
leased by it prior to the execution and delivery of this Lease and has found the
same to be in good order and repair and satisfactory for its purposes hereunder.
Tenant is leasing the applicable Leased Property "as is" in its condition on the
Commencement Date. Tenant waives any claim or action against Landlord in respect
of the condition of the Leased Property being leased by it. LANDLORD MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF ANY LEASED
PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE, OR OTHERWISE AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED
PROPERTY LEASED BY IT HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO
TENANT.
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TENANT FURTHER ACKNOWLEDGES THAT, ON AND AFTER THE COMMENCEMENT DATE AND
THROUGHOUT THE TERM, TENANT IS SOLELY RESPONSIBLE FOR THE CONDITION OF THE
LEASED PROPERTY LEASED BY IT. TO THE EXTENT PERMITTED BY LAW, HOWEVER, LANDLORD
HEREBY ASSIGNS TO TENANT ALL OF LANDLORD'S RIGHTS TO PROCEED AGAINST ANY
PREDECESSOR IN TITLE FOR BREACHES OF WARRANTIES OR REPRESENTATIONS OR FOR LATENT
DEFECTS IN THE APPLICABLE LEASED PROPERTY. LANDLORD SHALL FULLY COOPERATE WITH
TENANT IN THE PROSECUTION OF ANY SUCH CLAIMS, IN LANDLORD'S OR TENANT'S NAME,
ALL AT TENANT'S SOLE COST AND EXPENSE. TENANT SHALL INDEMNIFY, DEFEND, AND HOLD
HARMLESS LANDLORD FROM AND AGAINST ANY LOSS, COST, DAMAGE OR LIABILITY
(INCLUDING REASONABLE ATTORNEYS' FEES, COSTS AND DISBURSEMENTS) INCURRED BY
LANDLORD IN CONNECTION WITH SUCH COOPERATION.
7.2 USE OF THE LEASED PROPERTY.
7.2.1 Subject to the exceptions in clause (f) of the definition of
"Event of Default" in Article 2 hereof, throughout the Term, Tenant shall
continuously use the Leased Property leased by it for the Primary Intended Use
and for such other uses as may be necessary or incidental thereto, and no Tenant
shall use any Leased Property or any portion thereof for any other use without
the prior written consent of Landlord. No use shall be made or permitted to be
made of, or allowed in, any Leased Property, and no acts shall be done, which
will cause the cancellation of, or be prohibited by, any insurance policy
covering any Leased Property or any part thereof.
7.2.2 Tenant agrees that the Leased Property and Tenant's Personal
Property shall not be used for any unlawful purpose, nor shall Tenant commit or
suffer any waste on the Leased Property or cause or permit any nuisance thereon.
7.2.3 Tenant shall not suffer or permit the Leased Property, or any
portion thereof, or Tenant's Personal Property to be used in such a manner as
(i) might reasonably tend to impair Landlord's (or Tenant's, as the case may be)
title thereto or to any portion thereof, or (ii) may reasonably make possible a
claim or claims of adverse usage or adverse possession by the public or of
implied dedication of the applicable Leased Property or any portion thereof.
ARTICLE 8
LEGAL AND INSURANCE REQUIREMENTS
8.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS. Subject to Article
12, Tenant, at its expense, will promptly (i) comply with all applicable Legal
Requirements and
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Insurance Requirements in respect of the use, operation, maintenance, repair and
restoration of the Leased Property and Tenant's Personal Property, whether or
not compliance therewith requires structural changes in any of the Leased
Improvements (which structural changes shall be subject to Landlord's prior
written approval, which approval shall not be unreasonably withheld or delayed)
or interferes with or prevents the use and enjoyment of the Leased Property, and
(ii) procure, maintain and comply with all licenses, certificates of need,
provider agreements and other authorizations required for the use of the Leased
Property and Tenant's Personal Property then being made, and for the proper
erection, installation, operation and maintenance of the Leased Property or any
part thereof.
8.2 LEGAL REQUIREMENT COVENANTS. Tenant's use, maintenance, operation and
any alteration of the Leased Property shall at all times conform to all
applicable local, state, and federal laws, ordinances, rules, and regulations
(including but not limited to the Americans with Disabilities Act). The judgment
of any court or administrative body of competent jurisdiction, or the decision
of any arbitrator (final beyond any appeal) that Tenant has violated any such
Legal Requirements or Insurance Requirements, shall be conclusive of that fact
as between Landlord and Tenant.
8.3 CERTAIN FINANCIAL AND OTHER COVENANTS.
8.3.1 Certain Financial Covenants.
8.3.1.1 Minimum Capital Expenditures. During the second Lease
Year, Tenant shall make at least Three Hundred Dollars ($300) per-licensed-bed
of Qualified Capital Expenditures, and thereafter throughout the Term, Tenant
shall in each Lease Year make Qualified Capital Expenditures in an amount equal
to the amount of such expenditures required for the immediately preceding Lease
Year, multiplied by the percentage increase in the Cost of Living Index from the
first day of the prior Lease Year to the first day of the current Lease Year.
The amount of Qualified Capital Expenditures per-licensed-bed may never be less
in any Lease Year than the amount established in the prior Lease Year.
8.3.1.2 Permitted Debt. Except for Permitted Debt, Tenant shall
not incur or permit any Facility Subtenant to incur any Debt without the prior
written consent of Landlord, which Landlord may withhold in its discretion;
provided, however, that Landlord agrees that for a period of ninety (90) days
from the date hereof, Permitted Debt shall include the obligations of Tenant and
the Facility Subtenants arising out of the Guaranty and the Pledge and Security
Agreement pursuant to which obligations of IHS are guaranteed under IHS's
Revolving Credit and Term Loan Agreement, dated as of September 15, 1997, as
amended, provided further, however, that upon the expiration of such ninety (90)
day period, such obligations shall no longer be deemed Permitted Debt and the
existence of such obligations thereafter shall constitute an Event of Default
hereunder.
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8.3.1.3 Cash Flow to Debt Service Requirement. At all times
during the Term, Tenant shall maintain a ratio of Cash Flow from the Facilities
to Debt Service at least equal to the Cash Flow to Debt Service Requirement.
8.3.2 Management; Franchise.
8.3.2.1 Management Agreements. With respect to any of the Leased
Properties, Tenant shall not enter into, or permit any Facility Subtenant to
enter into, any management agreement other than the Management Agreement without
Landlord's consent, which consent Landlord may withhold or condition in its sole
discretion, and in no event without a satisfactory subordination by the manager
of its right to receive any management fees to the obligation of Tenant to pay
the Base Rent, the Earn Out Rent (if any) and Additional Charges to Landlord. As
long as Manager is owned or controlled by IHS, in the ordinary course of
business Tenant shall have the right to amend, modify or otherwise change the
terms of the Management Agreement without the prior written consent of Landlord;
provided, however, that any such amendments, modifications or other changes that
are material shall require the prior written consent of Landlord, which consent
shall not unreasonably be withheld.
8.3.2.2 Franchise Agreements. With the approval of Landlord,
Tenant has entered into the Franchise Agreement. As long as Franchisor is owned
or controlled by IHS, in the ordinary course of business Tenant shall have the
right to amend, modify or otherwise change the terms of the Franchise Agreement
without the prior written consent of Landlord; provided, however, that any such
amendments, modifications or other changes that are material shall require the
prior written consent of Landlord, which consent shall not unreasonably be
withheld.
8.4 OTHER BUSINESSES. During the Term of this Lease, Tenant shall not,
directly or indirectly, own, operate or manage any businesses other than health
care businesses.
ARTICLE 9
MAINTENANCE AND REPAIR; ENCROACHMENTS
9.1 MAINTENANCE AND REPAIR.
9.1.1 Tenant, at its expense, shall keep the Leased Property and all
fixtures thereon and all landscaping, private roadways, sidewalks and curbs
appurtenant thereto and which are under Tenant's control and Tenant's Personal
Property that is integral to the use of the respective Facilities for their
Primary Intended Use, in good order and repair (whether or not the need for such
repairs occurs as a result of Tenant's use, any prior use, the elements or the
age of the applicable Leased Property or any portion thereof, or any cause
whatever except the failure of Landlord to make any payment or to perform any
act expressly required under the Lease or the
28
negligence or willful misconduct of Landlord), and, except as may be provided to
the contrary in Article 14, with reasonable promptness, make all necessary and
appropriate repairs thereto of every kind and nature, whether interior or
exterior, structural or non-structural, ordinary or extraordinary, foreseen or
unforeseen or arising by reason of a condition existing prior to the
commencement of the Term of this Lease (concealed or otherwise).
9.1.2 Tenant shall do or cause others to do all shoring of the Leased
Property leased by it or adjoining property (whether or not owned by Landlord)
or of the foundations and walls of the Leased Improvements, and every other act
necessary or appropriate for the preservation and safety thereof, by reason of
or in connection with any subsidence, settling or excavation or other building
operation upon the Leased Property leased by it or adjoining property, whether
or not Tenant or Landlord shall, by any Legal Requirements, be required to take
such action or be liable for the failure to do so; provided, however, that such
shoring and any other material acts shall be subject to the prior written
consent of Landlord, which shall not unreasonably be withheld or delayed. All
repairs shall, to the extent reasonably achievable, be at least equivalent in
quality to the original work, and, subject to the provisions of paragraph 9.1.6,
where, by reason of age or condition, such repairs cannot be made to the quality
of the original work, the property to be repaired shall be replaced.
9.1.3 Landlord shall not under any circumstances be required to build
or rebuild any improvements on any Leased Property or on any property
appurtenant thereto, or to make any repairs, replacements, alterations,
restorations or renewals of any nature or description to any Leased Property,
whether ordinary or extraordinary, structural or non-structural, foreseen or
unforeseen, or upon any adjoining property, whether to provide lateral or other
support for any Leased Property or xxxxx a nuisance affecting any Leased
Property, or otherwise, or to make any expenditure whatsoever with respect
thereto, in connection with the Lease, or to maintain any Leased Property in any
way. Tenant hereby waives, to the extent permitted by law, any right provided by
law, but not provided by the terms of this Lease, to make repairs at the expense
of Landlord.
9.1.4 Nothing contained in this Lease shall be construed as (a)
constituting the consent or request of Landlord, expressed or implied, to any
contractor, subcontractor, laborer, materialmen or vendor to or for the
performance of any labor or services or the furnishing of any materials or other
property for the construction, alteration, addition, repair or demolition of or
to any Leased Property or any part thereof, or (b) giving Tenant any right,
power or permission to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against Landlord in respect thereof or to
make any agreement that may create, or in any way be the basis for any right,
title, interest, lien, claim or other encumbrance upon the estate of Landlord in
any Leased Property or any portion thereof. Landlord shall have the right to
give, record and post, as appropriate, notices of non-responsibility under any
mechanics' and construction lien laws now or hereafter existing.
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9.1.5 Tenant shall, from time to time as and when needed, replace with
Replacement Property any of the Fixtures or Personal Property (except Tenant's
Personal Property that is not integral to the use of the respective Facilities
for their Primary Intended Use) which shall have (a) become worn out, obsolete
or unusable for the purpose for which it is intended (if such Fixtures or
Personal Property continues to be necessary), (b) been the subject of a Taking
(in which event Tenant shall be entitled to that portion of any Award made
therefor), or (c) been lost, stolen or damaged or destroyed; provided, however,
that the Replacement Property shall (i) be in good operating condition, (ii) be
of a quality reasonably equivalent to that of the Replaced Property and (iii) be
suitable for a use which is the same or similar to that of the Replaced
Property. Tenant shall repair at its sole cost and expense all damage to the
applicable Leased Property caused by the removal of Replaced Property or other
personal property of Tenant or the installation of Replacement Property. All
Replacement Property shall become the property of Landlord and shall become
Fixtures or Landlord's Personal Property, as the case may be, to the same extent
as the Replaced Property had been. Upon Landlord's written request Tenant shall
with reasonable promptness cause to be executed and delivered to Landlord an
invoice, xxxx of sale or other appropriate instrument evidencing the transfer or
assignment to Landlord of all estate, right, title and interest (other than the
leasehold estate created hereby) of Tenant or any other Person in and to any
Replacement Property which, by operation of this Section 9.1.5, constitutes
Fixtures or Landlord's Personal Property, and the cost of which exceeds Twenty
Five Thousand Dollars ($25,000), free from all liens and other exceptions to
title, and Tenant shall pay all taxes, fees, costs and other expenses that may
become payable as a result thereof.
9.1.6 Upon the expiration or earlier termination of the Term, Tenant
shall vacate and surrender the Leased Property leased by it to Landlord as a
fully equipped, licensed health care facility, with all equipment required by
the laws of the State to maintain its then current license, and shall assign and
transfer to Landlord (or to another Person designated by Landlord) the Facility
Trade Names (excluding the words "Integrated," "IHS" and any variants thereof
from such trade names), local telephone numbers, local electronic mail and
"Internet" addresses, if any, under which the Facilities are then conducting
business, and all Facility- specific licenses, permits and rights to do business
of every kind (subject to such governmental approvals as may be required),
patient admission agreements and records, supplier and operator contracts, a
copy of all then-current data maintained by Tenant in writing or recorded on
computer media with respect to the business of the applicable Facility and all
computer software necessary to access and manipulate such data. Tenant shall not
be required to transfer proprietary software to Landlord, but shall cause the
data it is to transfer to Landlord to be transferred to Landlord, without
charge. At the expiration of the Term or the sooner termination of this Lease,
the Leased Properties, including all Leased Improvements, Fixtures and
Landlord's Personal Property, shall be returned to Landlord in good operating
condition, ordinary wear and tear, Taking and casualty damage that Tenant is not
required by this Lease to repair or restore, excepted, and except as repaired,
rebuilt, restored, altered or added to as permitted or required by the
provisions of this Lease. Notwithstanding anything to the contrary in this
Lease, not more than fifty percent (50%)
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of the value of the Personal Property returned to Landlord as required herein
may at the time of such return be subject to Purchase Money Financing, and at
the time of such return Tenant shall assign to Landlord all of its right, title
and interest in and to such any and all documents evidencing such Purchase Money
Financing.
9.2 ENCROACHMENTS, RESTRICTIONS, ETC. Except in the case of Permitted
Encumbrances, if any of the Leased Improvements (other than as existing on the
Commencement Date), at any time encroaches in a material adverse manner upon any
property, street or right-of-way adjacent to any Leased Property, or materially
violates the agreements or conditions contained in any lawful restrictive
covenant or other agreement affecting any Leased Property or any part thereof,
or materially impairs the rights of others under any easement or right-of-way to
which any Leased Property is subject, then promptly upon the request of Landlord
or at the behest of any person legitimately affected by any such encroachment,
violation or impairment, Tenant shall, at its expense, either (a) obtain valid
and effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment, or (b) make such
changes to the Leased Improvements, and take such other actions, as are
reasonably practicable, to remove such encroachment, and to end such violation
or impairment, including, if necessary, the alteration of any of the applicable
Leased Improvements, and in any event take all such actions as may be necessary
in order to be able to continue the operation of the applicable Leased Property
for the Primary Intended Use substantially in the manner and to the extent the
applicable Leased Property was operated prior to the assertion of such
violation, impairment or encroachment.
ARTICLE 10
ALTERATIONS AND ADDITIONS
10.1 CONSTRUCTION OF ALTERATIONS AND ADDITIONS TO LEASED PROPERTY. Tenant
shall not make or permit to be made any alterations, improvements or additions
of or to the Leased Property leased by it or any part thereof, other than
non-structural alterations having no material effect on the roof, foundation,
utility systems or structure, unless and until Tenant has caused plans and
specifications therefor to have been prepared, at Tenant's expense, by a
licensed architect and submitted to Landlord at least thirty (30) days (ninety
(90) days, if such alterations, improvements or additions are reasonably
estimated to cost more than the Approval Threshold) in advance of the
commencement of construction, and has obtained Landlord's written approval
thereof. Landlord shall have the right to require that, prior to the
commencement of construction of any alterations, improvements or additions as to
which its approval is required hereunder, Tenant also provide Landlord with
reasonable assurance of the payment of the cost thereof and, if the cost thereof
is in excess of the Approval Threshold, Tenant shall comply with Landlord's
requirements with respect to the periodic delivery of lien waivers and evidence
of payment for such cost. If such approval is granted, Tenant shall cause the
work described in such approved
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plans and specifications to be performed, at its expense, promptly, and in a
good, workerlike manner by licensed contractors and in compliance with
applicable governmental and Insurance Requirements and Legal Requirements and
the standards set forth in this Lease, which improvements shall in any event
constitute a complete architectural unit (if applicable) in keeping with the
character of the applicable Leased Property and the area in which the applicable
Leased Property is located and which will not diminish the value of the
applicable Leased Property or change the Primary Intended Use of the applicable
Leased Property. Tenant shall be responsible for the completion of such
improvements in accordance with the plans and specifications approved by
Landlord, and shall promptly correct any failure with respect thereto. Each and
every such improvement, alteration or addition shall immediately become a part
of the applicable Leased Property and shall belong to Landlord subject to the
terms and conditions of this Lease. Tenant shall not have any claim against
Landlord at any time in respect of the cost or value of any such improvement,
alteration or addition. There shall be no adjustment in the Base Rent and Earn
Out Rent (if any) by reason of any such improvement, alteration or addition,
unless such improvement, alteration or addition is financed by Landlord. With
Landlord's consent, expenditures made by a Tenant pursuant to this Article 10
may be included as capital expenditures for purposes of inclusion in the capital
expenditures budget for the applicable Facility and for measuring compliance
with the obligations of Tenant set forth in Section 8.3.1.1 hereof.
10.2 ASBESTOS REMOVAL FOR ALTERATIONS AND ADDITIONS. In connection with any
alteration other than removal pursuant to the Escrow Agreement which involves
the removal, demolition or disturbance of any asbestos-containing material,
Tenant shall cause to be prepared at its expense a full asbestos assessment
applicable to such alteration, and shall carry out such asbestos monitoring and
maintenance program as shall reasonably be required thereafter in light of the
results of such assessment.
ARTICLE 11
REMOVAL OF LIENS
Without the consent of Landlord, and except as expressly provided elsewhere
herein, Tenant shall not directly or indirectly create or allow to remain, and
within thirty (30) business days after notice thereof shall promptly discharge
at its expense, any lien, encumbrance, attachment, title retention agreement or
claim upon the Leased Property, and any attachment, levy, claim or encumbrance
in respect of the Rent, excluding (a) Permitted Encumbrances, (b) Mechanics
Liens for sums not yet due, (c) liens created by the acts or omissions of
Landlord, and (d) Mechanics Liens which Tenant is contesting (provided that the
aggregate amount of such contested liens shall not exceed one months' Base Rent
allocable to the Facility in question).
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ARTICLE 12
CONTEST OF LEGAL REQUIREMENTS, ETC.
12.1 PERMITTED CONTESTS. Tenant, on its own or on Landlord's behalf (or in
Landlord's name), but at Tenant's sole cost and expense, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity of any Imposition, Legal Requirement, Insurance
Requirement or Claim not otherwise permitted by Article 11, but this shall not
be deemed or construed in any way as relieving, modifying or extending Tenant's
covenants to pay or to cause to be paid any such charges at the time and in the
manner as in this Lease provided, nor shall any such legal proceedings operate
to relieve Tenant from its obligations hereunder and or cause the sale of any
Leased Property, or any part thereof, to satisfy the same or cause Landlord or
Tenant to be in default under any Encumbrance or in violation of any Legal
Requirements or Insurance Requirements upon any Leased Property or any interest
therein. Upon request of Landlord, if the claim exceeds the Approval Threshold,
Tenant shall either (a) provide a bond, letter of credit or other assurance
reasonably satisfactory to Landlord that all Claims, together with interest and
penalties, if any, thereon, will be paid, or (b) deposit within the time
otherwise required for payment with a bank or trust company selected by Landlord
as trustee, as security for the payment of such Claims, money in an amount
sufficient to pay the same, together with interest and penalties in connection
therewith, and all Claims which may be assessed against or become a Claim on the
applicable Leased Property, or any part thereof, in said legal proceedings.
Tenant shall furnish Landlord and any lender to Landlord and any other party
entitled to assert or enforce any Legal Requirements or Insurance Requirements
with evidence of such deposit within five (5) days of the same. Landlord agrees
to join in any such proceedings if the same be required to legally prosecute
such contest of the validity of such Claims; provided, however, that Landlord
shall not thereby be subjected to any liability for the payment of any costs or
expenses in connection with any such proceedings; and Tenant covenants to
indemnify and save harmless Landlord from any such costs or expenses, including
but not limited to attorney's fees incurred in any arbitration proceeding,
trial, appeal and post-judgment enforcement proceedings. Tenant shall be
entitled to any refund of any Claims and such charges and penalties or interest
thereon which have been paid by Tenant or paid by Landlord and for which
Landlord has been fully reimbursed. If Tenant fails to pay or satisfy the
requirements or conditions of any Claims when finally determined to be due or to
provide the security therefor as provided in this paragraph and to diligently
prosecute any contest of the same, Landlord may, upon thirty (30) days advance
written Notice to Tenant, pay such charges or satisfy such claims together with
any interest and penalties and the same (or the cost thereof) shall be repayable
by Tenant to Landlord forthwith as Additional Charges. If Landlord reasonably
determines that a shorter period is necessary in order to prevent loss to the
applicable Leased Property or avoid damage to Landlord, then Landlord shall give
such written Notice as is practical under the circumstances.
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12.2 LANDLORD'S REQUIREMENT FOR DEPOSITS. Upon and at any time after an
Event of Default, and regardless of whether or not Tenant subsequently cures
such Event of Default, Landlord, in its sole discretion, shall be entitled to
require Tenant to pay monthly a pro rata portion of the amounts required to
comply with the Insurance Requirements, any Imposition and any Legal
Requirements, and when such obligations become due, Landlord shall pay them (to
the extent of the deposit). If sufficient funds have not been deposited to cover
the amount of the obligations due at least thirty (30) days in advance of the
due date, Tenant shall forthwith deposit the same with Landlord upon written
request from Landlord. Landlord shall deposit such funds in a separate
interest-bearing account and shall not commingle such deposited funds with its
other funds, and Tenant shall be entitled to all interest paid on any deposit so
held by Landlord unless and except to the extent that Landlord, having the right
to do so by the terms of this Lease, applies such interest to Tenant's
obligations hereunder. Upon an Event of Default under this Lease, any of the
funds remaining on deposit may be applied under this Lease, in any manner and on
such priority as is determined by Landlord and after five (5) days Notice to
Tenant.
ARTICLE 13
INSURANCE
13.1 GENERAL INSURANCE REQUIREMENTS. During the Term, Tenant shall at all
times keep the Leased Property, and all property located in or on the applicable
Leased Property, including all Personal Property, insured with the kinds and
amounts of insurance described below. This insurance shall be written by
companies authorized to do insurance business in the State. All such policies
provided and maintained during the Term shall be written by companies having a
rating classification of not less than "A-VI" and a financial size category of
"Class X," according to the then most recent issue of Best's Key Rating Guide.
The policies (other than Workers' Compensation policies) shall name Landlord as
an additional insured. Losses shall be payable to Landlord and Tenant and
disbursed as provided in Article 14. Tenant shall pay when due all of the
premiums for the insurance required hereunder, and deliver certificates thereof
(in form and substance reasonably satisfactory to Landlord) to Landlord prior to
their effective date, or, with respect to any renewal policy, prior to the
expiration of the existing policy. In the event of the failure of Tenant either
to effect such insurance as herein called for or to pay the premiums therefor,
or to deliver such certificates thereof to Landlord at the times required,
Landlord shall be entitled, but shall have no obligation, to effect such
insurance and pay the premiums therefor when due, which premiums shall be
repayable to Landlord upon written demand therefor as Rent, and failure to repay
the same within thirty (30) days after Notice shall constitute an Event of
Default. The policies on each Leased Property, including the Leased Improvements
and Fixtures, and on the Personal Property, shall insure against the following
risks:
13.1.1 Loss or damage by fire, vandalism and malicious mischief,
earthquake (if available at commercially reasonable rates) and extended coverage
perils commonly known as
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"Special Risk," and all physical loss perils normally included in such Special
Risk insurance, including but not limited to sprinkler leakage, in an amount not
less than ninety percent (90%) of the then full replacement cost thereof (as
defined in Section 13.2 hereof);
13.1.2 Loss or damage by explosion of steam boilers, pressure vessels
or similar apparatus, now or hereafter installed in the applicable Facility;
13.1.3 Loss of rental included in a business income or rental value
insurance policy covering risk of loss during reconstruction necessitated by the
occurrence of any of the hazards described in Sections 13.1.1 or 13.1.2 hereof
(but in no event for a period of less than twelve (12) months) in an amount
sufficient to prevent either Landlord or Tenant from becoming a co-insurer;
13.1.4 Claims for personal injury or property damage under a policy of
commercial general public liability insurance with a combined single limit per
occurrence in respect of bodily injury and death and property damage of One
Million Dollars ($1,000,000), and an aggregate limitation of Three Million
Dollars ($3,000,000), which insurance shall include contractual liability
insurance;
13.1.5 Claims arising out of professional malpractice in an amount not
less than One Million Dollars ($1,000,000) for each occurrence and an aggregate
limit of Three Million Dollars ($3,000,000);
13.1.6 Flood (when the applicable Leased Property is located in whole
or in part within a designated flood plain area) and such other hazards and in
such amounts as may be customary for comparable properties in the area;
13.1.7 During such time as Tenant is constructing any improvements,
Tenant, at its sole cost and expense, shall carry or cause to be carried (a)
workers' compensation insurance and employers' liability insurance covering all
persons employed in connection with the improvements in statutory limits, (b) a
completed operations endorsement to the commercial general liability insurance
policy referred to above, and (c) builder's risk insurance, completed value
form, covering all physical loss, in an amount and subject to policy conditions
reasonably satisfactory to Landlord;
13.1.8 Tenant shall procure, and at all times during the Term of this
Lease shall maintain, a policy of primary automobile liability insurance with
limits of One Million Dollars ($1,000,000) per occurrence for owned and
non-owned and hired vehicles; and
13.1.9 If Tenant chooses to carry umbrella liability coverage to
obtain the limits of liability required hereunder, all such policies must cover
in the same manner as the
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primary commercial general liability policy and must contain no additional
exclusions or limitations materially different from those of the primary policy.
13.2 REPLACEMENT COST. The term "full replacement cost" means the actual
replacement cost of the applicable Leased Improvements, Fixtures and Landlord's
Personal Property, including an increased cost of construction endorsement, less
exclusions provided in the standard form of fire insurance policy. In all
events, full replacement cost shall be an amount sufficient that neither
Landlord nor Tenant is deemed to be a co-insurer of the applicable Leased
Property. If Landlord in good faith believes that full replacement cost (the
then replacement cost less such exclusions) of any Leased Property has increased
at any time during the Term, it shall have the right, upon Notice to Tenant, to
have such full replacement cost reasonably redetermined by an Impartial
Appraiser. The determination of the Impartial Appraiser shall be final and
binding on Landlord and Tenant, and Tenant shall forthwith adjust the amount of
the insurance carried pursuant to this Section, as the case may be, to the
amount so determined by the Impartial Appraiser. Landlord and Tenant shall each
pay one-half of the fee, if any, of the Impartial Appraiser.
13.3 WORKER'S COMPENSATION INSURANCE. Tenant shall at all times maintain
workers' compensation insurance coverage for all persons employed by Tenant on
the applicable Leased Property to the extent required under and in accordance
with applicable law.
13.4 WAIVER OF LIABILITY; WAIVER OF SUBROGATION. Landlord shall have no
liability to Tenant, and, provided Tenant carries the insurance required by this
Lease, Tenant shall have no liability to Landlord, regardless of the cause, for
any loss or expense resulting from or in connection with damage to or the
destruction or other loss of any Leased Property or Tenant's Personal Property,
and no party will have any right or claim against the other for any such loss or
expense by way of subrogation. Each insurance policy carried by Landlord or
Tenant covering any Leased Property and Tenant's Personal Property, including
without limitation, contents, fire and casualty insurance, shall expressly waive
any right of subrogation on the part of the insurer, if such a waiver is
commercially available. Tenant shall pay any additional costs or charges for
obtaining such waivers.
13.5 OTHER REQUIREMENTS. The form of all of the policies of insurance
referred to in this Article shall be the standard forms issued by the respective
insurers meeting the specific requirements of this Lease. The property loss
insurance policy shall contain a Replacement Cost Endorsement. If Tenant obtains
and maintains the professional malpractice insurance described in Section 13.1.5
hereof on a "claims-made" basis, Tenant shall provide continuous liability
coverage for claims arising during the Term either by obtaining an endorsement
providing for an extended reporting period reasonably acceptable to Landlord in
the event such policy is canceled or not renewed for any reason whatsoever, or
by obtaining "tail" insurance coverage converting the policies to "occurrence"
basis policies providing coverage for a period of at least three (3) years
beyond the expiration of the Term. Tenant shall cause each insurer mentioned in
this
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Article 13 to agree, by endorsement on the policy or policies issued by it, or
by independent instrument furnished to Landlord, that it will give to Landlord
at least thirty (30) days' written notice before the policy or policies in
question shall be materially altered or canceled. If requested by Landlord, and
if available at a commercially reasonable cost, all public liability and
property damage insurance shall contain a provision that Landlord, although
named as an insured, shall nevertheless be entitled to recovery under said
policies for any loss, damage, or injury to Landlord, its servants, agents and
employees by reason of the negligence of Tenant or Landlord.
13.6 INTENTIONALLY OMITTED.
13.7 BLANKET POLICY. Notwithstanding anything to the contrary contained in
this Article 13, Tenant's obligations to carry the insurance provided for herein
may be brought within the coverage of a so-called blanket policy or policies of
insurance carried and maintained by Tenant; provided, however, that the coverage
afforded Landlord will not be reduced or diminished or otherwise be materially
different from that which would exist under a separate policy meeting all other
requirements hereof by reason of the use of the blanket policy, and provided
further that the requirements of this Article 13 are otherwise satisfied, and
provided further that Tenant maintain specific allocations acceptable to
Landlord.
13.8 NO SEPARATE INSURANCE.
13.8.1 Tenant shall not, on its own initiative or pursuant to the
request or requirement of any third party, take out separate insurance
concurrent in form or contributing in the event of loss with that required in
this Article, to be furnished by, or which may reasonably be required to be
furnished by, Tenant, or increase the amount of any then existing insurance by
securing an additional policy or additional policies, unless all parties having
an insurable interest in the subject matter of the insurance, including in all
cases Landlord, are included therein as additional insureds, and the loss is
payable under said insurance in the same manner as losses are payable under this
Lease.
13.8.2 Nothing herein shall prohibit Tenant from (a) securing
insurance required to be carried hereby with higher limits of liability than
required in this Lease, (b) securing umbrella policies or (c) insuring against
risks not required to be insured pursuant to this Lease, and as to such
insurance, Landlord need not be included therein as an additional insured, nor
must the loss thereunder be payable in the same manner as losses are payable
under this Lease. Tenant shall immediately notify Landlord of the taking out of
any such separate insurance or of the increasing of any of the amounts of the
then existing insurance.
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ARTICLE 14
CASUALTY LOSS
14.1 INSURANCE PROCEEDS. All Net Proceeds payable under any risk policy of
insurance required by Article 13 of this Lease, whether or not paid directly to
Landlord and/or Tenant, shall promptly be deposited with or paid over to an
insurance company, title insurance company or other financial institution
reasonably selected by Landlord and disbursed as provided in this Lease. If no
Event of Default has occurred and is continuing, the Net Proceeds shall be made
available for restoration or repair, as the case may be, of any damage to or
destruction of the applicable Leased Property or any portion thereof as provided
in Section 14.10 hereof; provided, however, that, within fifteen (15) days of
the receipt of the Net Proceeds, Landlord and Tenant shall agree as to the
portion thereof attributable to the Tenant's Personal Property (and failing such
shall submit the matter to arbitration pursuant to the provisions of this Lease)
and those Net Proceeds which the parties agree are payable by reason of any loss
or damage to any of Tenant's Personal Property shall be disbursed to Tenant.
14.2 RESTORATION IN THE EVENT OF DAMAGE OR DESTRUCTION.
14.2.1 If any Leased Improvements are totally or partially damaged or
destroyed and the Facility thereon is thereby rendered Unsuitable for its
Primary Intended Use, Tenant shall give Landlord Notice of such damage or
destruction within fifteen (15) Business Days of the occurrence thereof. Within
ninety (90) days of such occurrence, Tenant shall commence and thereafter
diligently proceed to complete the restoration of the damaged or destroyed
Leased Improvements to substantially the same (or better) condition as that
which existed immediately prior to such damage or destruction.
14.2.2 If any Leased Improvements are totally or partially damaged or
destroyed, but the Facility thereon is not thereby rendered Unsuitable for its
Primary Intended Use, Tenant shall give Landlord Notice of such damage or
destruction within fifteen (15) Business Days of the occurrence thereof, and,
within ninety (90) days of the occurrence, Tenant shall commence and thereafter
diligently proceed to restore the Leased Improvements within the Reconstruction
Period to substantially the same (or better) condition as that which existed
immediately prior to such damage or destruction.
14.2.3 No such damage or destruction shall terminate this Lease as to
the affected Facility; provided, however, that if Tenant, after diligent effort,
cannot within a reasonable time obtain all necessary government approvals,
including building permits, licenses, conditional use permits and any
certificates of need, in order to be able to perform all required repair and
restoration work and thereafter to operate the Leased Improvements for the
Primary Intended Use thereof in substantially the same manner as that existing
immediately prior to such damage or destruction, Tenant shall purchase the
Facility of Leased Property on which the damaged or
38
destroyed Leased Improvements are located for the Facility Purchase Price, which
shall be determined as of the day of the damage or destruction.
14.3 INTENTIONALLY OMITTED.
14.4 TENANT'S PERSONAL PROPERTY. All insurance proceeds payable by reason
of any loss of or damage to any of Tenant's Personal Property shall be paid to
Tenant.
14.5 RESTORATION OF TENANT'S PROPERTY. If Tenant is required to restore the
Leased Property as provided in Section 14.2 hereof, Tenant shall also restore or
replace all alterations and improvements made by Tenant and all of the Personal
Property, to the extent required to maintain the then current license of the
applicable Leased Property.
14.6 NO ABATEMENT OF RENT. Except as to any Facility or Leased Property
purchased by Tenant pursuant to this Article 14, as to which this Lease shall
terminate upon the closing of such purchase, this Lease shall remain in full
force and effect and Tenant's obligation to pay Rent shall continue without
abatement during any period required for repair and restoration (except to the
extent that any insurance proceeds for loss of rental shall have been paid
directly to Landlord).
14.7 CONSEQUENCES OF PURCHASE OF DAMAGED LEASED PROPERTY. If Tenant
purchases a damaged Facility or Leased Property pursuant to the provisions of
this Article 14, this Lease shall terminate as to such Facility upon payment of
the price set forth herein, Landlord shall remit to Tenant any and all Net
Proceeds pertaining to the purchased Facility or Leased Property, and the Base
Rent shall be reduced by the Facility Rental Value of the purchased Facility or
Leased Property, determined as of the day prior to the date of the damage or
destruction to such Facility.
14.8 DAMAGE NEAR END OF TERM. Notwithstanding any provisions of Section
14.2 hereof, if damage to or destruction of any Leased Improvements occurs
during the last twelve (12) months of the Term of this Lease, and if, as
reasonably estimated by a qualified construction consultant selected by Tenant
and approved by Landlord (which approval shall not unreasonably be withheld),
such damage or destruction cannot be fully repaired and restored within six (6)
months immediately following the date of loss, then Tenant shall have the
option, which Tenant shall exercise by written notice to Landlord within thirty
(30) days of such damage or destruction, to (a) restore the damaged Facility or
Leased Property within the remaining twelve (12) months of the Term of this
Lease, or (b) to purchase the Facility or Leased Property on which the damaged
or destroyed Leased Improvements are located from Landlord, within sixty (60)
days following the date of the damage or destruction, for the Facility Purchase
Price, which shall be determined as of the day prior to the date of the damage
or destruction.
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14.9 WAIVER. Except as specifically provided elsewhere herein, Tenant
hereby waives any statutory or common law rights of termination which may arise
by reason of any damage to or destruction of any Facility.
14.10 PROCEDURE FOR DISBURSEMENT OF INSURANCE PROCEEDS. If Tenant restores
or repairs the damaged Facility or Leased Property pursuant to any Subsection of
this Article 14, the restoration or repair shall be performed in accordance with
the following procedures:
(a) If the Net Proceeds exceed the Approval Threshold, the restoration
or repair work shall be done pursuant to plans and specifications approved
by Landlord (not to be unreasonably withheld or delayed), and Tenant shall
cause to be prepared and presented to Landlord a certified construction
statement, reasonably acceptable to Landlord, showing the total estimated
cost of the restoration or repair.
(b) The Construction Funds shall be made available to Tenant as the
restoration and repair work progresses. If the Net Proceeds exceed the
Approved Threshold, such funds shall be made available pursuant to
certificates of an architect selected by Tenant that in the reasonable
judgment of Landlord is qualified in the design and construction of health
care facilities, or of the type of property for which the repair work is
being done.
(c) If the Net Proceeds exceed the Approval Threshold, there shall be
delivered to Landlord, with such certificates, sworn statements and lien
waivers from the general contractor and major subcontractors (i.e., those
having contracts of One Hundred Thousand Dollars ($100,000) or more), in
the form customary for the applicable State, in an amount at least equal to
the amount of Construction Funds to be paid out to Tenant pursuant to each
architect's certificate and dated as of the date of the disbursement to
which they relate.
(d) There shall be delivered to Landlord such other evidence as
Landlord may reasonably request, from time to time, during the restoration
and repair, as to the progress of the work, compliance with the approved
plans and specifications, the cost of restoration and repair and the total
amount needed to complete the restoration and repair.
(e) There shall be delivered to Landlord such other evidence as
Landlord may reasonably request, from time to time, showing that there are
no liens against the applicable Leased Property arising in connection with
the restoration and repair and that the cost of the restoration and repair
at least equals the total amount of Construction Funds then disbursed to
Tenant hereunder.
(f) If the Construction Funds are at any time determined by Landlord
not to be adequate for completion of the restoration and repair, Tenant
shall demonstrate to
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Landlord, upon request, that Tenant has sufficient funds available to cover
the difference, and shall disburse such funds pari passu with the
Construction Funds.
(g) The Construction Funds may be disbursed by the depository thereof
to Tenant or, at Tenant's direction, to the persons entitled to receive
payment thereof from Tenant, and such disbursement in either case may, at
Landlord's discretion, reasonably exercised, be made directly or through a
third party escrow agent, such as, but not limited to, a title insurance
company, or its agent. Provided no Event of Default has occurred and is
continuing, any excess Construction Funds shall be paid to Tenant upon
completion of the restoration or repair.
(h) If Tenant at any time fails to promptly and fully perform the
conditions and covenants set out in subparagraphs (a) through (f) hereof,
and the failure is not corrected within thirty (30) days of written Notice
thereof, or if during the restoration or repair an Event of Default occurs
hereunder, Landlord may, at its option, immediately cease making any
further payments to Tenant for the restoration and repair.
(i) Landlord may reimburse itself out of the Construction Fund for its
reasonable and documented expenses of consultants, attorneys and its
employee- inspectors incurred in administering the Construction Funds as
hereinbefore provided.
ARTICLE 15
TAKINGS
15.1 TOTAL TAKING. If title to the fee of the whole of any Facility or
Leased Property shall be acquired by any Condemnor as the result of a Taking,
this Lease shall cease and terminate as to such Facility or Leased Property as
of the Date of Taking by said Condemnor, and the Base Rent payable by Tenant
hereunder shall be reduced, as of the date the Lease shall have been so
terminated as to such Facility or Leased Property, by the Facility Rental Value
of the Facility taken.
15.2 ALLOCATION OF PORTION OF AWARD. The Award made with respect to the
Taking of all or any portion of any Leased Property or for loss of rent shall be
the property of and payable to Landlord up to the sum of (a) all costs and
expenses reasonably incurred and documented by Landlord in connection with the
Taking, (b) any loss of Rent suffered by Landlord as a result of the Taking
(except for any Rent accruing after the completion of a purchase by Tenant of
the affected Facility upon a Partial Taking as hereinafter provided) and (c) in
the case of a Taking of the entire Facility, the Facility Purchase Price as of
the time possession is delivered to the Condemnor. To the extent that the laws
of the State in which the applicable Facility is located permit Tenant to make a
claim for Tenant's leasehold interest, moving expenses, loss of goodwill
41
or business, and Tenant's claim does not have the effect, directly or
indirectly, of reducing Landlord's claim, Tenant shall have the right to pursue
such claim in the Taking proceeding and shall be entitled to the Award therefor.
In any Taking proceedings, Landlord and Tenant shall each seek its own Award, at
its own expense.
15.3 PARTIAL TAKING. In the event of a Partial Taking of a Facility, Tenant
shall commence and diligently proceed to restore the untaken portion of the
Leased Improvements on the applicable Leased Property so that such Leased
Improvements shall constitute a complete architectural unit (if applicable) of
the same general character and condition (as nearly as may be possible under the
circumstances) as the Leased Improvements existing immediately prior to such
Partial Taking; provided, however, that if a Partial Taking renders a Facility
Unsuitable for Its Primary Intended Use, Tenant shall have the right,
exercisable by written notice to Landlord within thirty (30) days after such
Partial Taking is final without appeal permitted, and before the Condemnor takes
possession, to purchase the affected Facility for the Facility Purchase Price,
which purchase shall be completed within sixty (60) days of such notice.
Landlord shall contribute to the cost of restoration, or if Tenant elects to
purchase the affected Facility, Landlord shall pay over to Tenant, any Award
payable to Landlord for such Partial Taking; provided, however, that the amount
of such contribution shall not exceed the cost of restoration. If (a) Tenant
elects to restore the Facility and (b) no Event of Default is then continuing,
then Landlord shall make the Award available to Tenant in the manner provided in
Section 14.10 hereof. The Base Rent shall be reduced by reason of such Partial
Taking to an amount agreed upon by Landlord and Tenant, and if Landlord and
Tenant cannot agree upon a new Base Rent, the new Base Rent amount shall be
equal to the Base Rent prior to the Partial Taking, reduced in proportion to the
reduction in the Fair Rental Value of the affected Facility of Leased Property
resulting from the Partial Taking.
15.4 TEMPORARY TAKING. In the event of a temporary Taking of the Leased
Property or any part thereof that is for a period of less than six (6) months,
this Lease shall not terminate with respect to the affected Leased Property, and
the entire amount of any Award therefor shall be paid to Tenant. Upon the
cessation of any such Taking of less than six (6) months, Tenant shall restore
the Leased Property as nearly as may be reasonably possible to the condition
existing immediately prior to such Taking. If any such Taking continues for six
(6) months or more, such Taking shall be considered a Taking governed by
Sections 15.1 through 15.3 hereof, and the parties shall have the rights
provided thereunder.
ARTICLE 16
CONSEQUENCES OF EVENTS OF DEFAULT
16.1 EVENTS OF DEFAULT. Upon the occurrence of an Event of Default,
Landlord shall have the rights and remedies hereinafter provided (provided,
however, that if an Event of Default
42
is cured prior to the exercise of any remedies by Landlord, it shall cease to be
such for purposes of this Lease).
16.2 LANDLORD'S RIGHTS UPON TENANT'S DEFAULT. If an Event of Default occurs
with respect to this Lease, Landlord may terminate this Lease by giving Tenant
Notice, whereupon as provided herein, the Term of this Lease shall terminate and
all rights of Tenant hereunder shall cease. The Notice provided for herein shall
be in lieu of, and not in addition to, any notice required by the laws of the
respective States in which the Leased Properties are located as a condition to
bringing an action for possession of any of the Leased Properties or to recover
damages under this Lease. In addition thereto, Landlord shall have all rights at
law and in equity available as a result of Tenant's breach.
16.3 LIABILITY FOR COSTS AND EXPENSES. Tenant will, to the extent permitted
by law, be liable for the payment, as Additional Charges, of reasonable and
documented costs of and expenses incurred by or on behalf of Landlord as a
consequence of an Event of Default, including, without limitation, reasonable
attorneys' fees (whether or not litigation is commenced, and if litigation is
commenced, including fees and expenses incurred in appeals and post-judgment
proceedings).
16.4 CERTAIN REMEDIES. If an Event of Default has occurred, and whether or
not this Lease has been terminated, Tenant shall, to the extent permitted by
law, if required by Landlord so to do, immediately surrender to Landlord the
Leased Properties and quit the same, and Landlord may enter upon and repossess
the respective Leased Properties by legal process, and may remove Tenant and all
other persons and any and all Personal Property from the respective Leased
Properties, subject to rights of any residents or patients and to any
requirement of law.
16.5 DAMAGES. None of (a) the termination of this Lease pursuant to Section
16.1 hereof, (b) the repossession of any Leased Property, (c) the failure of
Landlord to relet any Leased Property, (d) the reletting of all or any portion
thereof or (e) the failure of Landlord to collect or receive any rentals due
upon any reletting shall relieve Tenant of its liability and obligations
hereunder, all of which shall survive such termination, repossession or
reletting. In the event of any termination, Tenant shall forthwith pay to
Landlord all Rent due and payable with respect to the Leased Properties to and
including the date of the termination. At Landlord's option, as and for
liquidated and agreed current damages for Tenant's default, Tenant shall also
forthwith pay to Landlord:
(i) the sum of:
(A) the Worth at the Time of the Award of the amount by which the
unpaid Rent which would have been earned after termination until the time
of the award exceeds the aggregate Rental Value of the Leased Properties
for such period, and
43
(B) the Worth at the Time of the Award of the amount by which the
unpaid Rent for the balance of the Term after the time of the award exceeds
the aggregate Rental Value of the Leased Properties for such period, and
(C) any other amount necessary to compensate Landlord for all the
damage proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom; or
(ii) without termination of Tenant's right to possession of the respective
Leased Properties, each installment of the Rent and other sums payable
by Tenant to Landlord under this Lease as the same becomes due and
payable, which Rent and other sums shall bear interest at the Overdue
Rate from the date when due until paid, and Landlord may enforce, by
action or otherwise, any other term or covenant of this Lease.
16.6 WAIVER. If this Lease is terminated pursuant to Section 16.2 hereof,
Tenant waives the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt.
16.7 APPLICATION OF FUNDS. Any payments received by Landlord during the
existence or continuance of any Event of Default (and any payment made to
Landlord rather than Tenant due to the existence of an Event of Default),
including rentals received upon any reletting, shall be applied to Tenant's
obligations in the order which Landlord may determine or as may be prescribed by
the laws of the respective States in which the Leased Properties are located.
ARTICLE 17
LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
If Tenant fails to make any payment or to perform any act required to be
made or performed under this Lease, and fails to cure the same within the
relevant time periods provided in the definition of Event of Default in Section
2.1 hereof or elsewhere in this Lease, Landlord may (but shall not be obligated
to), after five (5) days' prior Notice to Tenant (except in an emergency), and
without waiving or releasing any obligation of Tenant or any Event of Default,
at any time thereafter make such payment or perform such act for the account and
at the expense of Tenant, and may, to the extent permitted by law, enter upon
the respective Facilities for such purpose and take all such action thereon as,
in Landlord's sole opinion, may be necessary or appropriate therefor. However,
if Landlord reasonably determines that the giving of such Notice as is provided
for in this Article or elsewhere in this Lease would risk loss to any Leased
Property or cause damage to Landlord, then Landlord will give such Notice as is
practical under the circumstances. No such entry shall be deemed an eviction of
Tenant. All sums so paid by
44
Landlord and all reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) so incurred, together with the interest
provided for in Section 3.3 thereon from the date on which such sums or expenses
are paid or incurred by Landlord, shall be paid by Tenant to Landlord on demand
and shall constitute Additional Charges. The obligations of Tenant and rights of
Landlord contained in this Article shall survive the expiration or earlier
termination of this Lease.
ARTICLE 18
CERTAIN ENVIRONMENTAL MATTERS
18.1 PROHIBITION AGAINST USE OF HAZARDOUS SUBSTANCES. Tenant shall not
permit, conduct or allow on any of the Leased Properties the generation,
introduction, presence, maintenance, use, receipt, acceptance, treatment,
manufacture, production, installation, management, storage, disposal or release
of any Hazardous Substance, except for those types and quantities of Hazardous
Substances ordinarily associated with the operation of the Leased Property as it
is being conducted on the date of this Lease and except in compliance with
Environmental Laws; provided, however, that the Permitted Environmental
Conditions shall be permitted to remain in place.
18.2 NOTICE OF ENVIRONMENTAL CLAIMS, ACTIONS OR CONTAMINATIONS. Tenant will
notify Landlord, in writing, promptly upon learning of any existing, pending or
threatened: (a) Regulatory Actions, (b) Contamination of any Leased Property,
(c) Third Party Claims or (d) violation of Environmental Law.
18.3 COSTS OF REMEDIAL ACTIONS WITH RESPECT TO ENVIRONMENTAL MATTERS. If
any investigation and/or Clean-Up of any Hazardous Substance or other
environmental condition on, under, about or with respect to any Leased Property
is required by any Environmental Law and by the terms of this Lease is within
the scope of Tenant's responsibility, then Tenant shall complete, at its own
expense, such investigation and/or Clean-Up or cause each person responsible for
any of the foregoing to conduct such investigation and/or Clean-Up.
18.4 DELIVERY OF ENVIRONMENTAL DOCUMENTS. If and to the extent not
delivered to Landlord prior to the date of this Lease, Tenant shall deliver to
Landlord complete copies of any and all Environmental Documents that may now be
in, or at any time hereafter come into, the possession of Tenant.
18.5 ENVIRONMENTAL AUDIT. At Landlord's expense, Tenant shall from time to
time, but in no case more often than annually, after Landlord's request
therefor, provide to Landlord an Environmental Audit with respect to each of the
Leased Properties. All tests and samplings in connection with an Environmental
Audit shall be conducted using generally accepted and
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scientifically valid technology and methodologies. Tenant shall give the
engineer or environmental consultant conducting the Environmental Audit
reasonable access to the applicable Leased Property and to all records in the
possession of Tenant that may indicate the presence (whether current or past) or
a Release or threatened Release of any Hazardous Substances on, in, under or
about the applicable Leased Property. Tenant shall also provide the engineer or
environmental consultant an opportunity to interview such persons employed in
connection with the applicable Leased Property as the engineer or consultant
deems appropriate. However, Landlord shall not be entitled to request such
Environmental Audit from Tenant unless (a) there have been any material changes,
modifications or additions to any Environmental Laws as applied to or affecting
the applicable Leased Property; (b) a significant change in the condition of the
applicable Leased Property has occurred; or (c) Landlord has another reasonable
basis for requesting such certificate or certificates. If an Environmental Audit
discloses the presence of Contamination at, or any noncompliance with
Environmental Laws by, any Leased Property, Tenant shall immediately perform all
of Tenant's obligations hereunder with respect to such Hazardous Substances or
noncompliance.
18.6 ENTRY ONTO LEASED PROPERTY FOR ENVIRONMENTAL MATTERS. If Tenant fails
to provide to Landlord an Environmental Audit as contemplated by Section 18.5
hereof, Tenant shall permit Landlord from time to time, by its employees,
agents, contractors or representatives, to enter upon the applicable Leased
Property for the purposes of conducting such Investigations as Landlord may
desire. Landlord and its employees, agents, contractors, consultants and/or
representatives shall conduct any such Investigation in a manner which does not
unreasonably interfere with Tenant's use of and operations on the applicable
Leased Property (however, reasonable temporary interference with such use and
operations is permissible if the Investigation cannot otherwise be reasonably
and inexpensively conducted). Other than in an emergency, Landlord shall provide
Tenant with prior notice before entering the applicable Leased Property to
conduct such Investigation, and shall provide copies of any reports or results
to Tenant, and Tenant shall cooperate fully in such Investigation.
18.7 ENVIRONMENTAL MATTERS UPON TERMINATION OR EXPIRATION OF TERM OF THIS
LEASE. Upon the termination or expiration of the Term of this Lease, Tenant
shall cause the Leased Properties to be delivered to Landlord free of all
Contamination the removal of which is recommended by the Phase I Environmental
Survey (or the equivalent at the time) completed by the engineering firm chosen
by the parties or otherwise selected as provided below, and in compliance with
all Environmental Laws with respect thereto, except for those Permitted
Environmental Conditions that are in compliance with all Environmental Laws in
effect at the time of the termination of expiration of the Term of this Lease.
At any time during (a) the three hundred sixty-five (365) days prior to, or the
sixty (60) days subsequent to, the expiration of the original Term hereof, if
Tenant has not
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given the notice required by Section 1.4 hereof in order to renew the Term or by
the terms hereof is not entitled to renew the Term, or, if the original Term has
been renewed, at any time during (b) the three hundred sixty-five (365) days
prior to, or the sixty (60) days subsequent to, the expiration of the First
Renewal Term hereof, if Tenant has not given the notice required by Section 1.5
hereof in order to renew the Term or by the terms hereof is not entitled to
renew the Term, or, if this Lease is terminated upon the occurrence of an Event
of Default, during (c) the sixty (60) days after the effective date of such
termination, Landlord may by written notice to Tenant specify a Cleanup to be
undertaken by Tenant (but not with respect to any Permitted Environmental
Condition that is in compliance with all Environmental Laws in effect at the
time of such notice), and upon receipt of such notice Tenant shall forthwith
begin and with reasonable diligence complete such Cleanup; provided, however,
that if Tenant in good faith disputes the need for such Cleanup on the grounds
that it is not required by any then applicable Environmental Laws, Tenant may by
written notice to Landlord demand an Environmental Audit of the Leased Property.
The Environmental Audit demanded by Tenant shall be performed by one of the
engineering firms listed on Exhibit H hereto or, if no such firms exist at the
time, by an engineering firm succeeding to the practice of one of such firms.
The question of whether or not a Cleanup is required by an applicable
Environmental Law, and, if so, the extent of such required Cleanup, shall be
determined by the conclusions reached in the Environmental Audit conducted by
the engineering firm so selected, and such determination shall be binding upon
the parties. The cost of such Environmental Audit shall be borne by Landlord if
the determination is that no Cleanup is required, or by Tenant if the
determination is that a Cleanup is required. Tenant shall promptly at its
expense complete any Cleanup determined by such process to be necessary.
18.8 COMPLIANCE WITH ENVIRONMENTAL LAWS. Tenant shall comply with, and
cause its agents, servants and employees to comply with Environmental Laws
applicable to the respective Leased Properties. Specifically, but without
limitation:
(a) Maintenance of Licenses and Permits. Tenant shall obtain and
maintain all permits, certificates, licenses and other consents and
approvals required by any applicable Environmental Law from time to time
with respect to Tenant and the Leased Property leased by it;
(b) Contamination. No Tenant shall cause, suffer or permit any
Contamination in, on, under or about any Leased Property;
(c) Clean-Up. If Contamination occurs in, on, under or about any
Leased Property during the Term, Tenant promptly shall cause the Clean-Up
and the removal of any Hazardous Substance, and in any such case such
Clean-Up and removal of the Hazardous Substance shall be effected in strict
compliance with and in accordance with the provisions of the applicable
Environmental Laws;
(d) Discharge of Lien. Within forty-five (45) days of the date on
which Tenant becomes aware of any lien imposed against any Leased Property
or any part thereof under any Environmental Law (or, in the event that
under the applicable Environmental Law, Tenant is unable, acting
diligently, to do so within forty-five (45) days, then within such
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period as is required for Tenant, acting diligently, to do so), Tenant
shall cause such lien to be discharged by payment, bond or otherwise;
(e) Notification of Landlord. Tenant shall notify Landlord in writing
promptly upon receipt by Tenant of notice of any breach or violation of any
environmental covenant or agreement; and
(f) Requests, Orders and Notices. Promptly upon receipt of any written
request, order or other notice relating to any Declaratory Action,
Contamination, Third Party Claims or Leased Property under any
Environmental Law concerning the Leased Property, Tenant shall forward a
copy thereof to Landlord.
18.9 ENVIRONMENTAL RELATED REMEDIES. If, subject to Tenant's right of
contest as set forth in Section 12.1 hereof, Tenant fails to perform any of its
covenants with respect to environmental matters and if such breach is not cured
within any applicable notice and/or grace period or within an additional thirty
(30) days after Landlord gives Notice to Tenant, Landlord may do any one or more
of the following (the exercise of one right or remedy hereunder not precluding
the simultaneous or subsequent taking of any other right hereunder):
(a) Cause a Clean-Up. Cause the Clean-Up of any Contamination on or
under the applicable Leased Property, or both, at Tenant's cost and
expense; or
(b) Payment of Regulatory Damages. Pay, on behalf of Tenant, any
damages, costs, fines or penalties imposed on Tenant as a result of any
Regulatory Actions; or
(c) Payments to Discharge Liens. Make any payment on behalf of Tenant
or perform any other act or cause any act to be performed which will
prevent a lien in favor of any federal, state or local governmental
authority from attaching to the applicable Leased Property or which will
cause the discharge of any lien then attached to the applicable Leased
Property; or
(d) Payment of Third Party Damages. Pay, on behalf of Tenant, any
damages, cost, fines or penalties imposed on Tenant as a result of any
Third Party Claims; or
(e) Demand of Payment. Demand that Tenant make immediate payment of
all of the costs of such Clean-Up and/or exercise of the remedies set forth
in this Section 18.9 incurred by Landlord and not theretofore paid by
Tenant as of the date of such demand, whether or not such costs exceed the
amount of Rent and Additional Charges that are otherwise to be paid
pursuant to this Lease, and whether or not any court has ordered the
Clean-Up, and payment of said costs shall become immediately due, without
notice.
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18.10 ENVIRONMENTAL INDEMNIFICATION. Tenant shall and does hereby agree to
indemnify, defend and hold harmless Landlord, its principals, officers,
directors, agents and employees from and against each and every incurred and
potential claim, cause of action, demand or proceeding, obligation, fine,
laboratory fee, liability, loss, penalty, imposition, settlement, xxxx, xxxx
removal, litigation, judgment, disbursement, expense and/or cost (including,
without limitation, the cost of each and every Clean-Up and including, but not
limited to, reasonable and documented attorneys' fees, consultants' fees,
experts' fees and related expenses, capital, operating and maintenance costs,
incurred in connection with (a) any investigation or monitoring of site
conditions at any Leased Property, (b) the presence of any asbestos-containing
materials in, on, under or about any Leased Property and (c) any Clean Up
required or performed by any federal, state or local governmental entity or
performed by any other entity or person because of the presence of any Hazardous
Substance, Release, threatened Release or any Contamination on, in, under or
about any Leased Property) which may be asserted against, imposed on, or
suffered or incurred by each and every Indemnitee arising out of or in any way
related to, or allegedly arising out of or due to any environmental matter,
including, but not limited to, any one or more of the following:
(i) Release Damage or Liability. The presence of Contamination in, on,
at, under or near any Leased Property or migrating to any Leased Property
from another location;
(ii) Injuries. All injuries to health or safety (including wrongful
death), or to the environment, by reason of environmental matters relating
to the condition of or activities past or present on, at, in or under any
Leased Property;
(iii) Violations of Law. All violations, and alleged violations, of
any Environmental Law by Tenant relating to any Leased Property or any
activity on, in, at, under or near any Leased Property;
(iv) Misrepresentation. All material misrepresentations relating to
environmental matters in any documents or materials furnished by Tenant to
Landlord and/or its representatives in connection with this Lease;
(v) Event of Default. Each and every Event of Default hereunder
relating to environmental matters;
(vi) Lawsuits. Any and all lawsuits brought or threatened against any
one or more of the Indemnitees, settlements reached and governmental orders
relating to any Hazardous Substances at, on, in, under or near any Leased
Property, and all demands or requirements of governmental authorities, in
each case based upon or in any way related to any Hazardous Substances at,
on, in or under any Leased Property; and
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(vii) Presence of Liens. All liens imposed upon any Leased Property
and charges imposed on any Indemnitee in favor of any governmental entity
or any person as a result of the presence, disposal, release or threat of
release of Hazardous Substances at, on, in, from or under any Leased
Property.
If the matter that is the subject of a claim for indemnification by any
Indemnitee pursuant to this Section 18.10 arises or is in connection with a
claim, suit or demand filed by a third party, Tenant shall be entitled to
defend against such Claim with counsel reasonably satisfactory to the
applicable Indemnitee(s). The Indemnitee(s) may continue to employ counsel
of its own, but such costs shall be borne by the Indemnitee(s) as long as
Tenant continues to so defend. With respect to such Claims arising from
third parties (A) if an Indemnitee declines to accept a bona fide offer of
settlement that is recommended by Tenant, which settlement includes a full
and complete release of such Indemnitee from the subject Claim, the maximum
liability of Tenant arising from such claim shall not exceed that amount
for which it would have been liable had such settlement been accepted, and
(B) if an Indemnitee settles the subject Claim without the consent of
Tenant, the maximum liability of Tenant under this Section arising from
such Claim shall not exceed the fair and reasonable settlement value of
such Claim.
18.11 RIGHTS CUMULATIVE AND SURVIVAL. The rights granted Landlord under
this Article are in addition to and not in limitation of any other rights or
remedies available to Landlord hereunder or allowed at law or in equity. The
obligations of Tenant to defend, indemnify and hold the Indemnitees harmless, as
set forth in this Article, arising as a result of an act, omission, condition or
other matter occurring or existing during the Term, whether or not the act,
omission, condition or matter as to which such obligations relate is discovered
during the Term, shall survive the expiration or earlier termination of the Term
of this Lease.
ARTICLE 19
HOLDOVER MATTERS
19.1 HOLDING OVER. If Tenant remains in possession of a Leased Property
after the expiration of the Term or earlier termination of this Lease, such
possession shall be as a month-to-month tenant during which time Tenant shall
pay as rental each month one and one-half times the aggregate of (a) one-twelfth
of the aggregate Base Rent and Earn Out Rent (if any) payable with respect to
the applicable Leased Property during the last Lease Year of the preceding Term,
and (b) all Additional Charges accruing during the month with respect to the
applicable Leased Property. Any interest, however, will be payable only at the
rate provided in this Lease and shall not exceed the maximum rate allowed by
law. During such period of month-to-month tenancy, Tenant shall be obligated to
perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to
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the extent given by law to month-to-month tenancies, to continue its occupancy
and use of the applicable Leased Property until the month-to-month tenancy is
terminated. Nothing contained herein shall constitute the consent, express or
implied, of Landlord to the holding over by Tenant after the expiration or
earlier termination of this Lease.
19.2 INDEMNITY. If Tenant fails to surrender a Leased Property in a timely
manner and in accordance with the provisions of Section 9.1.6 hereof upon the
expiration or termination of this Lease, in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall indemnify and hold Landlord, its
principals, officers, directors, agents and employees harmless from loss or
liability resulting from such failure, including, without limiting the
generality of the foregoing, loss of rental with respect to any new lease in
which the rental payable thereunder exceeds any rental paid by Tenant pursuant
to this Lease and any claims by any proposed new tenant founded on such failure.
The provisions of this Section 19.2 shall survive the expiration or termination
of this Lease.
ARTICLE 20
SUBORDINATION; ATTORNMENT; ESTOPPELS
20.1 SUBORDINATION. Upon written request of Landlord, Tenant will
subordinate its rights pursuant to this Lease in writing (a) to the lien of any
mortgage, deed of trust, security deed or the interest of any lease in which
Landlord is the Tenant and to all modifications, extensions, substitutions
thereof (or, at Landlord's option, cause the lien of said mortgage, deed of
trust, security deed or the interest of any lease in which Landlord is the
Tenant to be subordinated to this Lease), and (b) to all advances made or
hereafter to be made thereunder. As a condition to each such subordination,
Landlord shall deliver to Tenant a non-disturbance agreement providing inter
alia that, if such mortgagee, beneficiary, security deed grantee or Landlord
acquires any of the Leased Properties by way of foreclosure or deed in lieu,
such mortgagee, beneficiary, security deed grantee or Landlord will not disturb
Tenant's possession under this Lease and will recognize Tenant's rights
hereunder provided this Lease has not been terminated under Section 16.2 hereof.
20.2 ATTORNMENT. If any proceedings are brought for foreclosure, or if the
power of sale is exercised under any mortgage, deed of trust or security deed
made by Landlord encumbering any Leased Property, or if a lease in which
Landlord is the Tenant is terminated, Tenant shall attorn to the purchaser or
Landlord under such lease upon any foreclosure or deed in lieu thereof, sale or
lease termination and recognize the purchaser or Landlord as Landlord under this
Lease, provided that the purchaser or Landlord acquires and accepts the
applicable Leased Property subject to, and upon the terms and conditions set
forth in, this Lease.
20.3 ESTOPPEL CERTIFICATE. Each of Landlord and Tenant agrees, upon not
less than ten (10) days prior Notice from the other, to execute, acknowledge and
deliver to the other an
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Estoppel Certificate. It is intended that any Estoppel Certificate delivered
pursuant hereto may be relied upon by Landlord, Tenant, any prospective tenant,
subtenant, assignee or purchaser of the applicable Leased Property, any
mortgagee or prospective mortgagee, or by any other party who may reasonably
rely on such statement.
ARTICLE 21
RISK OF LOSS
During the Term of this Lease, the risk of loss or of decrease in the
enjoyment and beneficial use of any of the Leased Properties in consequence of
the damage or destruction thereof by fire, the elements, casualties, thefts,
riots, wars or otherwise, or in consequence of foreclosures, attachments, levies
or executions (other than those caused by Landlord and those claiming from,
through or under Landlord) is assumed by Tenant, and, in the absence of gross
negligence, willful misconduct or material breach of this Lease by Landlord,
Landlord shall in no event be answerable or accountable therefor nor shall any
of the events mentioned in this Section entitle Tenant to any abatement of Rent
under this Lease.
ARTICLE 22
INDEMNIFICATION
22.1 INDEMNIFICATION. Subject to Section 13.4 hereof, notwithstanding the
existence of any insurance or self-insurance provided for in Article 13 hereof,
and without regard to the policy limits of such insurance or self-insurance,
Tenant will, subject to Section 13.4 hereof, protect, indemnify, save harmless
and defend Landlord, its principals, partners, officers, directors,
shareholders, agents, and employees from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable and documented attorneys' fees and
expenses), to the maximum extent permitted by law, whenever asserted, or
incurred by or asserted against Landlord by reason of:
(a) any accident, injury to or death of persons or loss of or damage
to property occurring on or about the Leased Property or adjoining
sidewalks, including without limitation any claims of malpractice;
(b) any use, misuse, non-use, condition, maintenance or repair by
Tenant of any Leased Property;
(c) the failure to pay Impositions which are the obligations of Tenant
under this Lease;
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(d) any failure by Tenant to perform or comply with any of the terms
of this Lease;
(e) the nonperformance of any contractual obligation, express or
implied, assumed or undertaken by Tenant or any party in privity with
Tenant with respect to any Leased Property or any business or other
activity carried on with respect to any Leased Property during the Term or
thereafter during any time in which Tenant or any such other party is in
possession of any Leased Property or thereafter to the extent that any
conduct by Tenant or any such person (or failure of such conduct thereby if
the same should have been undertaken during such time of possession and
leads to such damage or loss) causes such loss or claim;
(f) the use, operation, possession, or management of each of the
Facilities by Tenant before or after the Commencement Date and during the
Term of this Lease until the Lease Termination Date;
(g) the breach by Tenant of any representation or warranty in this
Lease;
(h) any and all Claims accruing before or after the Commencement Date
relating to any current or former employee, consultant or independent
contractor of Tenant or any of the Facilities, including, but not limited
to, the termination or discharge of any current or former employee,
consultant, or independent contractor of Tenant or any of the Facilities
before or after the Commencement Date, Claims under federal, state, or
local laws, rules or regulations, accruing before or after the Commencement
Date, related to wages, hours, fair employment practices, unfair labor
practices, or other terms and conditions of employment and claims arising
under the Worker Adjustment and Retraining Notification Act or any
analogous state statute, or matters arising from any severance policy,
claim, agreement or contract;
(i) any and all Claims with respect to any qualified or non-qualified
retirement or benefit plans or arrangements established before or after the
Commencement Date involving any employee, consultant or independent
contractor of Tenant or any of the Facilities;
(j) Facilities which were decertified by Tenant during the Term of
this Lease;
(k) the removal of Tenant's Personal Property from any of the
Facilities; and
(l) the breach or failure by Tenant or any Facility Subtenant of any
representation or warranty or the failure by Tenant or any Facility
Subtenant to observe or perform any of the covenants, duties and
obligations set forth on Exhibit G hereto and as required to be made or
performed under Section 37.18 hereof.
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Any amounts which become payable by Tenant under this Section shall be paid
within thirty (30) days after liability therefor on the part of Tenant is
finally determined by litigation or otherwise, and if not timely paid, shall
bear interest (to the extent permitted by law) at the Overdue Rate from the date
of such determination to the date of payment. Nothing herein shall be construed
as indemnifying Landlord against its own grossly negligent acts or omissions or
willful misconduct.
22.2 SURVIVAL OF INDEMNIFICATION; TENANT RIGHT TO DEFEND LANDLORD. Tenant's
liability under this Article shall survive any termination of this Lease. Tenant
shall have the right (at Tenant's expense) to defend Landlord against any such
claim by counsel reasonably acceptable to Landlord (who may also act as Tenant's
counsel in the particular matter, provided Landlord's and Tenant's interests are
coincident and not adverse to one another). Tenant shall apprise Landlord
regularly as to the status of the particular matter.
ARTICLE 23
LIMITATIONS ON TRANSFERS
23.1 GENERAL PROHIBITION AGAINST TRANSFER. Tenant shall not Transfer its
interest in this Lease or any Leased Property, except as specifically permitted
by this Lease or consented to in advance by Landlord in writing. Except to the
extent otherwise specified herein, the parties agree that Landlord may
arbitrarily and unreasonably withhold its consent to any such request and no
court shall imply any agreement by Landlord to act in a reasonable fashion. Any
such attempted Transfer not specifically permitted by this Lease or otherwise
approved by Landlord shall be null and void and of no force and effect; but in
the event of any such Transfer, Landlord may collect rent and other charges from
the Transferee and apply the amounts collected to the rent and other charges
herein reserved, but no Transfer or collection of rent and other charges shall
be deemed to be a waiver of Landlord's rights to enforce Tenant's covenants or
the acceptance of the Transferee as Tenant, or a release of Tenant from the
performance of any covenants on the part of Tenant to be performed.
Notwithstanding any Transfer, Tenant and any Guarantor shall remain fully liable
for the performance of all terms, covenants and provisions of this Lease, both
before and after any such Transfer. Any violation of this Lease by any
Transferee shall be deemed to be a violation of this Lease by Tenant.
23.2 CORPORATE OR PARTNERSHIP TRANSACTIONS. If Tenant, Guarantor or the
Manager is a corporation, then the merger, consolidation or reorganization of
such corporation and/or the sale, issuance or transfer, cumulatively or in one
transaction, of any voting stock by Tenant, Guarantor or the Manager or the
stockholders of record of any of them as of the date of this Lease which results
in a change in the voting control of Tenant, Guarantor or the Manager or the
stockholders of record of any of them shall constitute a Transfer. If Tenant,
Guarantor or the Manager is a joint venture, partnership or other association,
then the transfer of or change in, cumulatively or in one transaction, voting
control of or a twenty percent (20%) or greater interest
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in such Tenant, Guarantor or Manager within any five-year period, or the
termination of such joint venture, partnership or other association, shall
constitute a Transfer. Notwithstanding the foregoing, if there occurs a "change
of control" with respect to Monarch, then the provisions of this Section shall
only apply to matters involving Tenant and not Guarantor or the Manager. For
purposes of this Section, a "change of control" shall mean a transaction or
series of transactions whereby any Person or group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder acquires beneficial ownership, directly or indirectly, of
membership interests of Monarch (or other interests convertible into such
membership interests) representing over fifty percent (50%) of the combined
voting power of all membership interests of Monarch entitled to vote in the
election of members of the Management Committee; provided, however, a "change of
control" with respect to Monarch shall not include an initial public offering
and sale of interests in Monarch pursuant to an effective registration statement
under the Securities Act of 1933, as amended, if Xxxxxx X. Xxxxxx continues
thereafter as the Chairman of the Management Committee of Monarch or Chairman of
the Board of Directors or Chairman of the Management Committee of any successor
in interest of Monarch.
23.3 PERMITTED SUBLEASES. Subject to Section 23.4 hereof, Tenant shall have
the right to sublease up to ten percent (10%) of the floor area of a Facility in
the ordinary course of the health care business being conducted in such Facility
without Landlord's consent, and subject to Landlord's consent, which shall not
unreasonably be withheld or delayed an additional ten percent (10%) of the floor
area of such Facility.
23.4 TRANSFERS TO A CONTROLLED ENTITY. Notwithstanding anything to the
contrary herein contained, Tenant may without the prior consent of Landlord
Transfer its interest herein to an entity Controlled by Lyric upon the condition
that (a) such entity expressly and in writing assumes all of the obligations and
liability of the Tenant hereunder, (b) such Transfer has no effect on the Lyric
Guaranty and Lyric confirms in writing that the Lyric Guaranty remains unchanged
and in full force and effect, (c) the stock of such entity (if a corporation) is
at the time of the Transfer pledged to Landlord to secure performance of its
obligations under this Lease, (d) all obligations of such entity to Lyric or any
Affiliate of Lyric, and all Debt of such entity to any third party, are
subordinated to its liability and obligations as Tenant hereunder and (e)
without the consent of Landlord, no such Transfer shall release the Tenant named
herein from liability hereunder.
23.5 SUBORDINATION AND ATTORNMENT. Tenant shall insert in any sublease
permitted by Landlord provisions to the effect that (a) such sublease is subject
and subordinate to all of the terms and provisions of this Lease and to the
rights of Landlord hereunder, (b) if this Lease terminates before the expiration
of such sublease, the subtenant thereunder will, at Landlord's option, attorn to
Landlord and waive any right the subtenant may have to terminate the sublease or
to surrender possession thereunder as a result of the termination of this Lease,
and (c) if the subtenant receives a written Notice from Landlord or Landlord's
assignee, if any, stating that an
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Event of Default has occurred under this Lease, the subtenant shall thereafter
be obligated to pay all rentals accruing under said sublease directly to the
party giving such Notice or as such party may direct. All rentals received from
the subtenant by Landlord or Landlord's assignees, if any, as the case may be,
shall be credited against the amounts owing by Tenant under this Lease.
23.6 SUBLEASE LIMITATION. Anything contained in this Lease to the contrary
notwithstanding, even if a sublease of a Leased Property is permitted, Tenant
shall not sublet the applicable Leased Property on any basis such that the
rental to be paid by the subtenant thereunder would be based, in whole or in
part, on either (a) the income or profits derived by the business activities of
the subtenant, or (b) any other formula such that any portion of the sublease
rental received by Landlord would fail to qualify as "rents from real property"
within the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto. The parties agree that this Section shall not be deemed
waived or modified by implication, but may be waived or modified only by an
instrument in writing explicitly referring to this Section by number.
23.7 FACILITY SUBLEASES PERMITTED. Landlord expressly consents to the
Facility Subleases to the Facility Subtenants identified in Exhibit A hereto;
provided, however, that any material modification or amendment of the terms
thereof shall require the prior written approval of Landlord.
ARTICLE 24
CERTAIN FINANCIAL MATTERS
24.1 OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS. Tenant shall furnish
to Landlord:
(a) Quarterly Financials. As soon as available and in any event within
fifty-five (55) days after the end of each calendar quarter, an unaudited
operating statement for each of the Facilities for the period commencing at
the end of the previous quarter and ending with the end of such quarter,
together with an Officer's Certificate of Tenant stating that Tenant is not
in default of any covenant set forth in Article 8 hereof, or if Tenant is
in default, specifying all such defaults, the nature thereof and the steps
being taken to remedy the same.
(b) Annual Financials. As soon as available and in any event within
one hundred twenty (120) days after the end of each Fiscal Year, a
consolidated balance sheet of the Facility Subtenants and Tenant as at the
end of such Fiscal Year and a consolidated operating statement for the
Facilities for such Fiscal Year, in each case accompanied by (i) an opinion
acceptable to Landlord of KPMG Peat Marwick or other independent public
accountants of recognized standing reasonably acceptable to Landlord and
(ii) an
56
Officer's Certificate of Tenant stating that Tenant is not in default in
the performance or observance of any of the terms of this Lease, or if
Tenant is in default, specifying all such defaults, the nature thereof and
the steps being taken to remedy the same.
(c) Cost Reports. Upon the request of Landlord and no more than once
in each calendar year, Tenant shall furnish to Landlord complete and
accurate copies of the most recent annual Medicaid and Medicare cost
reports for the Facilities and any and all amendments filed with respect to
such reports and all responses, audit reports or inquiries with respect to
each such report.
(d) Licensing Agency Reports. Upon the reasonable request of Landlord
and no more than once during any calendar year, Tenant shall furnish to
Landlord a copy of the most recent federal and state agency surveys or
report and any statement of deficiencies with respect to the Facilities,
and within the time period required by the particular agency for furnishing
a plan of correction, and without the need of any request from Landlord,
Tenant shall also furnish to Landlord a copy of the plan of correction
generated from such survey or report for the Facilities, and correct or
cause to be corrected a deficiency, the curing of which is a condition of
continued licensure or for full participation in Medicare and Medicaid for
existing patients or for new patients to be admitted with Medicare or
Medicaid coverage, by the date required for cure by such agency (plus
extensions granted by such agency.)
(e) Notices. Tenant shall require that each Facility Subtenant furnish
to Landlord within ten (10) days from its receipt, and Tenant shall furnish
to Landlord within ten (10) days from its receipt, any and all notices
(regardless of form) from any licensing and/or certifying agency that a
Facility's license or Medicare or Medicaid certification of a Facility is
being revoked or suspended.
(f) Patient Data. Within fifty-five (55) days of the end of each
fiscal quarter and to the extent not included in the operating statements
delivered pursuant to subsection (i), above, a statement of the actual
patient days incurred for the quarter, together with quarterly census
information for the Facilities as of the end of such quarter by patient-
mix (i.e., private, Medicare, Medicaid and V.A.) of the Facilities.
(g) Capital Budget. As soon as it is prepared in each Lease Year, a
capital budget for the Facilities for that and the following Lease Year,
for Landlord's information and not for approval;
(h) Other Information. With reasonable promptness, such other
information respecting the financial condition and affairs of Tenant, the
Facility Subtenants and the Facilities as Landlord may reasonably request
from time to time, including, without
57
limitation, any such other information as may be available to the
administration of the Facilities; and
(i) At times reasonably required by Landlord, and upon request as
appropriate, audited year-end information and unaudited quarterly financial
information concerning the Leased Properties, Tenant and the Facility
Subtenants as Landlord may require for applicable on-going filings with the
SEC, under both the Securities Act of 1933, as amended and the Securities
Exchange Act of 1934, as amended, including, but not limited to, 10-Q
Quarterly Reports, 10-K Annual Reports, 8- and registration statements
which may be filed by Landlord during the Term of this Lease.
24.2 PUBLIC OFFERING INFORMATION. Tenant specifically agrees that Landlord
may include financial information and such information concerning the operation
of the Facilities which does not violate the confidentiality of the
facility-patient relationship and the physician-patient privilege under
applicable laws, in offering memoranda or prospectuses, or similar publications
in connection with syndications or public offerings of Landlord's securities or
interests, and any other reporting requirements under applicable federal and
State laws, including those of any successor to Landlord. Tenant agrees to
provide such other reasonable information necessary with respect to Tenant and
the applicable Leased Property to facilitate a public offering or to satisfy SEC
or regulatory disclosure requirements. Landlord shall provide to Tenant a copy
of any information prepared by Landlord to be so published, and Tenant shall
have a reasonable period of time (not to exceed three (3) Business Days) after
receipt of such information to notify Landlord of any corrections. Landlord
shall protect, indemnify, save harmless and defend Tenant, its principals,
officers, directors and agents and employees from and against all liabilities,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses), to the extent
permitted by law, imposed upon or incurred by or asserted against them by a
third party or parties as a result of the publication of any such audited
financial statements by or at the direction of Landlord, but not against any
such liabilities, claims, damages, penalties, causes of action, costs or
expenses as may be suffered by Tenant, its principals, officers, directors and
agents and employees in or as a result of any action or proceeding with respect
to any such audited financial statement (a) in which a judgment is entered
against IHS, Lyric, Tenant, any Seller ( as defined in the Facilities Purchase
Agreement) or any principal, officer, director, agent or employee thereof, or
(b) is settled in whole or in part on the basis of a payment of Ten Thousand
Dollars ($10,000) or more to the claimant or moving party in such proceeding by
IHS, Lyric, Tenant, any Seller or any principal, officer, director, agent or
employee thereof alone or in combination with any payment made by IHS, Lyric,
Tenant, any Seller or any principal, officer, director, agent or employee
thereof (and as to expenses previously paid by Landlord pursuant to the
foregoing indemnity prior to an event described in (a) or (b), hereof, Tenant
shall repay such expenses promptly after the event specified).
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ARTICLE 25
LANDLORD INSPECTION
Tenant shall permit Landlord and its authorized representatives to inspect,
during normal business hours, at least once per quarter per Lease Year (a) the
respective Leased Properties and, (b) upon one Business Day's prior Notice,
which Notice shall set forth a reasonable cause for such inspection, Tenant's
books and records pertaining thereto (provided, however, that upon any Event of
Default, such Notice need not set forth any cause for such inspection).
Notwithstanding the foregoing, Landlord shall have the unlimited right to
inspect any Leased Property, upon twenty-four (24) hours prior Notice, if any
Leased Property is determined after a second inspection or review by an
applicable governmental regulatory authority not to be in substantial compliance
with applicable laws, rules and regulations which could result in a loss of the
Leased Property's operating healthcare license, payment of a material monetary
fine, penalty or judgment, termination of a provider agreement, restriction on
new patient admissions or other material decertification; provided, however,
Landlord may not inspect any Leased Property during the period that a
governmental regulatory authority inspection or survey is being conducted at the
Leased Property.
ARTICLE 26
[INTENTIONALLY OMITTED]
ARTICLE 27
[INTENTIONALLY OMITTED]
ARTICLE 28
ACCEPTANCE OF SURRENDER
No surrender to Landlord of this Lease or of the Leased Property or any
part thereof, or of any interest therein, shall be valid or effective unless
specifically agreed to and accepted in writing by Landlord, and no act by
Landlord or any representative or agent of Landlord, other than such a specific
written acceptance by Landlord, shall constitute an acceptance of any such
surrender.
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ARTICLE 29
MERGER OF TITLE; PARTNERSHIP
29.1 NO MERGER OF TITLE. There shall be no merger of this Lease or of the
leasehold estate created thereby by reason of the fact that the same person,
firm, corporation or other entity may acquire, own or hold, directly or
indirectly, (a) the Lease or the leasehold estate created hereby or any interest
in the Lease or such leasehold estate, and (b) the fee estate in any Leased
Property.
29.2 NO PARTNERSHIP. Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture between Landlord and Tenant
or to cause either party to be responsible in any way for the debts or
obligations of the other or any other party, it being the intention of the
parties that the only relationship hereunder is that of Landlord and Tenant.
ARTICLE 30
CONVEYANCE BY LANDLORD
If Landlord or any successor owner of any Leased Property conveys any
Leased Property in accordance with the terms hereof other than as security for a
debt, Landlord or such successor owner, as the case may be, shall thereupon be
released from all future liabilities and obligations of Landlord under this
Lease arising or accruing from and after the date of such conveyance, and all
such future liabilities and obligations shall thereupon be binding upon the new
owner, provided that the transferee gives Notice to Tenant that such transferee
has received any funds in the hands of Landlord or the then grantor at the time
of the transfer in which Tenant has an interest.
ARTICLE 31
QUIET ENJOYMENT
So long as Tenant pays all Rent as it becomes due and complies with all of
the terms of the Lease and performs its obligations thereunder, Tenant shall
peaceably and quietly have, hold and enjoy the respective Leased Properties
hereby leased for the Term, free of any claim or action by Landlord or anyone
claiming by, through or under Landlord.
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ARTICLE 32
[INTENTIONALLY OMITTED]
ARTICLE 33
APPRAISERS
If it becomes necessary to determine the Fair Rental Value of any of the
Leased Properties for any purpose of this Lease, Landlord and Tenant shall
attempt to agree upon a single appraiser to make such determination. If Landlord
and Tenant are unable to agree upon a single appraiser within thirty (30) days
thereafter, then the party required or permitted to give Notice of such required
determination shall include in the Notice the name of a person selected to act
as appraiser on its behalf. Within ten (10) days after such Notice, Landlord (or
Tenant, as the case may be) shall by Notice to Tenant (or Landlord, as the case
may be) appoint a second person as appraiser on its behalf. The appraisers thus
appointed, each of whom must be a member of the American Institute of Real
Estate Appraisers (or any successor organization thereto) and experienced in
appraising nursing home properties, shall, within forty-five (45) days after the
date of the Notice appointing the first appraiser, proceed to appraise the
applicable Leased Property to determine the Fair Rental Value of it as of the
relevant date (giving effect to the impact, if any, of inflation from the date
of their decision to the relevant date); provided, however, that if only one
appraiser has been so appointed, or if two appraisers have been so appointed but
only one such appraiser has made such deter mination within fifty (50) days
after the making of Tenant's or Landlord's request, then the determination of
such appraiser shall be final and binding upon the parties. If two appraisers
have been appointed and have made their determinations within the respective
requisite periods set forth above and if the difference between the amounts so
determined does not exceed ten percent (10%) of the lesser of such amounts, then
the Fair Rental Value shall be an amount equal to fifty percent (50%) of the sum
of the amounts so determined. If the difference between the amounts so
determined exceeds ten percent (10%) of the lesser of such amounts, then such
two appraisers shall have twenty (20) days to appoint a third appraiser. If no
such appraiser has been appointed within such twenty (20) day period or within
ninety (90) days of the original request for a determination of Fair Rental
Value, whichever is earlier, either Landlord or Tenant may apply to any court
having jurisdiction to have such appointment made by such court. Any appraiser
appointed by the original appraisers or by such court shall be instructed to
determine the Fair Rental Value within forty-five (45) days after appointment of
such appraiser. The determination of the appraiser which differs most in terms
of dollar amount from the determinations of the other two appraisers shall be
excluded, and the average of the sum of the remaining two determinations shall
be final and binding upon Landlord and Tenant as the Fair Rental Value of the
applicable Leased Property. Any such appraisal shall conform to FDIC or
equivalent requirements and format.
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This provision for determining the Fair Rental Value by appraisal shall
be specifically enforceable to the extent such remedy is available under
applicable law, and any determination hereunder shall be final and binding upon
the parties and judgment may be entered upon such determination in any court
having jurisdiction of the matter. Landlord and Tenant shall each pay the fees
and expenses of the appraiser appointed by it, and each shall pay one-half of
the fees and expenses of the third appraiser and one-half of all other costs and
expenses incurred in connection with each appraisal.
ARTICLE 34
BREACH OF LEASE BY LANDLORD
Landlord shall not be in breach of this Lease unless Landlord fails to
observe or perform any term, covenant or condition of this Lease on its part to
be performed and such failure continues for a period of thirty (30) days after
written Notice specifying such failure and the necessary curative action is
received by Landlord from Tenant. If the failure cannot with due diligence be
cured within a period of thirty (30) days, the failure shall not be deemed to
continue if Landlord, within said thirty (30) day period, proceeds promptly and
with due diligence to cure the failure and diligently completes the curing
thereof. The time within which Landlord shall be obligated to cure any such
failure shall also be subject to extension of time due to the occurrence of any
Unavoidable Delay.
ARTICLE 35
PERSONAL PROPERTY OPTION; TRANSFER OF FACILITY CONTROL
35.1 LANDLORD'S OPTION TO PURCHASE TENANT'S PERSONAL PROPERTY. Landlord may
purchase Tenant's Personal Property (other than proprietary software and data)
at the expiration or termination of this Lease for an amount equal to the then
fair market value thereof (determined in accordance with the appraisal
procedures set forth in Article 33 hereof), subject to, and with appropriate
credits for, any obligations owing from Tenant to Landlord and for all equipment
leases, conditional sale contracts and any other encumbrances to which Tenant's
Personal Property is subject. Landlord's option shall be exercised by Notice to
Tenant no more than one hundred eighty (180) days, nor less than ninety (90)
days, before the expiration of the Initial Term (or, before the expiration of
the First Renewal Term or the Second Renewal Term, as the case may be), unless
this Lease is terminated prior to its expiration date (a) by reason of an Event
of Default, in which event Landlord's option shall be exercised within
forty-five (45) days following the date of termination, or (b) by reason of the
exercise by a Tenant of a right to terminate provided for herein in the event of
a Taking, in which event Landlord's option shall be exercised within forty-five
(45) days following Tenant's exercise of such right. Landlord's option
62
shall terminate upon Tenant's purchase of the applicable Leased Property. If
Landlord exercises its option, Tenant shall, in exchange for Landlord's payment
of the purchase price, deliver Tenant's Personal Property to Landlord, together
with a xxxx of sale and such other documents as Landlord may reasonably request
in order to carry out the purchase of Tenant's Personal Property, and such
purchase shall be closed by such delivery and such payment on the date set by
Landlord in its Notice of exercise.
35.2 FACILITY TRADE NAMES. If this Lease is terminated by reason of an
Event of Default, or if Landlord purchases the Tenant's Personal Property with
respect to any Leased Property pursuant to Section 35.1 hereof, Landlord shall
be permitted to use the Facility Trade Names (except for the names "Integrated,"
"IHS" and variants thereof) under which the applicable Leased Property conducts
business in the market in which the applicable Facility is located, and Tenant
shall not after any such termination use the Facility Trade Names under which
the applicable Leased Property conducts business in any business that competes
with the applicable Leased Property.
35.3 TRANSFER OF OPERATIONAL CONTROL OF THE FACILITIES. Tenant shall
cooperate in transferring operational control of the Facilities to Landlord or
Landlord's nominee if the Term expires without extension or renewal by Tenant,
or if this Lease is terminated upon the occurrence of an Event of Default or for
any other reason, and shall use its best efforts, (without incurring material
cost or liability except after Event of Default), to accomplish such transfer
with minimal disruption of the business conducted at each Facility. To that end,
pending completion of the transfer of operational control of the Facilities to
Landlord or its nominee, Tenant agrees that during the period beginning ninety
(90) days prior to the expiration of the Term of this Lease (or at any time upon
the occurrence of an Event of Default):
(a) Tenant will not terminate the employment of any employees without
just cause, or change any salaries (other than normal merit raises and the
pre-announced wage increases of which Landlord has knowledge) or employment
agreements without Landlord's consent other than customary raises to
non-officers at regular review dates, and will not hire additional
employees except in good faith in the ordinary course of business.
(b) Tenant will use its best efforts to provide all necessary
information requested by Landlord or its nominee for the preparation and
filing of any and all necessary applications or notifications of any
federal or state governmental authority having jurisdiction over a change
in the operational control of the applicable Facility, and Tenant will
cooperate (without incurring material cost or liability except after an
Event of Default), to cause the operating health care license to be
transferred to Landlord or Landlord's nominee and will also cooperate with
any healthcare certification procedures required of Landlord or Landlord's
nominee by applicable law.
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(c) Tenant shall continue to operate the business in accordance with
reasonable and standard industry practices to keep the business and
organization of the applicable Facility intact and to preserve for Landlord
or its nominee the goodwill of the suppliers, distributors, residents and
others having business relations with Tenant with respect to the applicable
Facility.
(d) Tenant shall engage only in transactions or other activities with
respect to the applicable Facility which are in the ordinary course of its
business and shall perform all maintenance and repairs reasonably necessary
to keep the applicable Facility in satisfactory operating condition and
repair, and shall maintain the supplies and foodstuffs at levels which are
consistent and in compliance with all health care regulations, and shall
not sell or remove any personal property except in the ordinary course of
business.
(e) Tenant shall cooperate fully with Landlord or its nominee in
supplying any information that may be reasonably required to effect an
orderly transfer of the applicable Facility.
(f) Tenant shall provide Landlord or its nominee with full and
complete information regarding the employees of the applicable Facility and
shall reimburse Landlord or its nominee for all outstanding accrued
employee benefits, including accrued vacation, sick and holiday pay
calculated on a true accrual basis, including all earned and a prorated
portion of all unearned benefits.
(g) Tenant shall use its best efforts, (without incurring material
cost or liability except after Event of Default), to obtain the
acknowledgment and the consent of any creditor, Landlord or sublandlord,
mortgagee, beneficiary of a deed of trust or security agreement affecting
the real and personal properties of Tenant or any other party whose
acknowledgment and/or consent would be required because of a change in the
operational control of the applicable Facility and transfer of personal
property.
35.4 INTANGIBLES AND PERSONAL PROPERTY. Notwithstanding any other provision
of this Lease, but subject to Section 6.4 hereof (relating to Landlord's
security interest), Landlord's Personal Property shall not include goodwill, or
other intangible personal property severable from Landlord's "interests in real
property" within the meaning of Section 856(d) of the Code. All of Landlord's
Personal Property is leased to Tenant pursuant to the terms hereof.
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ARTICLE 36
[INTENTIONALLY OMITTED]
ARTICLE 37
MISCELLANEOUS
37.1 NOTICES. All notices, consents or other communications under this
Lease must be in writing and addressed to each party at its respective Notice
Addresses (or at any other address which the respective parties may designate by
notice given to the other party from time to time). Any notice required by this
Lease to be given or made within a specified period of time, on or before a date
certain, shall be deemed given or made if sent by hand, or by registered or
certified mail (return receipt requested and postage and registry fees prepaid).
Delivery "by hand" shall include delivery by commercial express or courier
service. A notice sent by registered or certified mail shall be deemed given on
the date of receipt (or attempted delivery if refused) indicated on the return
receipt. All other notices shall be deemed given when actually received. A
notice may be given by a party or by its legal counsel. The Notice Addresses of
the parties are as follows:
If to Landlord: Monarch Properties, LP
0000 Xxxxxxx Xxx Xxxxxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to: LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Xx., Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Tenant: Lyric Health Care Holdings III, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Copy to: Xxxxxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
65
37.2 SURVIVAL, CHOICE OF LAW. TENANT'S OBLIGATIONS UNDER THIS LEASE SHALL
SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THE TERM. AT LANDLORD'S OPTION,
THIS LEASE SHALL BE CONSTRUED AND ENFORCED EITHER (A) UNDER THE LAW OF THE STATE
OF NEW YORK OR, (B) IN ANY PARTICULAR CASE, THE LAW OF THE STATE IN WHICH ANY OF
THE FACILITIES IS LOCATED, IN ANY SUCH CASE WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS. TENANT IRREVOCABLY SUBMITS TO JURISDICTION IN ANY STATE IN
WHICH ANY FACILITY IS LOCATED (AND AGREES THAT SERVICE OF PROCESS MAY BE
EFFECTED UPON TENANT UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE
RESPECTIVE STATE IN WHICH LANDLORD COMMENCES A PROCEEDING AND IRREVOCABLY WAIVES
ANY OBJECTION TO VENUE IN THE STATE AND FEDERAL COURTS OF ANY SUCH STATE).
37.3 LIMITATION ON RECOVERY. Tenant specifically agrees to look solely to
Landlord's interest in the Leased Property leased by it, the net proceeds
received by Landlord from the sale or any financing or refinancing of the Leased
Property leased by it, any funds deposited by Tenant pursuant to Section 12.2
hereof and any Net Proceeds for recovery of any judgment against Landlord, it
being specifically agreed that no partner, manager, shareholder, officer,
director, or employee of Landlord shall ever be personally liable for any such
judgment or for the payment of any monetary obligation to Tenant. Furthermore,
Landlord (original or successor) shall not ever be liable to Tenant for any
indirect or consequential damages suffered by Tenant from whatever cause.
37.4 WAIVERS. Tenant waives all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor,
and notices of acceptance, and waives all notices of the existence, creation, or
incurring of new or additional obligations.
37.5 CONSENTS. Whenever the consent or approval of Landlord is required
hereunder, Landlord may in its sole discretion and without reason withhold that
consent or approval unless a provision of this Lease expressly requires that
Landlord be reasonable in not withholding or delaying consent or otherwise
provides to the contrary.
37.6 COUNTERPARTS. This Lease may be executed (a) in counterparts, a
complete set of which together shall constitute an original and (b) in
duplicates, each of which shall constitute an original. Copies of this Lease
showing the signatures of the respective parties, whether produced by
photographic, digital, computer, or other reproduction, may be used for all
purposes as originals.
37.7 OPTIONS FOLLOW LEASE. The renewal options and any other options
granted to Tenant in this Lease are not assignable or transferrable except in
connection with a permitted transfer or assignment of this Lease. Any attempt to
assign or transfer such options otherwise shall be void and of no force and
effect.
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37.8 RIGHTS CUMULATIVE. Except as provided herein to the contrary, the
respective rights and remedies of the parties specified in this Lease shall be
cumulative and in addition to any rights and remedies not specified in this
Lease.
37.9 ENTIRE AGREEMENT. There are no oral or written agreements or
representations between the parties hereto affecting this Lease. This Lease
supersedes and cancels any and all previous negotiations, arrangements,
representations, brochures, agreements and understandings, if any, between
Landlord and Tenant.
37.10 AMENDMENTS IN WRITING. Neither this Lease nor any provision hereof
may be changed, waived, discharged or terminated except by an instrument in
writing signed by Landlord and Tenant
37.11 SEVERABILITY. If any provision of this Lease or the application of
such provision to any person, entity or circumstance is found invalid or
unenforceable by a court of competent jurisdiction, such determination shall not
affect the other provisions of this Lease and all other provisions of this Lease
shall be deemed valid and enforceable.
37.12 SUCCESSORS. The term "Landlord" shall mean only the owner or owners
at the time in question of fee title in the respective Leased Properties. All
rights and obligations of Landlord and Tenant under this Lease shall extend to
and bind the respective heirs, executors, administrators and the permitted
concessionaires, successors, subtenants and assignees of the parties.
37.13 LATE CHARGES. If any late charges provided for in any provision of
this Lease are based upon a rate in excess of the maximum rate permitted by
applicable law, the parties agree that such charges shall be fixed at the
maximum permissible rate.
37.14 BINDING EFFECT. This Lease (and all terms thereof, whether so
expressed or not), shall be binding upon the respective permitted successors,
assigns and legal representatives of the parties and shall inure to the benefit
of and be enforceable by the parties and their respective permitted successors,
assigns and legal representatives.
37.15 EXHIBITS AND SCHEDULES. The Exhibits and Schedules attached hereto
are (and shall be deemed) parts of this Lease.
37.16 WAIVER OF JURY TRIAL. IN ANY ACTION OR PROCEEDING IN CONNECTION WITH
THIS LEASE, EACH OF LANDLORD AND TENANT HEREBY WAIVES THE RIGHT TO TRIAL BY
JURY.
37.17 MEMORANDUM OF LEASE. Landlord and Tenant shall, promptly upon the
request of either, enter into a short form Memorandum of Lease, in form suitable
for recording under the
67
laws of the applicable State in which reference to this Lease, and all options
contained therein, shall be made. Tenant shall pay all costs and expenses of
recording such Memorandum of Lease.
37.18 ADDITIONAL TENANT OBLIGATIONS. Tenant and the Facility Subtenants (a)
hereby make the representations and warranties and shall take all reasonable
measures to assure that such representations and warranties remain true and
correct at all times during the term of the Loan Facility, (b) shall pay the
charges, fees, costs and expenses during the term of the Loan Facility and (c)
shall perform the covenants, duties and obligations during the term of the Loan
Facility, all as set forth on Exhibit G hereto and as required therein, unless
Landlord otherwise consents in writing; provided, however, that in the event of
a refinance, amendment, modification or supplement of the Loan Facility (a "Loan
Facility Refinance") evidenced by a note, Tenant and the Facility Subtenants
shall (i) make such representations and warranties, (ii) pay such charges, fees,
costs and expenses and (iii) perform and observe such covenants, duties and
obligations which are required by the instruments evidencing the security or
pertaining to such Loan Facility Refinance, providing they are no more
burdensome than those relating to the Loan Facility.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have executed this Master Lease by their
duly authorized officers as of the date first above written.
MONARCH PROPERTIES, LP
By: MP Operating, LLC, its General Partner
By: MP Operating, Inc., its Manager
By: (Seal)
----------------------------
Name: Xxxxxxx Xxxxxxx
--------------------------
Title: Chief Financial Officer
-------------------------
LYRIC HEALTH CARE HOLDINGS III, INC.
By: (Seal)
----------------------------
Name: Xxxxxx X. Xxxxx
--------------------------
Title: Senior Vice President
-------------------------
S-1
LIST OF EXHIBITS TO MASTER LEASE
EXHIBIT A Facilities (Leased Properties); Facility Subtenants;
Land
EXHIBIT B Facility Lease Expiration Dates; Facility Renewal
Terms; Allocation of Base Rent
EXHIBIT C Cash Flow to Debt Service Requirement
EXHIBIT D Form of Estoppel Certificate
EXHIBIT E Initial Facility Subleases
EXHIBIT F Facility Purchase Prices
EXHIBIT G Additional Tenant Obligations
EXHIBIT H List of Engineering Firms
EXHIBIT I Landlord Wiring Instructions
EXHIBIT A
FACILITIES (LEASED PROPERTIES); FACILITY SUBTENANTS; LAND
---------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME ADDRESS BEDS SUBTENANT NAME STATE OF
INCORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 3625 Parkmoor Village 155 Integrated Health Delaware
of Colorado Springs Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 Services at Colorado
719-550-0200 Springs, Inc.
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Horizon Healthcare & 0000 X. Xxxx Xxxx 158 IHS Acquisition No. Delaware
Specialty Center Xxxxxxx Xxxxx, Xxxxxxx 00000 103, Inc.
(HHC- Daytona) 000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 0000 00xx Xxxxxx 110 Integrated Health Delaware
of Vero Beach Xxxx Xxxxx, Xxxxxxx 00000 Services at Central
000-000-0000 Florida, Inc.
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 000 Xxx Xxxxxx Xxxxx Xxxx 120 Briar Hill, Inc. Florida
of Florida at Auburndale Xxxxxxxxxx, Xxxxxxx 00000
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 0000 Xxxxxxxx Xxxxxx 150 Bethamy Living Center, Florida
of Florida at Clearwater Xxxxxxxxxx, Xxxxxxx 00000 Limited Partnership
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 000 Xxxxx 00xx Xxxxxx 107 Integrated Health Delaware
of Florida at Xxxx Xxxxxx Xxxx Xxxxxx, Xxxxxxx 00000 Services at Central
000-000-0000 Florida, Inc.
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 0000 Xxxxxxxxxx Xxxx 128 Integrated Health Georgia
of Atlanta at Briarcliff Xxxxxxx, Xxxxxxx 00000 Services at Briarcliff
Haven 404-875-6456 Haven, Inc.
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx 000 Xxxxxx Xxxx 99 IHS Xxxxxxxxxxx Xx. Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000 114, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
A-1
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME ADDRESS BEDS SUBTENANT NAME STATE OF
INCORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 000 Xxxxxxxx Xxx. 176 Cedarcroft Health Pennsylvania
of Xx. Xxxxx xx Xxx Xxxx Xxxxxx Xxxx, Xxxxxxxx 00000 Services, Inc.
Xxxxx 000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 000 Xxxxxxx Xxxx Xxxx 68 Manchester Integrated Pennsylvania
of New Hampshire at Manchester, New Hampshire Health, Inc.
Manchester 03102
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Ruidoso Care Center 5th & D Street 73 IHS Acquisition No. Delaware
Ruidoso, New Mexico 121, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxx Xxxx Xxxxxx 00 Xxxx Xxxxxx 100 IHS Acquisition No. Delaware
Xxxxxxx, Xxxx 00000 125, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxx Xxxxxx 000 Xxxxxxxxxx Xx. XX 96 IHS Acquisition No. Delaware
Xxxxxx, Xxxx 00000 124, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
HSH - Midwest City 0000 Xxxxxxxx Xxxxxx 31 IHS Acquisition No. Delaware
Xxxxxxx Xxxx, Xxxxxxxx 00000 168, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Midwest City Nursing 0000 Xxxxxxxx Xxxxxx 106 IHS Acquisition No. Delaware
Xxxxxxx Xxxx, Xxxxxxxx 00000 127, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 0000 Xxxxx Xxxx 244 Rest Haven Nursing Pennsylvania
at Whitemarsh Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Center (Whitemarsh),
610-825-6560 Inc.
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Amarillo Specialty Hospital 0000 Xxxx Xxxxx Xxxxx 30 Integrated of Amarillo, Texas
Xxxxxxxx, Xxxxx 00000 Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
A-2
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME ADDRESS BEDS SUBTENANT NAME STATE OF
INCORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
Doctors Healthcare Center 0000 Xxxxx Xxxx Xxxxx 325 IHS Acquisition No. Delaware
Dallas, Texas 128, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Harbor View Care Center 0000 Xxxxx Xxxxxx 116 IHS Acquisition Xx. Xxxxxxxx
Xxxxxx Xxxxxxx, Xxxxx 00000 140, Inc.
(Nueces County)
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Heritage Estates 201 Sycamore School Road 152 IHS Acquisition No. Delaware
Ft. Xxxxx, Xxxxx 00000 134, Inc.
(Tarrant County)
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx 0000 Xxxxx Xxxxxx Drive 150 IHS Acquisition No. Delaware
Xxxxxxxxxx, Xxxxx 00000 132, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Heritage Manor Longview 000 Xxxxxxxx Xxxxx 150 IHS Acquisition No. Delaware
Xxxxxxxx, Xxxxx 00000 138, Inc.
(Xxxxx County)
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Heritage Manor Plano 0000 Xxxx Xx. 186 IHS Acquisition No. Delaware
Xxxxx, Xxxxx 00000 129, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Heritage Place of Grand 000 Xxxxx Xxxxxx 166 IHS Acquisition No. Delaware
Prairie Xxxxx Xxxxxxx, Xxxxx 00000 133, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Horizon Healthcare -El 0000 X. Xxxxxx Xxxxxx. 182 IHS Acquisition Xx. Xxxxxxxx
Xxxx Xx Xxxx, Xxxxx 00000 131, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
A-3
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME ADDRESS BEDS SUBTENANT NAME STATE OF
INCORPORATION
-----------------------------------------------------------------------------------------------------------------------------------
HSH- Corpus Christi 0000 Xxxxx Xxxxxx 31 IHS Acquisition Xx. Xxxxxxxx
Xxxxxx Xxxxxxx, Xxxxx 00000 170, Inc.
(Nueces County)
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
XXX- Xx Xxxx 0000 X. Xxxxxx Xxxxxx 00 IHS Acquisition No. Delaware
Xx Xxxx, Xxxxx 00000 171, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services 0000 Xxxx Xxxxx Xxxxx 120 Integrated of Amarillo, Texas
of Amarillo Xxxxxxxx, Xxxxx 00000 Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxx Xxxxx 0000 Xxxxxxxxx Xxxx 187 Integrated Health Delaware
Xx Xxxx, Xxxxx 00000 Services at Hanover
915-544-2002 House, Inc.
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxx 000 X. Xxxxx 000 XXX Xxxxxxxxxxx Xx. Xxxxxxxx
Xxxxxx, Xxxxx 00000 139, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Plano Specialty Hospital 0000 Xxxx Xxxx 30 IHS Acquisition No. Delaware
(HSH- Plano) Xxxxx, Xxxxx 00000 174, Inc.
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
Silver Springs Nursing and 00000 Xxxx Xxxxx Xxxxx 150 IHS Acquisition No. Delaware
Rehabilitation Center Xxxxxxx, Xxxxx 00000 136, Inc.
(Xxxxxx County)
000-000-0000
000-000-0000 (fax)
-----------------------------------------------------------------------------------------------------------------------------------
A-4
EXHIBIT B
FACILITY LEASE EXPIRATION DATES;
FACILITY RENEWAL TERMS; ALLOCATION OF BASE RENT
-----------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME BASE RENT COMMENCEMENT EXPIRATION LEASE TERM NUMBER LENGTH
DATE DATE OF OF
RENEWAL RENEWALS
TERMS
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services of $622,688 January 1, 1999 December 31, 2008 10 3 5
Colorado Springs
Horizon Healthcare & Specialty $501,188 January 1, 1999 December 31, 2008 10 3 5
Center
Integrated Health Services of $372,094 January 1, 1999 December 31, 2008 10 3 5
Vero Beach
Integrated Health Services of $561,938 January 1, 1999 December 31, 2008 10 3 5
Florida at Auburndale
Integrated Health Services of $782,156 January 1, 1999 December 31, 2008 10 3 5
Florida at Clearwater
Integrated Health Services of $280,968 January 1, 1999 December 31, 2008 10 3 5
Florida at Fort Xxxxxx
Integrated Health Services of $539,136 January 1, 1999 December 31, 2008 10 3 5
Atlanta at Briarcliff Haven
Xxxxxxx Xxxxx $349,312 January 1, 1999 December 31, 2008 10 3 5
Integrated Health Services of St. $379,687 January 1, 1999 December 31, 2008 10 3 5
Louis at Big Bend Xxxxx
------------------------------------- ------------------ ---------------------------- ------------------------- -------------------
B-1
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME BASE RENT COMMENCEMENT EXPIRATION LEASE TERM NUMBER LENGTH
DATE DATE OF OF
RENEWAL RENEWALS
TERMS
-----------------------------------------------------------------------------------------------------------------------------------
Integrated Health Services of New $243,000 January 1, 1999 December 31, 2008 10 3 5
Hampshire at Manchester
Ruidoso Care Center $159,468 January 1, 1999 December 31, 2008 10 3 5
Meadowview Care Center $410,063 January 1, 1999 December 31, 2008 10 3 0
Xxxxxxxxxx Xxxxxx $243,000 January 1, 1999 December 31, 2008 10 3 5
HSH - Midwest City $136,688 January 1, 1999 December 31, 2008 10 3 5
Midwest City Nursing $303,750 January 1, 1999 December 31, 2008 10 3 5
Integrated Health Services at $934,031 January 1, 1999 December 31, 2008 10 3 5
Whitemarsh
Amarillo Specialty Hospital $174,656 January 1, 1999 December 31, 2008 10 3 5
Doctors Healthcare Center $1,215,000 January 1, 1999 December 31, 2008 10 3 5
Harbor View Care Center $303,750 January 1, 1999 December 31, 2008 10 3 5
Heritage Estates $561,938 January 1, 1999 December 31, 2008 10 3 5
Heritage Gardens $455,625 January 1, 1999 December 31, 2008 10 3 5
Heritage Manor Longview $273,375 January 1, 1999 December 31, 2008 10 3 5
Heritage Manor Plano $1,063,125 January 1, 1999 December 31, 2008 10 3 0
Xxxxxxxx Xxxxx of Grand Prarie $463,219 January 1, 1999 December 31, 2008 10 3 5
Horizon Healthcare - El Paso $265,781 January 1, 1999 December 31, 2008 10 3 5
B-2
-----------------------------------------------------------------------------------------------------------------------------------
FACILITY NAME BASE RENT COMMENCEMENT EXPIRATION LEASE TERM NUMBER LENGTH
DATE DATE OF OF
RENEWAL RENEWALS
TERMS
-----------------------------------------------------------------------------------------------------------------------------------
HSH - Corpus Christi $235,406 January 1, 1999 December 31, 2008 10 3 5
HSH - El Paso $303,750 January 1, 1999 December 31, 2008 10 3 5
Integrated Health Services of $311,344 January 1, 1999 December 31, 2008 10 3 5
Amarillo
Mountain View Place $546,750 January 1, 1999 December 31, 2008 10 3 0
Xxxxxxxx Xxxxx $296,156 January 1, 1999 December 31, 2008 10 3 5
Plano Specialty Hospital $288,563 January 1, 1999 December 31, 2008 10 3 5
Silver Springs Nursing and $394,875 January 1, 1999 December 31, 2008 10 3 5
Rehabilitation Center
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL $13,972,500
-------------------------------------------------
B-3
EXHIBIT C
CASH FLOW TO DEBT SERVICE REQUIREMENT
-------------------------------------
TEST COVERAGE
DATE RATIO
---- --------
31-Mar-99 1.25
30-Jun-99 1.30
30-Sep-99 1.30
31-Dec-99 1.35
31-Mar-00 1.35
30-Jun-00 1.40
30-Sep-00 1.40
31-Dec-00 1.45
31-Mar-01 1.45
30-Jun-01 1.50
30-Sep-01 1.50
Thru Term 1.50
C-1
EXHIBIT D
FORM OF ESTOPPEL CERTIFICATE
----------------------------
The undersigned, Lyric Health Care Holdings III, Inc., a Delaware
corporation ("Tenant") under that certain Master Lease (the "Lease"), dated as
of December 31, 1998, and made with Monarch Properties, LP ("Landlord"), hereby
certifies:
1. That it is the Tenant under the Lease; that attached hereto as Exhibit A
is a true and correct copy of the Lease; that said Lease is now in full force
and effect and has not been amended, modified or assigned except as disclosed or
included in Exhibit A; and that said Lease constitutes the entire agreement
between Landlord and Tenant.
2. That to the undersigned's knowledge there exist no defenses or offsets
to enforcement of the Lease; that to the undersigned's knowledge there are, as
of the date hereof, no breaches or uncured defaults on the part of the
undersigned or, to the undersigned's knowledge, on the part of the other party
to the Lease; and that the undersigned has no notice or knowledge of any prior
assignment, hypothecation, subletting or other transfer of the other party's
interest in the Lease, except .
3. That the Base Rent for the current Lease Year under the Lease is
$_______. [That the Earn Out Rent for the current Lease Year under the Lease is
$_____.] All Rent which is due prior to the date hereof has been paid, and there
are no unpaid Additional Charges owing to or by the undersigned under the Lease
as of the date hereof. No Base Rent [, Earn Out Rent] or other items (including
without limitation any impound account or funds) have been paid by the
undersigned in advance under the Lease and the monthly installment of Base Rent
[and Earn Out Rent] that became due on ___________, 19__.
4. That the undersigned has no claim against the other party to the Lease
for any impound account or prepaid Rent except as provided in paragraph 3 of
this Certificate.
5. That there are no actions, whether voluntary or otherwise, pending
against the undersigned under the bankruptcy laws of the United States or any
State thereof, nor has the undersigned nor, to the best of the undersigned's
knowledge has the other party to the Lease begun any action, or given or
received any notice for the purpose of termination of the Lease.
6. That to the undersigned's knowledge, there are, as of the date hereof,
no breaches or uncured defaults on the part of the undersigned under any other
agreement executed in connection with the Lease.
D-1
7. This Estoppel Certificate has been requested for the benefit of (the
"Relying Party"). The Relying Party is entitled to rely on the statements of the
undersigned contained in this Certificate.
8, All capitalized terms used herein and not defined herein shall have the
meanings for such terms set forth in the Lease.
Dated: _____________, 19__ LYRIC HEALTH CARE HOLDINGS III, INC.
By: (Seal)
---------------------------
Name:
-------------------------
Title:
------------------------
D-2
EXHIBIT E
INITIAL FACILITY SUBLEASES
--------------------------
1. Facility Sublease, dated as of December 31, 1998, between Integrated Health
Services at Colorado Springs, Inc. and Lyric Health Care Holdings III, Inc.
2. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 103, Inc. and Lyric Health Care Holdings III, Inc.
3. Facility Sublease, dated as of December 31, 1998, between Integrated Health
Services at Central Florida, Inc. and Lyric Health Care Holdings III, Inc.
4. Facility Sublease, dated as of December 31, 1998, between Briar Hill, Inc.
and Lyric Health Care Holdings III, Inc.
5. Facility Sublease, dated as of December 31, 1998, between Bethamy Living
Center Limited Partnership and Lyric Health Care Holdings III, Inc.
6. Facility Sublease, dated as of December 31, 1998, between Integrated Health
Services at Central Florida, Inc. and Lyric Health Care Holdings III, Inc.
7. Facility Sublease, dated as of December 31, 1998, between Integrated Health
Services at Briarcliff Haven, Inc. and Lyric Health Care Holdings III, Inc.
8. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 114, Inc. and Lyric Health Care Holdings III, Inc.
9. Facility Sublease, dated as of December 31, 1998, between Cedarcroft Health
Services, Inc. and Lyric Health Care Holdings III, Inc.
10. Facility Sublease, dated as of December 31, 1998, between Manchester
Integrated Health, Inc. and Lyric Health Care Holdings III, Inc.
11. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 121, Inc. and Lyric Health Care Holdings III, Inc.
12. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 125, Inc. and Lyric Health Care Holdings III, Inc.
E-1
13. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 124, Inc. and Lyric Health Care Holdings III, Inc.
14. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 168, Inc. and Lyric Health Care Holdings III, Inc.
15. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 127, Inc. and Lyric Health Care Holdings III, Inc.
16. Facility Sublease, dated as of December 31, 1998, between Rest Haven
Nursing Center (Whitemarsh), Inc. and Lyric Health Care Holdings III, Inc.
17. Facility Sublease, dated as of December 31, 1998, between Integrated of
Amarillo, Inc. and Lyric Health Care Holdings III, Inc.
18. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 128, Inc. and Lyric Health Care Holdings III, Inc.
19. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 140, Inc. and Lyric Health Care Holdings III, Inc.
20. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 134, Inc. and Lyric Health Care Holdings III, Inc.
21. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 132, Inc. and Lyric Health Care Holdings III, Inc.
22. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 138, Inc. and Lyric Health Care Holdings III, Inc.
23. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 129, Inc. and Lyric Health Care Holdings III, Inc.
24. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 133, Inc. and Lyric Health Care Holdings III, Inc.
25. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 131, Inc. and Lyric Health Care Holdings III, Inc.
26. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 170, Inc. and Lyric Health Care Holdings III, Inc.
E-2
27. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 171, Inc. and Lyric Health Care Holdings III, Inc.
28. Facility Sublease, dated as of December 31, 1998, between Integrated of
Amarillo, Inc. and Lyric Health Care Holdings III, Inc.
29. Facility Sublease, dated as of December 31, 1998, between Integrated Health
Services at Hanover House, Inc. and Lyric Health Care Holdings III, Inc.
30. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 139, Inc. and Lyric Health Care Holdings III, Inc.
31. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 174, Inc. and Lyric Health Care Holdings III, Inc.
32. Facility Sublease, dated as of December 31, 1998, between IHS Acquisition
No. 136, Inc. and Lyric Health Care Holdings III, Inc.
E-3
EXHIBIT F
FACILITY PURCHASE PRICES
------------------------
1. Seller: Integrated Health Services at Colorado Springs, Inc.
Facility: Integrated Health Services of Colorado Springs -- Colorado
Springs, Colorado
Purchase Price: $8,200,000
2. Seller: IHS Acquisition No. 103, Inc.
Facility: Horizon Healthcare & Specialty Center -- Daytona Beach, Florida
Purchase Price: $6,600,000
3. Seller: Integrated Health Services at Central Florida, Inc.
Facility: Integrated Health Services of Vero Beach -- Vero Beach, Florida
Purchase Price: $4,900,000
Facility: Integrated Health Services of Florida at Fort Xxxxxx -- Fort
Xxxxxx, Florida
Purchase Price: $3,700,000
4. Seller: Briar Hill, Inc.
Facility: Integrated Health Services of Florida at Auburndale --
Auburndale, Florida
Purchase Price: $7,400,000
5. Seller: Bethamy Living Center Limited Partnership
Facility: Integrated Health Services of Florida at Clearwater --
Clearwater, Florida
Purchase Price: $10,300,000
6. Seller: Integrated Health Services at Briarcliff Haven, Inc.
Facility: Integrated Health Services of Atlanta at Briarcliff Haven --
Atlanta, Georgia
Purchase Price: $7,100,000
7. Seller: IHS Acquisition No. 114, Inc.
Facility: Xxxxxxx Xxxxx -- Adrian, Michigan
Purchase Price: $4,600,000
8. Seller: Cedarcroft Health Services, Inc.
Facility: Integrated Health Services of St. Louis at Big Bend Xxxxx --
Valley Park, Missouri
Purchase Price: $5,000,000
F-1
9. Seller: Manchester Integrated Health, Inc.
Facility: Integrated Health Services of New Hampshire at Manchester --
Manchester, New Hampshire
Purchase Price: $3,200,000
10. Seller: IHS Acquisition No. 121, Inc.
Facility: Ruidoso Care Center -- Ruidoso, New Mexico
Purchase Price: $2,100,000
11. Seller: IHS Acquisition No. 125, Inc.
Facility: Meadowview Care Center -- Seville, Ohio
Purchase Price: $5,400,000
12. Seller: IHS Acquisition No. 124, Inc.
Facility: Washington Square -- Warren, Ohio
Purchase Price: $3,200,000
13. Seller: IHS Acquisition No. 168, Inc.
Facility: HSH - Midwest City -- Midwest City, Oklahoma
Purchase Price: $1,800,000
14. Seller: IHS Acquisition No. 127, Inc.
Facility: Midwest City Nursing -- Midwest City, Oklahoma
Purchase Price: $4,000,000
15. Seller: Rest Haven Nursing Center (Whitemarsh), Inc.
Facility: Integrated Health Services at Whitemarsh -- Whitemarsh,
Pennsylvania
Purchase Price: $12,300,000
16. Seller: Integrated of Amarillo, Inc.
Facility: Amarillo Specialty Hospital -- Amarillo, Texas
Purchase Price: $2,300,000
Facility: Integrated Health Services of Amarillo -- Amarillo, Texas
Purchase Price: $4,400,000
17. Seller: IHS Acquisition No. 128, Inc.
Facility: Doctors Healthcare Center -- Dallas, Texas
Purchase Price: $16,000,000
F-2
18. Seller: IHS Acquisition No. 140, Inc.
Facility: Harbor View Care Center -- Corpus Christi, Texas
Purchase Price: $4,000,000
19. Seller: IHS Acquisition No. 134, Inc.
Facility: Heritage Estates -- Ft. Worth, Texas
Purchase Price: $7,400,000
20. Seller: IHS Acquisition No. 132, Inc.
Facility: Heritage Gardens -- Carrollton, Texas
Purchase Price: $6,000,000
21. Seller: IHS Acquisition No. 138, Inc.
Facility: Heritage Manor Longview -- Longview, Texas
Purchase Price: $3,600,000
22. Seller: IHS Acquisition No. 129, Inc.
Facility: Heritage Manor Plano -- Plano, Texas
Purchase Price: $14,000,000
23. Seller: IHS Acquisition No. 133, Inc.
Facility: Heritage Place of Grand Prairie -- Grand Prairie, Texas
Purchase Price: $6,100,000
24. Seller: IHS Acquisition No. 131, Inc.
Facility: Horizon Health Care - El Paso -- El Paso, Texas
Purchase Price: $3,500,000
25. Seller: IHS Acquisition No. 170, Inc.
Facility: HSH - Corpus Christi
Purchase Price: $3,100,000
26. Seller: IHS Acquisition No. 171, Inc.
Facility: HSH - El Paso
Purchase Price: $4,000,000
27. Seller: Integrated Health Services at Hanover House, Inc.
Facility: Mountain View Place
Purchase Price: $7,200,000
F-3
28. Seller: IHS Acquisition No. 139, Inc.
Facility: Parkwood Place -- Justin, Texas
Purchase Price: $3,900,000
29. Seller: IHS Acquisition No. 174, Inc.
Facility: Plano Specialty Hospital (HSH - Plano) -- Plano, Texas
Purchase Price: $3,800,000
30. Seller: IHS Acquisition No. 136, Inc.
Facility: Silver Springs Nursing and Rehabilitation Center -- Houston,
Texas
Purchase Price: $5,200,000
SUMMARY:
Facilities = 32
Beds = 4084
Purchase Price = $184,300,000
F-4
EXHIBIT G
ADDITIONAL TENANT OBLIGATIONS
-----------------------------
All terms appearing herein having their first letter capitalized and not
otherwise defined shall have the respective meanings set forth in the Loan
Agreement, dated as of December 30, 1998, between Landlord and Lender (the "Loan
Agreement") and/or this Lease. All references herein to Sections shall be deemed
to be references to such Sections in the Loan Agreement.
1. In addition to the representations and warranties made by Tenant and the
Facility Subtenants under this Lease, Tenant and the Facility Subtenants also
make the following representations and warranties:
(a) The representations and warranties contained in Sections 3.6
through 3.17 of the Loan Agreement;
(b) The representations and warranties contained in Sections 3.19 and
3.20 of the Loan Agreement;
(c) The representations and warranties contained in Section 3.23 of
the Loan Agreement; and
(d) The representations and warranties contained in Sections 3.25 and
3.26 of the Loan Agreement.
2. In addition to the covenants, duties and obligations of Tenant and the
Facility Subtenants under this Lease, Tenant and the Facility Subtenants shall
have the following covenants, duties and obligations:
(a) The covenants, duties and obligations under Sections 4.4 through
4.9 of the Loan Agreement;
(b) The covenants, duties and obligations under Sections 4.11 through
4.25 of the Loan Agreement;
(c) The covenants, duties and obligations under Sections 5.1 and 5.2
of the Loan Agreement;
(d) The covenants, duties and obligations under Sections 5.5 and 5.6
of the Loan Agreement;
G-1
(e) The covenants, duties and obligations under Sections 5.10 through
5.12 of the Loan Agreement;
(f) The covenants, duties and obligations under Section 5.14 of the
Loan Agreement;
(g) The covenants, duties and obligations under Article VI of the Loan
Agreement;
(h) The covenants, duties and obligations under Sections 8.2 through
8.4 of the Loan Agreement;
(i) The covenants, duties and obligations under Section 8.7 of the
Loan Agreement; and
(j) The covenants, duties and obligations under Section 8.9 of the
Loan Agreement.
3. In addition to the covenants, duties and obligations of Tenant and the
Facility Subtenants under this Lease, Tenant and the Facility Subtenants shall
fully comply with the following provisions of each of the Mortgages:
(a) The covenants, duties and obligations under Sections 2 through 4
of each of the Mortgages;
(b) The covenants, duties and obligations under Sections 6 through 13
of each of the Mortgages; and
(c) The covenants, duties and obligations under Section 15 of each of
the Mortgages.
(d) The covenants, duties and obligations under Section 21 of each of
the Mortgages.
(e) The covenants, duties and obligations under Section 24 of each of
the Mortgages.
4. In addition to the representations and warranties made by Tenant and the
Facility Subtenants under this Lease, Tenant and the Facility Subtenants hereby
make the representations and warranties contained in Sections 4 through 21 of
the Loan Closing Certification, dated as of December 30, 1998, from Landlord to
Lender and shall take all reasonable measures to assure
G-2
that such representations and warranties remain true and correct at all times
during the Loan Facility.
5. In addition to the covenants, duties and obligation of Tenant and the
Facility Subtenants under this Lease, Tenant and the Facility Subtenants shall
be obligated to reimburse Landlord or pay directly on behalf of Landlord to
Lender the following charges, fees, costs and expenses caused by the failure to
pay timely Rent or other payment obligations in respect of the Loan Facility:
(a) Any Default Rate interest under section 1.3 of the Promissory
Note;
(b) Any Late Fees under Section 8.3 of the Promissory Note; and
(c) Any other charges, fee, cost or expense obligations of Landlord
provided for under the Promissory Note.
6. Tenant and the Facility Subtenants shall fully comply with the
covenants, duties and obligations of Tenant and the Facility Subtenants under
each of the following agreements in respect of the Loan Facility:
(a) Subordination and Attornment Agreement, dated as of December 30,
1998, among Lender, Landlord, Tenant and the Facility Subtenants.
(b) Capital Improvements Fund Escrow and Security Agreement, dated as
of December 30, 1998, among Lender, Landlord, Tenant and the Facility
Subtenants.
(c) Lessee Security Agreements, each dated as of December 30, 1998,
from Tenant and each of the Facility Subtenants in favor of Lender.
(d) Exceptions to Nonrecourse Guaranty, dated as of December 30, 1998,
from Tenant, Guarantor and the Facility Subtenants in favor of Lender.
(e) Subordination of Franchise Agreements, dated as of December 30,
1998, among Tenant, the Facility Subtenants, Lyric, Franchisor and Lender.
(f) Subordination of Management Agreements, dated as of December 30,
1998, among Tenant, the Facility Subtenants, Lyric, Manager and Lender.
(g) Stock Pledge Agreement, dated as of December 30, 1998, from Tenant
to Lender.
G-3
(h) Master Operations and Maintenance Agreement, dated as of December
30, 1998, between Lender and Landlord.
(i) Lessee Environmental Indemnity Agreement, dated as of December 30,
1998, among Lender, Tenant and the Facility Subtenants.
(j) Assignment of Leases and Rents, dated as of December 30, 1998,
among Lender, Tenant and Landlord.
(k) Post Closing Agreement, dated as of December 30, 1998, between
Landlord and Lender.
G-4
EXHIBIT H
LIST OF ENGINEERING FIRMS
-------------------------
ATC Associates Inc.
000 Xxxx Xxxxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
000-000-0000
H-1
EXHIBIT I
LANDLORD WIRING INSTRUCTIONS
----------------------------
Bank: SouthTrust Bank, National Association
----- Birmingham, Alabama
Account Name: Monarch Properties, LP
-------------
Account #: 00-000-000
----------
ABA #: 000 00 0000
-----
I-1
