EXHIBIT 6(f)
LEASE
BY AND BETWEEN
RESIDENTIAL HEALTH CARE PROPERTIES, INC.
("Landlord")
and
______________________________
("Tenant")
TABLE OF CONTENTS
Page
ARTICLE I - LEASE OF PREMISES 1
1.01 Lease of Premises 1
1.02 Habendum 1
ARTICLE II - USE OF PREMISES 2
2.01 Use of Premises 2
2.02 Continuous Occupancy and Operations 2
2.03 Title to Land and Improvements 2
ARTICLE III - TERM 2
3.01 Commencement Date 2
3.02 Original Term of Lease 2
3.03 Renewal Options 3
ARTICLE IV - BASIC RENT AND ADDITIONAL RENT 3
4.01 Basic Rent 3
4.02 Percentage Rental 5
4.03 Additional Rent 5
4.04 Net Lease; Non-Terminability 5
4.05 Place of Rent Payment 6
4.06 Late Payment Charge and Interest 6
ARTICLE V - PAYMENT OF IMPOSITIONS, TAXES AND ASSESSMENTS;
COMPLIANCE WITH LAWS AND ENVIRONMENTAL
MATTERS 7
5.01 Payment of Impositions 7
5.02 Compliance with Laws 8
5.03 Permitted Contests 8
5.04 Hazardous Materials 9
ARTICLE VI - MAINTENANCE, REPAIR AND ALTERATIONS 10
6.01 Maintenance and Repair 10
6.02 Alterations 10
6.03 Replacements of Personal Property 11
6.04 No Liens 12
ARTICLE VII - INSURANCE AND INDEMNIFICATION 12
7.01 Property Insurance 12
7.02 Liability Insurance 13
7.03 Builder's Risk Insurance 13
7.04 Insurance Requirements 14
7.05 Replacement Value 14
7.06 Blanket Policy 14
7.07 No Separate Insurance 14
7.08 Mortgages 15
7.09 Damages for Tenant's Failure to Properly Insure 15
7.10 Casualty 15
7.11 Indemnification 17
7.12 Waiver of Subrogation 17
ARTICLE VIII - EMINENT DOMAIN 18
8.01 Definitions 18
8.02 Total Condemnation 18
8.03 Partial Condemnation 18
8.04 Award 19
8.05 Temporary Taking 19
ARTICLE IX - NEGATIVE COVENANTS 20
9.01 No Liens 20
9.02 No Transfer 20
9.03 No Dissolution 20
9.04 Change of Location or Name 20
ARTICLE X - AFFIRMATIVE COVENANTS 20
10.01 Perform Obligations 20
10.02 Proceedings to Enjoin or Prevent Occupancy 21
10.03 Documents and Information 21
ARTICLE XI - REPRESENTATIONS AND WARRANTIES OF TENANT 22
11.01 Organization and Good Standing 22
11.02 Power and Authority 22
11.03 Enforceability 22
11.04 Solvency 23
11.05 No Litigation 23
11.06 Consents 23
11.07 No Violation 23
11.08 Reports and Statements 23
11.09 Chief Executive Office 24
ARTICLE XII - REPRESENTATIONS AND WARRANTIES OF LANDLORD 24
12.01 Organization and Good Standing 24
12.02 Power and Authority 24
12.03 Enforceability 24
ARTICLE XIII ASSIGNMENT AND SUBLETTING 24
13.01 Assignment and Subletting by Tenant 24
13.02 Assignment by Landlord 25
ARTICLE XIV DEFAULT 25
14.01 Events of Default 25
14.02 Landlord's Remedies 27
14.03 Additional Rights of Landlord 29
14.04 Waivers by Tenant 29
ARTICLE XV MISCELLANEOUS 29
15.01 Notices, Demands and Other Instruments 29
15.02 Estoppel Certificates 30
15.03 Holding Over by Tenant 30
15.04 Parties Bound 31
15.05 No Merger 31
15.06 Surrender 31
15.07 Severability 31
15.08 Attorneys' Fees 32
15.09 Savings Clause 32
15.10 Force Majeure 32
15.11 Recording - Memorandum of Lease 32
15.12 Time of the Essence 32
15.13 Transfer of Landlord's Interest 32
15.14 Subordination 32
15.15 Table of Contents and Headings 33
15.16 Governing Law 33
15.17 Certain Definitions 33
15.18 Entry by Landlord 34
15.19 Relationship of Landlord and Tenant 34
15.20 Integration 34
15.21 Brokers 34
15.22 Interest 34
15.23 Quiet Possession 34
15.24 Complete Agreement 34
ARTICLE XVI FAIR MARKET VALUE 35
15.01 Fair Market Value 35
ARTICLE XVII ALTERNATIVE DISPUTE RESOLUTION 36
17.01 Mediation 36
17.02 Arbitration 37
17.03 Location of Mediation or Arbitration 37
17.04 Reservation of Rights 37
17.05 Attorney-Client Privilege; Confidentiality 37
17.06 Third Parties 37
17.07 Attorneys Fees and Costs 38
Exhibit "A" - Legal Description of the Land
Exhibit "B" - Personal Property
LEASE
THIS LEASE (this "Lease") is made and entered into as of the ____ day of
_____________, 1997 (the "Effective Date"), by and between RESIDENTIAL
HEALTHCARE PROPERTIES, INC, a Nevada corporation ("Landlord"), and
___________________________, a __________________ ("Tenant").
WITNESSETH:
FOR AND IN CONSIDERATION of the rents and covenants to be paid and
performed by Tenant hereunder, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
covenant and agree as follows:
ARTICLE I
LEASE OF PREMISES
Section 1.01 Lease of Premises. Subject to the terms and
conditions of this Lease, Landlord does hereby lease unto Tenant, and Tenant
does hereby lease from Landlord, those certain premises (the "Premises")
consisting of (a) the real property containing approximately ______
plus/minus acres located in the City of _______________, County of ________,
State of _______, which is more particularly described in Exhibit "A"
attached hereto and incorporated herein by reference for all purposes,
together with all of Landlord's rights, privileges, easements and
appurtenances pertaining to such real property (such real property, rights,
privileges, easements and appurtenances being collectively hereinafter called
the "Land"), (b) a _______ (__ ) unit, assisted living facility
[retirement and/or Alzheimer's care] (the "Facility") containing approximately
___________ square feet of gross floor area ("Floor Area") and other
improvements (such Facility and other improvements are hereinafter called the
"Improvements") now located on the Land, and (c) certain furniture, fixtures,
and equipment identified in Exhibit "B" attached hereto (the "Personal
Property").
Section 1.02 Habendum. TO HAVE AND TO HOLD the Premises for the exclusive
use by Tenant, its permitted successors and assigns, for the Term (as
hereinafter defined) subject to termination as herein provided and subject to
and upon the terms, conditions, covenants, agreements, provisions and
limitations agreed to and imposed upon Tenant hereunder.
ARTICLE II
USE OF PREMISES
Section 2.01 Use of Premises. (a) Subject to the terms and provisions
hereof, Tenant shall use and occupy the Premises exclusively as an assisted
living facility [retirement and/or Alzheimer's care] (the "Facility") and for
all lawful and licensed ancillary uses, and for no other purpose without the
prior written consent of Landlord. Tenant shall obtain and maintain all
approvals, licenses and consents needed to use and operate the Premises as
herein permitted. Tenant shall deliver to Landlord complete copies of any
surveys, examinations, certification and licensure inspections, compliance
certificates and other similar reports issued to Tenant by any governmental
agency within ten (10) days after Tenant's receipt of each of such items.
(b) Notwithstanding the foregoing, Tenant shall not use or occupy, or
permit the Premises to be used or occupied, nor do or permit anything to be done
in or on the Premises in a manner which would (i) in any way make void or
voidable any insurance then in force on the Premises, (ii) make it impossible to
obtain the insurance required to be furnished by Tenant under this Lease, (iii)
constitute a public nuisance, or (iv) violate any present or future law,
regulation, ordinance or requirement of any governmental authority having
jurisdiction over the Premises.
Section 2.02 Continuous Occupancy and Operations. Tenant covenants and
agrees to occupy and use the entire Improvements continuously during the entire
term of this Lease for the purposes provided in Section 2.01(a) above, and will
operate such business during such period with diligence under the name
______________ and in accordance with the best standards of operation of such
assisted living facility business.
Section 2.03 Title to Land and Improvements. Landlord represents and
warrants to Tenant that Landlord is the owner of the Premises and has the right
to enter into this Lease and the Premises are free from all easements,
encumbrances, restrictions, liens and claims other than zoning and building
ordinances and easements, restrictions, covenants, and encumbrances and other
matters of record (the "Permitted Encumbrances").
ARTICLE III
TERM
Section 3.01 Commencement Date. As used herein, the "Commencement Date"
shall mean_________________.
Section 3.02 Original Term of Lease. The "Original Term" of this Lease
shall commence at 12:01 a.m. on the Commencement Date and shall end at 11:59
p.m. on December 31, 2018, unless sooner terminated or extended as set forth
herein. Tenant hereby acknowledges that all obligations of Tenant under this
Lease including Tenant's obligation to pay all Basic Rent, Percentage Rent, and
Additional Rent (all as hereinafter defined) shall commence on the Commencement
Date as provided in Section 4.01 below.
Section 3.03 Renewal Options. (a) Subject to the conditions
hereinafter set forth and provided this Lease is then in effect, Tenant shall
have the right to renew the term of this Lease for two (2) consecutive renewal
terms of five (5) years each (each, a "Renewal Term"), by delivering written
notice (the "Renewal Notice") to Landlord of its exercise of such right at least
one hundred eighty (180) days before the end of the Original Term or any Renewal
Term, as the case may be. Subject to the terms of this Lease set forth below,
the first such Renewal Term shall begin upon the expiration of the Original Term
and the second Renewal Term shall begin upon the expiration of the first Renewal
Term. All of the terms, provisions and covenants of this Lease shall apply to
each Renewal Term except that Basic Rent for each Renewal Term shall be
established as provided in paragraph (b) below. Tenant shall have no right to
exercise any option under this Section 3.03 if any Event of Default (as
hereinafter defined) exists at the time of electing a renewal option or at the
time any Renewal Term would commence. If Tenant fails to give timely notice of
Tenant's intention to renew this Lease, the Term of this Lease shall expire on
the scheduled expiration date, and Tenant shall have no further option to renew
this Lease. If Tenant does not exercise any such option in a
timely manner, then Landlord shall have the right during the remainder of the
Term of this Lease to advertise the availability of the Premises for sale or
lease. In this Lease the phrases "term of this Lease," "term hereof," "Lease
Term," and "Term" mean the Original Term and any Renewal Term that may become
effective pursuant to this Section 3.03.
(b) If Tenant elects to renew the Term of this Lease as provided in
paragraph (a) above, the Basic Rent payable by Tenant to Landlord for the
Premises during the First Lease Year of the Renewal Term shall be the greater
of (i) the Basic Rent or the Percentage Rent which was payable by Tenant during
the final Lease Year of the Term of this Lease immediately preceding such
Renewal Term or (ii) the amount obtained by multiplying the Fair Market Value of
the property as determined in accordance with Article 16 below by the sum of the
yield quoted in the Wall Street Journal on the day immediately prior
to thecommencement of the Renewal Term for the most actively traded 10-year
United States Treasury Security having a maturity date closest to the
expiration of the particular renewal period, plus 325 basis points. The
Basic Rent for subsequent Lease Years of the Renewal Term shall be calculated
as set forth in Section 4.01(g) below.
ARTICLE IV
BASIC RENT AND ADDITIONAL RENT
Section 4.01 Basic Rent.
(a) Tenant covenants to pay to Landlord, without any prior demand
therefor and without any deduction or set-off whatsoever, as basic rent (the
"Basic Rent"), as hereinafter set forth during each Lease Year (as hereinafter
defined) of the Original Term of this Lease. The annual Basic Rent shall be
payable in monthly installments equal to 1/12th of the applicable annual Basic
Rent, each such monthly installment payable in advance on the first day of each
calendar month of each Lease Year during the Lease Term. The monthly
installment of Basic Rent for the first month of the Lease Term shall be paid by
Tenant to Landlord on or before the Commencement Date. Rent for any fractional
calendar month in which the Lease Term begins or terminates shall be prorated on
a per diem basis, based on the number of days in such month with respect to such
fractional calendar month. The term "Lease Year," as used herein shall mean,
except in the case of the "Initial Period" as defined below, the period that
begins on January 1 and ends on December 31 of each calender year. The "First
Lease Year" shall begin on January 1, 1998 and end on December 31, 1998.
(b) For the period beginning on the Commencement Date through
December 31, 1997 (the "Initial Period"), Tenant shall pay to Landlord Basic
Rent of $ ______________.
(c) For the First Lease Year, Tenant shall pay Basic Rent which shall
be equal to the greater of (1) $____________[the Basic Rent amount for the
Initial Period on an annualized basis]; or (2) the total actual rent paid for
the Initial Period including Percentage Rental.
(d) For the Second Lease Year, Tenant shall pay Basic Rent which
shall be equal to the greater of: (1) $_____________ [to be set for each
facility at Lease Inception] or (2) the actual rent paid for the First Lease
Year including Percentage Rental.
(e) For the Third Lease Year, Tenant shall pay Basic Rent which shall
be the greater of (1) the Basic Rent for the Second Lease Year; or (2) the total
actual rent paid for the Second Lease Year including Percentage Rental.
(f) For the Fourth Lease Year, Tenant shall pay Basic Rent which
shall be the greater of (1) the Basic Rent for the Third Lease Year; or (2) the
total actual rent paid for the Third Lease Year including Percentage Rental.
(g) Commencing in the Fifth Lease Year, the Basic Rent shall be the
greater of (1) $__________ [to be set for each facility at Lease Inception]; (2)
the Basic Rent for the Fourth Lease Year; or (3) the actual total rent paid for
the Fourth Lease Year including Percentage Rental.
(h) Commencing on the Sixth Lease Year and thereafter, the Basic Rent
shall be the greater of: (1) the prior Lease Year's Basic Rent; or (2) the
actual total rent paid for the prior Lease Year including Percentage Rent.
(i) For the first month of each Lease Year following the Initial
Period, Tenant shall pay an estimated monthly Basic Rent payment which shall be
the Basic Rent, in the case of the First Lease Year, for the last month of the
Initial Period; and, in the case of subusequent Lease Years, shall be the Bgasic
Rent for the last month of the prior Lease Year. Tenant shall pay to Landlord,
at the time of furnishing the statement required to be given by Tenant in
accordance with Section 4.02 below, any difference between the estimated Basic
Rent for such month and the actual amount as determined in accordance with this
Lease.
Section 4.02 Percentage Rental. Commencing with the Commencement Date,
and thereafter throughout the Term, Tenant shall pay to Landlord, in addition
to the Base Rent, an amount by which twenty-two percent (22%) of the Gross
Revenue from the operation of the Facility exceeds the Base Rent ("Percentage
Rent"). Tenant shall submit to Landlord within thirty (30) days following the
end of the Initial Period and 30 days following the end of each quarter during
each Lease Year thereafter, a written statement certified by the chief financial
officer of Tenant setting forth the amount of the Gross Revenue of the Facility
during the Initial Period and the preceding quarter of the current Lease Year,
together with payment by Tenant of Percentage Rent, if any that may be due as
shown by said statement. "Gross Revenue" means all income from the operation of
the Facility during the Initial Period and each calander quarterof the
applicable Lease Year, excluding interest income and security deposits, but
including all income as determined in accordance with generally accepted
accounting principals.
Section 4.03 Additional Rent. Tenant covenants that all other amounts,
liabilities and obligations which Tenant assumes or agrees to pay or discharge
pursuant to this Lease together with every fine, penalty, interest and
cost which may be added for nonpayment or late payment thereof, shall
constitute additional rent ("Additional Rent") hereunder (whether or not the
same be designated as "Additional Rent"). The term "Rent," as used herein,
shall collectively mean and refer to Basic Rent, Percentage Rent and all
other Additional Rent hereunder.
Section 4.04 Net Lease; Non-Terminability. Except as expressly set forth
to the contrary in this Lease:
(a) This is an absolutely net lease to Landlord. It is the intent of
the parties hereto that the Rent payable under this Lease shall be an absolutely
net return to Landlord and that Tenant shall pay all costs and expenses relating
to the Premises and the business operated thereon. Any amount or obligation set
forth in this Lease and relating to the Premises which is not expressly declared
to be that of Landlord shall be deemed to be an obligation of Tenant to be
performed by Tenant at Tenant's expense. Basic Rent, Percentage Rent, and
Additional Rent and all other sums payable hereunder by Tenant, shall be paid
without notice, demand, set off, counterclaim, abatement, suspension, deduction
or defense.
(b) Except as otherwise expressly provided in this Lease, this Lease
shall not terminate, nor shall Tenant have any right to terminate this Lease,
nor shall Tenant be entitled to any abatement or reduction of Rent hereunder,
nor shall the obligations of Tenant under this Lease be affected by reason of
(i) any damage to or destruction of all or any part of the Premises from
whatever cause; (ii) the taking of the Premises or any portion thereof by
condemnation, requisition or otherwise; (iii) the prohibition, limitation or
restriction of Tenant's use of all or any part of the Premises, or any
interference with such use; (iv) any eviction by paramount title or otherwise;
(v) Tenant's acquisition or ownership of all or any part of the Premises; (vi)
any default on the part of Landlord under this Lease, or under any other
agreement to which Landlord and Tenant may be parties; (vii) the failure of
Landlord to deliver possession of the Premises; or (viii) any other cause
whether similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and it will not take any action to terminate, rescind
or avoid this Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding-up
or other proceeding affecting Landlord or its successors-in-interest, or (ii)
any action with respect to this Lease which may be taken by any trustee or
receiver of Landlord or its successors-in-interest or by any court in any such
proceeding.
(d) It is the intention of the parties hereto that the obligations of
Tenant hereunder shall be separate and independent covenants and agreements;
that Basic Rent, Percentage Rent, Additional Rent and all other sums payable by
Tenant hereunder shall continue to be payable in all events; and that the
obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated pursuant to an
express provision of this Lease.
Section 4.05 Place of Rent Payment. All payments of Rent hereunder
shall be made to Landlord as the same become due and payable in lawful money of
the United States of America at the address of Landlord specified in Section
15.01 hereof or at such other address as Landlord may designate in accordance
with the provisions of said Section 15.01.
Section 4.06 Late Payment Charges and Interest. Tenant hereby
acknowledges that late payment by Tenant to Landlord of Rent under this Lease
will cause Landlord to incur various expenses not contemplated by this Lease,
the exact amount of which are presently difficult to ascertain. Accordingly, if
any payment of Rent shall not be received by Landlord within five (5) days of
the due date thereof, then, without limiting any other rights of Landlord under
this Lease, in each month in which any Rent or other payment for such month is
not timely paid, Tenant shall also pay Landlord a late charge equal to $1000.00,
which late charge shall be in addition to such required payment and shall
constitute Additional Rent hereunder. Landlord and Tenant agree that such late
charge represents a fair and reasonable estimate of the expenses that Landlord
will incur by reason of such late payment by Tenant. Acceptance of such late
charge by Landlord shall not constitute a waiver of Tenant's default with
respect to any such past due amounts, nor prevent Landlord from exercising any
other rights or remedies granted to Landlord under this Lease or at law or in
equity. In addition, any Rent or any other sum required to be paid by Tenant
under this Lease which is not paid within five (5) days of the due date, shall
bear interest, commencing on the sixth (6th) day after the due date thereof and
continuing until paid, at the lesser of (a) the maximum rate permitted by
applicable law, or (b) eighteen percent (18%) per annum. For purposes of any
time periods set forth in this Section 4.06, the payment due date shall be used
as the first day of any such period.
Section 4.07 Right to Audit. Landlord shall have the right from time to
time, upon notice to Tenant to audit the books and records of Tenant to
determine the accuracy of the determination of the Percentage Rental payable to
Landlord hereunder. In the event that such audit discloses a liability for rent
in excess of the Percentage Rent previously reported by Tenant to Landlord,
Tenant shall promptly to Landlord all deficiencies in the Rent
payable to Landlord and the Basic Rent shall be redetermined for the
applicable Lease Year in accordance with the Percentage Rent as determined by
the audit. In addition should the audit disclose a lability for Rent to the
extent of five percent (5%) or more, Tenant shall on demand of Landlord pay
the cost of such audit in addition to the amount of any deficiency.
ARTICLE V
PAYMENT OF IMPOSITIONS, TAXES AND ASSESSMENTS;
COMPLIANCE WITH LAWS AND ENVIRONMENTAL MATTERS
Section 5.01 Payment of Impositions. (a) From and after the
Commencement Date, Tenant shall pay, discharge and satisfy the following charges
(the "Impositions") when due:
(i) all taxes, assessments (including assessments for benefits from
public works or improvements, whether or not begun or completed prior to
the Commencement Date and whether or not to be completed within the Term),
levies, fees, water and sewer rents and charges, and all other utility and
other governmental charges of every kind, general and special, ordinary and
extraordinary, together with, subject to the succeeding provisions of this
Section 5.01, any interest and penalties thereon, which accrue or are
payable during the Lease Term and which are imposed or levied upon or
assessed against (A) the Premises or any part thereof, (B) any Basic Rent,
Percentage Rent, or any Additional Rent reserved or payable hereunder, and
(C) this Lease or the leasehold estate hereby created or which arises in
respect of the operation, possession, occupancy or use of the Premises;
(ii) any gross receipts or similar taxes imposed or levied upon,
assessed against or measured by Basic Rent, Percentage Rent, or Additional
Rent payable by Tenant hereunder or levied upon or assessed against the
Premises;
(iii) all sales and use taxes which are levied or assessed against or
payable by Landlord and Tenant on account of the acquisition, leasing or
use of the Premises or any portion thereof; and
(iv) all charges for water, gas, light, heat, telephone, electricity,
power and other utilities and communications services rendered or used on
or about the Premises.
(b) Tenant agrees to furnish to Landlord, within thirty (30) days after
written demand therefor, evidence of the payment of all Impositions. In
the event that any Imposition levied or assessed against the Premises becomes
due and payable during the Term hereof and may legally be paid in installments,
Tenant shall have the option to pay such Imposition in installments. Tenant
shall request the appropriate taxing and assessing authorities having
jurisdiction over the Premises to send directly to Tenant all tax bills,
assessments and notices pertaining to the Premises. Notwithstanding the
foregoing, for any such tax bills, assessments and notices that are not sent
directly to Tenant but are sent to Landlord, Landlord hereby covenants and
agrees to forward to Tenant all such tax bills, assessments and notices
pertaining to the Premises within ten (10) business days after Landlord receives
same, but Tenant's obligation to pay timely any amount that was the subject of
such tax xxxx, assessment and notice shall not be conditioned upon Landlord's
delivery of such item to Tenant within such time period. Without limiting any
of the other provisions of this Lease, from and after an Event of Default,
Tenant shall, at Landlord's election, deposit with Landlord on the first day of
each month the sum equal to 1/12th of the Impositions assessed against the
Premises for the preceding Lease Year, which sums shall be used by Landlord
toward payment of future Impositions. Tenant, on demand, shall pay to Landlord
any additional funds necessary to pay and discharge the obligations of Tenant
pursuant to the provisions of this Section. The receipt by Landlord of the
payment of such Impositions by and from Tenant shall only be as an accommodation
to Tenant, any Fee Mortgagee or assessing authorities, and shall not be
construed as rent or income to Landlord, Landlord serving, if at all, only as a
conduit for delivery purposes.
Section 5.02 Compliance with Laws. Tenant shall, at its own cost and
expense, obtain any and all business licenses, permits and/or approvals
necessary for the operation of Tenant's business on the Premises ("Governmental
Authorizations") and shall comply with all governmental statutes, laws, orders,
ordinances, rules and regulations applicable to the use of the Premises and all
requirements of the Fire Insurance Rating Organization, Board of Fire Insurance
Underwriters and any similar bodies having jurisdiction thereof (collectively,
"Legal Requirements"), including those which require the making of any
structural, unforeseen or extraordinary changes to the Premises, whether or not
any of the same involve a change of policy on the part of the body enacting the
same, and shall promptly comply with all governmental orders and directives
and/or demands from Landlord for the correction, prevention and abatement of
nuisances in or upon, or connected with, the Premises. Without limiting the
foregoing, Tenant shall, at its expense, comply with all changes required in
order to obtain and/or maintain the Required Insurance (as hereinafter defined),
and with the provisions of all contracts, agreements, instruments and
restrictions existing on the
Commencement Date or thereafter suffered orpermitted by Tenant affecting the
Premises or any part thereof relating to the ownership, occupancy or use
thereof.
Section 5.03 Permitted Contests. Tenant shall not be required to
(a) pay any Imposition, (b) comply with any statute, law, rule, order,
regulation or ordinance, or (c) discharge or remove any lien, encumbrance or
charge against the Premises, so long as Tenant shall post a bond in an amount
and with a surety acceptable to Landlord and thereafter contest, in good faith
and at its sole expense, the existence, the amount or the validity thereof, the
amount of the damages caused thereby or the extent of its liability therefor, by
appropriate proceedings during the pendency of which there is prevented (i) the
collection of, or other realization upon, the tax, assessment, levy, fee, rent,
charge, lien or encumbrance so contested; (ii) the sale, forfeiture or loss of
the Premises, or any part thereof, or Basic Rent, Percentage Rent, or any
Additional Rent, or any portion thereof; (iii) any interference with the use or
occupancy of the Premises or any part thereof; and (iv) any interference with
the payment of Basic Rent, Percentage Rent, or any Additional Rent, or any
portion thereof. Tenant further agrees that each such contest shall be
diligently and continuously prosecuted to a final conclusion. Tenant shall
defend (with counsel reasonably acceptable to Landlord), indemnify and hold
Landlord harmless against, any and all losses, judgments, decrees and costs
(including all attorneys' fees, appearance costs and expenses) in connection
with any such contest and, promptly after the final settlement, compromise or
determination of such contest, shall fully pay and discharge the amounts which
shall be levied, assessed, charged or imposed or be determined to be payable in
connection therewith, together with all penalties, fines, interests, costs and
expenses thereof or in connection therewith, and perform all acts, the
performance of which shall be ordered or decreed as a result thereof.
Notwithstanding the foregoing, no such contest shall be pursued by Tenant if
doing so would subject Landlord or any Fee Mortgagee (as hereinafter defined) to
the risk of any criminal liability.
Section 5.04 Hazardous Materials. (a) Tenant shall not cause, or
suffer or permit Tenant's agents, contractors, employees, customers or persons
receiving or delivering goods or services to or from the Premises to cause, any
Hazardous Material (as hereinafter defined) to exist on or be discharged from
the Premises (whether originating thereon or migrating to the Premises from
other property) in violation of any Environmental Laws as hereinafter defined,
and Tenant shall promptly (i) remove any charge or lien upon any of the
Premises, and (ii) defend (with counsel reasonably acceptable to Landlord),
indemnify and hold Landlord, Fee Mortgagee and all of their successors and
assigns, harmless from and against any and all claims, expenses, liabilities,
losses or damages to or threatened against the Property, Landlord, Fee
Mortgagee or any third party, resulting from any Hazardous Material that is
placed, generated or created in, on or under the Premises or is discharged
from the Premises after the Commencement Date.
(b) Tenant shall notify Landlord and Fee Mortgagee of any Hazardous
Material that exists on or is discharged from or onto the Premises (whether
originating thereon or migrating to the Premises from other property) within
ten (10) days after Tenant first has knowledge of the existence or discharge
of such Hazardous Material.
(c) Throughout the Term, Tenant shall comply, and cause the Premises
to comply, with all statutes, laws, ordinances, rules and regulations of all
local, state or federal authorities having authority over the Premises or any
portion thereof or their use including, without limitation, those relative to
any Hazardous Material, petroleum products, asbestos containing materials or
PCB's.
(d) "Hazardous Material" means any hazardous or toxic material,
substance or waste which is defined by those or similar terms or is regulated as
such under any Environmental Laws. "Environmental Laws" means any statute, law,
ordinance, rule or regulation of any local, county, state or federal authority
having jurisdiction over the Premises or any portion thereof or its use,
including, but not limited to: (i) the Federal Water Pollution Control Act (33
U.S.C. Section 1317) as amended; (ii) the Federal Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.) as amended; (iii) the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S. C.
Section 9601 et seq.) as amended; (iv) the Toxic Substance Control Act (15
U.S.C. Section 2601) as amended; (v) the Clean Air Act (42 U.S.C. Section 7401),
as amended; and (vi)any similar state laws.
ARTICLE VI
MAINTENANCE, REPAIR REPLACEMENT AND ALTERATIONS
Section 6.01 Maintenance and Repair. Tenant agrees, at its sole expense,
to (a) keep and maintain the Premises, including any altered, rebuilt,
additional or substituted buildings, structures and other improvements thereto
and the Personal Property, in good repair and appearance, except for ordinary
wear and tear, and (b) make promptly all structural and nonstructural, foreseen
and unforeseen, ordinary and extraordinary changes and repairs of every kind
which may be required to keep the Premises in such good condition, repair and
appearance. Landlord shall not be required to
maintain, repair or rebuild or make any alterations, replacements or renewals
of any nature to the Premises, or any part thereof, whether ordinary or
extraordinary, structural or nonstructural, foreseen or unforeseen. Tenant
hereby expressly waives the right to make repairs at the expense of Landlord
which may be provided for in any law in effect at the time of the
commencement of the Term of this Lease or which may thereafter be enacted,
but the foregoing waiver shall not be a waiver of rights expressly granted to
Tenant by the terms of this Lease. Tenant, at its own cost and expense,
shall care for and maintain the grounds around the Improvements, including
the regular mowing of grass, care of shrubs and general landscaping, and the
maintenance of the parking areas, driveways and alleys on the Land, and shall
maintain the whole of the Premises in a clean and sanitary condition. Tenant
acknowledges that Tenant is familiar in all respects with the Premises, has
inspected the same and has accepted the Premises as suitable for Tenant's use
as set forth in this Lease. Landlord makes no representation, express or
implied, as to the suitability or habitability of the Premises for any
particular purpose.
Section 6.02 Alterations. (a) Tenant shall not make any alterations,
additions or modifications to the Premises without the prior written consent of
Landlord (which consent shall not be unreasonably withheld), except for
installation of unattached, movable trade fixtures in the Facility which may be
installed without drilling, cutting or otherwise defacing any part of the
Premises. All alterations, additions and modifications made to the Premises by
Tenant other than unattached, movable trade fixtures shall remain upon the
Premises and become the property of Landlord upon the expiration or termination
of this Lease, unless Landlord requests their removal, in which event Tenant, at
Tenant's expense, shall remove the same and restore the Premises to their
original condition as of the Commencement Date. If Tenant fails to repair any
damage to the Premises caused by any removal of any alterations, additions or
modifications to the Premises, then Landlord shall have the right, but not the
obligation, to repair any such damage to the Premises and thereafter Tenant will
be obligated to reimburse Landlord for the reasonable costs of repairing such
damage. All plumbing or electrical wiring connections exposed as a result of
the removal of any alterations, additions or modifications shall be capped by
Tenant in a safe and workmanlike manner.
(b) Notwithstanding anything contained in paragraph (a) above to
the contrary, before approving any alterations, additions or modifications
for which Landlord's consent is required, Landlord may require Tenant to
furnish it with (i) plans and specifications detailing the work to be
completed, (ii) the names and addresses of the contractors to complete such
work and copies of the contracts entered into with such contractors, (iii)
all permits necessary for the
construction of such alterations, additions or modifications, and (iv)
evidence of any insurance reasonably requested by Landlord in connection with
such alterations, additions and modifications, which insurance shall name
Landlord and any Fee Mortgagee as additional insured.
(c) All construction work done by Tenant within or upon the Premises
shall be performed in a good and workmanlike manner, in compliance with all
governmental requirements, and the requirements of any contract, mortgage, or
deed of trust to which Landlord may be a party.
(d) Tenant agrees that all improvements, alterations, repairs or
other work performed upon the Premises under any provision of this Lease
including, without limitation, any venting, opening, sealing, water proofing or
any altering of the roof of the Facility shall be performed under the direction
of a general contractor approved by Landlord in advance and that when completed
Tenant shall furnish to Landlord a certificate from such contractor stating that
all such alterations approved by Landlord have been completed in accordance with
plans and specifications previously approved by Landlord. Without limiting the
foregoing, the plans and drawings for installation or revision of mechanical,
electrical or plumbing systems shall be designed by an engineer approved by
Landlord in advance, such design work to be done at Tenant's expense. Tenant
shall defend (with counsel reasonably acceptable to Landlord), indemnify and
hold Landlord and any Fee Mortgagee harmless from and against all claims, liens,
costs, damages and expenses that may arise out of or in connection with any
changes, additions, alterations or modifications made to the Premises by Tenant.
Section 6.03 Replacements of Personal Property. Tenant shall not remove
any Personal Property from the Leased Property except to replace the Personal
Property by other similar items of equal quality and value. Items being
replaced by Tenant may be removed and shall become the property of Tenant and
items replacing the same shall be and remain the property of Landlord. Tenant
shall execute, upon written request from Landlord, any and all documents
necessary to evidence Landlord's ownership of the Personal Property and
replacements therefor. Tenant may finance replacements for the Personal
Property by equipment lease or by a security agreement and financing statement
if [i] Landlord has consented to the terms and conditions of the equipment lease
or security agreement; and [ii] the equipment lessor or lender has entered into
a non-disturbance agreement with Landlord upon terms and conditions reasonably
acceptable to Landlord, including without limitation, the following: [a]
Landlord shall have the right (but not the obligation) to assume such security
agreement or equipment lease upon the occurrence of an Event of Default under
this Lease; [b] the equipment lessor or lender shall notify Landlord of any
default by Tenant under the equipment lease or security agreement and give
Landlord a reasonable opportunity to cure such default; and [c] Landlord shall
have the right to
assign its rights under the equipment lease, security agreement, or
non-disturbance agreement. Tenant, within 30 days after receipt of an invoice
from Landlord, shall reimburse Landlord for all costs and expenses incurred in
reviewing and approving the equipment lease, security agreement, and
non-disturbance agreement, including without limitation, reasonable attorneys'
fees and costs.
Section 6.04 No Liens. Tenant will not create or permit to be created or
to remain, directly or indirectly, and will promptly discharge, at its expense,
any mortgage, lien, encumbrance or charge on, pledge of or conditional sale or
other title retention agreement with respect to, the Premises or any part
thereof or Tenant's interest therein or Basic Rent, Percentage Rent, and
Additional Rent or other sums payable by Tenant under this Lease. Nothing
contained in this Lease shall be construed as constituting the consent or
request, expressed or implied, by Landlord to the performance of any labor or
services or of the furnishing of any materials for any construction, alteration,
addition, repair or demolition of or to the Premises or any part thereof by any
contractor, subcontractor, laborer, materialman or vendor. Notice is hereby
given that Landlord will not be liable for any labor, services or materials
furnished or to be furnished to Tenant, or to anyone holding the Premises or any
part thereof, and that no mechanic's or other liens for any such labor, services
or materials shall attach to or effect the interest of Landlord in and to the
Premises.
ARTICLE VII
INSURANCE AND INDEMNIFICATION
Section 7.01 Property Insurance. At Tenant's expense, Tenant shall
maintain in full force and effect a property insurance policy or policies
insuring the Premises against the following:
(a) Loss or damage commonly covered by a "Special Form" policy
insuring against physical loss or damage to the Improvements and any personal
property, including but not limited to, risk of loss from fire and other
hazards, collapse, transit coverage, vandalism, malicious mischief, theft,
earthquake (if the Premises are in earthquake zone 1 or 2) and sinkholes (if
usually recommended in the area of the Premises). The policy shall be in the
amount of the full replacement value (as defined in Section 7.05) of the
Improvements and any personal property and shall contain a deductible amount
acceptable to Landlord. Landlord shall be named as an additional insured. The
policy shall include a stipulated value endorsement or agreed amount endorsement
and endorsements for contingent liability for operations of building laws,
demolition costs, and increased cost of construction
.
(b) If applicable, loss or damage by explosion of steam boilers,
pressure vessels or similar apparatus, now or hereafter installed on the
Premises, in commercially reasonable amounts acceptable to Landlord.
(c) Consequential loss of rents and income coverage insuring against
all "Special Form" risk of physical loss or damage with limits and deductible
amounts acceptable to Landlord covering risk of loss during the first twelve
(12) months of reconstruction, and containing an endorsement for extended period
of indemnity of at least six (6) months, and shall be written with a stipulated
amount of coverage if available at a reasonable premium.
(d) If the Premises are located, in whole or in part, in a federally
designated 100-year flood plain area, flood insurance for the Improvements in an
amount equal to the lesser of (i) the full replacement value of the
Improvements; or (ii) the maximum amount of insurance available for the
Improvements under all federal and private flood insurance programs.
(e) Loss or damage caused by the breakage of plate glass in
commercially reasonable amounts acceptable to Landlord.
(f) Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper currency,
depositors' forgery and loss of property of residents accepted by Tenant for
safekeeping, in commercially reasonable amounts acceptable to Landlord.
Section 7.02 Liability Insurance. At Tenant's expense, Tenant shall
maintain liability insurance against the following:
(a) Claims for personal injury or property damage commonly covered by
comprehensive general liability insurance with endorsements for incidental
malpractice, contractual, personal injury, owners' protective liability,
voluntary medical payments, products and completed operations, broad form
property damage and extended bodily injury, with commercially reasonable amounts
for bodily injury, property damage and voluntary medical payments acceptable to
Landlord, but with a combined single limit of not less that $5,000,000.00 per
occurrence.
(b) Claims for personal injury and property damage commonly covered
by comprehensive automobile liability insurance, covering all owned and
non-owned automobiles, with commercially reasonable amounts for bodily injury,
property damage and for automobile medical payments acceptable to Landlord, but
with a combined single limit of not less than $5,000,000.00 per
occurrence.
(c) Claims for personal injury commonly covered by medical
malpractice insurance in commercially reasonable amounts acceptable to Landlord.
(d) Claims commonly covered by worker's compensation insurance for
all persons employed by Tenant on the Premises. Such workers' compensation
insurance shall be in accordance with the requirements of all applicable local,
state, and federal law.
Section 7.03 Builder's Risk Insurance. In connection with any
construction by Tenant, Tenant shall maintain in full force and effect a
builder's completed value risk policy ("Builder's Risk Policy") of insurance in
a non-reporting form insuring against all "Special Form" risk of physical loss
or damage to the Improvements, including, but not limited to, risk of loss from
fire and other hazards, collapse, transit coverage, vandalism, malicious
mischief, theft, earthquake (if the Premises are in earthquake zone 1 or 2) and
sinkholes (if usually recommended in the area of the Premises). The Builder's
Risk Policy shall include endorsements providing coverage for building materials
and supplies and temporary premises. The Builder's Risk Policy shall be in the
amount of the full replacement value of the Improvements and shall contain a
deductible amount acceptable to Landlord. Landlord shall be named as an
additional insured. The Builder's Risk Policy shall include an endorsement
permitting initial occupancy.
Section 7.04 Insurance Requirements. The following provisions shall
apply to all insurance coverage required hereunder:
(a) The form and substance of all policies shall be subject to the
approval of Landlord, which approval will not be unreasonably withheld.
(b) The carriers of all policies shall have a Best's Rating of "All
or better and a Best's Financial Category of X or higher and shall be authorized
to do insurance business in the state where the Premises are located.
(c) Tenant shall be the "named insured" and Landlord and any Fee
Mortgagee shall be an "additional insured" on each liability policy. On all
property and casualty policies, Landlord, any Fee Mortgagee and Tenant shall be
joint loss payees.
(d) Tenant shall deliver to Landlord certificates or policies showing
the required coverage and endorsements. The policies of insurance shall provide
that the policy may not be canceled or not renewed, and no material change or
reduction in coverage may be made, without at least thirty (30) days' prior
written notice to Landlord.
(e) The policies shall contain a severability of interest and/or
cross-liability endorsement, provide that the acts or omissions of Tenant or
Landlord will not invalidate the coverage of the other party, and provide that
Landlord shall not be responsible for payment of premiums.
(f) All loss adjustment shall require the written consent of Landlord
and Tenant, as their interests may appear.
(g) At least thirty (30) days prior to the expiration of each policy,
Tenant shall deliver to Landlord a certificate showing renewal of such policy
and payment of the annual premium therefor or specifying other payment
arrangements acceptable to Landlord.
Section 7.05 Replacement Value. The term "replacement value" means the
actual replacement cost thereof from time to time including increased cost of
construction endorsement, with no reductions or deductions. Tenant shall, in
connection with each annual policy renewal, deliver to Landlord a
redetermination of the full replacement value by the insurer or an endorsement
indicating that the Premises are insured for their full replacement value. If
Tenant makes any permitted alterations to the Premises, Landlord may have such
full replacement value redetermined at any time after such permitted alterations
are made, regardless of when the full replacement value was last determined.
Section 7.06 Blanket Policy. Notwithstanding anything to the contrary
contained in this Article, Tenant may carry the insurance required by this
Article under a blanket policy of insurance, provided that the coverage afforded
Tenant will not be reduced or diminished or otherwise be different from that
which would exist under a separate policy meeting all of the requirements of
this Lease.
Section 7.07 No Separate Insurance. Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article, or increase the amounts of any then existing
insurance, by securing an additional policy or additional policies, unless all
parties having an insurable interest in the subject matter of the insurance,
including Landlord and any Fee Mortgagee, are included therein as additional
insured or loss payees, the loss is payable under said insurance in the same
manner as losses are payable under this Lease, and such additional insurance is
not prohibited by the existing policies of insurance. Tenant immediately
shall notify Landlord of the taking out of such separate insurance or the
increasing of any of the amounts of the existing insurance by securing an
additional policy or additional policies.
Section 7.08 Mortgages. The following provisions shall apply if
Landlord now or hereafter places a Fee Mortgage on the Premises or any part
thereof: (a) Tenant shall obtain a standard form of lender's loss payable
clause insuring the interest of the Fee Mortgagee; (b) Tenant shall deliver
evidence of insurance to such Fee Mortgagee; (c) loss adjustment shall
require the consent of the Fee Mortgagee; and (d) Tenant shall provide such
other information and documents as may be required by the Fee Mortgagee.
Section 7.09 Damages for Failure to Properly Insure. Landlord or any Fee
Mortgagee shall not be limited in the proof of any damages which Landlord or Fee
Mortgage may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance, as provided above, to the amount
of the insurance premium or premiums not paid or incurred by Tenant and which
would have been payable under such insurance; but Landlord and any Fee Mortgagee
shall also be entitled to recover as damages for such breach, the uninsured
amount of any loss, to the extent of any deficiency in the Required Insurance
and damages, costs and expenses of suit suffered or incurred by reason of or
damage to, or destruction of, the Premises, occurring during any period when
Tenant shall have failed or neglected to provide the Required Insurance. Tenant
shall defend (with counsel reasonably acceptable to Landlord), indemnify and
hold harmless Landlord and any Fee Mortgagee for any liability incurred by
Landlord or any Fee Mortgagee for or arising out of the failure to pay any
deductibles for the Required Insurance.
Section 7.10 Casualty. (a) If the Premises or any part thereof shall be
damaged or destroyed by casualty, Tenant promptly shall notify Landlord thereof,
and, except as provided in this Section 7.10, Tenant, with reasonable promptness
and diligence, shall rebuild, replace and repair any damage or destruction to
the Premises, at its expense, in conformity with the requirements of Article VII
in such manner as to restore the same to the same condition, as nearly as
possible, as existed prior to such casualty, and there shall be no abatement of
Basic Rent, Percentage Rent, or Additional Rent.
(b) Insurance claims by reason of damage to or destruction of any
portion of the Premises shall be adjusted by Landlord and Tenant, but any Fee
Mortgagee shall have the right to join with Landlord and Tenant in adjusting any
such loss. Insurance proceeds shall be placed in an account controlled by
Landlord or Fee Mortgagee and shall be disbursed in the manner provided in this
Section 7.10. Any insurance proceeds remaining after Tenant has repaired
the Premises pursuant to this Section 7.10 shall be paid to and shall be the
property of Fee Mortgagee, if Fee Mortgagee's lien documents require, otherwise
such sums shall be the property of Landlord.
(c) Before Tenant commences such repairing, restoration or
rebuilding, plans and specifications therefor, prepared by a licensed architect
satisfactory to Landlord (the "Approved Architect"), shall be submitted to
Landlord for approval, and Tenant shall furnish to Landlord (i) an estimate of
the cost of the proposed work, certified to by the Approved Architect, it being
agreed that the cost of repairing, restoring and reconstructing the Premises
shall include any and all costs and expenses for labor, materials, engineering,
design and architectural fees to be incurred in connection with such repair,
restoration or rebuilding of the Premises, (ii) names and addresses of Tenant's
proposed general contractors, (iii) copies of proposed contracts with general
contractors and the necessary permits, (iv) evidence of builder's risk,
liability and property damage insurance of the general contractor naming
Landlord and any Fee Mortgagee as additional insured in limits reasonably
acceptable to Landlord and any Fee Mortgagee, and (v) if required by any Fee
Mortgagee, payment and performance bonds covering the full amount of the
proposed contracts, all in form and substance reasonably satisfactory to Fee
Mortgagee. Tenant shall defend (with counsel reasonably acceptable to
Landlord), indemnify and hold Landlord harmless from and against all claims,
liens, costs, damages and expenses that may arise out of or in connection with
any changes, additions, alterations or improvements to the Premises by Tenant.
(d) Within thirty (30) days from the date of the determination of the
cost of the work by the Approved Architect, Tenant shall deposit with the party
holding the insurance proceeds, any excess in the estimated cost of the work
over the insurance proceeds held in an account pursuant to the provisions of
Paragraph (b) above. Tenant diligently and continuously shall pursue the
repair, restoration or rebuilding of the improvements in a good and workmanlike
manner, using only high quality materials. Proceeds of such insurance and
Tenant's deposit shall be made available to Tenant against Tenant's applications
for payment delivered to Landlord from time to time as such work or repair
progresses. In each application, Tenant shall (i) describe the work or repair
for which Tenant is requesting payment, (ii) confirm that the work to date has
been performed in accordance with the approved plans and specifications relating
thereto, (iii) confirm the costs incurred by Tenant in connection therewith,
(iv) confirm that except for bills for which Tenant is requesting reimbursement
pursuant to the current application, all bills for work and materials have been
paid in full, (v) state that Tenant has not theretofore received payment for
such work, (vi) confirm that the undisbursed funds in the account are sufficient
to pay in full the cost of completing the
work free of liens or claims, and (vii) include any lien waivers reasonably
requested by Landlord or any Fee Mortgagee.
(e) In the event of damage to, or destruction of more than, thirty
percent (30%) of the then replacement cost of the Improvements on the Premises
(as determined by the Approved Architect) during the final twelve (12) months of
the term of this Lease or the first Renewal Term, Landlord may elect to
terminate this Lease and retain the insurance proceeds unless Tenant exercises
its option to renew as set forth in Paragraph (f) below. If Landlord elects to
terminate, Landlord shall give notice to Tenant (the "Termination Notice") of
Landlord's election within 30 days after receipt of Tenant's notice of damage.
If Tenant does not exercise its option to renew within 15 days after delivery of
the Termination Notice, this Lease shall terminate 15 days after the termination
notice. Tenant shall remain liable to Landlord for all Basic Rent, Percentage
Rent, and Additional Rent and all other obligations accrued under this Lease
through the effective date of termination.
(f) In the event of damage to, or destruction of more than, thirty
percent (30%) of the then replacement cost of the Improvements on the Premises
(as determined by the Approved Architect) during the final twelve (12) months of
the term of this Lease or the first Renewal Term, and Landlord gives the
Termination Notice, Tenant shall have the option to renew this Lease. Tenant
shall give Landlord irrevocable notice of renewal within 15 days after delivery
of the Termination Notice. If Tenant elects to renew, the Renewal Term will be
effective for the balance of the Original Term, plus the period of time
necessary to restore the Premises and five (5) years. The Renewal Term shall
commence on the third day following Landlord's receipt of Tenant's irrevocable
election to renew. If this Lease is not terminated under Section 7.10(e),
Tenant shall proceed to rebuild or repair the Improvements according to the
other provisions of this Section 7.10.
(g) Subject to the provisions of Section 7.03 and this section 7.10,
Landlord hereby covenants and agrees to deliver to Tenant, to the extent
available, any and all amounts requested by Tenant within twenty (20) days after
the date Tenant makes request therefor pursuant to the application for payment
described above. Landlord may withhold from such amounts up to ten percent
(10%) of any such request to insure completion of Tenant's repair obligation and
compliance with applicable mechanic and material lien statutes.
Section 7.11 Indemnification. Tenant agrees to pay and to protect,
defend (with counsel reasonably acceptable to Landlord), indemnify and hold
harmless Landlord, any Fee Mortgagee and their agents, successors and assigns
from and against any and all liabilities, losses, damages, costs,
expenses (including all reasonable attorneys' fees and expenses), causes of
action, suits, claims, demands or judgments of any nature whatsoever arising
out of (a) any injury to, or the death of, any person or any damage to
property on the Premises or upon adjoining sidewalks, streets or ways, or
(b) the violation by Tenant of this Lease or any contract or agreement to
which Tenant is a party or any restriction, law, ordinance or regulation to
which Tenant or the Premises are subject, including all liabilities, losses,
damages, costs,expenses (including all reasonable attorneys' fees and
expenses), causes of action, suits, claims, demands or judgments arising or
claiming to arise from the sole or concurrent negligence of Landlord or
Landlord's agents, servants, partners, shareholders, officers, directors, or
employees. If Landlord, any Fee Mortgagee or any agent of Landlord or any
Fee Mortgagee shall be made a party to any litigation commenced against
Tenant for which Tenant is obligated to provide indemnification pursuant to
the terms of this Lease, and if Tenant, at its expense, shall fail to provide
Landlord, any Fee Mortgagee or their agents with counsel approved by
Landlord, Tenant shall pay all reasonable costs and reasonable attorneys'
fees and expenses incurred or paid by Landlord, any Fee Mortgagee or their
agents in connection with such litigation.
Section 7.12 Waiver of Subrogation. Notwithstanding any provision
contained herein to the contrary, Landlord and Tenant for themselves and their
respective insurers or any other party claiming through or under them by way of
subrogation or otherwise, each hereby waives any and all rights of recovery,
claim, action, or cause of action, against the other, its agents, servants,
partners, shareholders, officers, directors, or employees for any injury to or
death of any person or any loss or damage that may occur to the Premises, or any
improvements thereto, or any of its property located in, upon or constituting a
part of the Premises, which loss or damage is covered by valid and collectible
fire and extended coverage and liability policies, to the extent that such
loss or damage is recoverable thereunder, even if such injury, loss, or damage
is attributable to the sole or concurrent negligence of Landlord or Landlord's
agents, servants, partners, shareholders, officers, directors, or employees.
Inasmuch as the above mutual waivers will preclude the assignment of any
aforesaid claim by way of subrogation (or otherwise) to an insurance company (or
any other person), Landlord and Tenant severally agree immediately to give each
insurance company which has issued to it policies of insurance, written notice
of the terms of said mutual waivers, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of such insurance
coverage by reason of said waivers. Nothing contained in this waiver shall be
deemed to limit or reduce the indemnity of Landlord by Tenant
ARTICLE VIII
EMINENT DOMAIN
Section 8.01 Definitions. As used in this Lease, the following words
shall have the following meanings:
(a) "Condemnation proceedings" means any action or proceeding brought
for the purpose of any taking of property or any property interest by competent
authority as a result of the exercise of the power of eminent domain,
condemnation or purchase under threat thereof or in lieu thereof;
(b) "Taking" or "taken" means the taking of, or damage to, property
or any property interest pursuant to condemnation proceedings; and
(c) "Date of taking" means the date on which a condemning authority
rightfully obtains physical possession of property pursuant to a taking.
Section 8.02 Total Condemnation. If all of the Premises should be
taken, this Lease shall terminate as of the date of taking of the Premises.
Section 8.03 Partial Condemnation. (a) If more than fifty percent
(50%) of the Floor Area of the Facility should be permanently taken for any
public or quasi-public use under any governmental law, ordinance or regulation
or by right of eminent domain or by private purchase in lieu thereof, this Lease
shall terminate and the Rent shall be abated during the unexpired portion of
this Lease, effective on the date physical possession is taken by the condemning
authority.
(b) If less than fifty percent (50%) of the Floor Area of the
Facility should be permanently taken as aforesaid, this Lease shall not
terminate; however, the Basic Rent payable hereunder during the unexpired
portion of this Lease shall be reduced in proportion to the Facility Floor Area
taken, effective on the date physical possession is taken by the condemning
authority. Following such partial taking, Tenant shall make all necessary
repairs or alterations necessary to make the Facility an architectural whole as
provided in Section 7.10 above, which Section shall be deemed to apply to
condemnation instead of casualty.
(c) If this Lease is terminated as provided in this Article VIII, all
compensation awarded for any taking (or the proceeds of private sale in lieu
thereof) of the Premises shall be the property of Landlord and Tenant hereby
assigns its interest in any such award to Landlord. If this Lease is not
terminated as provided in this Article VIII, then all compensation awarded for
any taking (or the proceeds of private sale in lieu thereof) of the Premises
shall
be held by Landlord for the account of Tenant and Tenant shall use such
compensation to restore promptly the remainder of the Premises and the
Improvements to a complete unit of like quality, character and condition as that
which existed immediately prior to the taking. In this regard, before
commencing any restoration, Tenant must submit to Landlord, for approval, which
approval shall not be unreasonably withheld or delayed, (i) plans and
specifications for such restoration prepared by an Approved Architect; (ii) an
estimate of the cost of proposed restoration, certified to by the Approved
Architect, it being agreed that the cost of restoration includes any and all
costs and expenses for labor, materials, engineering, design, and architectural
fees incurred in connection with such restoration; (iii) copies of proposed
contracts with general contractors; (iv) evidence of builder's risk, liability,
and property damage insurance of the general contractor naming Landlord and any
Fee Mortgagee, as additional insured in limits reasonably acceptable to Landlord
and such Fee Mortgagee; and (v) if required by any Fee Mortgagee, payment and
performance bonds covering the full amount of the proposed contract, all in form
and substance reasonably satisfactory to any Fee Mortgagee. Within thirty (30)
days after determination by the Approved Architect of the cost of any
restoration work performed under this Article VIII, Tenant shall deposit into an
account controlled by Landlord or such Fee Mortgagee any excess in the estimated
cost of the restoration work of the compensation awarded in connection with the
taking and all funds held in said account shall be distributed in the same
manner as insurance proceeds are to be distributed under Article VII. If Tenant
does not complete the restoration within twelve (12) months after the date of
taking, then, unless the delay is for reasons not within the reasonable control
of Tenant, in addition to whatever other remedies Landlord may have either under
this Lease, at law or in equity, Landlord may retain the entire award or the
balance thereof remaining in the custody of Landlord, as the case may be, as
liquidated damages resulting from the failure of Tenant to comply with the
provisions of this Section 8.03. Any portion of such award as may not have to be
expended for such repairing or restoration shall be paid to Landlord.
Section 8.04 Award. All compensation awarded for any taking (or the
proceeds of private sale in lieu thereof) of all or any part of the Premises
shall be the property of Landlord, whether such damage shall be awarded as
compensation for diminution in the value of the leasehold or to the fee of the
Premises or otherwise, subject to disbursement to Tenant in accordance with the
provisions of this Lease, and Tenant hereby assigns to Landlord all of Tenant's
right, title and interest in and to any such compensation; provided that Tenant
shall be entitled to pursue a separate claim for damages to Tenant's personal
property, leasehold improvements, trade fixtures and equipment to the full
extent permitted under the laws of the state in which the
Premises are situated. The termination of this Lease shall not affect the
rights of the respective parties to such awards.
Section 8.05 Temporary Taking. If any of the events described in
Sections 8.02 or 8.03 occur as a result of a taking for temporary use, then,
except as hereinafter provided, this Lease shall continue in full force and
effect, except that Tenant shall not be obligated to comply with any covenant or
provision of this Lease to the extent such compliance is rendered impossible or
impracticable by reason of the taking. In no event shall the Rent payable
hereunder xxxxx or be reduced by reason of any such temporary taking.
ARTICLE IX
NEGATIVE COVENANTS
Tenant covenants and agrees that Tenant shall not do any of the following
without the prior written consent of Landlord:
Section 9.01 No Liens. Tenant shall not create, incur, or permit to exist
any lien, charge, encumbrance, easement or restriction upon the Premises or any
lien upon or pledge of any interest in Tenant.
Section 9.02 No Transfer. Tenant shall not sell, lease, sublease,
mortgage, convey, assign or otherwise transfer any legal or equitable interest
in the Premises or any part thereof.
Section 9.03 No Dissolution. Tenant shall not dissolve, liquidate,
merge, consolidate or terminate its existence or sell, assign, lease or
otherwise transfer (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter
acquired).
Section 9.04 Change of Location or Name. Tenant shall not change any
of the following without giving Landlord at least sixty (60) days advance
written notice; (a) the location of the principal place of business or chief
executive office of Tenant, or any office where any of Tenant's books and
records are maintained; or (b) the name under which Tenant conducts any of its
business or operations.
ARTICLE X
AFFIRMATIVE COVENANTS
Section 10.01 Perform Obligations. Tenant shall perform all of its
obligations under this Lease and comply with all legal requirements governing
or relating to the Premises and/or the operation of the Facility.
Section 10.02 Proceedings to Enjoin or Prevent Occupancy. If any
proceedings are filed seeking to enjoin or otherwise prevent or declare invalid
or unlawful Tenant's occupancy, use, maintenance, or operation of the Facility
or any portion thereof, Tenant will cause such proceedings to be contested
vigorously in good faith, and in the event of an adverse ruling or decision,
prosecute all allowable appeals therefrom, and will, without limiting the
generality of the foregoing, resist the entry or seek the stay of any temporary
or permanent injunction that may be entered, and use its best efforts to bring
about favorable and speedy disposition of all such proceedings and any other
proceedings.
Section 10.03 Documents and Information. (a) Tenant, periodically
during the Term of the Lease, shall deliver to Landlord financial statements and
other documents requested by Landlord reflecting Tenant's financial condition.
With each delivery of such information to Landlord, Tenant shall also deliver to
Landlord a certificate signed by the Chief Financial Officer, general partner or
managing member (as applicable) of Tenant. Tenant shall furnish a monthly
profit and loss statement for the Facility within 30 days following the end of
each month, an annual Facility financial report or quarterly Facility financial
report, as applicable, and a quarterly Facility accounts receivable aging report
all in form reasonably acceptable to Landlord. In addition, Tenant shall
deliver to Landlord an annual Facility financial report and a quarterly Facility
accounts receivable aging report (based upon internal financial statements)
within sixty (60) days after the end of each fiscal year.
(b) Without limiting the foregoing, Tenant shall (i) supply promptly
Landlord with such information concerning its financial condition, affairs and
property, as Landlord may reasonably request from time to time hereafter; (ii)
notify promptly Landlord in writing of any condition or event that constitutes a
breach or Event of Default of any term, condition, warranty, representation or
provisions of this Lease or any other agreement, and of any material adverse
change in its financial condition; (iii) permit Landlord or any of its agents or
representatives to have access to and to examine all of its books and records
regarding the financial condition of the Facility at any time or times hereafter
during business hours and after reasonable oral or written notice; and (iv)
permit Landlord to copy and make abstracts from any and all of said books and
records.
(c) Tenant shall also furnish to Landlord financial statements
prepared by Guarantor on a consolidated basis for each quarter and annually.
The annual financial statements of Guarantor shall be audited statements and
shall be prepared in accordance with generally accepted accounting procedures.
If either Tenant or any Guarantor is a "reporting company," then such company
may provide copies of its annual 10-K Reports and its quarterly 10-Q Reports in
lieu of the annual and quarterly statements which would otherwise be required
pursuant to this paragraph.
(d) Tenant shall, on request of Landlord from time to time, execute,
deliver and furnish documents as may be necessary to consummate the transactions
contemplated under this Lease. Within fifteen (15) days after a request from
Landlord, Tenant shall provide to Landlord such additional information regarding
Tenant, Tenant's financial condition or the Facility as Landlord, or any
existing or proposed creditor of Landlord (including, without limitation, any
Fee Mortgagee), or any auditor or underwriter of Landlord, may reasonably
require from time to time.
(e) Tenant shall transmit to Landlord, within five (5) business days
after receipt thereof, any material communication affecting the Facility or this
Lease, and Tenant will respond promptly to Landlord's inquiry with respect to
such information. Tenant shall notify promptly Landlord in writing after
Tenant has knowledge of any potential, threatened or existing litigation or
proceeding against, or investigation of, Tenant or the Facility that may affect
the right to operate the Facility or Landlord's title to the Premises or
Tenant's interest therein.
(f) All financial statements shall: (i) be prepared in accordance
with general accepted accounting principles consistently applied; and (ii)
fairly present the financial condition and performance for the relevant period
in all material respects.
(g) Tenant shall comply with all Legal Requirements affecting the
Premises and the operation of the Facility and keep all Government
Authorizations in full force and effect. Tenant shall pay when due all taxes
and governmental charges of every kind and nature that are assessed or imposed
upon Tenant at any time during the term of the Lease, including, without
limitation, all income, franchise, capital stock, property, sales and use,
business, intangible, employee withholding, and all taxes and charges relating
to Tenant's business and operations. Tenant shall be responsible for compliance
with all Legal Requirements affecting the Premises and the operation of the
Facility and Landlord shall have no responsibility for such compliance.
(h) If this Lease is terminated due to expiration of the Term,
pursuant to an Event of Default or for any reason, or if Tenant vacates the
Premises
without termination of this Lease, if requested by Landlord, Tenant shall
execute, deliver and file all documents and statements requested by Landlord to
effect the transfer of the Facility license and Governmental Authorizations to
an entity designated by Landlord, subject to any required approval of
governmental regulatory authorities, and Tenant shall provide to Landlord all
information and records reasonably required by Landlord in connection with the
transfer of the license and Government Authorizations.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES
Tenant hereby makes the following representations and warranties, as of the
Effective Date, to Landlord and acknowledges that Landlord is granting the Lease
in reliance upon such representations and warranties. Tenant's representations
and warranties shall survive the termination of this Lease.
Section 11.01 Organization and Good Standing. Tenant is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of ________ and is qualified to do business in and is in good standing
under the laws of the State of _________. Guarantor is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
________ and is qualified to do business in and is in good standing under the
laws of the State of _________.
Section 11.02 Power and Authority. Tenant and Guarantor have the power
and authority to execute, deliver and perform this Lease. Tenant and Guarantor
have taken all requisite action necessary to authorize the execution, delivery
and performance of Tenant's obligations under this Lease and Guarantor's
obligations under the Guaranty.
Section 11.03 Enforceability. This Lease constitutes a legal, valid and
binding obligation of Tenant enforceable in accordance with its terms.
Section 11.04 Solvency. Tenant and Guarantor are solvent, and no
bankruptcy, insolvency, or similar proceeding is pending or contemplated by or,
to the knowledge of Tenant, threatened against Tenant or Guarantor.
Section 11.05 No Litigation. As of the Effective Date (a) there are
no actions or suits, or any proceedings or investigations by any governmental
agency or regulatory body pending against Tenant or any Guarantor; (b) Tenant
has not received notice of any threatened actions, suits, proceedings or
investigations against Tenant or Guarantor at law or in equity, or before any
governmental board, agency or authority which, if determined adversely to Tenant
or Guarantor, would materially and adversely affect the right to operate the
Facility as presently contemplated, or the financial condition of Tenant or
Guarantor; (c) there are no unsatisfied or outstanding judgments against Tenant
or Guarantor; (d) there is no labor dispute materially and adversely affecting
the operation or business conducted by Tenant or Guarantor; and (e) neither
Tenant nor Guarantor has knowledge of any facts or circumstances which might
reasonably form the basis for any such action, suit or proceeding against Tenant
or Guarantor.
Section 11.06 Consents. The execution, deliver and performance of
this Lease and the Guaranty will not require any consent, approval,
authorization, order, or declaration of, or any filing or registration with, any
court or any federal, state or local entity, the absence of which would impair
materially the ability of Tenant to operate the Facility as it is presently
intended to be operated.
Section 11.07 No Violation. The execution, delivery and performance
of this Lease and the Guaranty (a) do not and will not conflict with, and do not
and will not result in a breach of Tenant's or Guarantor's organizational
documents; (b) do not and will not conflict with, and do not and will not result
in a breach of, and do not and will not constitute a default under (or an event
which, with or without notice or lapse of time, or both, would constitute a
default under), any of the terms, conditions or provisions of any agreement or
other instrument or obligation to which Tenant or Guarantor is a party or by
which its assets are bound; and (c) do not and will not violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Tenant or
Guarantor.
Section 11.08 Reports and Statements. All reports, statements,
certificates and other data furnished by or on behalf of Tenant and Guarantor to
Landlord in connection with this Lease, and all representations and warranties
made herein or in any certificate or other instrument delivered in connection
herewith and therewith, are true and correct in all material respects and do not
omit to state any material fact or circumstance necessary to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading as of the date of such report, statement, certificate or
other data. The copies of all agreements and instruments submitted to Landlord,
including, without limitation, all agreements relating to management of the
Facility are true, correct and complete copies and include all amendments and
modifications of such agreements.
Section 11.09 Chief Executive Office. Tenant maintains its chief
executive office and its books and records at the address set forth in Section
15.01. Tenant does not conduct any of its business or operations other than at
its chief executive office and at the Premises.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES OF LANDLORD
Section 12.01 Organization and Good Standing. Landlord is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of _________.
Section 12.02 Power and Authority. Landlord has the power and authority
to execute, deliver and perform this Lease. Landlord has taken all requisite
action necessary to authorize the execution, delivery and performance of
Landlord's obligations under this Lease.
Section 12.03 Enforceability. This Lease constitutes a legal, valid and
binding obligation of Landlord enforceable in accordance with its terms.
ARTICLE XIII
ASSIGNMENT AND SUBLETTING
Section 13. 01 Assignment and Subletting by Tenant. (a) Except as
permitted in subparagraph (d) below, Tenant shall not and may not assign or in
any manner transfer this Lease or any estate or interest therein, or sublet the
Premises or any part thereof, or grant any license, concession, management
agreement, or other right to occupy any portion of the Premises without the
prior written consent of Landlord, which may be granted or denied in Landlord's
sole and absolute discretion; provided, however, that Tenant may sublease,
without Landlord's prior written consent, a total of not more than
______________ (______) square feet of the Premises to third parties on a
month-to-month basis for the operation of a beauty shop, wellness clinic,
resident-operated gift shop or for the operation of similar enterprises and such
rent received by Tenant shall be included in the calculation of Gross Revenue.
Without limiting the foregoing, in no event shall an assignment or subletting by
Tenant hereunder relieve Tenant of any of its obligations under this Lease and
Tenant shall be responsible for causing the assignee or subtenant, as the case
may be, to comply with all of the terms and conditions of this Lease. An
assignment or sublease without the prior written consent of Landlord will be
void at Landlord's option. Landlord's consent to one assignment or sublease
will not waive the requirement of its consent to any subsequent assignment or
sublease.
(b) Notwithstanding anything contained in paragraph (a) above to the
contrary, Tenant may enter into an occupancy agreement with residents of the
Premises without the prior written consent of Landlord provided that (i) the
agreement does not provide for life care services, (ii) Tenant may not collect
rent for more than two (2) months in advance, (iii) all residents of the
Premises are accurately shown in Tenant's accounting records, and (iv) the form
of such occupancy agreement has been submitted to and approved in writing by
Landlord.
(c) Tenant shall not mortgage, pledge or otherwise encumber its
interest in this Lease or in the Premises, except as otherwise expressly
provided herein.
(d) Notwithstanding the foregoing, Tenant may assign this Lease to
Greenbriar Corporation or an Affiliate of Tenant (as hereinafter defined) that
is wholly-owned by Greenbriar Corporation.
Section 13.02 Assignment by Landlord. In the event of the transfer
and assignment by Landlord of its interests in this Lease and in the Premises to
a person or entity expressly assuming Landlord's obligations under this Lease,
Landlord shall automatically be released from any further obligations hereunder,
and Tenant agrees to accept such successor in interest and to look solely to
such successor in interest for performance of Landlord's obligations arising
after the date of such assignment.
ARTICLE XIV
DEFAULT
Section 14.01 Events of Default. Any of the following occurrences or
acts shall constitute an event of default (herein called an "Event of Default")
under this Lease:
(a) Tenant shall fail to make any payment when due of Basic Rent,
Percentage Rent, and Additional Rent or other sum herein required to be paid by
Tenant hereunder;
(b) Tenant shall fail to observe or perform any other provision or
obligation hereof and such failure continues for twenty (20) days after Landlord
has given notice thereof to Tenant (provided, that in the event of such default
cannot with diligence be cured within such twenty (20) day period, if Tenant
shall proceed promptly and continuously to cure the same and thereafter shall
prosecute the curing of such default with diligence, the time within which such
failure may be cured shall be extended for such period as may be necessary to
complete the curing of the same with diligence, but not to exceed an additional
sixty (60) days;
(c) Any representation or warranty of Tenant or Guarantor set forth
in any notice, certificate, demand, request or other instrument delivered
pursuant to, or in connection with, this Lease, shall either prove to be false
or misleading in any material respect as of the time when the same shall have
been made;
(d) Tenant or Guarantor shall (i) apply for or consent to the
appointment of, or the taking of possession by, any receiver, custodian,
trustee, United States Trustee or liquidator (or other similar official) of the
Premises or any part thereof or of any substantial portion of Tenant's or
Guarantor's (as applicable) property, or (ii) make a general assignment for the
benefit of its creditors, or (iii) file petition commencing a voluntary case
under or seeking to take advantage of any Federal Bankruptcy Code or any other
federal or state law (as now or hereafter in effect) relating to bankruptcy,
insolvency, reorganization, winding-up or adjustment of debts (hereinafter
collectively called "Bankruptcy Law"), or (v) take any action in furtherance of
any of the foregoing;
(e) If an order for relief against Tenant or Guarantor shall be
entered in any involuntary case under the Federal Bankruptcy Code or any similar
order against Tenant Guarantor shall be entered pursuant to any other Bankruptcy
Law, or if a petition commencing an involuntary case against Tenant or proposing
the reorganization of Tenant or Guarantor under any Bankruptcy Law shall be
filed and not be discharged or denied within sixty (60) days after such filing
(or such longer period of time as may be reasonably necessary, in Landlord's
sole discretion to obtain such discharge or denial and Tenant or Guarantor is
pursuing same with diligence), or if a proceeding or case shall be commenced in
any court of competent jurisdiction seeking (i) the liquidation, reorganization,
dissolution, winding-up or adjustment of debts of Tenant or Guarantor, or (ii)
the appointment of a receiver, custodian, trustee, United States Trustee or
liquidator (or any similar official) of the Premises or any part thereof or of
Tenant or of any substantial portion of Tenant's or Guarantor's property, or
(iii) any similar relief as to Tenant or Guarantor pursuant to any Bankruptcy
Law, and any such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect for sixty (60) days (or such longer period
of time as may be reasonably necessary, in Landlord's sole discretion, to obtain
such stay and Tenant or Guarantor is pursuing same with diligence);
(f) Tenant shall desert or vacate any portion of the Premises;
(g) The business operated by Tenant shall be closed for any reason
whatsoever;
(h) Any Guarantor of this Lease, dissolves, mergers, is acquired by
any other entity is files a petition in bankruptcy or is adjudicated insolvent
under Chapter 11 United State Code, or other insolvency law or fails to comply
with any covenant or requirement of such Guarantor set forth in this Lease or in
any guaranty of Guarantor;
(i) Tenant, any Guarantor or any entity which is an affiliate of
Tenant or Guarantor, defaults on any obligation to Landlord including, without
limitation, any lease with Landlord and any applicable cure or grace period with
respect to default under such indebtedness or obligation expires with such
default having been cured. This provision shall apply to all such obligations
and agreements now existing or hereafter entered into and as they may be
extended, modified, renewed or amended from time to time. "Affiliate" means any
person, corporation, partnership, limited liability company or other legal
entity that directly or indirectly controls or is controlled by, or is under
common control with Tenant or Guarantor. "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of such entity. "Affiliate" includes without limitation
Tenant and Greenbriar Corporation;
(j) The license for the Property or any other governmental permit
required for its operation is canceled, suspended, or otherwise invalidated or
notice of impending revocation proceedings is received and Tenant fails to
contest diligently such proceedings, or any reduction occurs in the number of
licensed beds or units at the Property.
Section 14.02 Landlord's Remedies. Upon the occurrence of any Event of
Default, Landlord shall have the option to pursue any one or more of the
following remedies:
(a) Terminate this Lease by notice to Tenant, in which event Tenant
shall surrender immediately the Premises to Landlord, and if Tenant fails to do
so, Landlord may, without prejudice to any other remedy which Landlord may have
under this Lease or applicable law, enter upon and take possession of the
Premises and expel or remove Tenant and any other persons who may be occupying
the Premises or any part thereof, by force if necessary, without being liable
for prosecution or any claim of damages therefor;
(b) Enter upon and take possession of the Premises and expel or
remove Tenant and other person who may be occupying the Premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor, and no such action by Landlord shall be construed as
an election on Landlord's part to terminate the Term of this Lease unless a
written notice of such intention is given to Tenant as provided in paragraph (a)
above;
(c) At any time or from time to time after the repossession of the
Premises or any part thereof pursuant to paragraph (b) above, whether or not the
Term of this Lease shall have been terminated pursuant to paragraph (a) above,
Landlord may (but shall be under no obligation to) relet the Premises or any
part thereof for the account of Tenant, in the name of Tenant or Landlord or
otherwise, without notice to Tenant, for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
balance of the Term of this Lease) and on such conditions (which may include
concessions or free rent) and for such uses Landlord, in its sole and absolute
discretion, may determine, and Landlord may collect and receive any rents
payable by reason of such reletting and such rents so received shall be applied
first to additional costs incurred by Landlord in reletting (including tenant
finish expenses incurred by Landlord in preparing the Premises for a new tenant)
and then credited against amounts otherwise owed to Landlord hereunder.
Landlord shall not be responsible or liable for any failure to relet the
Premises or any part thereof or for any failure to collect any rent due upon any
such reletting;
(d) No termination of this Lease pursuant to paragraph (a) above, by
operation of law or otherwise, and no repossession of the Premises or any part
thereof pursuant to paragraph (b) above or otherwise, and no reletting of the
Premises or any part thereof pursuant to paragraph (c) above, shall relieve
Tenant of its liabilities and obligations hereunder, all of which shall survive
such expiration, termination, repossession or reletting;
(e) In the event of any such termination or repossession, Tenant will
pay to Landlord the Basic Rent, Percentage Rent, and Additional Rent and other
sums required to be paid by Tenant to and including the date of such termination
or repossession and, thereafter, Tenant shall, until the end of what would have
been the Term of this Lease in the absence of such termination or repossession,
and whether or not the Premises or any part thereof shall have been relet, be
liable to Landlord for, and shall pay to Landlord (i) the Basic Rent, Percentage
Rent, and Additional Rent and other sums which would be payable under this Lease
by Tenant in the absence of such termination or repossession, less (ii) the net
proceeds, if any, of any reletting effected for the account of Tenant pursuant
to paragraph (c) above, after deducting from such proceeds all Landlord's
expenses incurred in connection with such reletting (including, without
limitation, all repossession costs, new tenant finish-out expenses, brokerage
commissions, legal expenses, attorneys' fees and employees' expenses). Tenant
will pay such current damages on the days on which the Basic Rent would have
been payable under this Lease in the absence of such termination or
repossession, and Landlord shall be entitled to recover the same from Tenant on
each such day;
(f) At Landlord's option, if Landlord terminates this Lease by reason
of an Event of Default, Tenant shall pay to Landlord the sum of all Rent and
other indebtedness accrued hereunder to the date of such termination, the
amounts of Landlord's expenses in connection with any reletting as stated in
Paragraph (e) above to the date of such termination or repossession, and, as
liquidated damages, an amount equal to the then present value of the Rent and
all other indebtedness as would otherwise have been required to be paid by
Tenant to Landlord during the period following the termination of the term
measured from the date of such termination to the date of expiration stated in
Section 3.02, less the then present fair market rental value of the Leased
Premises for such period; because of the difficulty of ascertaining the fair
market rental value of the Leased Premises and the costs and time associated
with reletting the Leased Premises, the Landlord and Tenant stipulate that such
fair market rental value shall in no event be deemed to exceed seventy-five
percent (75%) of the then present value of the Rent reserved for such period;
(g) In addition to any other remedy available to Landlord, in the
event Tenant should neglect to perform the maintenance required of it pursuant
to the terms of this Lease, and such failure shall not be cured after notice to
Tenant and expiration of any applicable curative period (including any
applicable right to extend the curative period) set forth herein (except Tenant
shall have no grace or curative period to correct any condition that poses an
imminent danger to persons or property), Landlord shall have the right, but not
the obligation, to cause repairs or corrections to be made, in which event the
cost of such repairs shall be reimbursed by Tenant to Landlord within thirty
(30) days after Tenant receives written demand therefor from Landlord together
with copies of itemized invoices reflecting the cost of such repairs;
(h) In the event of any termination of this Lease by Tenant pursuant
to a right granted by this Lease or by operation of law, Tenant's liability for
the payment and performance of all covenants, debts, indemnities and other
obligations of Tenant under this Lease accrued through the date of termination
shall be unaffected by such termination and shall be enforceable against Tenant
in the same manner as if this Lease continued to be in full force and effect.
Section 14.03 Additional Rights of Landlord. No right or remedy
herein conferred upon or reserved to Landlord is intended to be exclusive of any
other right or remedy, and each and every right and remedy shall be cumulative
and in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity or by statute, unless expressly excluded by the
terms of this Lease. The failure of Landlord to insist at any time upon the
strict performance of any covenant or agreement or to exercise any option,
right, power or remedy contained in this Lease shall not be construed as a
waiver or a relinquishment thereof for the future. A receipt by Landlord of any
Basic Rent, Percentage Rent, and any Additional Rent or any other sum payable
hereunder with knowledge of the breach of any covenant or agreement contained in
this Lease shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision of this Lease shall be deemed to have been made unless
expressed in writing and signed by Landlord. In addition to other remedies
provided in this Lease, Landlord shall be entitled, to the extent permitted by
applicable law, to injunctive relief in case of the violation, or attempted or
threatened violation, of any of the covenants, agreements, conditions or
provisions of this Lease, or to decree compelling performance of any of the
covenants, agreements, conditions or provisions of this Lease, or to any other
remedy allowed to Landlord at law or in equity.
Section 14.04 Waivers by Tenant. Tenant hereby waives and surrenders
for itself and all those claiming under it, including creditors of all kinds,
any right of privilege which it or any of them may have under any present or
future construction, statute or rule of law to redeem the Premises or to have a
continuance of this Lease for the Term hereby demised after termination of
Tenant's right of occupancy by order or judgment of any court or by any legal
process or writ, or under the terms of this Lease or after the termination of
the term of this Lease as herein provided.
ARTICLE XV
MISCELLANEOUS
Section 15. 01 Notices, Demands and Other Instruments. All notices,
correspondence, documents or requests given, sent or required to be given with
respect to any matter pertaining to this Lease shall be in writing. Any
notices, correspondence, documents or requests required or permitted to be
delivered under this Lease shall be addressed to the applicable party at the
addresses set forth below, or to such other address as Landlord or Tenant may
designate in writing, and deemed delivered or received (a) regardless of whether
actually received or not, upon deposit in the United States mail, postage
prepaid, certified mail, return receipt requested, or (b) when actually received
if sent other than by certified mail.
If to Tenant: ______________________________________
______________________________________
______________________________________
Attention: __________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
With a copy to:______________________________________
______________________________________
______________________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
If to Landlord:______________________________________
______________________________________
______________________________________
Attention: __________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
With a copy to:______________________________________
______________________________________
______________________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
Landlord and Tenant shall each have the right from time to time to specify
as its address for purposes of this Lease any other address in the United States
of America upon giving written notice thereof, similarly given, to the other
party.
Section 15.02 Estoppel Certificates. Tenant and Landlord will, at any
time and from time to time, upon not less than twenty (20) days prior request by
the other party, execute, acknowledge and deliver to the requesting party a
certificate certifying, to the extent correct, (a) that this Lease is unmodified
and in full effect (or setting forth any modifications and that this Lease is in
full effect as modified); (b) the amount of Basic Rent, Percentage Rent, and
Additional Rent payable and the dates to which the Basic Rent, Percentage Rent,
and Additional Rent and other sums payable hereunder have been paid; (c) that,
to its knowledge, no default exists hereunder on the part of the requesting
party and that there are no rental abatements, termination
rights, defenses or offsets hereunder (or stating those rental abatements,
termination rights, defaults, defenses or offsets claimed by the recipient of
the request); (d) the commencement and expiration dates of this Lease; (e) the
amount of any security or other deposits; (f) that Tenant is in possession of
the Premises, and (g) such other matters as may reasonably be required by the
requesting party. Any such certificate may be relied upon by any Fee Mortgagee
or other mortgagee or prospective purchaser or prospective mortgagee of the
Premises. Tenant hereby irrevocably appoints Landlord Tenant's true and lawful
attorney-in-fact to deliver such certificate on behalf of Tenant should Tenant
refuse or fail to deliver any estoppel certificate when required to do so by
Landlord and such certificate shall be binding on Tenant as if and to the same
extent as if executed by Tenant.
Section 15.03 Holding Over by Tenant. It is covenanted and agreed that
in the event that Tenant remains in possession of the Premises after the
expiration of the Term of this Lease, without the execution of a new lease or of
an agreement extending the term hereof but is engaged in good faith negotiations
with Landlord for a new lease or extension, Tenant shall be deemed to be
occupying the Premises as a Tenant from month to month, subject to all of the
terms of this Lease as may be applicable to a month to month tenancy, and at the
Rent and other charges provided for in the last preceding year, prorated on a
monthly basis. If, however, Tenant has no agreement and is not negotiating with
Landlord in good faith, or if Landlord has notified Tenant in writing that it is
unwilling to negotiate with Tenant for a new lease, Tenant shall be deemed a
tenant at sufferance and shall pay as Basic Rent an amount equal to one hundred
fifty percent (150%) the Basic Rent provided for in the last preceding year, and
all Percentage Rent and Additional Rent.
Section 15.04 Parties Bound. This Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors, and assigns where
permitted by this Lease.
Section 15.05 No Merger. There shall be no merger of this Lease or the
leasehold estate hereby created with the fee estate in the Premises or any part
thereof by reason of the same person acquiring or holding, directly or
indirectly, this Lease or the leasehold estate hereby created or any interest in
this Lease or in such leasehold estate as well as the fee estate in the Premises
or any portion thereof.
Section 15.06 Surrender. Upon the termination of this Lease, Tenant
shall peaceably surrender the Premises to Landlord in the same condition in
which they were received from Landlord at the commencement of this Lease,
except as altered as permitted or required by this Lease, except for ordinary
wear and tear and except to the extent that the terms of this Lease expressly
relieve Tenant from the obligation to repair, restore or rebuild the Premises
following the occurrence of any casualty or condemnation. Provided that Tenant
is not in default hereunder, Tenant shall remove from the Premises prior to or
within a reasonable time (not to exceed thirty (30) days) after such termination
all property not owned by Landlord, and, at Tenant's expense, shall at such
times of removal, repair any damage caused by such removal. Property not so
removed shall become the property of Landlord. Landlord may thereafter remove
and dispose of such property, and the cost of removing and disposing of the
property, together with the cost of repairing any damage caused by such removal,
shall be borne by Tenant.
Section 15.07 Severability. Each and every covenant and agreement
contained in this Lease is separate and independent, and the breach of any
thereof by Landlord shall not discharge or relieve Tenant from any obligation
hereunder. If any term or provision of this Lease or the application thereof to
any person or circumstances or at any time to any extent be invalid and
unenforceable, the remainder of this Lease, or the application of such term or
provision to persons or circumstances or at any time other than those to which
it is invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and shall be enforced to the extent
permitted by law.
Section 15.08 Attorneys' Fees. In the event either party brings any
action or proceeding against the other party under this Lease to enforce the
terms and provisions of this Lease, the party losing in such action or
proceeding shall pay the reasonable attorneys' fees and expenses of the party
prevailing in such action or proceeding.
Section 15.09 Savings Clause. No provision contained in this Lease
which purports to obligate Tenant to pay any amount of interest or any fees,
costs or expenses which are in excess of the maximum permitted by applicable
law, shall be effective to the extent that it calls for payment of any interest
or other sums in excess of such maximum rate.
Section 15.10 Force Majeure. Whenever a period of time is herein
prescribed for action to be taken by Landlord or Tenant, such party shall not be
liable or responsible for, and there shall be excluded from the computation of
any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
reasonable control of such party (a "Force Majeure Delay"). The provisions of
this section shall not operate to excuse Tenant from the prompt payment of
Rent or any other payments required by the terms of this Lease.
Section 15.11 Recording - Memorandum of Lease. Landlord and Tenant
agree to execute, acknowledge and deliver at any time after the date of this
Lease, at the request of the other party, a short-form Memorandum of Lease in a
form reasonably acceptable to Landlord and Tenant, setting forth the
Commencement Date and Term hereof, the renewal options, and such other
provisions hereof (except those specifying the Basic Rent payable hereunder) as
Landlord and Tenant shall reasonably deem appropriate, and such Memorandum of
Lease may be recorded at Landlord's or Tenant's option.
Section 15.12 Time of the Essence. Time is of the essence of this Lease
and the provisions relating thereto shall be strictly construed.
Section 15.13 Transfer of Landlord's Interest. The term "Landlord," as
used in this Lease, so far as covenants or obligations on the part of Landlord
are concerned, shall be limited to mean and include only the owner or owners at
the time in question of the fee of the Premises, and in the event of any
transfer or transfers of the title to such fee, (a) Landlord herein named (and
in case of any subsequent transfer or conveyance, the then grantor)
automatically shall be freed, released and relieved, from and after the date of
such transfer or conveyance, of all liability as respects the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed; and (b) Tenant shall attorn to the then current
owner of the fee as provided below.
Section 15.14 Subordination. (a) Tenant accepts this lease subject and
subordinate to any Fee Mortgage presently existing or hereafter created upon the
Premises, and to any renewals and extensions thereof, but Tenant agrees that any
Fee Mortgagee shall have the right at any time to subordinate such Fee Mortgage
to this Lease. Landlord is hereby irrevocably vested with full power and
authority to subordinate this Lease to any Fee Mortgage hereafter placed upon
the Premises, and Tenant agrees upon demand to execute such further instruments
subordinating this Lease as Landlord may request, and, upon any failure of
Tenant to do so, without limitation of Landlord's other available remedies,
Landlord shall have the right to execute same as attorney-in-fact for Tenant.
Notwithstanding the foregoing, as a condition to Tenant's obligation to
subordinate hereunder, Landlord shall obtain and furnish to Tenant a
subordination, non-disturbance and attornment agreement (the "Non-Disturbance
Agreement") executed by Fee Mortgagee providing that Tenant's possession of the
Premises will not be disturbed so long as Tenant continues to perform its
obligations under this Lease and accept Fee Mortgagee as its landlord as
provided below.
(b) Subject to the terms of the Non-Disturbance Agreement, Tenant
confirms that if by reason of a default under any Fee Mortgage, Fee Mortgagee or
its successor or assignee in interest becomes Landlord hereunder, Tenant shall
attorn to and shall recognize such Fee Mortgagee or its successor or assignee as
Tenant's landlord under this Lease, provided that such successor in interest
shall not (i) be bound by any payment of Rent for more than the current month to
any prior landlord; (ii) be bound by any amendment or modification of this Lease
made without the written consent of Fee Mortgagee or such successor or assignee
in interest; (iii) be liable in damages for any previous act or omission by any
prior landlord under this Lease; and (iv) have any obligation with respect to
any security deposited under this Lease unless such security has been physically
delivered to the party succeeding to the interest of Landlord. Tenant shall
execute and deliver, at any time and from time to time, upon request of Landlord
or of Fee Mortgagee, an instrument which reasonably may be necessary or
appropriate to evidence such attornment. Tenant waives the provisions of any
statute or rule of law now or hereafter in effect which may give or propose to
give Tenant any right or election to terminate this Lease or to surrender
possession of the Premises in the event any proceeding is brought by Fee
Mortgagee to acquire Landlord's interest hereunder
Section 15.15 Table of Contents and Headings. The table of contents and
headings used in this Lease are for convenient reference only and shall not to
any extent have the effect of modifying, amending or changing the provisions of
this Lease.
Section 15.16 Governing Law. This Lease shall be governed by and
interpreted under the laws of the State of _________, and all obligations of the
parties hereto are performable in ________ County, _________.
Section 15.17 Certain Definitions. (a) The term "Tenant's Certificate"
means a written certificate signed by the Chairman of the Board, the President
or any Vice President of Tenant.
(b) The term "Fee Mortgage" means any ground lease, mortgage, deed of
trust, security agreement, assignment of lease or other security instrument
encumbering the Premises, and all renewals, modifications, consolidations,
replacements and extensions thereof.
(c) The term "Fee Mortgagee" means any ground lessor, mortgagee or
beneficiary under a Fee Mortgage, and its successors and assigns.
(d) The term "Records" means the office of the County Clerk of ______
County, _________.
Section 15.18 Entry by Landlord. Tenant shall permit Landlord and its
agents to enter upon the Premises at all reasonable times and upon no less than
one (1) day's prior notice to inspect and examine the Premises, to show the
Premises to prospective purchasers, mortgagees or tenants or to make repairs.
If Tenant is not present to open and permit an entry by Landlord into the
Facility at any time when entry therein is necessary because of an emergency,
Landlord or its agents shall not be liable for damages to property arising as a
result of such entry unless such damage is due to the gross negligence or
willful misconduct of Landlord.
Section 15.19 Relationship of Landlord and Tenant. Nothing herein
contained shall be deemed or construed by the parties hereto, nor by any third
party, as creating the relationship of principal and agent, partnership or joint
venture, between the parties hereto, it being understood and agreed that neither
the method for computation of Rent, nor any other provisions contained herein,
nor any act of the parties hereto, shall be deemed to create any relationship
between the parties hereto other than the relationship of landlord and tenant.
Section 15.20 Integration. This Lease contains the entire agreement
between the parties hereto with regard to the subject matter hereof, and
supersedes any prior understandings, agreements or negotiations. This Lease may
not be amended or modified except by a writing executed by both parties hereto.
Section 15.21 Brokers. Tenant and Landlord represent and warrant to each
other that neither has had any contacts or engaged in any actions which would
give rise to any claim from any broker in connection with the negotiation or
execution of this Lease, and hereby agree to indemnify and hold each other
harmless from any claim for a commission or fee by any party making such claim
upon the basis of any alleged contract or agreement with the indemnifying party.
Section 15.22 Interest. In the event either party fails to pay the
other any amount under this Lease when due (after expiration of any applicable
notice and grace period), such amount shall bear interest at the lesser of
eighteen percent (18%) per annum or the maximum non-usurious rate of interest
permitted under applicable law.
Section 15.23 Quiet Possession. Subject to the terms and provisions of
this Lease, Landlord hereby grants to Tenant lawful, peaceable and quiet
occupancy, possession and enjoyment of the Premises and all
appurtenances and rights granted to Tenant under this Lease during the Term of
this Lease without hindrance or ejection by Landlord or the successors or
assigns of Landlord or anyone acting by, through or under Landlord.
Section 15.24 Complete Agreement. This Lease contains the entire
agreement between the parties hereto, and no agent, representative, salesman or
officer of Landlord has authority to make, or has made, any statement, agreement
or representation, either oral or written, in connection herewith, modifying,
adding or changing the terms and conditions herein set forth.
ARTICLE XVI
FAIR MARKET VALUE
Section 16.01 Fair Market Value. The fair market value (the "Fair Market
Value") of the Leased Property shall be determined as follows.
(a) The parties shall attempt to determine the Fair Market
Value by mutual agreement within 15 days after giving the Renewal Notice.
However, if the parties do not agree on the Fair Market Value within such 15-day
period, the parties shall endeavor to select a mutually acceptable appraiser to
determine the Fair Market Value. The costs of such appraiser shall be borne
equally by the parties. In the event the parties do not agree on an acceptable
appraiser within 15 days following the above 15-day period or either party
objects to the Fair Market Value determination by the selected appraiser the
provisions below shall apply.
(b) Landlord and Tenant shall each give the other party notice
of the name of an acceptable appraiser 45 days after giving of the Renewal
Notice. If the parties did not agree on an acceptable appraiser pursuant to
Paragraph (a) above, the two appraisers will then select a third appraiser
within an additional 5 days. Each appraiser must demonstrate to the reasonable
satisfaction of both Landlord and Tenant that it has significant experience in
appraising properties similar to the Premises. Within 5 days after designation,
each appraiser shall submit a resume to Landlord and Tenant setting forth such
appraiser's qualifications including education and experience with similar
properties. A notice of objections to the qualifications of any appraiser shall
be given within 10 days after receipt of such resume. If a party fails to
timely object to the qualifications of an appraiser, then the appraiser shall be
conclusively deemed satisfactory. If a party gives a timely notice of objection
to the qualifications of an appraiser, then the disqualified appraiser shall be
replaced by an appraiser selected by the qualified appraisers or, if all
appraisers are disqualified, then by an appraiser selected by a commercial
arbitrator acceptable to Landlord and Tenant.
(c) The Fair Market Value shall be determined by the
appraiser(s) within 60 days thereafter as follows. Each of the appraisers shall
be instructed to prepare an appraisal of the Premises in accordance with the
following instructions:
The Premises is to be valued upon the three conventional
approaches to estimate value known as the Income, Sales
Comparison and Cost Approaches. Once the approaches are
completed, the appraiser correlates the individual
approaches into a final value conclusion.
The three approaches to estimate value are summarized as follows:
Income Approach: This valuation approach recognizes that
the value of the operating tangible and intangible assets
can be represented by the expected economic viability of the
business giving returns on and of the assets.
Sales Comparison Approach: This valuation approach is based
upon the principle of substitution. When a facility is
replaceable in the market, the market approach assumes that
value tends to be set at the price of acquiring an equally
desirable substitute facility. Since health care market
conditions change and frequently are subject to regulatory
and financing environments, adjustments need to be
considered. These adjustments also consider the operating
differences such as services and demographics.
Cost Approach: This valuation approach estimates the value
of the tangible assets only. Value is represented by the
market value of the land plus the depreciated reproduction
cost of all improvements and equipment.
In general, the Income and Sales Comparison Approaches are considered the best
representation of value because they cover both tangible and intangible assets,
consider the operating characteristics of the business and have the most
significant influence on attracting potential investors.
Unless the Fair Market Value has been determined in accordance with Subparagraph
(a) above, the appraised values submitted by the three appraisers (including the
Fair Market Value determined by the appraiser selected in accordance with
Subparagraph (a) above) shall be ranked from highest value to middle value to
lowest value, the appraised value (highest or lowest) which is furthest from the
middle appraised value shall be discarded, and the remaining two appraised
values shall be averaged to arrive at the Fair Market Value.
ARTICLE XVII
ALTERNATIVE DISPUTE RESOLUTION
Section 17.01 Mediation. The parties agree that if a claim,
controversy or dispute arising out of or related to this Agreement cannot be
resolved by negotiation they will in good faith submit to mediation as a
condition precedent to initiation of arbitration. Mediation shall be initiated
by a party requesting same in writing, and shall be conducted in accord with the
Commercial Mediation Rules of the American Arbitration Association (the "AAA")
or other such body as the parties may agree to. If the parties do not agree to
a mediator within three (3) days of the written request for mediation, the party
requesting mediation shall request a list of mediators from the AAA and the
AAA's procedures for selection of a mediator shall apply. If the dispute has
not been resolved within 30 calendar days of the written request for mediation,
either party shall be free to initiate arbitration as herein provided Each
party shall bear its respective costs incurred and the parties shall share
equally the fees and expenses of the mediator.
Section 17.02 Arbitration. Any claim, controversy or dispute which
cannot be resolved by negotiation or mediation shall be resolved conclusively by
binding arbitration before three arbitrators in accord with the Commercial
Arbitration Rules of the American Arbitration Association and the provisions of
this Article. Each party shall appoint an arbitrator and the two arbitrators so
appointed shall appoint a third arbitrator. In the event of any inconsistency
between the provisions of this Article and the Commercial Arbitration Rules of
the American Arbitration Association, this Article shall control, subject to the
right to appeal as hereinafter set forth. Judgment on the award may be entered
in any court having jurisdiction thereof. In the event either party requests
injunctive relief, the AAA shall forthwith appoint a single arbitrator to
promptly hear such claim and such arbitrator shall have the authority to grant
any provisional remedy which would be available in a court of competent
jurisdiction. The arbitrator shall resolve all matters in accordance with
applicable substantive law. The arbitrator shall have authority to determine
(whether on a provisional or final basis) who shall bear the responsibility for
arbitration fees, arbitrators' fee, and attorneys' fees. All arbitration shall
be commenced within thirty (30) days of the demand therefor and any decision or
award shall be rendered within sixty (60) days thereafter. The award shall be
rendered in writing and shall set forth findings of fact and conclusions of law.
A party shall be entitled to appeal any error of law in connection with the
award of the arbitrators.
Section 17.03 Location of Mediation or Arbitration. Proceedings for
mediation or arbitration hereunder shall be conducted in Dallas, Texas.
Section 17.04 Reservation of Rights. Nothing in this Agreement shall be
deemed to limit the applicability of any otherwise applicable statutes of
limitations or
repose and any waivers contained in this Agreement; limit the right of a party
to exercise self help remedies; or preclude a party from initiating litigation
for provisional or ancillary remedies such as injunctive relief to prevent
irreparable injury. The exercise of any remedy or the institution of any action
permitted by this provision shall not constitute a waiver of the right of any
party, including the plaintiff in any such action, to arbitrate the merits of
the controversy or claim giving rise to such remedies.
Section 17.05 Attorney-Client Privilege; Confidentiality. Any
attorney-client privilege or other protection against disclosure of confidential
information, including without limitation any protection afforded the
work-product of any attorney, that could otherwise be claimed by any party shall
be available to, and may be claimed by, any party in arbitration proceedings.
No party waives any attorney-client privilege or any other protection against
disclosure of confidential information by reason of anything contained in or
done pursuant to or in connection with this Article. Each party agrees to keep
all controversies and claims for mediation or arbitration and related
proceedings strictly confidential, except for disclosures of information
required by applicable law or regulation. In addition all conduct, statements,
offers and opinions, whether written or oral, made in the course of any
mediation shall be deemed made for the purpose of compromise and settlement.
Section 17.06 Third Parties. No arbitration or mediation proceeding
arising out of or related to this Agreement shall include by consolidation,
joinder or in any other manner, an additional person or entity not a party to
this Agreement, except by written consent containing specific reference to this
Agreement signed by the parties hereto and any other person or entity sought to
be joined. Consent to arbitration involving an additional person or entity shall
not constitute consent to arbitrate or mediate any claim not described in the
written consent or with a person or entity not named or described therein.
Section 17.07 Attorneys' Fees and Costs. In the event of arbitration
arising out of the interpretation or enforcement of this Agreement, the
prevailing party shall be entitled to receive, in addition to any other award,
his reasonable costs of proceeding, including reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above set forth.
LANDLORD:
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By:
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Name:
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Title
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TENANT:
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By:
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Name:
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Title:
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EXHIBIT A
Legal Description of Land
(to be attached)
EXHIBIT B
Personal Property
(to be attached)
